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New Clause 11

Volume 978: debated on Monday 11 February 1980

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'It shall be the duty of the Secretary of State so to exercise his powers under this Act

as to secure that shares for the time being held by him or his nominees in the successor company carry at least 51 per cent. of the voting rights exercisable at general meetings of that company.'.—[ Mr. Stan Thorne.]

Brought up, and read the First time.

6.30 pm

I beg to move, That the clause be read a Second time.

The clause gives 51 per cent. of the voting rights at a general meeting to the Secretary of State. Important decisions are taken at general meetings. An examination is made of what has happened and future policy is discussed. The policy of a company is often determined at such general meetings. That is why we have tabled new clause 11.

On Second Reading the Secretary of State said that he was anxious that the Government should not have control within the industry. Our view is that it is important for some power over the new company to be exercised by the Secretary of State. If the Secretary of State has a 51 per cent. holding, and if he is answerable to the House, it might be possible for hon. Members to ask about certain aspects of the industry which cause them anxiety.

With a 51 per cent. holding the Secretary of State could influence decisions within the industry. I put it no stronger than that. Unfortunately, the selection of amendments—which I do not question—does not permit us to discuss industrial democracy. However, in the 1977 Act there is a suggestion that an organic growth of industrial democracy should take place. That will wither away, because even if he had 51 per cent. of the voting rights the Secretary of State would have no intention of placing any obligations on the successor company. We must not forget the involvement with the manufacturing industries which the successor company will have, whatever its other interests.

The British aerospace industry competes with other world aerospace manufacturing industries. Decisions affecting its marketing activities will involve the Secretary of State. The successor company will manufacture military aircraft. Will that company have the right to sell military aircraft to Egypt, Israel, China or South Africa? Will a decision to sell to other countries be left to the successor company? If the Secretary of State had 51 per cent. of the voting rights he would have some measure of control over such decisions.

There are other political aspects of international trading which affect the aerospace industry. This Government are, and the previous Government were, involved in weighing up the pros and cons of linking with McDonnell Douglas or with companies in the European Economic Community. Sometimes the aerospace industry is involved in deals which are not necessarily the most profitable in terms of pounds and pence. Sometimes they act according to the Government's political aspirations. I do not quarrel with that. Obviously any Government have the right to determine their allies.

I am worried because a whole range of decisions could be made by a private company which might be against the national interest. That is why the Secretary of State must have a 51 per cent. holding. The right hon. Gentleman has paid tribute to the industry for its productivity, inventiveness, organisation and administration. In the interests of the work force, it is vital that hon Members should be able to question the Secretary of State for Industry about the British aerospace industry, its conditions, policies, marketing and industrial relations. The best way to ensure that is for the House to agree to the new clause.

It is astonishing and sinister that the Government do not intend to take up a 51 per cent. interest in the new company. The Secretary of State and the Minister of State have made it clear that the Government's holding will be relatively minimal. The Government are about to denationalise the British aerospace industry. That is doctrine gone mad. The Government will not even consider taking 51 per cent. of the voting rights. What is the reason for that? Their dogmatic assertion has gone to extremes.

The Government would not have to exercise their right if they had a 51 per cent. holding. No one would press them to act to overthrow the new board's decisions. However, such a holding would ensure that if matters got out of hand the Government could exert pressure as a last resort. The sanction is needed, even though it may not have to be used. With an industry that is extremely important in terms of defence and security, it is dangerous for the Government not to retain a last-resort authority to take action if they think that the new company is heading in a direction that is not in the public interest. For that reason alone, the Minister should think twice before rejecting the clause.

Perhaps the Government do not want the clause because the Secretary of State has already been told by the people that he wants to come into the new company that they will not do so unless they are given a free hand without what they would call Government interference. Perhaps some of the Government's big industrial friends and cohorts have indicated that unless the government keep their nose out they will not participate. That aspect confirms us in our belief that there is something rotten in the State of Denmark in relation to the provision that the Secretary of State has seen fit to write into the Bill.

Even Conservative Members who have no regard for public enterprise and who repeat the stupidity that all nationalised industries lose money—most of them actually earn large amounts—must have some feeling of patriotism and fear that problems could arise with the new company were it to follow the wrong course. I urge the Minister to consider the implication of rejecting the clause.

Mr. Bob Cryer(Keighley): If we could rely upon good intentions, we should never need to legislate. Equally, if we were dealing with people of universal good will, we should not bother to legislate. But legislation gives a guarantee that certain actions will be followed. The Minister of State said earlier that the Government had no intention of hiving off parts of the industry. I imagine that they had no intention of having a steel strike, although that has happened and it is largely their responsibility. I imagine that they had no intention of embarking upon such a disastrous economic policy, but that is what is falling about their ears and causing such deep splits in the Cabinet. Therefore, the Minister of State's statement that the Government do not intend to hive off parts of the industry is in no way inconsistent with possible future hiving off.

The Minister said that the Government would keep at least 25 per cent., and perhaps around a half of the shares, to block foreign control. That may be their intention, but there is often a large gap between intention and action. That is why we have legislation. We must legislate to see that intentions are translated into action and to close the gap between intention and reality. In this modest clause we say that the intention that the Government have espoused of protecting the position of the aerospace industry should be translated into legislation.

6.45 pm

The clause is necessary for several reasons. The first is confidence in the industry. The Minister might say that we are scare mongering and that we should not talk about a possible loss of jobs, but the very fact that the Bill has been introduced and is going through the House causes uncertainty among people in the industry. The Minister travels the country telling the workers not to worry, but the very fact that he has to do that indicates the need for people to be reassured. The clause would give them the certainty they require by enshrining the certainty in legislation.

The workers are not daft. They see how Governments change—and I do not mean from one side of the House to the other. Ministers are shuffled around every year or two in the same Government, and one Minister might put different emphasis from another on a particular issue. They are entitled to do that unless they are bound by legislation. An emergency might arise, and a Minister might decide to sell off shares. If the Minister talked to the public he would find that they have a deep cynicism towards statements by politicians. That is born of the shifting sands of political attitudes over the years. The clause would help in those circumstances to generate confidence in the industry.

There is another reason. The industry is composed of thousands of small firms supplying components and services to the major concerns. How often is a small firm placed in difficulties when a large company to which it devotes a considerable part of its production runs into trouble? Its investment, stock building and employment plans grind to a halt. Its training plans are placed in jeopardy. If the Government accept the clause they will help to create confidence among the cornponertt suppliers and the workers employed by those firms.

The House is being asked to authorise an extraordinary process. It is significant that the Government are having to embody in the Act the procedure that is to be followed. If they want the company to be enshrined in the law, why not the control of it? The Government are setting up a £100 company whose capital will be held by two civil servants on behalf of the Secretary of State. He will allow the public corporation to emerge in the second stage.

We are given no guarantees. We do not have the memorandum and articles of association for the public company—only the straightforward memorandum and articles for a private company, as provided for in the Companies Act 1948, as amended. There are elements in common between the two, but there is no safeguard.

The Minister has said that at least 25 per cent. of the company will be retained but how much better for the nation as a whole, if rather than just the relatively tiny component of the aerospace industry—it is of course important—this new component were written into law! It should not depend on vagaries or on articles that we do not have for a company which does not exist. This is all cloudy and remote. Why cannot we have a legislative guarantee? That is what the House of Commons is best at.

The development of these companies will involve a close relationship with senior civil servants. I am not happy about that. My fears are based on the examples that we have seen of civil servants departing readily for the boardrooms of big corporations. This legislation involves the Civil Service even more closely. Without the new clause the Civil Service might press for a closer relationship between the Government and the companies with which they deal every day—such as GEC and ICI. The Civil Service should be at arm's length with companies, to ensure that they are treated equally. In this case, however, two senior civil servants will be shareholders on the Secretary of State's behalf.

It is true that the Minister has the last word, but the senior Civil Service is intimately involved in advising and influencing Ministers. Civil servants might give advice, which they thought was in the best interests of the commercial realities, to sell more than 75 per cent.

This industry depends massively on public funds. The Minister rehearsed the various Acts which have enabled hundreds and thousands of millions of pounds to be given since the war in this industry's support. This company will be virtually the sole contractor, or a major partner in any contractor, to the British Government for military supplies. An example is Panavia, of which British Aerospace is a key component. In any joint Western European effort this private company will play a major role as virtually a monopoly supplier of military hardware.

I put forward this argument with reservations, because I am not a militarist. I believe that we should disarm, but if we do not disarm, we shall at some time use these dreadful weapons. A large portion of our expenditure goes on arms and aerospace instruments of death. This company will be a major recipient of that money—not a free-standing private enterprise, as the Minister so often says. Like British Aerospace before nationalisation, it will depend massively on public funds for military projects and for civil projects such as the 146. Concorde, mistakenly, in my view, was enormously supported by the taxpayer. This company will have a unique relationship with the British Government.

We accept the Minister's reservations, but let us get them down in black and white. When people are nonplussed, they say that there should be a law about something. People sometimes believe rubbish printed in The Sun or say "I saw it in black and white. It was in the Daily Mail". That is a doubtful source of anything. But few people query Acts of Parliament. There are sometimes differences of interpretation, but there will be fewer with this clause. There might be differences at the margin, but these will be no problem if the courts are sensible. In a case only recently the House of Lords said that Parliament, and not the Court of Appeal,

should change the law. That is a sensible view.

I do not like to use patriotism as an argument, because it is frequently the last resort of the scoundrel, as we have seen from the Tories over the last few weeks, but there is a national interest here. We are a nation State, with the same language and cultural attitudes, and nations come together as equals to exchange ideas. In that context we should retain the British aerospace industry and civil manufacturing capacity. This company should be kept within our control.

In 1956 the Governor of the nationalised Bank of England was involved in selling shares because it was thought that he had special information about the increase in interest rates. He said to the Bank rate tribunal:

"Although it is anti-British and derogatory to sterling, it makes sense to me."

That man was not a Communist shop steward, a militant or an activist. He was not a working man who clocked in. He was one of the toffee-nosed gents who have run our country for so long. He was a man of the City. He was probably a member of Lloyd's and of other notable institutions. He was Governor of the Bank of England. There are not many such high level posts, and those who hold such office are supposed to be dedicated to the interests of this country. His definition of the national interest was a fine one if ever there was one.

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It is probable that there are more such fine gentlemen involved with British Aerospace. They might say the same, and add "We will make sure that the articles and memorandum of this company are changed so that we can sell more shares and line our pockets". When it comes to a choice between the national interest and lining their own pockets, those toffee-nosed gentlemen in the City, who are supposed to be a symbol of all that is best in this country, choose to line their own pockets. That is what that famous statement by the Governor of the Bank of England was all about.

Let us eradicate that sort of thing by including this clause in the Bill, so that workers, industrialists, component suppliers and City gents have confidence in this vital industry, which employs 70,000 people. That will ensure that the company remains of this country, where it belongs.

At the risk of trespassing on the Minister's territory, I urge him to make sure that the Government, instead of taking 51 per cent. control of this company, divest themselves entirely of shareholder control. The Government should not reduce their holding below 25 per cent., for the good reason—put forward by Opposition Members—that that will enable us to keep control over the memorandum and articles of association of the company. If the Government retain 51 per cent. of the company, that will defeat the whole objective they have set themselves in setting up a limited liability company. It will ensure that politicians interfere in the commercial considerations that a properly run commercial company should take into account. The fact that political, social and other considerations have impinged on commercial decisions largely explains the lack of success among nationalised industries as a whole.

The hon. Member for Nuneaton (Mr. Huckfield) has travelled up and down the country, and visited the constituency of my hon. Friend the Member for Preston, North (Mr. Atkins), saying that those Members of Parliament who were not on the Committee have taken no interest in the Bill. However, I know from the reports of the Committee proceedings that my hon. Friend the Minister of State said that the reason he cannot say exactly what percentage the Government will take in the shareholding of the new company is that he wants to make provision for employee participation, enabling them to purchase shares.

I welcome that assurance from my hon. Friend. I hope that the difference between a 51 per cent. and a 25 per cent. holding by the Government will soon be owned by the employees, despite the wrecking tactics of Opposition Members who have asked their friends in the trade unions not to purchase, directly or indirectly, any shares in this company.

The hon. Member for Nuneaton has made such scurrilous and sarcastic remarks today and up and down the country that it would be fruitless to allow him to intervene. It would be inviting him to make more sarcastic remarks of a derogatory kind if I were to give way to him.

When I discussed this Bill with the trade unions in Stevenage, I was asked why they were not consulted about or able to take part in the discussion on the nationalisation of the industry and why they, as members of the company, were not taking part in the consideration of the Bill in the House.

The reason why those trades union members were unable to take part in these considerations was that they did not own any shares in the company. State ownership does not mean ownership by the employees or by individual members. It means ownership by the State, controlled by the small party caucus of whichever party is in government. That is exceedingly dangerous, especially when such industries are in the hands of Opposition Members.

We saw how industrial democracy was perverted under the nationalisation legislation in 1977. In the industrial democracy exercise demanded by that legislation almost 50 per cent. of employees of the aerospace industry were completely eliminated from discussions on and control over their own future. The highly technically skilled engineers, administrators and technologists are still excluded as a bargaining unit by British Aerospace. The trade union movement and trade unions recognised by and affiliated to the TUC were the only ones, under those clauses of the 1977 legislation, that were able to be elected and to take part in the industrial democracy exercise. That is the sort of perversion that goes on when industrial democracy is introduced by Opposition Members.

I hope that the Minister will reinforce that we want this industry to be largely in the hands and under the control of its employees. That will result in those employees having a direct interest in making the company successful and prosperous. Their families and successors will benefit from having a shareholding in the company, and the employees will have an interest in making the company profitable. That is the way I hope we shall see increasing ownership of shares in companies, especially in British Aerospace

If that is done, the company will be more commercially focused and will be a happier company. All those who wish to participate will be able to do so. They will contribute to the prosperity of the company. That is the truest and strongest guarantee to enable this limited liability company to be of great benefit to its employees and the nation.

:We said earlier that one of the high points of the debate on this aspect of Government legislation would be that those of us who took part in the Committee would be able to hear Government Members make some contribution. We have just heard such a contribution from the hon. Member for Hertford and Stevenage (Mr. Wells). It is clear that he does not know much about the British aerospace industry.

British Aerospace is already a highly competitive international company. If that were not so, there would be no attempt by the Government to sell the shares because they would not be sellable. The State corporation has an order book of about £3,000 million. In 1977 aerospace represented 16 per cent. of the gross domestic product. That was a far bigger proportion than in any other aerospace nation. From 1970 to 1977, the companies which made up the British aerospace industry grew at 4·7 per cent. per annum, as compared with the gross domestic product rate of 1·9 per cent. That is the successful organisation—made so by the trade unions and the workers and the management working together in a nationalised industry over the last two years—that the hon. Member for Hertford and Steven age and his Government are wishing to dismantle and to sell off.

That is why we are attempting to insert the new clause, which will ensure that in this very highly profitable and successful company we shall be able to retain some control over the private concerns that may come into the industry.

The hon. Member also said that Labour Members had been advising workers not to buy shares. We have not been advising workers to do anything except to continue working in a nationalised industry. What we have said is that when we return to power we shall renationalise this industry without compensation. We are making it quite clear.

We are spelling it out so that no one will make any mistakes or be in any doubt. That is exactly what we shall do when we return to power.

The mistake that the hon. Member makes is in not speaking to the workers in the industry. If he did that, they would tell him how they contribute their share to the success of British Aerospace. They do it through something called a productivity scheme—of which I am sure the hon. Gentleman must be aware if he speaks to workers in the industry. I am sure that he will be able to intervene at this stage and tell me exactly howthat scheme works. The hon. Gentleman obviously does not want to intervene, but I shall tell him how the scheme works. It is quite simple. Of all the money earned, 50 per cent. goes to the workers who earn it and 50 per cent. goes to British Aerospace, which uses it.

In the chairman's comments in the annual report, he makes it quite clear that
"British Aerospace is unique among major aerospace manufacturers in the western world in being required to fund all its own civil research. The United States funding by Government was previously some ten times that of the United Kingdom. Clearly their privately owned industries will now be further advantaged against their United Kingdom competitor."
But who are they really taking on? They are taking on the productivity of the ordinary workers in British Aerospace who have created the profits which have allowed that company to invest and to continue investing.

The hon. Member makes some claim to have spoken to some workers in British Aerospace who claim that they did not participate in the debates surrounding the nationalisation in 1977. I refer the hon. Member to a Labour Party publication in 1974 on the nationalisation of the aircraft industry. Long before we nationalised British Aerospace we consulted all those relevant within that industry. We asked them what type of British aerospace industry they would like, and the people who were relevant at the time numbered among them Lord Beswick, the TUC and the Confederation of Shipbuilding and Engineering Unions—which is the relevant union within the industry.

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If the hon. Member was talking to some workers who do not think that they made a contribution, perhaps it is because they are not members of a union at all, In an overwhelming minority, they can hardly expect to affect the decisions of the majority. Clearly, long before we formed British Aerospace and British Shipbuilders, we consulted the people concerned—the management and the workers in those industries.

The new clause seeks to ensure that the Secretary of State will have at least 51 per cent. of the voting rights exercisable at general meetings of the company. I would not claim to know the intricate workings of companies at their board meetings because I have not attended very many, but I know that at any general meeting of any company, or of any club—a golf club, a football club or a friendly association—decisions for the following year are taken, decisions on how the company or club will spend its money, and decisions on the areas into which it may wish to venture, whether it is to build a new extension to the club or to invest in a new civil aircraft. These decisions are all taken at the annual general meeting. They are taken in the sense that one has to allocate funds at that time if one intends to branch out.

That is why the annual general meeting takes other decisions. Concerning British Aerospace, it takes decisions with regard to re-equipment, about the basic research funding and about relations with the Government—all absolutely vital areas.

It is for that reason that we are suggesting that the new clause should be accepted. We believe that this is one of the most vital industries of the country.

Like my hon. Friend the Member for Keighley (Mr. Cryer), in Committee I was also concerned about the small business man. This is not a concern solely of Conservative Members. We are concerned about small businesses because there are many small businesses which supply British Aerospace at present. We want to ensure that when the Bill becomes law they continue to supply British Aerospace, because once the company begins to be sold off to private investors there will certainly be a possibility that they may take a decision not to use the same suppliers and vendors, which are at present, in the main, small British companies employing British workers. It may very well be that they will start using their French, Swedish or German subsidiaries. That is what concerns us and that is why we believe, on behalf of the small business men, that it is important that the Government should stay there. We have often heard from Conservative Members that the Government are the guardians of the small business man. We should like to think that we, too, are concerned with the small business man. If the Government agree with us, they should accept the new clause.

I am not a warmonger. I do not believe that the policies being pursued by Conservative Members, and certainly by the Prime Minister, will bring peace and detente within the next few years.

I know that it is absolutely vital that if we are to have a defence system it must be under the control of British nationals. I should certainly be concerned—we shall go on to debate this matter on another amendment—if any form of foreign ownership, however hidden, were to be introduced into British Aerospace. The only way in which we can have that guarantee is to ensure that the Secretary of State retains 51 per cent. of the shareholding in the company. It is not the articles of association that are the crucial area. The crucial question is, who owns and controls British Aerospace?

What we are saying in the amendment is that clearly British Aerospace is a vital part of the British economy which should be controlled by the Government through the Secretary of State. That is why we shall be asking Labour Members to divide the House if the Government do not accept the new clause.

We have had an interesting debate on the new clause and the suggestion that British Aerospace should have 51 per cent. of its shares held by the Secretary of State. I think that it is fair to say that we have had a slight problem, because we debated precisely the same new clause in Standing Committee. Those who wish to study these matters in detail may find it helpful to look at columns 701–10 and 711–38 of the Official Report of the twelfth sitting of Standing Committee G, in which these arguments were deployed very fully.

It was, therefore, with a certain fascinated interest and curiosity that I awaited the first remarks of the hon. Member for Preston, South (Mr. Thorne). I have to give him his due. I enjoy listening to him. He is an hon. Member who brings a certain enjoyment and relish to our proceedings in the House, which we can all enjoy. I must praise him, because he asked some new questions. That was a great joy to me and is in stark contrast to the speech of the hon. Member for Nuneaton (Mr. Huckfield). In a contest such as "Just a Minute", the hon. Member would be penalised again and again for tedious repetition.

May I point out that the hon. Member for Nuneaton (Mr.Huckfield) has not seen fit to hear the remarks of my hon. Friend? Perhaps the hon. Gentleman would care to comment on that, in view of his past remarks.

I shall reply to my hon. Friend. The hon. Member for Nuneaton sometimes seems to think that the proceedings are run solely for his benefit. My hon. Friend fairly made the point that the hon. Member for Nuneaton has been skipping in and out. The hon. Gentleman has made the same point in regard to my hon. Friend. It will not get us very far if we spend all day arguing about who is in the Chamber. According to my calculations it averages eight to five in our favour. The House has not been packed, but the quality of the debate is high. I hope that the hon. Member for Nuneaton will drop the dispute.

The hon. Member for Preston, South had the courtesy to raise one or two new questions. That was manna from Heaven to those of us who have listened to questions on this clause time and time again. One of his questions concerned the degree of parliamentary accountability. He thought that a 51 per cent. holding would strengthen accountability to the House. However, that is not true. If the Government were to hold 25 per cent., 50 per cent., or 51 per cent., accountability would still be in terms of the Government's responsibility to their shareholding.

The hon. Member for Preston, South also mentioned industrial democracy. There is no provision in the Bill for industrial democracy. We strongly believe that industrial democracy should not be provided by legislation. However, the hon. Gentleman would prefer to employ legislation for that purpose. He also inquired about sales to foreign powers and so on. With his experience, the hon. Gentleman will realise, on reflection, that whether the Government held 51 per cent., 49 per cent., or 25 per cent., it would not affect the way in which foreign trade might be controlled. That is dependent upon other factors, such as export licensing and so on. Governments can exercise their influence in other directions. However, I am grateful that he had the courtesy to ask new questions.

Hon. Members tend to suffer from a lingering misconception that a shareholding of 51 per cent. can be related to control. They use that concept as premise and they therefore argue in favour of a fixed shareholding. The hon. Member for Keighley (Mr. Cryer) had to join us rather late in the day. I do not mean that in a carping sense, but he missed several arguments. However, he did introduce some reasonably fresh material. He gave us a tourďhorizon and, as usual, he wore his red glasses through which he sees the world so darkly. He attempted to stir the waters yet again. He wishes to argue about the principles of nationalisation. However, the new clause does not provide effective control. The hon. Gentleman is well aware of that argument, but he took the opportunity to argue the case for nationalisation. That argument was decided on Second Reading.

I shall pick up some of the hon. Gentleman's points, as they are worthy of comment. He mentioned confidence in the industry. He suggested that some of us had to give reassurances as we travelled round the country. That is a fair point. However, part of the reason for doing that is that we must overcome the difficulties and doubts that he and his hon. Friends attempt to stir up. If he looked at the problem in a more fair-minded fashion, he would accept that the process of nationalisation is unsettling. His arguments can therefore, be used against nationalisation.

The burden of my argument is that the Government have been given a mandate, yet they have moved with moderation. I think that that is the view of most thinking people. The hon. Gentleman faces that opinion when he tries to whip up arguments about denationalisation and confidence. He also mentioned the problems of political credibility. Many of us are sympathetic to his arguments. Politicians face a problem of credibility. That is why we adopt a reasonably moderate approach. We need to maintain the stability of the industry. We seek to ensure that British Aerospace does not suffer from the deprivations of politicians. I speak as one who has suffered ad nauseam from some of the bitter fruits of failure, such as can be found in the steel industry.

The hon. Member for Dundee, West (Mr. Ross) is inclined to suggest that some strange and wonderful new world has been born since British Aerospace became a State enterprise. He cannot seriously put forward that argument. He and his colleagues have played some part in building up the industry over many years. The lead times and order book that he quoted were not created in the two years since State ownership.

They are the brain child of engineering skills about which the hon. Member is passionately concerned. I am happy to share that interest. They were created by the work of people at all levels. Success will not stop, or disappear overnight when the company is half-owned by the Government.

The Minister and the Secretary of State are trying to make a nice quiet case. They have both deliberately attempted to mislead the House and the country. Until nationalisation took place, all those involved in the aircraft industry complained of political interference. Since nationalisation, everyone in British Aerospace has said that it works well. The relationship between Government and British Aerospace means that problems can be discussed. British Aerospace can manage on its own. The present board of British Aerospace does not agree that a major private shareholding should be reintroduced. The Minister has failed to convince British Aerospace that it is a good idea.

I understand why the hon. Gentleman has made that point. It is a fact of life that people prefer the devil they know. That is a natural fact of human nature. However, one must consider political intervention over the past two years. It is a fortuitous circumstance that intervention has not been a factor during that short period. If the hon. Gentleman were to look ahead and to consider the possibility of competing claims on public expenditure by different parts of industry—some declining and some growing—he would see that those in the industry are afraid that the nationalised sector lends itself to far greater political argument about where priorities lie.

The nub of the argument about the shareholding is that it will give a degree of flexibility to British Aerospace when it seeks to raise its own funding. It will have the assurance of a Government shareholding that reflects our interest in the strategic aspects of defence and so on. That is a fair balance.

The Minister fails to understand my point. The civil side of British Aerospace is funded by British Aerospace. Government funding is required for the defence side, which will in any case receive that funding as long as this Government are in power. That is guaranteed by this Government's commitment to defence spending.

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I accept that. That is a basic reason for proposing that a Government shareholding should be retained.

It is part of the argument about defence and the national interest.

The hon. Member for Keighley said that he had five or six points to raise, but I counted about nine. Regarding small firms and the confidence of small firms, I could not help thinking wryly of one late evening in this Chamber, in the previous Parliament, when one of his hon. Friends asked who the Minister with responsibility for small businesses was. The hon. Gentleman said that he was almost too modest to reply but that it was himself.

Credibility of small businesses is a topic that should sometimes be approached with care. The hon. Gentleman falls into the trap of suggesting that there is magic in the 51 percent. figure, which I believe he understands is not so. When he talked of control he was misleading himself. In Committee, in an exchange with the Minister of State, the hon. Gentleman pointed out that BP, even when it was 51 per cent., Government-owned, was freestanding. That is the point. Whether it be 49 per cent., 25 per cent. or 51 per cent., it will be free-standing. In the sense of a Companies Act company, the 51 per cent. does not give a magic sense of control.

The hon. Gentleman's point about dependency on public funds has already been covered. The Government take the view that they should retain a shareholding because of defence and in the strategic and national interest.

The hon. Member for Nuneaton attempted to tweak a few tails and have a bit of fun and games about the lack of a speech from my hon. Friend the Member for Welwyn and Hatfield (Mr. Murphy) in Committee. The answer is simple, On the Conservative Benches we are at one on these matters. We have rehearsed the arguments. We had discussions and consultations. We are not in the position of the divided ranks on the Labour Benches. We do not have the various factions that the hon. Gentleman has to steer his uneasy way through. I have sympathy for him. We pull together.

My hon. Friend the Member for Hertford and Stevenage (Mr. Wells), who, sadly, was not with us in Committee, has a major part of British Aerospace in his constituency, and his contribution was welcome. It would be churlish not to welcome contributions from hon. Members who did not sit with us for the long hours in Committee. My hon. Friend gave us balanced and sensible views. It is precisely because of such views that my hon. Friend was reflecting, particularly in regard to Stevenage, the fact that the Government recognise the case for keeping British Aerospace as one entity. We recognise the need to maintain the relationship between the dynamics and the airframe side.

I am happy to see my hon. Friend the Under-Secretary of State for Defence for the Royal Air Force here. He has had many opportunities to look into the matter. We have travelled together to look into the way in which the relationship between the dynamics and the airframe side is working effectively in British Aerospace. It is interesting to see the way in which the defence procurement side is working closely with British Aerospace to ensure a long-term future and understanding.

My hon. Friend the Member for Hertford and Stevenage gave an effective demonstration of his concern to look after the interests of his constituents in that part of British Aerospace that he has the honour to represent. He spoke of the danger of legislation in regard to industrial democracy. I agree that this is not to be enshrined in statute. My hon. Friend made many valid points.

In Committee the arguments have been rehearsed many times. The 51 per cent. is equated in the minds of some hon. Gentlemen with effective control, but that is not so. A fixed shareholding does not provide for that with a Companies Act company. The interesting development is to see a Companies Act company in which the Government seek to hold about half the shares but with a minimum of 25 per cent., because of the blocking mechanism. That is relevant to the foreign control aspect, which, perhaps, we shall debate later. The BP argument is often deployed, but we are, in a sense, breaking new ground.

A key element in the whole plan is the employee shareholding. We cannot be certain of the precise level of Government shareholding until we see what the level of employee shareholding will be. I hope that the hon. Member for Dundee, West will think carefully and seriously before he casts aside such an opportunity.

We are continuing to consult not only the management and directors of British Aerospace but the trade unions on the way in which that proposed employee shareholding should work in practice. The hon. Gentleman should have a care before he makes blanket assurances about renationalisation without compensation. If employees have an important stake in their own company, they should be regarded with absolute fairness by any Government. I hope that the hon. Gentleman will share that philosophy.

It is difficult to put together the component parts of the argument put forward by the Government for the proposed employee shareholding. Conservative Members decry workers in British industry for lack of productivity. We assumed that the proposals would be built around that supposed lack of productivity. However, there is no lack of productivity. In spite of the argument that the Government have put forward about lack of productivity in other areas, British Aerospace workers wish to contribute to their future through increasing productivity and sharing the benefits between themselves and the company.

I appreciate that the hon. Gentleman is speaking from experience about productivity schemes. Nothing that I have said inhibits such a development. It is welcome. In these matters it is wise to keep an open mind. I hope that the hon. Gentleman will do that.

We have looked at the argument many times, and it would be wrong not to state firmly that we are talking of a fundamental change. We are trying to combine stability with change. We have deliberately set our face against extreme forms of nationalisation, and that is why we talk about half. We hope that our proposals will defuse not just the argument about the industrial structure but the political argument.

I recognise that certain hon. Gentlemen take a strong, passionate view about State ownership and control and the means of production and exchange, and that some will never accept our arguments. However, some hon. Gentlemen accept that in a mixed economy, with all the problems and pressures that face us in the world today, we have to try to find an effective mechanism. Throughout the country—and this includes British Aerospace—many people feel that our proposals are reasonably fair, balanced and moderate.

We stress continuity of employment. We wish to ensure continuity of direction and management between the corporation and the new company. More importantly, we wish to establish a continuing and robust company, and that lies behind our decision to maintain a substantial Government shareholding.

We have said that the Government will retain about half the shares. We are seeking to create a mix between the Government and the private sector—a British Aerospace of the type that we have and that has proved so successful. The precedent is there. It is a hopeful and stirring precedent. On reflection, recognising that the precedent has promise for the future, and, finally, in the narrow sense that many hon. Gentlemen would wish to argue, recognising that the new clause would not provide any effective control in the terms that have been put to us, I hope that hon. Gentlemen will withdraw it.

The Under-Secretary of State always comes on at this time of the evening, like the good guy in the play, and he tries to set at naught the concerns which the Opposition have expressed. I do not think that he ever convinces any of us. I know that my hon. Friends the Members for Dundee, West (Mr. Ross), for Preston, South (Mr. Thorne) and for Keighley (Mr. Cryer) are never convinced by his arguments. We admire the hon. Gentleman's guile in presenting them, though we do not think much of their content and we think less of the impression which they create.

When the Under-Secretary talks about the industry in the tone which he has just used, he arouses greater concern among us because he does not seem to realise what sort of animal will be created by the Bill. Indeed, one is led to the conclusion that at this stage no one can envisage the sort of animal which will ultimately be created. I am beginning to despair of ever seeing the memorandum and articles of association of the new company. I wonder whether they will ever see the light of day. We have seen nothing of the private articles either in committee or in the House thus far, and we should be able to understand a little better what the hon. Gentleman says if we were furnished with more detail of what he is trying to put across.

The hon. Gentleman's most worrying comments come when he talks about the way in which influence and control will be exercised over the company. His right hon. Friend the Secretary of State, who is frequently to be heard on the radio, on television and elsewhere making pronouncements, summed the matter up when he said:
"Ministers are specifically eschewing responsibility…The whole purpose is to move the responsibility for decision-making from Ministers, who are not equipped for the role"—
that is certainly true in the present case—
"to shareholders and their managements."
Is it said that we can treat a great industry in that way? Can we eschew responsibility for a manufacturing industry which is responsible for 16 per cent. of our total gross national product? Can we eschew responsibility in an industry which has 68,000 workers directly employed and perhaps some 300,000 employed in component and other supplying industries? Can we eschew responsibility for an industry of that kind? That is the sort of responsibility which the Government are apparently prepared to cast aside and set at naught.

It is that approach which is leading to the rapid de-industrialisation of Britain. That is what it is all about. After Leyland and British Steel will come British Aerospace, because this Government do not care. They do not care if we suffer gradual de-industrialisation so that import penetration and the import bill take us and our balance of payments deeper and deeper into the red.

It is possible for two major shareholders with interests totally inimical to those of the Government to gain a shareholding of more than 51 per cent. and consequently to control the company. Two major shareholders could do it. Heaven forbid that one of them might be Lord Robens. Heaven forbid that the other might be Sir Arnold Weinstock. Yet two such people and corporations such as the ones they represent could acquire a majority shareholding and domination over this company. From time to time their interests are totally at variance with those of the Government and sometimes at variance with the country's interests as well. Yet that is the kind of control and domination into which the Government are prepared to let this company fall.

7.45 pm

Ministers say that they intend to retain a 25 per cent. stake in order to exercise what they loosely call a blocking mechanism to prohibit a change in the articles of association, and it is on the articles of association that they pin their hopes because they say that under the articles they can prohibit foreigners from taking more than a 15 per cent. stake. But the significant omission from the Bill is that there is no floor to the Government's investment holding. They can put a ceiling on but there is no floor. If they really believe that the Government ought to retain a controlling interest for some sort of national interest, strategic or security reason, why do they not put that 25 per cent. floor in the Bill?

That is why we get ever more worried the more that Ministers talk, since it becomes patently obvious—it will become more obvious to the country at large before long—that they just do not care. They will have no means of preventing this industry gradually drifting abroad. They will have no means of preventing it falling into hands whose interests are totally at variance with those of the country, of the workers and of the manufacturing base which we sorely need.

I am pleased that the hon. Member has been provoked into some kind of reaction. That is the most constructive reaction we have had from him since 27 November. It is a significant improvement, since he spent the whole of the Committee stage filling out his share applications and he has not spoken once on Report. Incidentally, I know why the hon. Member for Hertford and Stevenage (Mr. Wells) does not speak very often. Now that we have heard him once, we can well understand why.

I am glad that hon. Gentlemen are actually showing some interest in an industry which is about to be lost to our nation's economy.

Order. I would rather that they did not show vocal interest from a sedentary postion.

We know that at this time of the evening the hon. Member for Totnes (Mr. Mawby) may find it inconvenient to rise from that position.

What worries us is not only that two major private shareholders could acquire domination over the company but that what is being done here is leading to the creation in our economy of a privately owned and very privileged monopoly industry. It will not be subjected to any of the checks and balances of public accountability.

I shall be interested to know what sort of interest is taken by the Minister for Consumer Affairs who from time to time talks about consumer matters. I do not say that she speaks as though she is responsible for consumer matters but she occasionally talks about them. I wonder what she will say about this new company. It will be a highly significant company in the economy. It will have almost a monopoly in broad areas of industry. That is why we should have at least—our new clause says "at least"—a 51 per cent. holding so that we can ensure some protection of the public interest. After all, since so much public money is involved, the public interests should be regarded and protected.

But the Bill does precisely the opposite. Under clause 9 the Government permit the new company to take all the risks but the Secretary of State pays all the debts. Of course, it will be private venture capital which can have its fling, of course it can be private money engaged in the risk taking, but under clause 9 it will be the Secretary of State liable for the debts. The Secretary of State will have to carry the can. That is why we say that this company would be in a privileged borrowing and privileged monopoly position, and that is why there must be a much bigger shareholding than the Government are prepared so far to admit.

Ministers frequently make the point—they made it from time to time in Committee and they have referred to it again tonight—that this is their way of taking the industry out of politics. That is what they have said. The hon. Member for Arundel (Mr. Marshall), in his milder nicer moments, says it.

Once again, the hon. Gentleman takes a fleeting interest in our proceedings.

If the Government want to take the industry out of politics, and if they really believe in the magnificence, eminence, dignity and solemnity of the BP solution, why do they not write that in the Bill? Why do they not say that the Government shareholding must be approximately half? Why do they not say that there should be a majority Government stake in the company? That could be written into the Bill, and into the articles of the new company. When they say that they want to take the industry out of politics by putting forward this sort of half and half solution, we are loth to take them at their word because each time that we press them on the meaning of half and half they back-track, they are vague, and on most occasions they back down.

My hon. Friend the Member for Preston, South is right to press for an assurance that at least 51 per cent. of those shares will be retained by the Government. If Conservative Members will not accept what my hon. Friend the Member for Preston, South and Labour Members said in Committee, will he please refer to the Plowden report of 1965? I do not think that there was a Tribune group majority on the Plowden committee or that there was a set of "Militant" infiltrators. The Plowden committee carried out an independent examination of the requirements and the relationships in our aerospace industry. I note that the Under-Secretary is nodding his head. I hope that he is agreeing with me.

The Plowden committee put forward the same arguments 15 years ago. Its report stated:
"The Government is becoming more and more deeply involved in the industry's affairs: it is the source of most of the industry's finance it makes critical decisions on projects, while the managements have to deal with the industrial consequences of these decisions; its financial and technical control duplicates the industry's own control and hampers efficiency."
Plowden's final conclusion is that:
"Of the possible means of remedying the situation, the balance of advantage…is in favour of the Government acquiring a shareholding in BAC and in the airframe elements of Hawker Siddeley, including their guided weapons interests."
The Plowden committee suggestions are the same as those put forward my my hon. Friend the Member for Preston, South in his new clause. If the hon. Member for Bristol, North-West (Mr. Colvin) is about to make the first intervention in our affairs since 27 November 1979, I shall give way to him.

The hon. Member for Nuneaton (Mr. Huckfield) is wrong. Plowden did not specify whether there should be a 50 per cent. shareholding, or whether the shareholding should be above or below that level. It favoured a shareholding of less than 50 per cent.

The hon. Gentleman made one speech in Committee. He stood up, moved an amendment, and sat down again. The hon. Gentleman is wrong about the Plowden report. A majority of the Plowden committee was in favour of nationalisation. The only difficulty with its recommendations was that it thought that outright and immediate nationalisation

Division No. 167]


[7.56 pm

Abse, LeoCarter-Jones, LewisDuffy, A. E. P.
Adams, AllenCartwright, JohnDunn, James A. (Liverpool, Kirkdale)
Allaun, FrankClark, Dr David (South Shields)Dunnett, Jack
Archer, Rt Hon PeterCocks, Rt Hon Michael (Bristol S)Eadie Alex
Armstrong, Rt Hon ErnestCohen, StanleyEastham, Ken
Ashley, Rt Hon JackConcannon, Rt Hon J. D.Edwards, Robert (Wolv SE)
Ashton, JoeConlan, BernardEllis, Raymond (NE Derbyshire)
Atkinson, Norman (H'gey, Tott'ham)Cook, Robin F.Ellis, Tom (Wrexham)
Barnett, Guy (Greenwich)Cowans, HarryEnglish, Michael
Barnett, Rt Hon Joel (Heywood)Craigen, J. M. (Glasgow, Maryhill)Ennals, Rt Hon David
Benn, Rt Hon Anthony WedgwoodCrowther, J. S.Evans, Ioan (Aberdare)
Bennett, Andrew (Stockport N)Cryer, BobEvans, John (Newton)
Bidwell, SydneyCunliffe, LawrenceEwing, Harry
Booth, Rt Hon AlbertCunningham, George (Islington S)Faulds Andrew
Boothroyd, Miss BettyCunningham, Dr John (Whitehaven)Field, Frank
Bottomley, Rt Hon Arthur (M'brough)Dalyell, TamFitch, Alan
Bradley, TomDavidson, ArthurFlannery, Martin
Bray, Dr JeremyDavies, Rt Hon Denzil (Llanelli)Fietcher, Ted (Darlington)
Brown, Hugh D. (Provan)Davies, Ifor (Gower)Foot, Rt Hon Michael
Brown, Robert C. (Newcastle W)Davis, Terry (B'rm'ham, Stechford)Forrester, John
Brown, Ronald W. (Hackney S)Deakins, EricFoster, Derek
Brown, Ron (Edinburgh, Leith)Dean, Joseph (Leeds West)Foulkes, George
Buchan, NormanDempsey, JamesFraser, John (Lambeth, Norwood)
Callaghan, Rt Hon J. (Cardiff SE)Dewar, DonaldFreeson Rt Hon Reginald
Callaghan, Jim (Middleton & P)Dixon, DonaldGarrett, John (Norwich S)
Campbell, IanDobson, FrankGarrett, W. E. (Wallsend)
Canavan, DennisDormand, JackGeorge, Bruce
Cant, R. B.Douglas, DickGilbert, Rt Hon Dr John
Carmichael, NeilDubs, AlfredGolding, John

isation would have taken too long to get through the House.

That is why my hon. Friend the Member for Preston, South tabled his new clause, and why we think that there should be Government control over and Government responsibility for the industry. If the Government will not take control and responsibility and give more than the assurances that we have been given today, I hope that my hon. Friend will press his new clause to a Division.

Labour Members form various attitudes to Tories, on te basis of their experience. The Under-Secretary is not one of the worst Tories, but the spectacle of him and his colleagues pulling together over the passive body of British Aerospace is too much. It strains my credulity beyond breaking point, particularly when I hear the barrage of words spoken by the Minister, with the highly plausible gentility for which he is well known. Nothing that he said will protect the workers in the industry from the decisions that will be taken at annual general meetings, in the absence of a 51 per cent. shareholding. For those reasons, I urge the House to vote for the new clause.

Question put, That the clause be read a Second time:—

The House divided: Ayes 235, Noes 296.

Gourlay, HarryMaclennan, RobertSheerman, Barry
Graham, TedMcMahon, AndrewSheldon, Rt Hon Robert (A'ton-u-L)
Grant, George (Morpeth)McMillan, Tom (Glasgow, Central)Short, Mrs Renée
Grant, John (Islington C)McNally, ThomasSilkin, Rt Hon John (Deptford)
Hamilton, James (Bothwell)McNamara, KevinSilkin, Rt Hon S. C. (Dulwich)
Hamilton, W. W. (Central Fife)McWilliam, JohnSilverman, Julius
Harrison, Rt Hon WalterMagee, BryanSmith, Rt Hon J. (North Lanarkshire)
Hart, Rt Hon Dame JudithMarks, KennethSnape, Peter
Hattersley, Rt Hon RoyMarshall, David (Gl'sgow, Shettles'n)Soley, Clive
Haynes, FrankMarshall, Dr Edmund (Goole)Spearing, Nigel
Healey, Rt Hon DenisMartin, Michael (Gl'gow, Springb'rn)Spriggs, Leslie
Heffer, Eric S.Mason, Rt Hon RoyStallard, A. W.
Hogg, Norman (E Dunbartonshire)Maxton, JohnStewart, Rt Hon Donald (W Isles)
Holland, Stuart (L'beth, Vauxhall)Maynard, Miss JoanStoddart, David
Home Robertson, JohnMeacher, MichaelStott, Roger
Homewood, WilliamMellish, Rt Hon RobertStrang, Gavin
Hooley, FrankMikardo, IanStraw, Jack
Horam, JohnMillan, Rt Hon BruceSummerskill, Hon Dr Shirley
Howell, Rt Hon Denis (B'ham, Sm H)Miller, Dr M. S. (East Kilbride)Taylor, Mrs Ann (Bolton West)
Huckfield, LesMitchell, R. C. (Soton, Itchen)Thomas, Dafydd (Merioneth)
Hudson Davies, Gwilym EdnyfedMorris, Rt Hon Alfred (Wythenshawe)Thomas, Jeffrey (Abertillery)
Hughes, Mark (Durham)Morris, Rt Hon Charles (Openshaw)Thomas, Mike (Newcastle East)
Hughes, Robert (Aberdeen North)Morris, Rt Hon John (Aberavon)Thorne, Stan (Preston South)
Hughes, Roy (Newport)Moyle, Rt Hon RolandTilley, John
Janner, Hon GrevilleNewens, StanleyTinn, James
Jay, Rt Hon DouglasOakes, Rt Hon GordonTorney, Tom
Johnson, Walter (Derby South)O'Halloran, MichaelUrwin, Rt Hon Tom
Jones, Rt Hon Alec (Rhondda)O'Neill, MartinVarley, Rt Hon Eric G.
Jones, Barry (East Flint)Orme, Rt Hon StanleyWainwright, Edwin (Dearne Valley)
Jones, Dan (Burnley)Owen, Rt Hon Dr DavidWalker, Rt Hon Harold (Doncaster)
Kaufman, Rt Hon GeraldPalmer, ArthurWatkins, David
Kerr, RussellPark, GeorgeWeetch, Ken
Kilroy-Silk, RobertParker, JohnWelsh, Michael
Kinnock, NeilPendry, TomWhite, Frank R. (Bury & Radcliffe)
Lambie, DavidPowell, Raymond (Ogmore)White, James (Glasgow, Pollok)
Lamborn, HarryPrescott, JohnWhitehead, Phillip
Lamond, JamesPrice, Christopher (Lewisham West)Whitlock, William
Leighton, RonaldRees, Rt Hon Merlyn (Leeds South)Williams, Rt Hon Alan (Swansea W)
Lewis, Arthur (Newham North West)Richardson, JoWilliams, Sir Thomas (Warrington)
Lewis, Ron (Carlisle)Roberts, Allan (Bootle)Wilson, Gordon (Dundee East)
Litherland, RobertRoberts, Gwilym (Cannock)Wilson, Rt Hon Sir Harold (Huyton)
Lofthouse, GeoffreyRobertson, GeorgeWilson, William (Coventry SE)
Lyon, Alexander (York)Robinson, Geoffrey (Coventry NW)Winnick, David
Lyons, Edward (Bradford West)Rodgers, Rt Hon WilliamWoodall, Alec
Mabon, Rt Hon Dr J. DicksonRooker, J. W.Wrigglesworth, Ian
McCartney, HughRoper, JohnYoung, David (Bolton East)
McDonald, Dr OonaghRoss, Ernest (Dundee West)
McElhone, FrankRowlands, TedTELLERS FOR THE AYES
McKay, Allen (Penistone)Ryman, JohnMr. Austin Mitchell and Mr. George Morton.
McKelvey, WilliamSandelson, Neville
MacKenzie, Rt Hon GregorSever, John


Adley, RobertBrocklebank-Fowler, ChristopherDean, Paul (North Somerset)
Aitken, JonathanBrooke, Hon PeterDorrell, Stephen
Alexander, RichardBrotherton, MichaelDouglas-Hamilton, Lord James
Ancram, MichaelBrown, Michael (Brigg & Sc'thorpe)Dover, Denshore
Arnold, TomBrowne, John (Winchester)du Cann, Rt Hon Edward
Aspinwall, JackBruce-Gardyne, JohnDunn, Robert (Dartford)
Atkins, Robert (Preston North)Bryan, Sir PaulDurant, Tony
Atkinson, David (B'mouth, East)Buchanan-Smith, Hon AlickDykes, Hugh
Baker, Nicholas (North Dorset)Budgen, NickEden, Rt Hon Sir John
Banks, RobertBulmer, EsmondEggar, Timothy
Beaumont-Dark, AnthonyBurden, F. A.Elliott, Sir William
Beith, A. J.Butcher, JohnEmery, Peter
Bell, Sir RonaldButler, Hon AdamFairbairn, Nicholas
Bendall, VivianCadbury, JocelynFairgrieve, Russell
Benyon, Thomas (Abingdon)Carlisle, John (Luton West)Faith, Mrs Sheila
Benyon, W. (Buckingham)Carlisle, Kenneth (Lincoln)Farr, John
Best, KeithCarlisle, Rt Hon Mark (Runcorn)Fell, Anthony
Biffen, Rt Hon JohnChalker, Mrs LyndaFenner, Mrs Peggy
Biggs-Davison, JohnChannon, PaulFisher, Sir Nigel
Blackburn, JohnChapman, SydneyFletcher, Alexander (Edinburgh N)
Blaker, PeterClark, Hon Alan (Plymouth, Sutton)Fietcher-Cooke, Charles
Body, RichardClark, Sir William (Croydon South)Fookes, Miss Janet
Bonsor, Sir NicholasClarke, Kenneth (Rushcliffe)Forman, Nigel
Boscawen, Hon RobertCockeram, EricFowler, Ht Hon Norman
Bottomley, Peter (Woolwich West)Colvin, MichaelFox, Marcus
Bowden, AndrewCope, JohnFraser, Peter (South Angus)
Boyson, Dr RhodesCormack, PatrickFry Peter
Braine, Sir BernardCorrie, JohnGalbraith, Hon T. G. D.
Bright, GrahamCostain, A. P.Gardiner George (Reigate)
Brinton, TimCranborne, ViscountGardner, Edward (South Fylde)
Brittan, LeonCrouch, DavidGarel-Jones, Tristan

Gilmour, Rt Hon Sir IanMadel, DavidSainsbury, Hon Timothy
Glyn, Dr AlanMajor, JohnSt. John Stevas, Rt Hon Norman
Goodlad, AlaslairMarland, PaulScott, Nicholas
Gorst, JohnMarlow, TonyShaw, Giles (Pudsey)
Gow, IanMarshall, Michael (Arundel)Shaw, Michael (Scarborough)
Gower, Sir RaymondMates, MichaelShelton, William (Streatham)
Grant, Anthony (Harrow C)Mather, CarolShepherd, Colin (Hereford)
Gray, HamishMaude, Rt Hon AngusShepherd, Richard (Aldfidge-Br'hills)
Greenway, HarryMawby, RayShersby, Michael
Grieve, PercyMawhinney, Dr BrianSilvester, Fred
Griffiths, Eldon (Bury Rt Edmunds)Maxwell-Hyslop, RobinSims, Roger
Griffiths, Peter (Portsmouth N)Mayhew, PatrickSkeet, T. H. H.
Grist, IanMellor, DavidSmith, Dudley (War. and Leam'ton)
Grylls, MichaelMeyer, Sir AnthonySpeed, Keith
Gummer, John SelwynMiller, Hal (Bromsgrove & Redditch)Speller, Tony
Hamilton, Hon Archie (Eps'm&Ew'll)Mills, Iain (Meriden)Spence, John
Hamilton, Michael (Salisbury)Mills, Peter (West Devon)Spicer, Jim (West Dorset)
Hampson, Dr KeithMiscampbell, NormanSpicer, Michael (S Worcestershire)
Hannam, JohnMitchell, David (Basingstoke)Squire, Robin
Haselhurst, AlanMoate, RogerStainton, Keith
Hastings, StephenMolyneaux, JamesStanbrook, Ivor
Havers, Rt Hon Sir MichaelMonro, HectorStanley, John
Hawksley, WarrenMontgomery, FergusSteen, Anthony
Hayhoe,BarneyMoore, JohnStevens, Martin
Heddle, JohnMorgan, GeraintStewart, Ian (Hitchin)
Henderson, BarryMorris, Michael (Northampton, Sth)Stewart, John (East Renfrewshire)
Haseltine, Rt Hon MichaelMorrison, Hon Charles (Devizes)Stokes, John
Hicks, RobertMorrison, Hon Peter (City of Chester)Stradling Thomas, J.
Higgins, Rt Hon Terence L.Mudd, DavidTapsell, Peter
Hill, JamesMurphy, ChristopherTaylor, Robert (Croydon NW)
Hogg, Hon Douglas (Grantham)Myles, DavidTemple-Morris, Peter
Holland, Philip (Carlton)Neale, GerrardThatcher, Rt Hon Mrs Margaret
Hooson, TomNeedham, RichardThomas, Rt Hon Peter (Hendon S)
Hordern, PeterNelson, AnthonyThompson, Donald
Howell, Rt Hon David (Guildford)Neubert, MichaelThornton, Malcolm
Howell, Ralph (North Norfolk)Newton, TonyTownend, John (Bridlington)
Hunt, David (Wirral)Onslow, CranleyTownsend, Cyril D. (Bexleyheath)
Hunt,John (Ravensbourne)Osborn, JohnTrippier, David
Hurd, Hon DouglasPage, Rt Hon Sir R. GrahamTrotter, Neville
Irvine, Charles (Cheltenham)Page, Richard (SW Hertfordshire)Vaughan, Dr Gerard
Jenkin, Rt Hon PatrickParkinson, CecilViggers, Peter
Johnson Smith, GeoffreyParris, MatthewWaddington, David
Jopling, Rt Hon MichaelPatten, Christopher (Bath)Wainwright, Richard (Colne Valley)
Kershaw, AnthonyPatten, John (Oxford)Wakeham, John
King, Rt Hon TomPattie, GeoffreyWaldegrave, Hon William
Kitson, Sir TimothyPawsey, JamesWalker, Rt Hon peter (Worcester)
Knight, Mrs JillPercival, Sir IanWalker, Bill (Perth & E Perthshire)
Knox, DavidPeyton, Rt Hon JohnWalker-Smith, Rt Hon Sir Derek
Lamont, NormanPink, R. BonnerWalters, Dennis
Lang, IanPollock, AlexanderWard, John
Langford-Holt, Sir JohnPorter, GeorgeWarren, Kenneth
Latham, MichaelPowell, Rt Hon J. Enoch (S Down)Watson, John
Lawrence, IvanPrice, David (Eastleigh)Wells, John (Maidstone)
Lawson, NigelPrior, Rt Hon JamesWells, Bowen (Hert'rd & Stev'nage)
Lee, JohnProctor, K. HarveyWheeler, John
Lennox-Boyd, Hon MarkPym, Rt Hon FrancisWhitelaw, Rt Hon William
Lester, Jim (Beeston)Ralson, TimothyWhitney, Raymond
Lewis, Kenneth (Rutland)Rathbone, TimWickenden, Keith
Lloyd, Peter (Fareham)Rees, Peter (Dover and Deal)Wiggin, Jerry
Loveridge, JohnRees-Davies, W. R.Wilkinson, John
Luce, RichardRenton, TimWilliams, Delwyn (Montgomery)
Lyell, NicholasRhodes James, RobertWinterton, Nicholas
McCrindle, RobertRidley, Hon NicholasWolfson, Mark
Macfarlane, NeilRidsdale, JulianYoung, Sir George (Acton)
MacGregor, JohnRifklnd, MalcolmYounger, Rt Hon George
MacKay, John (Argyll)Roberts, Wyn (Conway)
McNair-Wilson, Michael (Newbury)Rossi, HughTELLERS FOR THE NOES:
McNair-Wilson, Patrick (New Forest)Rost, PeterMr. Spencer Le Marchant and
McQuarrie, AlbertRoyle, Sir AnthonyMr. Anthony Berry.

Question accordingly negatived.