HC Deb 06 November 1972 vol 845 cc755-81

10.14 p.m.

Mr. Brian O'Malley (Rotherham)

I beg to move, That an humble Address be presented to Her Majesty, praying that the Teachers Superannuation (Financial Provisions and Family Benefits) (Amendment) Regulations 1972 (S.I., 1972, No. 1092), dated 24th July 1972, a copy of which was laid before this House on 2nd August, in the last session of Parliament, be annulled. I ought to begin by declaring an interest. For a number of years before coming into this House I was employed as a teacher. During that period I was a member of the National Association of Schoolmasters, and I have maintained a connection with that organisation in the intervening period. However, I make it plain from the outset that I am here today not as a spokesman of the association in any sense but as a spokesman of the Parliamentary Labour Party.

Perhaps it would not be out of order if, before I proceed further, I congratulate the hon. Member for Chelmsford (Mr. St. John-Stevas) on his new appointment to the Department of Education and Science. He is sitting shyly and coyly on the Front Bench for the first time and we wish him well for what we hope will be for him and the rest of the Government a short stay on that Front Bench.

I should like to recount briefly the course of events which led to the publication of this Statutory Instrument. The working party set up to consider the restructuring of teachers' superannuation first met during the period of the Labour Government, in April, 1970. Had that Government continued in office, the teaching profession which have been able to look forward today to better provision for retirement, ill health and widowhood than is envisaged in this Statutory Instrument and in the new Social Security Bill.

I say that because the amended teachers' superannuation schemes, with which the Statutory Instrument deals, are in no respect integrated with the national insurance provisions. Indeed, the integration envisaged by the Labour Government was completely rejected by the present Government and that decision has had and will have in the future dire results for the teaching profession.

The first result is that teachers are now being required to pay over ½ per cent. more in total contributions for their pensions than was envisaged at the time the working party was set up. In return for these larger contributions, teachers and their families will receive smaller total cover. This is particularly true in the case of widowhood and invalidity.

Let us compare the total provision for the widow of a schoolmaster, coming from both the national insurance scheme as envisaged by the Government in the Social Security Bill and the provision in the Statutory Instrument, with the provision that would have been payable under the Labour Government's proposals. One then sees how much bigger and how superior the benefits payable to widows would have been under the Labour Government's proposals compared with the present Government's proposals. Therefore, we are taking this opportunity of rejecting totally the superannuation strategy of the present Government of which this Statutory Instrument forms a part.

It is also the case that the teaching profession as a whole was deeply dissatisfied with various and major aspects of its revised superannuation schemes. It would, however, be ungracious to proceed in examining this Statutory Instrument without recognising that it brings some welcome and significant improvements in the provision for teachers' superannuation, widowhood and ill-health cover.

One must, however, point out that the teaching profession has had a very long wait indeed to get these improvements. I am not blaming the present Government specifically or solely for this. It arose partly from the fact that successive Governments had been engaged in a complete overhaul and reappraisal of their pensions and superannuation strategy. Nevertheless, it is true that while in the private sector improvements in pensions in many firms, certainly the best firms, have gone on apace, the teachers, because certain aspects of their schemes have been inferior to other schemes in the public sector, have suffered and lost by having to wait many years for this revision.

We should not allow this debate to pass without noticing that for the first time there is provision for a widow's pension of 50 per cent. of the man's entitlement. This is to be welcomed. Previously there was no provision unless the male teacher was prepared to pay an extra 2 per cent., making a total of 8 per cent., and even then the cover he received for that 2 per cent. was very poor. His widow received protection of only one-third of the husband's entitlement. Therefore, the Government and the working party are entitled to say that the 6¾ per cent. contribution which includes entitlement to widow's benefit means a contribution reduction for many teachers. The teachers have had to wait many years for this, whereas other public sector schemes have provided cover for widows.

There is a puzzling aspect of this provision. The Inland Revenue tax rules for occupational pensions allow tax relief on a pension up to the ceiling of the pension earned by the man to a widow with a number of dependent children. However, where there are no children this public service sector scheme, in common with the revised arrangements for schemes within the public sector generally, goes nowhere near the allowable tax ceiling. The Government have agreed in this case, as in others, that there should be a widowhood provision of 50 per cent., which is 16 per cent. below what is allowable under the Inland Revenue rules. It would be helpful if the Secretary of State would explain the Government's thinking on this matter and say why the pension for widows is well below the ceiling for tax relief applied by the Inland Revenue rules.

There have been improvements in the final salary assessment arrangements and there is a reduction in the qualifying period for a pension. However, the teaching profession as a whole has made it clear that it accepted what was put forward by the official side of the working party—which was dominated by the Department of Education and Science—not because it was satisfied but because it thought there was nothing more to come. As proof of that I quote from page 3 of the Report of the Working Party on Teachers' Superannuation: … the major consideration which induced the representatives of teachers to accept modified objectives was the pressure on them to reach agreement with the official side in time to allow the same improvements to be made in the teachers' schemes with effect from 1st April, 1972 as were being made at about the same time in other public service schemes. From my own inquiries it seems that the teachers accepted the recommendations in the working party report for the improvements which are contained in this Statutory Instrument not because they were satisfied that they represented a suitably revised superannuation scheme but because the Government were putting the block on any further improvement which they still required. The teaching profession still has a number of aims which it would like to see satisfied and written into the superannuation arrangements.

When it is argued that teachers should be able to retire at 60 on full 40 years' pension, it is often said that this is impossible to achieve because young teachers do not come out of the training colleges at the earliest before they are 21 or 22. Therefore, the teachers have suggested a shorter accrual period for the maximum pension. This has not been the major objection by the teachers to the proposals in the regulations. The fiercest argument has centred on the financial basis of the superannuation schemes.

Teachers and local authority representatives have been united in their dissatisfaction with the financial arrangements on notional funding on which the scheme is based. I quote from page 9 of the working party report: The teachers' view was that they were not obtaining a fair return on the balances in the schemes … The local authorities agree with the teachers in contending that the balances in the schemes are not attracting a fair return. From that basic dissatisfaction with the scheme, the teachers have argued that other injustices have occurred. One of the main areas of objection is that the level of contribution amounting to 6¾ per cent. is high by any standard in either public or private sector superannuation schemes, and I believe this to be a strong argument.

The Secretary of State must seek to justify, if she can, why members of the teaching profession employed in local government are being required to pay 6¾ per cent. of reckonable earnings while NALGO members pay only 6 per cent. for similar benefits. I appreciate that the right hon. Lady will say that the total new entrant cost is rather different for one group of people compared wth another. But if that argument is being pushed too far—and I believe that the Government are pushing it a little far—is there not an argument that every entrant should pay a different contribution rate?

It could be argued that the split of cost envisaged between employers and employees is not in line with the best modern superannuation practice. We know the difficulties confronting local authorities faced with heavy deficiency payments. The teaching unions and the local authorities say that those deficiency payments are to a large extent the result of the way in which the scheme has been notionally funded for many years. The teaching profession is worried not only that the local authorities are to pay heavy deficiency payments now but that, as the result of the continuation of the scheme on the present basis, further deficiencies will be built up for the future.

It has been argued that in estimating the new entrant costs the Government Actuary has calculated on the assumption that the fund will be properly invested. In practice the fund is not properly invested; it is notionally invested. Since it is not invested in practice, that inevitably means, unless someone can tell me that I am wrong, that at some stage in future the gap between the two different yields—the notional and what could have been achieved with funding—will show up in further deficiencies.

In these circumstances it is not surprising that the teaching organisations, which are professionally advised that the deficiencies could be cut substantially by other investment arrangements, have pressed for change. When they argue for funding—I am not doing that at the moment; I am stating the arguments put forward by the teaching profession—the Government are their best witness, because they have said "We will set up a reserve scheme for all people who do not have occupational pensions, and the right way for such a scheme is to have an independent board, including, for ex- ample, members from the CBI and the TUC, which will wholly fund the money coming into that reserve Government pension scheme."

The teachers are also bound to notice that the National Coal Board and the Post Office Corporation are now in process of funding and increasing parts of their investment income.

I do not suggest that tonight the House can come to a decision on this complex matter of whether the teachers' pension fund should be notionally funded, should be on a pay-as-you-go basis or should be fully or partially funded.

On 24th May my hon. Friend the Member for Bassetlaw (Mr. Ashton) in a Written Question asked the Secretary of State for Education and Science for a full investigation of the financial arrangements of the Teachers' Superannuation Scheme. He was informed by the then Under-Secretary of State that, in view of the working party's deliberations, he could see no need for any further investigation. That was a not unreasonable reply. But something significant has happened since 24th May.

The working party on teachers' superannuation was to look at the whole of the financial arrangements of the scheme. However, I understand that the prospect of any substantial change in those arrangements was utterly refused by the Government on 12th September, and the working party is now discussing technical and detailed actuarial matters related to implementing the scheme laid down in the Statutory Instrument. The teachers also object that their family benefits portfolio, which appears to have been highly profitable and well run, is being taken over by the Government and swallowed by the Treasury, and that the stage has now been reached where the Government have said "We are not prepared to discuss or negotiate further on this matter."

The Secretary of State cannot leave the situation as it is. I do not suggest that any of the three possible courses—funding, notional funding or pay-as-yougo—should proceed. I suggest that throughout the teaching profession there is widespread dissatisfaction with the way the superannuation fund is run. We really cannot leave the matter like this. We have not reached the end of the line. In a period when members of the electorate require a greater say in and a more democratic organisation of their affairs, the Secretary of State must move. The only thing that will satisfy the teaching profession as a whole would be a full, independent and expert inquiry into the whole matter. The right hon. Lady cannot continue to act unilaterally and independently of both the local authorities and the teaching profession. The dissatisfaction with this superannuation scheme will continue until such time as she makes a move in these directions. This is the major problem confronting her.

I hope that since we have given the right hon. Lady an opportunity to respond by praying against these regulations, she will now have something to say on the whole question of the arrangement of teachers' superannuation, because what is perfectly clear to us on these benches is that the position at the moment is far from satisfactory. For the reasons I have given, particularly at the outset of my speech, we intend to divide the House on this Prayer.

10.41 p.m.

Mr. Nigel Spearing (Acton)

I support my hon. Friend the Member for Rotherham (Mr. O'Malley) in his remarks which were most comprehensive. I too have an interest in this matter, having contributed to the fund for 14 years. The House will find it a little ironic that having transferred to the system run by this House, I received unexpectedly not long ago a lump sum payment and it was explained in a covering note that this sum was a repayment to me for the extra payments I had made in order to give coverage to a potential widow of mine. If some untoward incident occurs in the electoral process under redistribution and I do not return to this place, and I rejoin the fund, no doubt I will have to pay back not only that sum but the sum that I have got in the meantime—

Mr. William Hamling (Woolwich, West)

With compound interest.

Mr. Spearing

—with compound interest, as my hon. Friend says.

I may be wrong on the technical details, but at least that example shows how many teachers feel a justified grievance at the Government not having dealt with this matter in a straightforward and honourable way. I am afraid that the evidence which my hon. Friend has given, that the Government are no longer prepared to discuss the matter—they are, after all, in a strong bargaining position—will reinforce that point of view. In a matter like this, equity is fairly easy to judge. One can balance one factor against another and say "You have struck a reasonable balance; it could have been a little better for us but, on the whole, we think it is reasonable." That has not happened in this case. At such a time as this, in view of the general attitude of the Government to prices and equity in the economic affairs of the nation, it is to be regretted that they have not acted more equitably towards teachers.

I now turn to a point which was raised by my hon. Friend and to which I hope the right hon. Lady will pay attention. He pointed out that the scheme is not funded in the same way as superannuation schemes relating to other comparable groups of people, particularly local government officers. I had some correspondence on this subject with the former Under-Secretary, the hon. Member for Wokingham (Mr. van Straubenzee) and I should like to quote from a letter he sent me on 10th August, 1972. Referring to the new entrant contribution rate, the hon. Gentleman said: The determination has been made on the assumption of an actually funded scheme with average performance. He did not quote any figure of return. I do not blame him for that, because it cannot perhaps be done with certainty. But he has maintained that this is a notionally funded scheme with average performance. If that is so, it is curious that the Treasury has had to cough up every now and again to meet the deficiencies. So perhaps the past scheme has had less than average performance.

Even if that were so, what does the hon. Gentleman mean by "average performance"? Does he mean the average performance of comparable funded schemes such as those of the National Coal Board or NALGO? This imprecision of phrase suggests that there is far more in principle behind this than the Government have yet admitted.

The same point is raised in the Written Answer which the former Under-Secretary gave my hon. Friend the Member for Bassetlaw (Mr. Ashton) on 24th May. In respect of funding as a principle, the hon. Gentleman said: I have seen no evidence that a change to real funding, to which I see serious objections would be in the interests of the teachers themselves."—[OFFICIAL REPORT, 24th May, 1972; Vol. 837, c. 421.] Perhaps it would not, but surely the onus is on the Government to say why not. When someone is told "It is not in your interests to adopt this scheme", the reasons for that view should be made clear so that the person concerned can accept or reject them. I hope that the right hon. Lady will give us some of her serious objections—not those of her hon. Friend—to this principle.

If the Secretary of State cannot do so tonight—she might think that this point is a little obscure—it will show that the Government's thinking on this matter is even less fundamental than we had thought. I hope that the right hon. Lady can, because there are thousands of people whose security and that of their dependants rests on this scheme.

It is worth saying on this particular day that the Government must be seen to be fair in this. An evening paper article by one of their friends tonight says that the Government are not interested in equality, only in equity. They have not shown equity in relation to this scheme. I hope that the right hon. Lady will tell us why she thinks that the scheme is equitable, because hundreds of thousands of teachers think that it is not.

10.44 p.m.

Mr. Alan Haselhurst (Middleton and Prestwich)

I must voice some of the grievances which have been put to me by constituents. I have talked to teachers in my constituency about their anxieties on this scheme. I do not necessarily agree with all the points they have put to me but I have been impressed by their real concern. It is only right that their voice should be heard tonight, and from the Government benches.

I have been amazed at their strong representations. It does not make me quite as angry as it makes the hon. Member for Acton (Mr. Spearing) and I would not join him or the hon. Member for Rotherham (Mr. O'Malley) in directing any venom towards my right hon. Friend the Secretary of State. But the teachers might be given some more assurances as to the longer-term future if they are asked to accept the scheme which my right hon. Friend wishes them to accept. There is no dishonesty or underhandedness in what my right hon. Friend has been doing, but more light should be shed on these matters in future discussions.

As to the particular figure which will be the share by the teachers towards their benefits, various comparisons can be and have been made. It is understandable that teachers will put forward the examples which most favour their case. However, I wonder whether the cost sharing on a fifty-fifty basis is the only possible way that it could be done. The best way of deciding this is not merely to say that the teachers have to fall into one category or another. It would be of greater benefit to teachers, and greater respect could be shown for teachers, if they were regarded as a case on their own.

We believe that the teaching profession is one of the important professions in our society. Teachers are entitled on merit to have their particular apportionment made. It is not entirely right, therefore, to be deciding it in relation to one particular group with which teachers might be conveniently compared. I respect the Government's arguments, which no doubt will be repeated tonight, that there is a peculiarity affecting the age spread of the teaching profession which, for example, would rule out the comparison with NALGO. Nevertheless, the teaching profession should be treated on its own and it should not be good enough, therefore, to say that a fifty-fifty cost sharing ratio is right simply because other bodies can be cited which achieve that same ratio.

Mr. O'Malley

I agree with much of what the hon. Gentleman has said. The point about the fifty-fifty contribution is that it is not the practice in good superannuation schemes to make that fifty-fifty split and the teachers have repeatedly pointed out—all hon. Members will have had letters to this effect—that the House of Commons scheme does not have such a split; and the former Leader of the House defended it on the basis that it was usual for the employer to pay more than the employee.

Mr. Haselhurst

I have given the hon. Gentleman an opportunity to make an additional point, but I accept his observation and I thought that was implicit in what I said. There are other schemes which do not stick rigidly to the idea of fifty-fifty cost sharing.

Mr. Peter Hardy (Rother Valley)

The hon. Gentleman seems doubtful about the people engaged in local government. Will he take the point that the majority of people engaged in education administration were themselves teachers and paid contributions to the teachers' superannuation scheme but that on entering education administration they would most certainly opt for the NALGO scheme and thus enjoy an easier life and pay a lower rate of contribution?

Mr. Haselhurst

I am being very generous in giving way. I have enabled the hon. Member for Rother Valley (Mr. Hardy) to make an individual point which he is hanging on to my speech although it could have been made in his own speech.

On the question of funding, about which teachers are greatly exercised, I hope that the Government will not simply say that difficulties of practice must always stand in the way of discussion of this matter. I do not see why it should not be looked at very carefully for the future. There are immense difficulties because this has not been implemented from the start, and to change over now would cause difficulties. But the phrase "practical difficulties" is sometimes advanced as an automatic defence mechanism when on its merits the matter could be looked at for the long-term future.

The trend of pension schemes today is in the direction of funded schemes. That is good sense when one is talking about existing pension funds. Undoubtedly many firms and organisations are examining their pension schemes and trying to improve them in that direction. I hope that the Government will not exclude such re-examination by the phrase "difficulties of practice".

Regarding the years of service before full pension entitlement is earned, we cannot say to teachers "It is practically possible after your training, providing that you work after the age of 60, to achieve this qualification." There is a trend in our society towards a shorter working life. I do not believe that the idea of a 40-year qualification can be maintained indefinitely. I hope that my right hon. Friend the Secretary of State will not suggest that this qualification should be inflexible.

I have raised only matters which have been impressed upon me and with which I have some sympathy. I shall support my right hon. Friend tonight. I hope, however, that although the Government are making a reasonable response they will not say that this is the end of the story. I hope that my right hon. Friend will be able to convince the House, and convince me, that this is merely one staging post along the way and that various other matters which cause anxiety to teachers are not forgotten but will continue to be examined and discussed with teachers.

10.52 p.m.

Mr. J. C. Jennings (Burton)

I must declare an interest. As the House knows, I have been a member of the National Union of Teachers for many years. I draw a teacher's pension and in that sense I have no financial interest because I no longer pay superannuation contributions.

This subject has a long history. When I first entered the House in 1955 one of the first Bills which I had to vote upon after the Summer Recess was the Teachers (Superannuation) Bill which was introduced by the then Minister of Education, Sir David Eccles, now Lord Eccles. I was constrained to vote against the Bill on a three-line Whip. That sealed my parliamentary life for many years.

Therefore, I have a longstanding and intense feeling about superannuation. Let us be honest with ourselves. An examination of previous legislation regarding teachers' superannuation shows that neither side of the House has honestly squared up to the fundamentals. It ill behoves the Opposition to cast aspersions upon the present Government. I have a long memory on this subject. When the Labour Government were in power they made no attempt to introduce any legislation to end teachers' superannuation contributions or any of the contributions that came either from the Government or local authorities.

These regulations are not wholly bad. There are some vast improvements—for example, terminal service. In the old days, terminal service used to be the average of the last five years' service. Then there was an improvement and the pension was based on the average of the last three years' service. That provision still applies, but the highest year's salary is taken as the sum upon which the superannution will be based. That is an improvement.

The main complaint over the years—by teachers in particular—has been that all the contributions from the various parties have been notionally funded; in other words, they have been funded theoretically. Theoretical figures have been produced. Year after year we have been told that there was a deficiency on the fund. We were not told, however, that there were theoretical deficiencies.

I detect some progress in the regulations. I have a profound admiration for my right hon. Friend the Secretary of State, as she is a first-class Minister. I should like to know whether Regulation 5—"General Account A"—is a step forward to a suspicion of real funding. It states: All sums payable to the Secretary of State in respect of contributions so payable after 31st March 1972 … shall be paid into a part of the General Account, to be called General Account A, which shall be kept separate from the rest of that Account ". Is this a move in the right direction?

Teachers' great worry is that we—I still regard myself as a teacher, for I must sometimes teach hon. Members—must pay our contributions, the local authorities pay theirs and the Government pay theirs. I ask my right hon. Friend to look at this again and tell teachers that the Government will put all this money into a separate fund so that the Government know where they are actuarially. That would get rid of all ideas of notional funding and deficiencies, notional or otherwise. Then the public, teachers and everybody else concerned would know exactly where they stood. If contributions had to be increased because an actuarial deficiency was proved, teachers would be the first to face up to that.

10.58 p.m.

Mr. R. C. Mitchell (Southampton, Itchen)

The hon. Member for Burton (Mr. Jennings) is a good teacher and I hope that his pupil on the Front Bench will heed his wise words.

The Minister must answer two points. First, why must the contribution from the teachers be 6¾ per cent. whereas in local government and many other funds it is 6 per cent.? When I was a teacher in 1956 we were told that "actual" deficiencies in the fund necessitated that we increase our contribution from 5 per cent. to 6 per cent. I could never discover where the theoretical or actual deficiences came from: it was all too complicated. I have not been able to discover today why it is necessary to increase the teacher's contribution from 6 per cent. to 6¾ per cent. I would not mind, but an eminent authority in the form of the President of the Institute of Actuaries has called the 6¾ per cent. contribution high by any standards. If he thought they were high, who are we to disagree?

Secondly, the Minister should say whether she intends to look again at funding. The concept of notional funding is a bit absurd. I quite agree that neither Government have ever agreed to commit themselves, but I hope that before long some Government will do so. We must look at the matter seriously, present the choice to the teachers and let them decide whether they want funding. It must be done not over the teachers' heads but in consultation with them. I therefore hope that the right hon. Lady will let us know something of her future intentions.

11.1 p.m.

Mr. Fergus Montgomery (Brierley Hill)

I am sorry that on this occasion I have to cross swords with my right hon. Friend the Secretary of State, because I have a great respect for her. She has done a tremendous amount for education, and I agree with my hon. Friend the Member for Burton (Mr. Jennings) that there are great advantages for the teaching profession in what she is trying to do. My hon. Friend was quite right to point out that for Labour hon. Members now to adopt a holier-than-thou attitude is quite out of place.

The hon. Member for Rotherham (Mr. O'Malley) started off with a great eulogy about what would have happened if his Government had remained in power but he is putting his head in the sand. I remember that at a teachers' conference when he spoke on the Crosland plan, as it was called, he got a stony reception, because teachers were dubious about it. In fact, one of the things that pleased a lot of people about the Tory victory at the last election was that the Crosland plan disappeared altogether.

In 1925 the Emmett Committee recommended funding, but the subject has never since been taken up by any Government. I am told that if we had had funding in the 'fifties and the 'sixties the fund would now stand at over £2,000 million.

The point stressed repeatedly from both sides is the dissatisfaction in the teaching profession today. Teachers see civil servants with a non-contributory scheme and local authority people having to pay 6 per cent. while the teachers have to pay 6¾ per cent. for exactly the same benefits. I therefore ask my right hon. Friend to look very carefully at this proposal.

11.3 p.m.

The Secretary of State for Education and Science (Mrs. Margaret Thatcher)

The hon. Member for Rotherham (Mr. O'Malley) was kind enough to congratulate my hon. Friend the Member for Wokingham (Mr. van Straubenzee) on his very well deserved promotion to Minister of State for Northern Ireland. I certainly join in that congratulation but could wish that that promotion had come 24 hours later, because then my hon. Friend might have been doing the job I am now doing.

I also welcome my hon. Friend the Member for Chelmsford (Mr. St. John-Stevas), who will in future be doing the job I am now doing. But on a particularly technical subject, having, like the hon. Member for Rotherham, spent some time on national insurance, I thought it perhaps right that I should take on the task tonight. I will do my best to answer as many as possible of the questions which have been raised.

Let me clear up one matter at the very outset. I thought that the hon. Member for Acton (Mr. Spearing) rather implied that I had refused to see the working party. I have done no such thing—and I am glad to see the hon. Member indicate that he does not think I did. I am only too happy to see members of the Working party. I had hoped to arrange to do so before any debate took place on the regulations. In the event that was not possible, but I shall be seeing them later on.

We are really discussing the report of a working party, set up in April, 1970, consisting of representatives of teachers, their employers and representatives of the Scottish Office and my Department. By a large majority the teachers accepted the recommendations. The exceptions were the National Association of Schoolmasters and the Scottish Schoolmasters Association, who dissented, as they were perfectly entitled to do if they wished. The hon. Member for Rotherham suggested that pressure had been put on the teachers as a result of which they had agreed. With all due respect, I have never known teachers to agree to anything because of pressure from the Department if they fundamentally disagreed with it. I think they agreed because on the whole the package is a good one, and it is that total package that I have accepted.

The hon. Gentleman did a good deal of selective quoting. I should like to quote a passage towards the beginning of the working party's report; we must have been working from different documents. Paragraph 5 on page 2, dealing with preliminary considerations which were accepted by the working party says: First, the Pensions (Increase) Act 1971 has already ensured that the teachers' schemes will broadly protect the value of pensions after award against increases in prices. It was agreed that the application of the Act to teachers pensions constituted a major improvement in the schemes (an improvement enhanced by the announcement in December 1971 that reviews would be annual and not biennial), and that this improvement would add appreciably to the cost of providing pensions increase, which is at present borne by the Exchequer. That is the first point I wish to get across; all the increases for teachers' pensions after they have retired are borne not by the fund but by the Exchequer. The Government Actuary has calculated that that is equal to an extra 2.2 per cent. contribution. I am glad that the working party recognised that at the outset.

Mr. R. C. Mitchell

Will the right hon. Lady read the next sentence?

Mrs. Thatcher

Yes. It says: However, there was a difference of opinion between the official side of the working party and the teachers' side on the method of taking this extra cost into account, the official side contending that it could not be disregarded in considering the finances of the schemes and teachers' contributions, and the teachers' side arguing that since it arose from an item of general Government policy and was applicable to all public service pensions it should be so disregarded. That guarantee does not necessarily apply to all funds. On the whole, it applies only to notional funds. I cannot think of one big actual fund to which that provision applies. It arose from the Government's general guarantee as a notional fund, a guarantee that does not apply where there are big actual funds.

Mr. Jennings

What my right hon. Friend says may be true, but her argument about vocational pensions and annual reviews and so on is entirely applicable to all public service pensions, including teachers and all public service employees, under the public service pensions Acts.

Mrs. Thatcher

But the pension schemes of many public service employees have notional funds and not actual funds. The local government fund is an actual fund and that provision does not apply to local government employees. It may be argued that local government employees are public service employees, but the provision does not apply to them in that way.

I wish to make it clear that from the beginning it has been a notionally funded scheme. The arrangement is that contributions from teachers and their employers are paid into the Exchequer and benefits are paid by the Exchequer. An account of income and expenditure is maintained and the balances are deemed to attract interest. Thus the scheme is run as though it is a funded scheme and it is notionally funded. The balances were made at the beginning to attract a fixed rate of interest of 3½ per cent. That was thought to be a better method in those days to protect the scheme from capital depreciation, and in the 1930s it did protect the scheme from capital depreciation.

By the time we came to 1956 the fund was in actuarial deficit. Rapidly increasing salaries had increased the cost of benefits to a point at which the credits, standing in the account fell short by £274 million of the total of £536 million needed to balance the scheme's actuarial liability. As those who are teachers know, there was a settlement made in 1956 which was really a three-part settlement. First, the new entrants' rate of contributions was put up. The new entrants' rate is the rate determined actuarially to be sufficient to support the stated level of benefits if paid throughout his career in respect of someone newly entering the scheme. That rate at that time was increased to 12 per cent.

At the same time the employers undertook to meet deficiencies which would arise in future and in addition there are the post-retirement increases. The deficiency payment has risen considerably. It is now equivalent to contributions of 2.5 per cent. and with the improvements would be equivalent to contributions of 3.15 per cent.

Before going on to that I should point out that since 1956 there have been new arrangements about the rate of interest. The rate of interest since 1956 has been much higher than 3½ per cent. It has been calculated since 1956, on new money entering the account since deemed to have been invested in long-term Government securities, and therefore the rate of interest credited to the scheme has varied from 4.9 per cent.—mostly above that—to the 1970–71 rate of 9.4 per cent.

Mr. Montgomery

So it should be.

Mrs. Thatcher

So it should be and so it is. It is quite misleading to think that the rate has been 3½ per cent.

Mr. O'Malley

Would the right hon. Lady care to comment on the estimate made by the actuary employed by the teachers' side of the working party that, had there been funding during the period in question, the deficiency payment of 3.3 per cent. required today would not be needed and would be much reduced—reduced by 2 per cent? Are those figures accepted or rejected by the Department?

Mrs. Thatcher

I cannot say whether the precise figures would be accepted. We would accept that had the whole scheme been funded and had it been spread in investments precisely to the indices by which the £2,000 million has been calculated, which is not necessarily a correct assumption, it would have given greater payments than have been given now and the deficiency payments would be reduced. The deficiency payments are paid wholly by the local authorities and not the teachers so it would not therefore have affected the contributions which the teachers have to pay towards this scheme.

The crucial point in this kind of scheme is that it is affected by a Government guarantee to pay the benefits in all circumstances. The value to the teachers of such a guarantee will vary from time to time. When income is exceeding expenditure as it will when the teaching force is growing fast, any system will be buoyant although, as experience shows, not necessarily actuarially solvent.

The present rate of growth of the teacher force can hardly be maintained indefinitely and the expectation must be that in time the number of pensioned teachers will grow relative to the number of contributing teachers in the service and expenditure will consequently come to exceed income. At that point the guarantee will ensure that the Government will pay the benefits.

Some of the other schemes have been mentioned. The nationalised industries and the Post Office have actually-funded schemes and a similar arrangement is intended for the proposed State reserve scheme. In all these cases there is no Government guarantee and no direct contributions from general taxation.

It is alleged that having a notional fund has been damaging to the teachers' interests. A number of hon. Members have pointed out that local government services pay a lesser contribution of 6 per cent. There are some local government services which pay a higher contribution. The police services pay 7 per cent. Fire services also pay 6¾ per cent.—[HON. MEMBERS: "They retire earlier."] I agree. On the whole, local government employees retire later than teachers; that is to say, they pay their contributions for a longer period and draw their benefits for a shorter period. That is one of the factors affecting the contributions that they have to pay.

National Health Service workers also pay 64 per cent. So that figure of 6¾ per cent. is not necessarily an unusual one.

We have given very serious consideration to this matter, and I want now to return to the point made by the hon. Member for Acton about the 14.2 per cent. actuarial calculation for new entrants to the teachers' scheme. This calculation, which as far as I know is not disputed by anyone, is fully agreed not to be based upon notional funding. It is based upon actual funding, and the principle upon which it is based is that the Government Actuary is also responsible for a number of actual funds which he uses for this calculation, and he also has regard to the performance of the general indices of financial performance like the Financial Times actuary's index. So the 14.2 per cent. does not depend upon its being a notional fund. It would have been the same had it been an actual fund. Therefore the teachers do not suffer any damage in that respect because the scheme is a notional one. We then come to the kind of split that we have of the 14.2 per cent.

Before coming to that, however, there is one further point. The corresponding figure on a similar basis for local government funds is 12.3 per cent. The actuarial contribution for new entrants to local government would be 12.3 per cent. Of course, it takes into account their benefits, their length of service, retirement age, etc., but their 6 per cent. is about the same proportion of 12.3 per cent. as the teachers' 6.75 per cent. is of the 14.2 per cent. One could argue that the proportion to the teachers of the total is slightly more favourable than is the proportion to employees of local government in relation to what the employers pay.

I have referred to some other schemes. There are a number of points in detail, but I am afraid that they involve rather a lot of figures. May I go back now to the point of apportionment of contributions between employers and employees? A number of hon. Members have given a great deal of attention to it.

The figures that I use are again those of the Government Actuary in the report of the working party, because they cannot be disputed for accuracy and for giving the precise picture of the cost of the teachers' superannuation schemes in terms of the Government Actuary's analyses of costs.

The opportionment agreed by the working party is that teachers should pay 6.75 per cent. and that employers should pay the balance of 7.45 per cent. Immediately the employers are paying more than the employees. Throughout the working party, the local authorities insisted on roughly equal contributions, so that even on the 14.2 per cent. which again is on an actual fund basis they are paying the higher amount—a contribution of 7.45 per cent. But this is not the end of the employers' contribution. They also have to pay a further 2.5 per cent. for the deficiencies of the scheme. That brings their contribution up higher and, in addition, as a result of the application of the improvements, they will have to pay a further 0.65 per cent. That means the teachers are paying 6.75 per cent. and their employers, the local authorities, are paying 7.45 per cent. plus 3.15 per cent. coming up to 10.6 per cent. In addition, the Exchequer pays 2.2 per cent. for post-retirement inflation.

The total cost of the scheme in terms of percentage contributions on salary is 19.55 per cent. of which the teachers are meeting 6.75 per cent. I am sorry there are so many figures but I hope that what I have said puts the matter into better perspective.

Mr. Peter Rost (Derbyshire, South-East)

Would not my right hon. Friend agree that the fact that the contributions by the State and by the local authorities is substantially higher than that paid by the teachers merely confirms the case put by hon. Members on both sides of the House that the scheme ought to be funded, and that if it were funded properly this liability would not accrue to the taxpayers?

Mrs. Thatcher

I think that if the scheme had been funded at the outset things would have been very different now. They would also have been very different in the 1930s as well. One cannot have the roundabouts and leave the swings. Nor can one ignore the actuarial calculations. In this House we have seen what happens to insurance companies which look only at income and not at the liabilities they are building up as a result of the contributions and premiums which have been paid.

I think most of us would agree that had the schemes been funded at the outset the position just now, when we have a comparatively small number of pensioners to a large number of teachers—an increasingly young teaching force—the position would have been better than it is. But we would not necessarily say that it would be better if we had a very much larger retired force compared with the number of those who are teaching and who are training to come into the profession. Because those who are coming into teaching now will be drawing pensions as late as the year 2030, one has to take a long view of these schemes although, as we know, they are modified every few years.

I want to say something more about the funding aspect. It is not possible just to pay the total amount equal to the notional funding. The effect would be quite disastrous upon the Exchequer and, therefore, upon the economy and everyone else. In addition, a number of other schemes would want a similar arrangement made for them. The most practicable arrangement would be to start one's funding now with some contributions going towards a fund and not towards the payment of benefits from the Exchequer or the notional fundings. The problem again would be that that arrangement would have to apply to a number of other funds. It would mean in effect that there would be no contribution towards outgoings; we would have to meet those outgoings from the Exchequer while contributions were going to a fund. It is my advice that if we did this for all schemes which are at present notionally funded and started to convert them into actual funding, the cost would be very great, depending upon the rate at which it was done. It would come to hundreds of millions of pounds a year.

I want now to deal with the question of widows' benefits. That particular family benefit fund is under the control of a board of managers. It cannot be transferred without the consent of the board. On the whole, I think that 50 per cent. for a widow is in line with good private sector schemes and good public schemes as well. The Exchequer, from 1st April this year, has assumed the liabilities on the basis that it would, of course, also be assuming the assets. I hope we can come to some reasonable agreement about this. Most people would not wish the improvements to be held up.

The working party's report will give rise to four Statutory Instruments. Tonight's is the first. The improved benefits are already in payment, and if the Opposition were to be successful tonight in defeating the regulations no future payments of improved benefits would be made.

Mr. O'Malley

Do not be silly.

Mrs. Thatcher

I am sorry but they would not. Let me make it quite clear. If these regulations were annulled there would be no question of going back again to 1st April, 1972, because the whole question would be open again, and the hon. Gentleman knows it.

I will sum up the complex points I have been making. The existing notional fund arrangement gives to teachers the Government's guarantee that they will continue to receive the level of benefits appropriate to a public service occupational pension scheme of this type. It is common ground that these benefits are now being greatly improved. A valuable degree of inflation-proofing is provided by the Pensions (Increase) Acts.

The scheme requires from the teachers a contribution in line with the employees' contributions in comparable schemes and covers only about 40 per cent. or two-fifths of the total cost of the scheme, whether it be actually or notionally funded. For this purpose I am taking the figure most favourable to the teachers of 16.4 per cent., which is the new entrant contribution of 14.2 per cent. plus the Exchequer contribution of 2.2 per cent., leaving aside the deficiency contribution. The remainder falls on either the Exchequer or the employer, the latter bearing by way of supplementary contributions payments needed to bring the investment income up to the necessary levels. On the whole, this is not a bad deal.

I have tried to deal with the possibility of a change to a real fund. This is hardly practicable or, at any rate, practicable only over so long a time-scale that at the very best any advantages there might be to teachers would be very long deferred. More important, the scheme would then lose the Government guarantee, including the pensions increase cover. The potential benefits of a funded scheme could hardly be expected to exceed the value of the guarantee of a favourable level of benefits and a reasonable inflation-proofing, backed by the whole financing power of the State.

I ask the House to reject the Prayer. The regulations which I have placed before the House are the first of a series of such Statutory Instruments designed to give effect to a package which will produce great improvements in the teachers' superannuation scheme benefits for England and Wales. There is, of course, a similar package for Scotland. The packages have been accepted by all the teachers' associations except the National Association of Schoolmasters and the Scottish Schoolmasters' Association.

If the House accepts the Prayer and annuls the first set of regulations, it will be depriving the teachers of a considerable measure of improvement in the terms of their superannuation which the vast majority of them clearly desire. The past payments we have made would stand—there would be no attempt to claw them back—but future payments under the scheme would have to fall and negotiations would have to start again from scratch. Any further agreement would have to operate from a date subsequent to 1st April, 1972. If the regulations are annulled we shall have to start all over again—and we started this working party in April, 1970.

It has taken two and a half years to get an agreed package, and if the hon. Gentleman puts that in issue he must understand that it will take a very long time to get agreement. He will not face the reality of the action he is asking the House to take. I cannot believe that more than a minority of teachers, having regard to the position of those now retiring, would wish to see this result, and I therefore ask the House to reject the Prayer.

Question put:—

The House divided: Ayes 178, Noes 183.

Division No. 2. AYES [9.59 p.m.
Abse, Leo Douglas, Dick (Stirlingshire, E.) Johnson, Walter (Derby, S.)
Albu, Austen Douglas-Mann, Bruce Jones, Barry (Flint, E.)
Allaun, Frank (Salford, E.) Drlberg, Tom Jones, Dan (Burnley)
Allen, Scholefield Duffy, A. E. P. Jones, Rt.Hn.Sir Elwyn (W.Ham, S.)
Archer, Peter (Rowley Regis) Dunnett, Jack Jones, Gwynoro (Carmarthen)
Ashley, Jack Eadie, Alex Jones, T. Alec (Rhondda, W.)
Ashton, Joe Edelman, Maurice Judd, Frank
Atkinson, Norman Edwards, Robert (Bilston) Kaufman, Gerald
Bagier, Gordon A. T. Edwards, William (Merioneth) Kelley, Richard
Barnes, Michael Ellis Tom Kerr, Russell
Barnett, Guy (Greenwich) English, Michael Kinnock, Nell
Barnett, Joel (Heywood and Royton) Evans, Fred Lamble, David
Baxter, William Ewing, Harry Lamborn, Harry
Beaney, Alan Faulds, Andrew Lamond, James
Benn, Rt. Hn. Anthony Wedgwood Fernyhough, Rt. Hn. E. Latham, Arthur
Bennett, James (Glasgow, Bridgeton) Fisher, Mrs. Doris (B'ham, Ladywood) Lawson, George
Bidwell, Sydney Fitch, Alan (Wigan) Leadbitter, Ted
Bishop, E. S. Fletcher, Raymond (Ilkeston) Lee, Rt. Hn. Frederick
Blenkinsop, Arthur Fletcher, Ted (Darlington) Leonard, Dick
Boardman, H. (Leigh) Foley, Maurice Lestor, Miss Joan
Booth, Albert Foot, Michael Lever, Rt. Hn. Harold
Bottomley, Rt. Hn. Arthur Ford, Ben Lewis, Arthur (W. Ham, N.)
Boyden, James (Bishop Auckland) Forrester, John Lewis, Ron (Carlisle)
Bradley, Tom Fraser, John (Norwood) Lipton, Marcus
Broughton, Sir Alfred Freeson, Reginald Lomas, Kenneth
Brown, Robert C. (N'c'tle-u-Tyne, W.) Galpern, Sir Myer Loughlin, Charles
Brown, Hugh D. (G'gow, Provan) Garrett, W. E. Lyon, Alexander W. (York)
Brown, Ronald (Shoreditch & F'bury) Gilbert, Dr. John Lyons, Edward (Bradford, E.)
Buchan, Norman Ginsburg, David (Dewsbury) Mabon, Dr. J. Dickson
Buchanan, Richard (G'gow, Sp'burn) Golding, John McBride, Neil
Callaghan, Rt. Hn. James Gourlay, Harry McCartney, Hugh
Campbell, I. (Dunbartonshire, W.) Grant, George (Morpeth) McElhone, Frank
Cant, R. B. Grant, John D. (Islington, E.) McGuire, Michael
Carmichael, Neil Griffiths, Eddie (Brightside) Mackenzie, Gregor
Carter, Ray (Birmingham, Northfield) Griffiths, Will (Exchange) Mackie, John
Carter-Jones, Lewis (Eccles) Hamilton, James (Bothwell) Mackintosh, John P.
Castle, Rt. Hn. Barbara Hamilton, William (Fife, W.) Maclennan, Robert
Clark, David (Colne Valley) Hamling, William McMillan, Tom (Glasgow, C.)
Cocks, Michael (Bristol, S.) Hannan, William (G'gow, Maryhill) McNamara, J. Kevin
Cohen, Stanley Hardy, Peter Mallalieu, J.P.W. (Huddersfield, E.)
Coleman, Donald Harper, Joseph Marks, Kenneth
Concannon, J. D. Harrison, Walter (Wakefield) Marsden, F.
Conlan, Bernard Hart, Rt. Hn. Judith Marshall, Dr. Edmund
Corbet, Mrs. Freda Hattersley, Roy Mason, Rt. Hn. Roy
Cox, Thomas (Wandsworth, C.) Healey, Rt. Hn. Denis Mayhew, Christopher
Crawshaw, Richard Heffer, Eric, S. Meacher, Michael
Cronin, John Hilton, W. S. Mellish, Rt. Hn. Robert
Crosland, Rt. Hn. Anthony Hooson, Emlyn Mendelson, John
Cunningham, G. (Islington, S.W.) Horam, John Mikardo, Ian
Cunningham, Dr. J. A. (Whitehaven) Houghton, Rt. Hn. Douglas Millan, Bruce
Dalyell, Tam Huckfield, Leslie Miller, Dr. M. S.
Darling, Rt. Hn. George Hughes, Rt. Hn. Cledwyn (Anglesey) Milne, Edward
Davidson, Arthur Hughes, Mark (Durham) Mitchell, R. C. (S'hampton, Itchen)
Davies, Denzil (Llanelly) Hughes, Robert (Aberdeen, N.) Molloy, William
Davies, G. Elfed (Rhondda, E.) Hughes, Roy (Newport) Morgan, Elystan (Cardiganshire)
Davies, Ifor (Gower) Hunter, Adam Morris, Alfred (Wythenshawe)
Davis, Clinton (Hackney, C.) Irvine, Rt. Hn. Sir Arthur (Edge Hill) Morris, Charles R. (Openshaw)
Davis, Terry (Bromsgrove) Janner, Greville Morris, Rt. Hn. John (Aberavon)
Deakins, Eric Jay, Rt. Hn. Douglas Moyle, Roland
de Freitas, Rt. Hn. Sir Geoffrey Jeger, Mrs. Lena Mulley, Rt. Hn. Frederick
Delargy, Hugh Jenkins, Hugh (Putney) Murray, Ronald King
Dell, Rt. Hn. Edmund Jenkins, Rt. Hn. Roy (Stechford) Oakes, Gordon
Dempsey, James John, Brynmor Ogden, Eric
Dolg, Peter Johnson, Carol (Lewisham, S.) O'Halloran, Michael
Dormand, J. D. Johnson, James (K'ston-on-Hull, W.) O'Malley, Brian
Oram, Bert
Orbach, Maurice Ross, Rt. Hn. William (Kinmarnock) Thomson, Rt. Hn. G. (Dundee, E.)
Orme, Stanley Rowlands, Ted Tinn, James
Oswald, Thomas Sandelson, Neville Tomney, Frank
Owen, Dr. Lavid (Plymouth, Sutton) Sheldon, Robert (Ashton-under-Lyne) Torney, Tom
Padley, Walter Shore, Rt. Hn. Peter (Stepney) Tuck, Raphael
Paget, R. T. Short, Rt. Hn.(Edward(N'c'tle-u-Tyne) Urwin, T. W.
Palmer, Arthur Short, Mrs. Renée (W'hampton, N.E.) Varley, Eric G.
Pannell, Rt. Hn. Charles Silkin, Rt. HAn. John (Deptford) Wainwright, Edwin
Parker, John (Dagenham) Silkin, Hn. S. C. (Dulwich) Walden, Brian (B'm'ham, All Saints)
Parry, Robert (Liverpool, Exchange) sillars, James Walker, Harold (Doncaster)
Pavitt, Laurie Silverman, Julius Wallace, George
Peart, Rt. Hn. Fred Skinner, Dennis Watkins, David
Pendry, Tom Small, William Weitzman, David
Perry, Ernest G. Smith, Cyril (Rochdale) Wells, William (Walsall, N.)
Prentice, Rt. Hn. Reg. Smith, John (Lanarkshire, N.) White, James (Glasgow, Pollok)
Prescott, John Spearing, Nigel Whitehead, Phillip
Price, J. T. (Westhoughton) Spriggs, Leslie Whitlock, William
Price, William (Rugby) Stallard, A. W. Willey, Rt. Hn. Frederick
Probert, Arthur Steel, David Williams, Alan (Swansea, W.)
Reed, D. (Sedgfield) Stewart, Donald (Western Isles) Williams, Mrs. Shirley (Hitchin)
Rees, Merlyn (Leeds, S.) Stewart, Rt. Hn. Michael (Fulham) Williams, W. T. (Warrington)
Rhodes, Geoffrey Stoddart, David (Swindon) Wilson, Alexander (Hamilton)
Richard, Ivor Stonehouse, Rt. Hn. John Wilson, William (Coventry, S.)
Roberts, Albert (Normanton) Strang, Gavin Woof, Robert
Roberts, Rt. Hn. Goronwy (Caernarvon) Strauss, Rt. Hn. G. R.
Robertson, John (Paisley) Summerskill, Hn. Dr. Shirley TELLERS FOR THE AYES:
Roderick, Caerwyn E.(Br'c'n & R'dnor) Swain, Thomas Mr. James A. Dunn and
Rodgers, William (Stockton-on-Tees) Thomas, Rt. Hn. George (Cardiff, W.) Mr. James Wellbeloved.
Rose, Paul B. Thomas, Jeffrey (Abertillery)
NOES
Adley, Robert Cooper, A. E. Grieve, Percy
Alison, Michael (Barkston Ash) Cordle, John Griffiths, Eldon (Bury St. Edmunds)
Allason, James (Hemel Hempstead) Corfield, Rt. Hn. Sir Frederick Grylls, Michael
Amery, Rt. Hn. Julian Cormack, Patrick Gummer, J. Selwyn
Archer, Jeffrey (Louth) Costain, A. P. Gurden, Harold
Astor, John Critchley, Julian Hall, Miss Joan (Keighley)
Atkins, Humphrey Crouch, David Hall, John (Wycombe)
Awdry, Daniel Crowder, F. P. Hall-Davis, A. G. F.
Baker, Kenneth (St. Marylebone) Dalkeith, Earl of Hamilton, Michael (Salisbury)
Baker, W. H. K. (Banff) Davies, Rt. Hn. John (Knutsford) Hannam, John (Exeter)
Balniel, Rt. Hn. Lord d'Avigdor-Goldsmid, Sir Henry Harrison, Brian (Maldon)
Barber, Rt. Hn. Anthony d'Avigdor-Goldsmid, Maj.-Gen. Jack Harrison, Col. Sir Harwood (Eye)
Batsford, Brian Dean, Paul Haselhurst, Alan
Beamish, Col. Sir Tufton Deedes, Rt. Hn. W. F. Hastings, Stephen
Bell, Ronald Digby, Simon Wingfield Havers, Michael
Bennett, Sir Frederic (Torquay) Dixon, Piers Hawkins, Paul
Bennett, Dr. Reginald (Gosport) Dodds-Parker, Douglas Hay, John
Benyon W. Drayson, G. B. Hayhoe, Barney
Berry Hn Anthony du Cann, Rt. Hn. Edward Heseltine, Michael
Biffen, John Dykes, Hugh Hicks, Robert
Biggs-Davison, John Eden, Rt. Hn. Sir John Higgins, Terence L.
Blaker Peter Edwards, Nicholas (Pembroke) Hiley, Joseph
Boardman Tom (Leicester, S.W.) Elliot, Capt. Walter (Carshalton) Hill, John E. B. (Norfolk, S.)
Body Richard Elliott, R. W. (N'c'tle-upon-Tyne, N.) Hill, James (Southampton, Test)
Boscawen, Hn. Robert Emery Peter Holland, Philip
Bowden, Andrew Eyre, Reginald Holt, Miss Mary
Braine, Sir Bernard Farr, John Hordern, Peter
Bray Ronald Fell, Anthony Hornby, Richard
Brewis, John Fenner, Mrs. Peggy Hornsby-Smith. Rt. Hn. Dame Patricia
Brinton, Sir Tatton Finsberg, Geoffrey (Hampstead) Howe, Hn. Sir Geoffrey (Reigate)
Brocklebank-Fowler, Christopher Fisher, Nigel (Surbiton) Howell, David (Guildford)
Brown, Sir Edward (Bath) Fletcher-Cooke, Charles Howell, Ralph (Norfolk, N.)
Bruce-Gardyne, J. Fookes, Miss Janet Hunt, John
Bryan, Sir Paul Fortescue, Tim Hutchison, Michael Clark
Buchanan-Smith, Alick(Angus, N&M) Foster, Sir John Iremonger, T. L.
Buck, Antony Fowler, Norman Irvine, Bryant Godman (Rye)
Bullus, Sir Eric Fox, Marcus James, David
Burden, F. A. Fraser, Rt. Hn. Hugh (St'fford & Stone) Jenkin, Patrick (Woodford)
Butler, Adam (Bosworth) Fry, Peter Jennings, J. C. (Burton)
Campbell, Rt. Hn. G.(Moray & Nairn) Galbraith, Hn. T. G. D. Jessel, Toby
Carlisle, Mark Gardner, Edward Johnson Smith, G. (E. Grinstead)
Cary Sir Robert Gibson-Watt, David Jones, Arthur (Northants, S.)
Channon, Paul Gilmour, Sir John (Fife, E.) Jopling, Michael
Chapman, Sydney Glyn, Dr. Alan Joseph, Rt. Hn. Sir Keith
Chataway, Rt. Hn. Christopher Godber, Rt. Hn. J. B. Kaberry, Sir Donald
Chichester-Clark, R. Goodhart, Philip Kellett-Bowman, Mrs. Elaine
Churchill W. S. Goodhew, Victor Kershaw, Anthony
Clark, William (Surrey, E.) Gorst, John Kimball, Marcus
Clarke, Kenneth (Rushcliffe) Gower, Raymond King, Evelyn (Dorset, S.)
Cockeram, Eric Grant, Anthony (Harrow, C.) King, Tom (Bridgwater)
Cooke, Robert Gray, Hamish Kinsey, J. R.
Coombs, Derek Green, Alan Kirk, Peter
Kitson, Timothy Noble, Rt. Hn. Michael Spence, John
Knight, Mrs. Jill Normanton, Tom Sproat, Iain
Knox, David Noll, John Stainton, Keith
Lambton, Lord Onslow, Cranley Stanbrook, Ivor
Lamont, Norman Oppenheim, Mrs. Sally Stewart-Smith, Geoffrey (Belper)
Lane, David Orr, Capt. L. P. S. Stodart, Anthony (Edinburgh, W.)
Langford-Holt, Sir John Osborn, John Stoddart-Scott, Col. Sir M.
Le Marchant, Spencer Owen, Idris (Stockport, N.) Stokes, John
Lewis, Kenneth (Rutland) Page, Rt. Hn. Graham (Crosby) Stuttaford, Dr. Tom
Lloyd, Rt. Hn. Geoffrey (Sut'nC'dfield) Page, John (Harrow, W.) Sutcliffe, John
Lloyd, Ian (P'tsm'th, Langstone) Parkinson, Cecil Tapsell, Peter
Longden, Sir Gilbert Peel, John Taylor, Sir Charles (Eastbourne)
Loveridge, John Percival, Ian Taylor, Edward M.(G'gow, Cathcart)
Luce, R. N. Pike, Miss Mervyn Taylor, Frank (Moss Side)
McAdden, Sir Stephen Pink, R. Bonner Taylor, Robert (Croydon, N.W.)
MacArthur, Ian Pounder, Rafton Tebbit, Norman
McCrindle, R. A. Powell, Rt. Hn. J. Enoch Temple, John M.
McLaren, Martin Price, David (Eastleigh) Thatcher, Rt. Hn. Mrs. Margaret
Maclean, Sir Fitzroy Prior, Rt. H. J. M. L. Thomas, John Stradling (Monmouth)
McMaster, Stanley Proudfoot, Wilfred Thomas, Rt. Hn. Peter (Hendon, S.)
Macmillan, Rt. Hn. Maurice (Farnham) Pym, Rt. Hn. Francis Thompson, Sir Richard (Croydon, S.)
McNair-Wilson, Michael Quennell, Miss J. M. Tilney, John
McNair-Wilson, Patrick (New Forest) Raison, Timothy Trafford, Dr. Anthony
Maddan, Martin Ramsden, Rt. Hn. James Trew, Peter
Madel, David Rawlinson, Rt. Hn. Sir Peter Tugendhat, Christopher
Marples, Rt. Hn. Ernest Redmond, Robert Turton, Rt. Hn. Sir Robin
Marten, Neil Reed, Laurance (Bolton, E.) van Straubsnzee, W. R.
Mather, Carol Rees, Peter (Dover) Vaughan, Dr. Gerard
Maudling, Rt. Hn. Reginald Rees-Davies, W. R. Vickers, Dame Joan
Mawby, Ray Renton, Rt. Hn. Sir David Walder, David (Clitheroe)
Maxwell-Hyslop, R. J. Rhys Williams, Sir Brandon Walter, Rt. Hn. Peter (Worcester)
Meyer, Sir Anthony Ridley, Hn. Nicholas Walker-Smith, Rt. Hn. Sir Derek
Mills, Peter (Torrington) Ridsdale, Julian Wall, Patrick
Mills, Stratton (Belfast, N.) Rippon, Rt. Hn. Geoffrey Walters, Dennis
Miscampbell, Norman Roberts, Michael (Cardiff, N.) Ward, Dame Irene
Mitchell, Lt.-Col. C.(Aberdeenshire, W) Roberts, Wyn (Conway) Warren, Kenneth
Mitchell, David (Basingstoke) Rodgers, Sir John (Sevenoaks) Wells, John (Maidstone)
Moate, Roger Rossi, Hugh (Hornsey) White, Roger (Gravesend)
Money, Ernie Rost, Peter Wiggin, Jerry
Monks, Mrs. Connie Russell, Sir Ronald Wilkinson, John
Monro, Hector St. John-Stevas, Norman Winterton, Nicholas
Montgomery, Fergus Scott, Nicholas Wolrige-Gordon, Patrick
More, Jasper Scott, Hopkins, James Woodhouse, Hn. Christopher
Morgan, Geraint (Denbigh) Shaw, Michael (Sc'b'gh & Whitby) Woodnutt, Mark
Morgan-Giles, Rear-Adm. Shelton, William (Clapham) Worsley, Marcus
Morrison, Charles Simeons, Charles Wylie, Rt. Hn. N. R.
Mudd, David Sinclair, Sir George Younger, Hn. George
Murton, Oscar Skeet, T. H. H.
Nabarro, Sir Gerald Smith, Dudley (W'wick & L'mington) TELLERS FOR THE NOES:
Neave, Airey Soref, Harold Mr. Bernard Weatherill and
Nicholls, Sir Harmar Speed, Keith Mr. Walter Clegg.
Division No. 3.] AYES [11.30 p.m.
Ashley, Jack Hannan, William (G'gow, Maryhill) Oswald, Thomas
Ashton, Joe Hardy, Peter Palmer, Arthur
Atkinson, Norman Harrison, Walter (Wakefield) Parker, John (Dagenham)
Bagier, Gordon A. T. Hattersley, Roy Parry, Robert (Liverpool, Exchange)
Barnett, Guy (Greenwich) Hooson, Emlyn Pavitt, Laurie
Benn, Rt. Hn. Anthony Wedgwood Horam, John Peart, Rt. Hn. Fred
Bennett, James (Glasgow, Bridgeton) Houghton, Rt. Hn. Douglas Pendry, Tom
Bishop, E. S. Hughes, Rt. Hn. Cledwyn (Anglesey) Perry, Ernest G.
Blenkinsop, Arthur Hughes, Mark (Durham) Prentice, Rt. Hn. Reg.
Boardman, H. (Leigh) Hughes, Robert (Aberdeen, N.) Prescott, John
Boyden, James (Bishop Auckland) Hunter, Adam Price, William (Rugby)
Brown, Hugh D. (G'gow, Provan) Irvine, Rt. Hn. Sir Arthur (Edge Hill) Probert, Arthur
Buchan, Norman Janner, Greville Reed, D. (Sedgefield)
Buchanan, Richard (G'gow, Sp'burn) John, Brynmor Rees, Merlyn (Leeds, S.)
Campbell, I. (Dunbartonshire, W.) Johnson, James (K'ston-on-Hull, W.) Roberts, Rt. Hn. Goronwy (Caernarvon)
Carmichael, Neil Johnson, Walter (Derby, S.) Robertson, John (Paisley)
Carter-Jones, Lewis (Eccles) Jones, Barry (Flint, E.) Roderick, Caerwyn E.(Brc'n&R'dnor)
Clark, David (Colne Valley) Jones, Dan (Burnley) Rose, Paul B.
Cocks, Michael (Bristol, S.) Jones, T. Alec (Rhondda, W.) Ross, Rt. Hn. William (Kilmarnock)
Cohen, Stanley Judd, Frank Rowlands, Ted
Coleman, Donald Kaufman, Gerald Sandelson, Neville
Concannon, J. D. Kerr, Russell Short, Rt. Hn. Edward (N'c'tle-u-Tyne)
Conlan, Bernard Kinnock, Neil Sillars, James
Cox, Thomas (Wandsworth, C.) Lamble, David Skinner, Dennis
Crawshaw, Richard Lamborn, Harry Small, William
Crosland, Rt. Hn. Anthony Lamond, James Smith, Cyril (Rochdale)
Cunningham, Dr. J. A. (Whitehaven) Latham, Arthur Smith, John (Lanarkshire, N.)
Dalyell, Tam Leadbitter, Ted Spearing, Nigel
Davidson, Arthur Leonard, Dick Spriggs, Leslie
Davies, G. Elfed (Rhondda, E.) Lestor, Miss Joan Stallard, A. W.
Davies, Ifor (Gower) Lewis, Ron (Carlisle) Steel, David
Davis, Clinton (Hackney, C.) Lomas, Kenneth Stewart, Rt. Hn. Michael (Fulham)
Davis, Terry (Bromsgrove) Mabon, Dr. J. Dickson Stoddart, David (Swindon)
Deakins, Eric McBride, Neil Strang, Gavin
de Freitas, Rt. Hn. Sir Geoffrey McCartney, Hugh Summerskill, Hn. Dr. Shirley
Dempsey, James McElhone, Frank Swain, Thomas
Dormand, J. D. McGuire, Michael Thomas, Rt. Hn. George (Cardiff, W.)
Douglas-Mann, Bruce Mackenzie, Gregor Thomas, Jeffrey (Abertillery)
Driberg, Tom Maclennan, Robert Tinn, James
Duffy, A. E. P. McMillan, Tom (Glasgow, C.) Torney, Tom
Eadie, Alex McNamara, J. Kevin Urwin, T. W.
Edelman, Maurice Mallalieu, J. P. W. (Huddersfield. E.) Varley, Eric G.
Ellis, Tom Marks, Kenneth Wainwright, Edwin
English, Michael Marsden, F. Walden, Brian (B'm'ham, All Saints)
Evans, Fred Marshall, Dr. Edmund Walker, Harold (Doncaster)
Fernyhough. Rt. Hn. E. Mason, Rt. Hn. Roy Watkins, David
Fisher, Mrs. Doris (B'ham, Ladywood) Meacher, Michael Wellbeloved, James
Fitch, Alan (Wigan) Mellish, Rt. Hn. Robert Wells, William (Walsall, N.)
Fletcher, Ted (Darlington) Mendelson, John White, James (Glasgow, Pollok)
Foley, Maurice Millan, Bruce Whitehead, Phillip
Foot, Michael Miller, Dr. M. S. Whitlock, William
Ford, Ben Mitchell, R. C. (S'hampton, Itchen) Willey, Rt. Hn. Frederick
Forrester, John Money, Ernie Williams, Alan (Swansea, W.)
Freeson, Reginald Morgan, Elystan (Cardiganshire) Wilson, Alexander (Hamilton)
Golding, John Morris, Charles R. (Openshaw) Wilson, William (Coventry, S.)
Gourlay, Harry Moyle, Roland Woof, Robert
Grant, George (Morpeth) Mulley, Rt. Hn. Frederick
Grant, John D. (Islington, E.) Murray, Ronald King TELLERS FOR THE AYES:
Griffiths, Eddie (Brightside) Oakes, Gordon Mr. Joseph Harper and
Hamilton, James (Bothwell) Ogden, Eric Mr. James A. Dunn.
Hamling, William O'Malley, Brian
NOES
Adley, Robert Boscawen, Hon. Robert Chataway, Rt. Hn. Christopher
Alison, Michael (Barkston Ash) Bray, Ronald Chichester-Clark, R.
Archer, Jeffrey (Louth) Brewis, John Clarke, Kenneth (Rushcliffe)
Astor, John Brinton, Sir Tatton Clegg, Walter
Atkins, Humphrey Brocklebank-Fowler, Christopher Cockeram, Eric
Awdry, Daniel Brown, Sir Edward (Bath) Cooke, Robert
Berry, Hn. Anthony Buchanan-Smith, Alick (Angus, N&M) Corfield, Rt. Hn. Sir Frederick
Biffen, John Buck, Antony Cormack, Patrick
Biggs-Davison, John Bullus, Sir Eric Crouch, David
Blaker, Peter Butler, Adam (Bosworth) Crowder, F. P.
Boardman, Tom (Leicester, S.W.) Chapman, Sydney Dean, Paul
Deedes, Rt. Hn. W. F. Knight, Mrs. Jill Rhys Williams, Sir Brandon
du Cann, Rt. Hon. Edward Knox, David Ridley, Hn. Nicholas
Eden, Rt. Hn. Sir John Lamont, Norman Roberts, Wyn (Conway)
Elliott, R. W. (N'c'tle-upon-Tyne, N.) Lane, David Rossi, Hugh (Hornsey)
Eyre, Reginald Le Merchant, Spencer Russell, Sir Ronald
Farr, John Lloyd, Ian (P'tsm'th, Langstone) St. John-Stevas, Norman
Fenner, Mrs. Peggy Luce, R. N. Scott, Nicholas
Finsberg, Geoffrey (Hampstead) McAdden, Sir Stephen Scott-Hopkins, James
Fisher, Nigel (Surbiton) MacArthur, Ian Shaw, Michael (Sc'b'gh & Whitby)
Fortescue, Tim McCrindle, R. A. Shelton, William (Clapham)
Foster, Sir John McLaren, Martin Simeons, Charles
Fowler, Norman Macmillan, Rt. Hon. Maurice (Farnham) Sinclair, Sir George
Fox, Marcus McNair-Wilson, Michael Skeet, T. H. H.
Gardner, Edward McNair-Wilson, Patrick (New Forest) Smith, Dudley (W'wick & L'mington)
Gibson-Walt, David Madden, Martin Soref, Harold
Gilmour, Sir John (Fife, E.) Madel, David Speed, Keith
Gorst, John Mather, Carol Spence, John
Grant, Anthony (Harrow, C.) Mawby, Ray Stainton, Keith
Gray, Hamish Maxwell-Hyslop, R. J. Stanbrook, Ivor
Green, Alan Meyer, Sir Anthony Stewart-Smith, Geoffrey (Belper)
Grieve, Percy Mills, Peter (Torrington) Stoddart-Scott, Col. Sir M.
Griffiths, Eldon (Bury St. Edmunds) Mills, Stratton (Belfast, N.) Stokes, John
Grylls, Michael Miscampbell, Norman Stuttaford, Dr. Tom
Gummer, J. Selwyn Mitchell, Lt.-Col. C.(Aberdeenshire, W.) Sutcliffe, John
Hall, Miss Joan (Keighley) Moate, Roger Tapsell, Peter
Hall, John (Wycombe) Monks, Mrs. Connie Taylor, Frank (Moss Side)
Hall-Davies, A. G. F. Monro, Hector Tebbit, Norman
Hamilton, Michael (Salisbury) Morgan, Geraint (Denbigh) Thatcher, Rt. Hn. Mrs. Margaret
Harrison, Col. Sir Harwood (Eye) Morgan-Giles, Rear-Adm. Thomas, John Stradling (Monmouth)
Haselhurst, Alan Morrison, Charles Thompson, Sir Richard (Croydon, S.)
Hawkins, Paul Mudd, David Trew, Peter
Hayhoe, Barney Neave, Alrey Turton, Rt. Hn. Sir Robin
Hicks, Robert Noble, Rt. Hn. Michael van Straubenzee, W. R.
Hiley, Joseph Normanton, Tom Vaughan, Dr. Gerard
Hill, John E. B. (Norfolk, S.) Nott, John Vickers, Dame Joan
Holland Philip Osborn, John Welder, David (Clitheroe)
Hornsby-Smith, Rt. Hn. Dame Patricia Owen, Idris (Stockport, N.) Wall, Patrick
Howell, Ralph (Norfolk, N.) Page, Rt. Hn. Graham (Crosby) Ward, Dame Irene
Hunt, John Page, John (Harrow, W.) Warren, Kenneth
Hutchison, Michael Clark Parkinson, Cecil Weatherill, Bernard
Iremonger, T. L. Peel, John Wiggin, Jerry
James, David Percival, Ian Wilkinson, John
Jennings, J. C. (Burton) Powell, Rt. Hn. J. Enoch Winterton, Nicholas
Jessel, Toby Price, David (Eastleigh) Wolrige-Gordon, Patrick
Jopling, Michael Prior, Rt. Hn. J. M. L. Worsley, Marcus
Kaberry, Sir Donald Proudfoot, Wilfred Wylie, Rt. Hn. N. R.
King, Evelyn (Dorset, S.) Pym, Rt. Hn. Francis Younger, Hn. George
King, Tom (Bridgwater) Raison, Timothy
Kinsey, J. R. Redmond, Robert TELLERS FOR THE NOES:
Kirk, Peter Reed, Laurance (Bolton, E.) Mr. Victor Goodhew and
Kitson, Timothy Rees, Peter (Dover) Mr. Oscar Murton.
Rees-Davies, W. R.

Question accordingly negatived.

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