HC Deb 08 May 1973 vol 856 cc333-63

For an occupational pension scheme to be recognised in relation to an earner's employment it must provide that if a person who is a member of that scheme terminates his employment before the normal age of retirement in that employment there may, at the option of that person, be paid out of the funds of that scheme either—

  1. (a) the sum of that person's contributions to the scheme plus the sum of the contributions which his employer would have paid to the reserve pension scheme in respect of his service, if he had been a member of that scheme during the appropriate period of his employment, or
  2. (b) the actuarial value of his entitlement on the date of the termination of his service,
whichever is the greater, which payment shall be used for the purchase of a deferred annuity for the benefit of that person, the first payment of which shall fall due on the date on which he reaches the normal age of retirement in the employment he has terminated.—[Sir B. Rhys Williams.]

Brought up, and read the First time.

Sir B. Rhys Williams

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

This is a subject on which I have frequently spoken both in Committee and in the House. Indeed, I made my maiden speech on this subject. Much of what I wish to say about the new clause may be found in HANSARD, in speeches that I have made in earlier years.

I take the view, which I think is generally accepted on both sides of the House, that a pension is a form of deferred pay. It is wrong that a man who changes his job before the normal age of retirement in his occupational pension scheme should lose his pension rights, as it were, retrospectively because he is not continuing in the employment in which those rights have started to build up.

It is obvious, and also generally accepted, I think, that transferability of pension rights is an ideal which we must seek to attain. Transferability has been provided in the public service. I therefore ask: why has it not been provided in this great structure Bill, reforming occupational pension schemes in the private sector?

We do not find transferability in the Bill. The proposal in the Bill is not even as satisfactory as the present situa- tion, because the majority of schemes provide for a man who leaves a contributory pension scheme early to take his contributions out, so that at all events he has the protection of the ability to take away his own asset.

9.30 p.m.

What the Government propose—a proposal that I criticised severely on Second Reading—is that the man should lose the right to remove his contributions. In other words, the firm, with which he may have quarrelled when he left, can retain his pension rights and is able to get the capital gains and the income free of tax until the normal age of retirement from that scheme, which may be 30 years or more later. Then the only liability on the employer is to pay out in money values which have remained the same as they were on the day when the man left the firm. That is so unsatisfactory that I believe my hon. Friend the Under-Secretary agrees that an amendment is needed.

There are various ways in which this idea could be improved. I am not asking that the Bill should simply restore the present situation, because I have come to accept the force of the most persuasive argument of my hon. Friend the Undersecretary that the object of a pension scheme—which is a tax-protected and privileged scheme—is to provide benefits for retirement and not to provide interim benefits for a man who changes his job. withdraws his pension contributions and then, perhaps, uses them unwisely and not necessarily towards the purchase of an eventual pension entitlement, a deferred annuity.

We shall go some way, but only a very small way, towards transferability if we amend the Bill to allow a man to remove his contributions and use them for the purchase of a deferred annuity in one of the schemes which already exists or a similar scheme which might be set up in the future for this purpose—one often hears people speaking about the desirability of a clearing house for accrued pension rights—but a scheme which will continue to get the benefit of the tax provisions which have been introduced in order to encourage occupational pension schemes.

By choosing a well-managed company the employee who withdraws part of his asset—that is, his contributions—from the first employer's trust may be able to make a satisfactory investment which will be reasonably proof against changes in the value of money.

The question then arises of the definition of the employer's contribution to the employee's pension rights during his years of service. How do we define the asset in terms which are sufficiently fair for people to accept that rough justice, at any rate, has been done? I recognise that there are scores of different types of scheme. It is very difficult to legislate in terms that will catch them all and provide reasonable justice for both sides. But the first-class advice that I have been given, and which I have sought to incorporate in the new clause, is near enough justice and would provide a satisfactory basis for an amendment of the Bill so as to take us at any rate as far as we need for the immediate present—to a half-way house between preservation and transferability.

The definition of the employee's asset in the trust is particularly difficult for young workers, because there are schemes which require the employer to put little or nothing into this trust on behalf of the younger workers, as from the actuarial point of view their own contributions are enough, or more than enough, to cover the trust's liability in their early years. The reserve scheme will provide a dynamised preserved pension including an employer's contribution for young early job changers. It is only 2½ per cent. of relevant earnings, so it is not very much. But at any rate an employee with a firm that has joined the reserve scheme and who changes jobs in his twenties, his thirties or even later will be certain eventually of receiving the benefit of his employer's contributions.

The spirit of the Bill requires that members of private schemes should do no worse than if they had been members of the reserve scheme. This really underlies all the provisions that are embodied in the Bill governing the recognition of occupational pension schemes set up by employers who do not choose to join the reserve scheme. In terms of preservation, occupational pension schemes should be no worse than the reserve scheme. It is easy to say that, because it is not very good, although—as I said on an earlier amendment—I hope it will improve rapidly with the passage of time. So, in new Clause 7 I have suggested that the employee should get a contribution of at least 2½ per cent. over the relevant earnings for the appropriate period of his employment.

I recognise that if it were accepted by the Government this contribution would end what I call the virtuoso-controlled funding systems that have been adopted in recent years by firms that are perhaps sailing as close to the wind as actuaries will permit in allowing the employees' asset to grow in the trust when they are putting nothing towards it. I recognise that many actuaries will say that this is perfectly sound practice in final salary schemes, but others feel it would be no bad thing for the occupational pension movement if this type of funding principle were made virtually impossible.

If one early leaver is entitled to make a claim on the fund equal to 2½ per cent. of the reserve scheme contribution from the employer, it may be asked, what about all the others—early leavers who leave the following week, or those who decide to remain loyal to the firm and stay with it at a time of particular difficulty? One must not allow the people who leave to take more out than the value of the asset which remains behind for each of the others. This, of course, I accept. So, if the employers accepted the liability to pay out 2½ per cent. to those who leave, the fund would have to be large enough for at least 2½ per cent. as employers' contribution to be available to those who remained within the fund on top of the sum of their own contributions.

I am willing to accept that the employees' own contributions, and indeed the employers' own contributions, should not bear interest, because one has to reflect that in a good occupational pension scheme there will have been life cover for the employee while he was in service. It is easy to forget that an employee has been getting the benefit of life cover throughout years of service during which he has not had the ill fortune to die. Nevertheless, it has cost the scheme something to give him that, and therefore it makes a rough and ready balance with the interest which might have accrued on the contributions year by year. However, in a general scheme the minimum contribution of 2½ per cent. which it would be necessary to put in for all employees and not only those likely to leave would be less than the altogether higher general payment to the trust.

So, for a good scheme what I suggest in new Clause 7 would not be onerous at all, and for a scheme run on rock-bottom lines I think it would be a sound safeguard which many actuaries would approve. Therefore, the first proviso in new Clause 7 is not very exacting.

What about the other provision—that the employee should be able to claim not less than the actuarial value? This, too, seems to be simply a question of justice. The definition of the actuarial value presents difficulties which I am assured have been solved by the Department in earlier essays on this subject. If they have been solved in the public sector, it need not take us too long to find an adequate definition of the actuarial value for the private sector.

It is part of the strategy of the Bill to give employees confidence in occupational schemes and to make them happy to belong to them. It is also part of the Government's policy to encourage people to make the most of their careers, which frequently means that a man, in pursuit of his own interest and that of his family, is right to change his job several times in his career. We must not continue to penalise, as we have done since the beginning of the occupational pension movement, the man who chooses to move about, in order to maximise his value to himself, his family, his firm and the community. It is necessary for the Government to act.

I do not blame the occupational pension movement, because this has not come about of itself. I have on earlier occasions sought to draw the attention of the House to the sometimes extreme difficulties which are put in the way of firms which would like to do better by such employees but are prevented from doing so by the rules of the Inland Revenue. Nevertheless, those regulations can be changed by Government.

What have the Government said their intentions are? In our manifesto for the 1970 election we said much the same as we said in previous elections and much the same as other parties have said in their manifestos. The specific words were: and we will ensure that everyone can take their pension rights with them when they change their job. I do not interpret that as meaning that they can take back their own contributions to pension funds and forfeit what the employer might have put in. A formula has to be found, which can be seen to be fair, to cover employers' contributions as well.

The new clause would give the employee two options, of which he can take the most favourable to him. Is that loading the dice too much on the employee's side? If the sum of his own contributions and the employer's 2½ per cent. is more than the actuarial value, one might say that he was placing too heavy a burden on the employer. But, equally, we must recognise that actuarial value is not as generous as it might be.

In a final salary scheme, the employee's eventual asset if he stays in the scheme throughout his career is related to his salary at 65, which is probably his highest earnings. But if he leaves at 35, it is a reasonable expectation that he will have been earning much less; if the trustees of the scheme are entitled to calculate his asset on the basis of his earnings when he was 35, apart from any question of changes in money values during the rest of his career, which is another issue, it is likely that this factor in the calculation of the actuarial value will be highly adverse to the employee. So it is once again a question of roundabouts and swings. On balance, the advice that I have been given and which has gone into the making of the clause has come from a very perceptive analysis of the sort of circumstances that are likely to arise.

If my hon. Friend finds fault with the wording of a back-bench amendment, I hope that he will at any rate say that the Government are prepared to honour the forecast of their policy that they made in the manifesto and that something will be done which will give people the assurance of protection of their own contributions in some scheme which will give reasonable protection against changes in the value of money, and that the early leaver can make a reasonable claim on the trust of his first employer in respect of the employer's contributions as well.

I am confident that there is no question of insoluble problems. The difficulty that arises is whether this is the opportune moment to place an additional burden on employers. We must recognise that if the beneficiaries of occupational pension schemes are to gain from a provision like the new clause the money will have to come from somewhere—and it will, of course, have to come from employers.

One has to think carefully whether this might be inflationary, or might upset all kinds of checks and balances in the economy. But whether it does or not, I believe that the will of the House and the country demands that something should be done now about transferability of pension rights.

9.45 p.m.

Mr. Dell

I have thought it right to add my name to the new clause. I do so because I support the wording of the clause and the motives behind it.

The hon. Member for Kensington, South (Sir B. Rhys Williams) laid down as a principle that people in occupational pension schemes should in no case do worse than they would have done had they been in the reserve pension scheme. I find that a totally acceptable principle, indeed, so acceptable that I advocated it as frequently as I could in Committee. But on no occasion could I persuade the Government or the Committee to agree with me. There are in fact many occasions within this Bill, surprising though it may be, bad as the reserve pension scheme is, in which the reserve pension scheme will actually prove to be better than the occupational pension scheme. One of these is where a person's pension within the occupational pension system is subject to frequent preservation.

It will be true of many young people and even in certain cases of older people, if the rate of inflation increases. There are many circumstances in which people can actually do better within the pathetic reserve pension scheme than they would within the occupational pension system at minimum level. As the hon. Gentleman now states that principle to the House, I want to say at once that I agree that it is a principle relevant to this new clause.

Among my other reasons for supporting the new clause is that I believe trans- ferability should be encouraged, not discouraged. The effect of this Bill is to discourage transferability. It discourages it because it writes into the Bill preservation at such low cost to the scheme that employers will be disinclined to move towards transferability because they will prefer to rely instead on the financial gains to the scheme which accrue to them from people leaving the scheme.

It has always been calculated that something like 15 per cent. to 20 per cent. of the cost of schemes is met by leaving members who get only the return of their own contributions. Preservation as laid down in this Bill will make very little difference to those figures. The Government claim that preservation is an advance. Of course it could be, but I doubt very much whether preservation as laid down within this Bill is in fact an advance. I believe that it could be a retreat and that it could be damaging to occupational pension schemes, even good ones, and even to good final salary schemes, because I believe that the acceptability of the occupational pension system has depended, in some part at any rate, on the fact that people could withdraw their contributions when they left an employment. When they went into an employment they were compelled to be a member of the occupational pension scheme run by the employer, but at any rate they knew that if they left they would have as a minimum the return of their own contribution, as I myself have experienced on more than one occasion when I have received a return of contribution on leaving an employment.

I say to the Government that it is only right to withdraw this facility of return of contributions if there is a good substitute. If there is a good substitute one can argue that substitute to the person who would prefer to have a return of his contribution. He can be shown that he will do better by the substitute than he would by return of contribution. But in this Bill return of contributions can continue to be better than preservation, even if the return of the contribution does not include the employer's share. As reported in col. 1270 of the Committee proceedings, I gave a specific example of where I believed return of contribution would be better for the individual than preservation under the Bill. I asked a Question of the Minister, quoting that Question, I believe at c. 1269 of the Committee proceedings, showing in a particular example how preservation under the Bill could be inferior to return of contribution. It is not acceptable that people should be deprived of an established right unless something at least equivalent is put in its place—and nothing equivalent is put into its place in the Bill.

I am not saying that we should make this point about return of contributions an article of faith. I am prepared to see it withdrawn so that when they retire people shall not become dependent upon supplementary benefit, provided that there is a proper substitute. But there is no proper substitute in the Bill. Preservation can be a disincentive to the mobility of labour at a time when we want that mobility to be encouraged. People know how much they lose when they leave an employment. They will lose more under the Bill than they lose now and this is another unsatisfactory aspect.

Another reason why I support the clause is the Government's complete failure, in spite of the extended discussions on this point in Committee, to bring forward anything better than was in the Bill to begin with. We had assurance after assurance from the Minister about the consideration he would give to the arguments which were adduced in Committee. He said, for example, I take the right hon. Gentleman's point —it was made by my hon. Friend the Member for Kensington, South (Sir B. Rhys Williams) as well—that one of the effects of preservation to the minimum standards could be that some people would find their contributions locked in to their disadvantage, or they might be in the position where they would receive in their preservation a value less than the contributions they had paid. I recognise that this is an area which is not covered under existing arrangements. In other words the Government recognise the very points I have presented to the House. He said, I shall listen to what is said during the debate and will give consideration to the possibility of doing something to meet the case where the employee finds, or could find, that the benefits preserved to him are less than the contributions he has paid into the scheme. Again the Under-Secretary, referring to one of his hon. Friends—I suspect the hon. Member for Kensington, South— said: The other aspect which concerned my hon. Friend was to ensure that if this route should turn out to be inappropriate, we could find some way in which at least the contributions of people who had contributed to any type of scheme were guaranteed in some form in the event of their leaving the schemes. I should be willing to consider that possibility. And again: We shall consider the solutions in the light of the suggestions made by hon. and right hon. Members on both sides of the Committee, and I repeat the undertaking that I gave earlier today, namely to return to the House on Report with the Government's views on the best approach to the problem."—[OFFICIAL REPORT, Standing Committee E, 27th March 1973; c. 1276 and 1289–90.] The House may consider that these are firm categorical assurances which the Minister gave but what do we find on the Order Paper? Nothing. The Government have sat on this egg and they have hatched absolutely nothing. We are left with the deplorable preservation conditions which are unacceptable in themselves and are a disincentive to what is in most cases, though not in all, the far better solution of transferability. It is for this reason that I support the new clause and I hope that the hon. Member for Kensington, South, if he does not get satisfactory replies from the Minister, wilt force the issue to a vote.

Mr. A. G. F. Hall-Davis (Morecambe and Lonsdale)

Although I have not had the benefit of listening to the Committee discussions I should like to say some-think on the new clause. I know how dedicated is my hon. Friend the Member for Kensington, South (Sir B. Rhys Williams) to improving all form of social benefit and I fully support him in focusing attention on the importance of transferability. Failure to cope with this problem by those responsible for occupational schemes and by previous Governments, has been one of the great and outstanding weaknesses of pensions. It has persisted for a deplorably long time.

The Government's proposals go considerably further than those put forward by the Opposition in the Bill they introduced in the closing days of the last Parliament. I welcome that advance. I should have liked to say that I felt that my hon. Friend had found the right solution, because he goes into these matters so thoroughly. I am afraid that I cannot say that about the new clause. The danger of moving too quickly in the area of transferability is that, strangely enough perhaps, it will militate against the older man in favour of the younger man.

The younger man has a much better pension prospect ahead of him whether he is working for a company that has, or is likely to, institute an occupational scheme, or whether he will remain in the money purchase reserve scheme. I suppose that the greatest criticism of having to use a money purchase scheme as the fairest method of operating a State reserve scheme is that it is so beneficial to the younger man and it does not enable one to introduce the element of redistribution of pension entitlement, which was one of the strengths of the early days of an occupational scheme.

One cannot overlook the fact that all occupational schemes have a large element of pay-as-you-go in them. My feeling about the new clause that my hon. Friend has introduced is that it will hit the employer at both ends because the option that he is holding out will enable the younger man probably to take from the employer more than the employer felt would be created as his liability for that employee. It would certainly enable the older man to take in actuarial terms, or in cash terms, far more than the employer would have paid in for a late joiner to his company and would therefore, make the employer more reluctant to take an older man.

I feel that one has to be careful about introducing complicated options exercis-able by the employee. This may sound a controversial statement from someone who I hope is on record as supporting free choice in society, but I have had the opportunity of seeing time and time again an individual exercise the wrong option in the face of all the disinterested expert advice that one could put before him. I should be happier if there were no complicated option demanded from the individual to exercise.

I think the new clause could become a minimum that occupational schemes would provide. I think they should do far more, and pressures will undoubtedly make them do more shortly. I believe that it could act as a deterrent to the expansion and to the introduction of new occupational pension schemes. I do not think that the deterrent effect of inflation on the introduction and expansion of final salary pension schemes has yet been fully felt. Firms which in good faith have introduced in recent years final salary pension schemes and have given, out of a sense of wanting to help long-service employees, generous back service entitlement, now find themselves, from the inflation of the last few years, with substantial liabilities resulting from the pace of inflation and the curve of earnings.

I hope that my hon. Friend the Member for Kensington, South, will forgive me on this occasion for not being able to support him—

It being Ten o'clock, the debate stood adjourned.

Ordered, That the Social Security Bill may be proceeded with at this day's Sitting, though opposed, until any hour.—[Mr. Murton.]

Question again proposed, That the clause be read a Second time.

Mr. Hall-Davis

I am sorry that I cannot support my hon. Friend the Member for Kensington, South but I hope that that will not discourage him and other hon. Members from pressing the Government to find the right solution. I congratulate my hon. Friend, who has such an outstanding technical command of the subject, on the progress that he has made. It was long overdue.

Mr. George Cunningham

The hon. Member for Morecambe and Lonsdale (Mr. Hall-Davis) suggested that it would be a disincentive if employers were required to make more appropriate provision for transferability and preservation. Surely it is also true that we impose a very severe disincentive on the free movement of labour if employees find it a big disadvantage to move from one job to another in less than five years. It is notorious that we ought to have more mobility of labour and that losing one's pension rights, or a significant part of them, is a very important deterrent to that mobility.

I did not hear the opening remarks of the hon. Member for Kensington, South (Sir B. Rhys Williams) but, in case he did not stress the point, I ought to remind hon. Members that the issue is very important for any individual involved in transferring from one job to another and that the number of such people is very large at present. The latest statistics show that in occupational pension schemes there was a 10 per cent. turnover in the period covered by the Government Actuary's last report and that, of that turnover, no less than 70 per cent. made the transfer with less than five years' service and, therefore, in terms of the Bill, would not have been guaranteed full preservation of the benefits that they had accrued in service, although some may have enjoyed that preservation.

It is difficult to estimate what that is in terms of numbers in normal conditions as opposed to a period when membership of occupational schemes has been declining. My estimate in Committee was about 400,000 per year, and that will not be very far out. That means that a great many people will be discouraged from shifting jobs when they would otherwise wish to do so, due entirely to inadequate preservation of pension entitlement.

Mr. Albert Booth (Barrow-in-Furness)

I wish to support the clause because I believe that, in the absence of it or of some similar provision, employers may continue to use pension schemes quite wrongly for the purpose of retaining labour which would otherwise move, for very good and valid reasons, from job to job.

Anyone who has had the job of a trade union representative trying to negotiate improvements in pension schemes with employers who have bad records in respect of their provision for older employees will know that one of the greatest difficulties lies in securing anything like adequate transferability. In firms where employees depend on maintaining their jobs for the provision of reasonable pensions on retirement, they will hang on to their jobs, irrespective of the conditions, for the last few years of their employment. This cannot be a desirable situation to perpetuate in law. Also, we should recognise that what we call a free exercise of the option to leave one job for another is, in many cases, anything but a free choice for the person involved; that with the large number of technological changes taking place at the moment, and changes in the pattern of employment in certain areas, people are heavily influenced to move their jobs because of what happens not only in their own employment circumstances but that of other immediate members of their families. For that reason, they decide to leave a job and find themselves, in the circumstances of many pension schemes, at a considerable disadvantage.

I would like to challenge the point made by the hon. Gentleman the Member for Morecambe and Lonsdale (Mr. Hall-Davis) regarding the way in which an individual exercises his option in moving from one job to another. If this new clause were passed, there would be no question of the individual's making the wrong choice. He would be required by the terms of the new clause to take the better of the two provisions open to him.

For all those reasons, I support those who have spoken in favour of this new clause, and hope that the House will pass it this evening.

Mr. Dean

It is very appropriate that my hon. Friend the Member for Kensington, South (Sir B. Rhys Williams) should be introducing a debate on this subject this evening because for many years he has advocated improved arrangements for transferability of pension rights. Indeed, it is fair that the House should concede that my hon. Friend, in his advocacy and from his immense knowledge of this subject, over the years has done a great deal to inspire the progress in this field which is represented by this Bill. On the other hand, of course, my hon. Friend the Member for Morecambe and Lonsdale (Mr. Hall-Davis) sounded a note of caution as to how far one should go beyond what is already written into this Bill at the present time—and, given the inevitable limitation of the resources of employers, how much one should expect them to devote to the pension rights of the early leavers in contrast to the man or the woman nearer pension age.

The right hon. Member for Birkenhead (Mr. Dell), in his intervention, was, if I may say so, less than his usual fair self because he condemned the Government before he had heard what the Government were proposing to do in this field. I hope he will feel more satisfied when I have had a chance to explain that.

Preservation of pension rights is something which has been talked about in this country for years, and very little has been done about it. Although it is fair to say that a great many pension schemes now provide for preservation or transfer-ability, it is in many cases on a voluntary basis and the individual exercises the choice when he leaves. In a great many cases the choice that the individual has made has been to withdraw his own contribution from the pension scheme and to lose all benefit of the contributions paid by his employer, or from the investment of the fund. As a result we have the hole in the bottom of the bucket, the person building up pension rights in a job and then losing those pension rights, through his own choice in many cases, when he leaves. Later in his life, when he comes near to retirement, he may regret it.

Therefore, what we say in this Bill is that we have now reached a point at which pension rights should be regarded as deferred pay to which men or women are entitled in the same way as they are entitled to their monthly salary or their weekly wages. Therefore, when they leave their jobs there should be some provision for the preservation of those rights. That, in essence, is what this Bill provides for, and I hope the House will agree that this is a major advance on much current practice.

There are various ways in which this will be done in practice. The Bill lays down minimum standards which must be observed—in this case the preservation of pension rights. Many of us would prefer to go further towards transferability, but the House will probably agree that, at least at this stage in the advance of pension schemes, to compel transfer-ability would mean compelling some individuals, depending on the scheme they are in now and the scheme they are moving to, to a bad bargain. In its simplest terms that is the main reason why we have not gone as far as to compel transferability.

There is little doubt that every pension scheme—not only recognised schemes, but all schemes—will have to provide for the preservation of pension rights in one form or another. They will, therefore, have to consider how best to do it. Many will feel that transfer-ability of the full pension rights from the scheme that the person is leaving to the new scheme he is joining will be the most satisfactory way not only for the em- ployee but for the employer. When people leave them many employers will be anxious to fulfill their obligations under the Bill and to get those men or women off their books rather than to keep them on their books and possibly to keep track of them for 20 or 30 years. In many cases, the decision will be made for transferability rather than for preservation.

Here, the public service is setting a good example, as it should, in that in public service schemes under certain conditions transferability will be available before the compulsory date laid down in the Bill.

Another way in which this obligation may be carried out is through the deferred annuity which was mentioned by my hon. Friend the Member for Kensington, South. Here, too, in some cases this may be the most appropriate course both for the employee and the employer.

In discussing the various choices, the right hon. Member for Birkenhead said that he was doubtful whether transfer-ability would take place to any extent because of the comparatively cheap option he thought preservation would provide. When I come to tell the House what we propose, he will perhaps take a slightly different view. Whatever his view on that may be, I suggest to him that the very fact that employers will be anxious if they can to complete their obligations when a man or woman leaves them will be a powerful influence towards the transferability of pension rights where this can be appropriately done, as in many cases it can.

The Government are sympathetic to the suggestion made by my hon. Friend the Member for Kensington, South that we should find a suitable way of ensuring at least a fair return on an employee's contributions when he leaves. That is the main argument that my hon. Friend put, and he has put it on many previous occasions. I freely concede that point to him and I shall in a few moments say how the Government propose to put it into practical operation.

My hon. Friend went on to say that there should also be some element of the employer's contribution. Here, one introduces a different concept which could cut across, the basis on which most schemes and the benefits they provide are structured. There may also be, as I think my hon. Friend recognised, some undesirable practical results.

My hon. Friend the Member for More-cambe and Lonsdale drew attention to the common practice in occupational pension schemes to have a cross-subsidy between the generations within the scheme. My hon. Friend described it as redistribution of pension entitlement in occupational schemes. This is one of the desirable features of schemes.

I do not think my hon. Friend the Member for Kensington, South would wish to put occuational schemes and employers in a position in which they might have to make a choice between doing more for the early leaver and less for the full-term member. I suggest that there is a great deal of substance in the point made by my hon. Friend the Member for More-cambe and Lonsdale that there is a risk, if we put too many obligations on employers and schemes at this time, that it will be to the disadvantage of the full-term members and those nearing retirement age.

10.15 p.m.

One has also take into account that in the Bill not only are we for the first time putting an obligation on occupational schemes for preservation, but we are also putting on them new requirements as to the minimum level of pension to be provided in regard to widow cover and increases in the pension to take care of inflation. To meet the conditions laid down in the Bill the cost for many schemes will rise. The more we oblige them to incur additional costs to help the early leaver, the more difficult it will be for them to fulfil their obligations towards the full-term members and those nearing retirement age who should have the first command on the resources of the scheme.

Mr. O'Malley

If it is desirable, as I agree with the Under-Seoretary that it is, that there should be a cross-subsidy between the generations in occupational pensions schemes, would he care to explain to the House why it is undesirable that those not fortunate enough to be in an occupational scheme and who are forced into the reserve scheme should enjoy that same kind of cross-subsidy?

Mr. Dean

That is because the reserve pensions scheme is entirely different. The recognised occupational scheme or series of schemes is run by an employer for his employees. Therefore he can have a cross-subsidy within the arrangements. In the reserve pensions scheme there will be a large number of different employers contributing, many of them in competition with each other, and a large number of different employees contributing to the scheme. The only way to ensure value for money and an effective return for each individual in the reserve pensions scheme is by ensuring that there are not cross-subsidies and that the money purchase title arrangements are assured.

Having put the points which were put so effectively by my hon. Friend the Member for Morecambe and Lonsdale about obliging the employer in some way to make a contribution in this area, I go on to suggest the way in which the Government feel we can go further than is provided in the Bill at present. This, of course, was a matter which we discussed in Committee, and I undertook to return to it on Report with the Government's views on how best to approach the question of ensuring that members of contributory schemes were guaranteed in one way or another at least value for their contributions. One possibility I mentioned in Committee was a requirement for contributory schemes to give leaving members the option of a deferred annuity purchased with their contributions.

Another approach would be to place a direct legal obligation on scheme trustees and managers to take steps to ensure that members received value for their contributions on leaving, without necessarily specifying whether they need increase the level of benefits preserved by the scheme in an appropriate manner, or arrange for insurance contracts to be bought. It seems reasonable that schemes might be excluded from such a requirement if they already provided value for the member's contributions in one way or another.

Most money purchase schemes, for example, seem to fall into this category. There would be a strong prima facie case for excluding schemes which increased preserved benefits on an acceptable basis over the period between a member leaving and reaching pension age. I should emphasise that this is a highly complex area in which we shall have to seek the views and advice of the Occupational Pensions Board. We shall need to make sure that any provision is sensible and workable. We must do all we can to ensure that employees are not worse off by having to accept a preserved pension worth less than a refund of their contributions. We are undertaking, under the powers in Schedule 14, to make suitable regulations which will cover this point.

I hope that the House will feel that we have gone some way to meet the point that my hon. Friend the Member for Kensington, South made. I hope he will feel that we have gone a good way along the road he wishes us to move by at least ensuring that the value of an individual's contributions will be available to him in one form or another.

Sir B. Rhys Williams

Would my hon. Friend be so kind as to enlighten me? Does this mean that the Government's intention is to ensure that in no circumstances will the amount received by the man be less than the actuarial value of his assets in the fund?

Mr. Dean

Yes. My hon. Friend is broadly right. We shall ensure that in no circumstances will an individual receive less than the value of his own contributions. I give this assurance to my hon. Friend and to the House. I hope that the House will feel that with this firm commitment, which will be embodied in regulations, we have not only made a major advance in the preservation of pension rights but we have here one of the most important and far-reaching features in the Bill.

I am certain that, having laid down these minimum standards, we shall find in this area, as in others where the Bill lays down standards, that current practice will rapidly develop, and transfer-ability, where it is most appropriate, will grow following the good example now being set in the public service. I hope that the House will feel that this major advance, on which we are now proceeding somewhat further with the commitment I have given, is a satisfactory solution to the problem of preservation of pension rights which has been talked about for so long but on which so little action has been taken until now.

Mr. O'Malley

I am sure that privately the Under-Secretary cannot expect the House to be satisfied with the present preservation arrangements as set out in the Bill. It is disappointing that after the major discussions in Committee no new proposals have come forward. All that the hon. Gentleman has been able to say, if I may paraphrase his remarks, is, first of all, that there are a number of new requirements being made as a result of the Bill. That is true, although those new requirements do not take us very far.

Secondly, the hon. Gentleman said that there is a major advance on much current practice. The Bill brings us to the current practice, of which I should like to give an example—and a very unsatisfactory current practice it is. I have received a letter from a Mr. Richardson of King's Lynn, who expressed the wish that his case and his dispute with the National Westminster Bank should be used as an illustration in the debate. It is a very useful illustration. He writes: I left the service of that bank, then the Westminster, 12 years ago and was told I had in cold storage a pension of £550 per annum to be drawn after I reached the age of 60. I do reach this age this year and have been in contact with that bank pointing out that inflation has in 12 years halved the purchasing power of the pension. In spite of record profits of £140 million last year, that bank has point-blank refused to do anything for me. That is not untypical of the behaviour of employers, major and minor, when they are preserving pensions. What the Minister is doing is to perpetuate that kind of situation. The basic weakness of the preservation arrangements made in the Bill is that there is no provision for pre-award dynamism, although the Minister admitted to a delegation from the National Federation of Professional Workers that such pre-award dynamism was very important and desirable. The Government have persistently, throughout all the discussions on the Bill, refused to introduce the concept into the preservation arrangements.

The second thing the Government have failed to do, in spite of the debate in Committee, is to make firm proposals, which they should have been introducing and not leaving to the Occupational Pensions Board, about the future of clearing house arrangements. As a number of us pointed out in Committee, there could well be people retiring half a century and more into the future who will have bits of non-dynamised preserved pensions scattered all over the country, with no adequate administrative arrangements to see that those payments are made or that the beneficiaries are traced, and certainly no arrangements for any investment of the deferred income of those beneficiaries to be used to provide an income to give some protection against the inflation about which the writer of the letter I have quoted has complained.

The second comment I must make on the general question of preservation is that although hon. Members on both sides raised the matter of the early leaver the Government have done nothing to change the five-year qualification terms for a preserved pension. The National Union of Journalists lobbied Opposition Members, and I assume that it also lobbied Conservative Members, including Ministers, pointing out that its profession was not entirely untypical of many other professions in which if young men were to make a future for themselves they would work for perhaps 12 months, 18 months or two years for one employer and then move on to another. That must be the situation in many other professions, occupations and industries.

Although we raised the matter with the Under-Secretary, nothing has been done to make the preservation arrangements more flexible to deal with the needs of such categories. The Government have done nothing to ease their passage into the reserve pension scheme. As the scheme is a money purchase scheme, the value of the pension eventually paid out depends not only on the amount of money paid into the scheme but on the age of the person concerned at the time specific sums are paid in and on the year in which such sums are paid in. It can be the case and it will be the case that quite large numbers of people who move after a couple of years, for example, in one job to another job in seeking promotion, with the ex-employer having no responsibility to provide a reserve pension and having to make no arrangements for transferability, will make payments into the State reserve pension scheme. As it is a money purchase scheme, such categories will have a reduced pension because their contributions are being put in at a later date.

10.30 p.m.

It is inevitable, because the preservation requirements put forward by the Government are unsatisfactory, and in a mess which could have been resolved had the Government been prepared to consider the situation between Committee stage and Report stage, that we are obliged to consider any proposal or any new clause or amendment which would seek to give a greater degree of equitable treatment to the categories which I have mentioned or to improve the preservation arrangements and the facilities open to individuals to build up for themselves reasonable pension rights.

I must tell the hon. Member for Kensington, South (Sir B. Rhys Williams) and my right hon. Friend the Member for Birkenhead (Mr. Dell) that I have some reservations about the formula which they have adopted. For example, if an employer is making a contribution of 5 per cent. to an occupational pension scheme-that should be regarded as deferred pay. The employer should not have an obligation to pay back to his ex-employee his contributions minus tax plus 25 per cent. rather than 5 per cent. or 6 per cent.—

Sir B. Rhys Williams rose—

Mr. O'Malley

That is part of the deferred pay of that ex-employee.

Sir B. Rhys Williams

I think that the hon. Gentleman has not fully read the new clause. It is intended that the employee, in the event of his exercising his option to take out the assets from the fund to purchase an annuity, should be given the actuarial value of his entitlement if that were the greater. That would cover the point which the hon. Gentleman is making.

Mr. O'Malley

That may or may not cover the point. It could do so in the generality of circumstances. I have read the new clause and there is no guarantee that that would be the case. It is a sorry reflection on the structure being put forward by the Government that we must depend on individuals purchasing deferred annuities to provide decent pensions for themselves and for their families in retire- ment. How much better were the comprehensive proposals put forward by the last Labour Government, which not only provided complete transferability for anyone who was paying into the State scheme but gave benefits of a magnitude and of a type which are unparalleled in the legislation which we are now considering

I express reservations about the new clause because of the entirely unsatisfactory nature of the preservation arrangements. My reservations are expressed only in that context. I recommend to my right hon. and hon Friends that if the two hon. Members who put down the new clause wish to put it to a Division on the basis that the present preservation arrangements are extremely unsatisfactory, they should vote for it merely to reflect their dissatisfaction with the arrangements.

Mr. Marks

The Under-Secretary's reply confirmed my view that the hon. Member for Kensington, South (Sir B. Rhys Williams) was being naive when he quoted the Conservative Party's manifesto for 1970. To the hon. Gentleman, to myself, and to most people interested, the words, And we will ensure that everyone can take their pension rights with them when they change their job", meant transferability, and that we have not got.

The hon. Member for Morecambe and Lonsdale (Mr. Hall-Davis) said that there are more provisions for transferability of private pensions in this Bill than in the 1970 Bill. Of course there are. We had no need to worry about the private occupational pension schemes in the 1970 Bill, because there was a substantial National Superannuation Bill with full transferability, and many of the private and public service schemes were to reduce contributions and benefits, so that they were topping up the main scheme.

The contributions to private schemes made by employees and employers are, as my hon. Friend the Member for Rother-ham (Mr. O'Malley) said, deferred wages. Not only the contributions made by employees, but those made by employers, are deferred wages, and they are taken into consideration when negotiations take place.

Transferability rights written into the Government's scheme are now written into public service schemes. If the private schemes are as good as we are led to believe, they ought to be written into them, too. I am sure that if the Government had said in the White Paper that transferability was necessary for acceptance by the board, the companies would have found some way of doing it.

The whole purpose of the Bill is not to provide adequate pensions, but, as the Under-Secretary said, to maximise occupational pension schemes. We have not got transferability because of the opposition of private pensions interests. We have not even got what the hon. Member for Kensington, South is asking for.

In January the National Association of Pensions Funds, despite pleas from some on its platform that the kind of thing for which the hon. Gentleman is asking was not possible, overwhelmingly voted in favour of such a scheme. I urge right hon. and hon. Members on both sides of the House to support the new clause.

Sir B. Rhys Williams

I hope to deal briefly, but fairly, with the points that have been made.

First, I should like to thank right hon. and hon. Members on both sides of the House for the way that they have dealt with the new clause and for some of the pleasant remarks they have made about my efforts, which I am sure I do not deserve.

I hope that the hon. Member for Rotherham (Mr. O'Malley) did not think that I intended any discourtesy when I said that he had not fully taken in the implications of the new clause. It would be premature to suggest that employees should be entitled in certain circumstances to take out more than their contributions, plus the minimum contributions that their employers might have made to the reserve scheme, and more even than the actuarial value of their own asset in the scheme. I should be chary about inviting the House to go so far as the hon. Gentleman suggested. However, he was kind enough to welcome the new clause and to suggest that right hon. and hon. Members on both sides should support it. Therefore, I appreciate the general tenor of his remarks.

My hon. Friend the Member for Morecambe and Lonsdale (Mr. Hall-Davis) made three or four serious points. He said that the Bill went further than the Crossman Bill. It goes further than that Bill when it began, but I recall that the long Committee stage, in which my hon. Friend played a notable part, ended with the Secretary of State accepting an amendment of mine, if my memory is right, which, unless I am much mistaken, meant that at the time that it died the Crossman Bill conferred transferability of pension rights. This little nugget of gold that went down with the coffin into the deep when the Bill was lost I have been unable to dredge up again, but I live in hope.

My hon. Friend felt that there was a danger that a provision of the kind that I am suggesting would militate against the older man. I tried to show how it would be necessary for schemes to accommodate their funding methods to the implications in the new clause, but that it would not place a heavy burden on employers. I do not think that the young who leave, whom my hon. Friend felt would be getting an advantage, would be getting such a serious advantage in many schemes if they got only 2½ per cent. from their employers' contributions, bearing in mind that in many sound occupational pension schemes the employer will be putting in an average of 10 per cent. or even 15 per cent. on top of the employee's contribution of perhaps 5 per cent. A minimum overriding obligation for employers to pay out 2½ per cent. is not a very frightening commitment.

Concerning the other horn of the option, if my hon. Friend is grumbling that the young employees who take out their actuarial rights would be robbing the scheme, he must be thinking of schemes which are not fully funded. My hon. Friend would not like to be known as the friend of the unfunded schemes. I hope that he will reconsider the points he was making.

Concerning the question of requiring employees to make a complicated option, I quite appreciate the danger; but that was not my intention and it would not be the effect of the new clause. The option which the employee would exercise, as I understand it from the words on the Notice Paper, is that of asking the trustees to purchase him a deferred annuity. The way in which they valued his asset would not be at the employee's option nor, indeed, at the trustees' option. They would have to buy for him a deferred annuity on whichever terms were the greater by the two methods of calculation.

My hon. Friend also said that a clause of this kind would have a deterrent effect on occupational pension schemes. Nothing has happened since 1970, when we thought that transferability was right, to change the situation. If occupational pension schemes cannot introduce even this limited degree of protection—or will not do it—that is about the worst thing that we have heard concerning such schemes.

I was grateful to my hon. Friend the Minister for his remarks. I understand his reasons for caution. Certainly one wants to be cautious in making provisions which will affect many millions of people in regard to assets which are of great value. My hon. Friend the Minister is right in saying that preservation of pension rights is something which has been talked about for many years. But it has been talked about for many years too long. The time must come very soon when something is done about it.

The Bill requires some preservation in that it prevents employees from taking out their own contributions in future. It would not be right to suggest that every employee who takes out his contributions is a reckless fool. It may well be that he is taking out his contributions in order to find the deposit for a new house, which probably would he his most precious asset when he eventually retires. He certainly would not have lost the value of his contributions for his retirement in that case.

I pressed the Minister to say whether, by the provisions for protection which the Government intend to introduce into the Bill at a later stage, the actuarial value of the employee's asset would be protected, and his reply seems to be very much, "Yes, we have no bananas". Yes, it was the Government's intention; but, no, that would not be the actual effect of what the Government intended to do. In fact, all that the Government intended to do was to give the trustees, who do not like keeping little fiddly bits of preserved pension on their books because of the cost, which is undeniable, a way of clearing them off and saying goodbye to the unsatisfactory early leaver.

By his reply, my hon. Friend the Minister has not met my point. He made two other points, that the new clause might mean that the trustees would have to make a choice between doing more for the early leaver than for the older man, which might be to the disadvantage of the full-time member; and that it would be putting new requirements on employers. That is true. As I tried to explain in introducing the new clause, if one changes the law to the advantage of the beneficiaries, one is putting new burdens on someone. It would not be possible for employers altogether to shake off that burden. If they tried to do it, it could be that the older men would suffer. I believe that that would not be possible under the particular terms of the new clause, though it would be a matter possibly requiring further consideration. The extra burden that the new clause would place on employers is a relatively small one. We said that we would do it. Now is the time to do it.

I have one or two further points to mention so that right hon. and hon. Members can perhaps see this proposal in focus. By the time a man has reached mid-career in the sort of occupational pension scheme which most people would regard as reasonably satisfactory, his asset in the scheme is likely to be worth considerably more than his house. To lose that when one changes one's job is a more serious matter than many people realise until they have lost their rights and it is too late. I know, too, from years of experience in personnel selection work that the fear of loss of pension rights seriously restricts job movement among senior men. If we do not do something about this, we are not acting in the national interest so far as industry is concerned.

Most employers want something to be done about protection of pension rights, because a more fluid labour market is to the advantage of the active employer who wants to expand and recruit good men with useful experience. Employers have been hampered for years by the iniquitous "mixed benefits" rule applied by the Inland Revenue, and I believe that they would seriously like the Government to grasp this nettle.

The administrative cost of keeping little fiddly bits of preserved pension, as originally suggested in the Bill, is a serious potential burden for employers which they cannot want. Therefore, I believe that the House would be right to adopt something on the lines of the new clause. We would then be sending the Bill for

consideration in another place with our own best idea of how transferability should be approached. I believe it would help the noble contributors to that debate to have something specific to chew on. I shall therefore ask the House to support me in pressing the new clause.

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

The House divided: Ayes 162, Noes 168.

Division No. 125.] AYES [10.47 p.m.
Abse, Leo Gourlay, Harry Oakes, Gordon
Archer, Peter (Rowley Regis) Grant, George (Morpeth) Ogden, Eric
Ashton, Joe Griffiths, Eddie (Brightside) O'Halloran, Michael
Bagier, Gordon A. T. Grimond, Rt. Hn. J. O'Malley, Brian
Barnett, Joel (Heywood and Royton) Hamilton, James (Bothwell) Orbach, Maurice
Baxter, William Hardy, Peter Oswald, Thomas
Bishop, E. S. Harpar, Joseph Palmer, Arthur
Blenkinsop, Arthur Harrison, Walter (Wakefield) Pardoe, John
Boardman, H. (Leigh) Heffer, Eric S. Parker, John (Dagenham)
Booth, Albert Holt, Miss Mary Parry, Robert (Liverpool, Exchange)
Bottomley, Rt. Hn. Arthur Horam, John Pavitt, Laurie
Bradley, Tom Houghton, Rt. Hn. Douglas Peart, Rt. Hn. Fred
Brown, Robert C. (N'c'tle-u-Tyne,W.) Huckfield, Leslie Perry,Ernest G.
Brown, Hugh D. (G'gow, Provan) Hughes, Mark (Durham) Prescott, John
Brown, Ronald(Shoreditch & F'bury) Hughes, Robert (Aberdeen, N.) Probert, Arthur
Buchan, Norman Hunter, Adem Rees, Merlyn (Leeds, S.)
Buchanan, Richard (G'gow, Sp'burn) Janner, Greville Rhodes, Geoffrey
Butler, Mrs. Joyce (Wood Green) John, Brynmor Roberts, Albert (Normanton)
Campbell, I. (Dunbartonshire, W.) Johnson, James (K'ston-on-Hull, W.) Roberts, Rt.Hn.Goronwy (Caernarvon)
Cant, R.B. Johnson, Walter (Derby, S.) Robertson, John (Paisley)
Carmichael, Neil Jones, Barry (Flint, E.) Roderick, Caerwyn E.(Brc'n&R'dnor)
Carter-Jones, Lewis (Eccles) Jones, Gwynoro (Carmarthen) Rose, Paul B.
Castle, Rt. Hn. Barbara Jones, T. Alec (Rhondda, W.) Ross, Rt. Hn. William (Kilmarnock)
Clark, David (Colne Valley) Judd, Frank Short, Rt. Hn. Edward (N'c'tle-u-Tyne)
Cohen, Stanley Kaufman, Gerald Silkin, Rt. Hn. John (Deptford)
Coleman, Donald Kinnock, Neil Silverman, Julius
Concannon, J. D. Kinnock, Neil Skinner, Dennis
Conlan, Bernard Lamond, James Small, William
Crawshaw, Richard Lawson, George small, William
Crosland, Rt. Hn. Anthony Leonard, Dick Spearing, Nigel
Cunningham, G. (Islington, S.W.) Lestor, Miss Joan Spriggs, Leslie
Cunningham, Dr. J. A. (Whitehaven) Lipton, Marcus Steel, David
Dalyell, Tam Lomas, Kenneth Stonehouse, Rt. Hn. John
Davidson, Arthur Loughlin, Charles Strang, Gavin
Davies, G. Elfed (Rhondda, E.) Lyon, Alexander W. (York) Summerskill, Hn. Dr. Shirley
Davis, Clinton (Hackney, C.) Lyons, Edward (Bradford, E.) Thomas, Rt. Hn. George (Cardiff,W.)
Davis, Terry (Bromsgrove) Mabon, Dr. J. Dickson Tinn, James
Doig, Peter McBride, Neil Tope, Graham
Douglas, Dick (Stirlingshire, E.) McEihone, Frank Torney, Tom
Douglas-Mann, Bruce McGuire, Michael Urwin, T. W.
Duffy, A. E. P. Machin, George Varley, Eric G.
Dunn, James A. Mackintosh, John P. Walnwright, Edwin
Dunnett, Jack McMillan, Tom (Glasgow, C.) Walker, Harold Doncaster)
Eadie, Alex McNamara, J Kevin Watkins, David
Edwards, William (Merioneth) Marks, Kenneth Weitzman, David
Ellis, Tom Marsden, F. Wellbeloved, James
English, Michael Mason, Rt. Hn. Roy White, James (Glasgow, Pollok)
Ewing, Harry Meacher, Michael Whitehead, Phillip
Faulds, Andrew Mellish, Rt. Hn. Robert Williams, W. T. (Warrington)
Fernyhough, Rt. Hn. E. Mendelson, John Wilson, Alexander (Hamilton)
Fletcher, Ted (Darlington) Millan, Bruce Wilson, William (Coventry, S.)
Foot, Michael Mitchell, R. C. (S'hampton, Itchen) Woof, Robert
Ford, Ben Molloy, William
Forrester, John Monks, Mrs. Connie TELLERS FOR THE AYES:
Galpern, Sir Myer Morgan, Elystan (Cardiganshire) Mr. Brandon Rhys-Williams
Gilbert, Dr. John Morris, Alfred (Wythenshawe) Mr. Edmund Dell
NOES
Adley, Robert Baker, W. H. K. (Banff) Biffen, John
Alison, Michael (Barkston Ash) Bainiel, Rt. Hn. Lord Biggs-Davison, John
Allason, James (Hemel Hempstead) Bennett, Dr. Reginald (Gosport) Boardman, Tom (Leicester, S.W.)
Atkins, Humphrey Benyon, W. Bossom, Sir Clive
Awdry, Daniel Berry, Hn. Anthony Bowden, Andrew
Brocklebank-Fowler, Christopher Hornsby-Smith, Rt. Hn. Dame Patricia Pym, Rt. Hn. Francis
Bruce-Gardyne, J. Hutchison, Michael Clark Raison, Timothy
Bryan, Sir Paul Irvine, Bryant Godman (Rye) Redmond, Robert
Buchanan-Smith, Alick(Angus,N&M) James, David Reed, Laurance (Bolton, E.)
Buck, Antony Jenkin, Patrick (Woodford) Renton, Rt. Hn. Sir David
Butler, Adam (Bosworth) Jopling, Michael Roberts, Michael (Cardiff, N.)
Campbell, Rt. Hn. G. (Moray & Nairn) Kaberry, Sir Donald Roberts, Wyn (Conway)
Carlisle, Mark Kellett-Bowman, Mrs. Elaine Rost, Peter
Chapman, Sydney Kershaw, Anthony Royle, Anthony
Chataway, Rt. Hn. Christopher Kimball, Marcus Russell, Sir Ronald
Chichester-Clark, R. King, Evelyn (Dorset, S.) Shaw, Michael (Sc'b'gh & Whitby)
Churchill, W. S. King, Tom (Bridgwater) Sinclair, Sir George
Clarke, Kenneth (Rushclifle) Kinsey, J. R. Skeet, T. H. H.
Cockeram, Eric Knox, David Soref, Harold
Cooke, Robert Lamont, Norman Speed, Keith
Cordle, John Lane, David Sproat, lain
Cormack, Patrick Langford-Holt, Sir John Stoddart-Scott, Col. Sir M.
Critchley, Julian Lewis, Kenneth (Rutland) Stuttaford, Dr. Tom
Crowder, F. P Loveridge, John Sutcliffe, John
d'Avigdor-Goldsmid, Maj.-Gen. Jack MacArthur, Ian Taylor, Sir Charles (Eastbourne)
Dean, Paul McLaren, Martin Taylor, Edward M.(Ggow,Cathcart)
Deedes, Rt. Hn. W. F. Macmillan, Rt. Hn. Maurice (Farnham) Taylor, Frank (Moss Side)
Digby, Simon Wingfield McNair-Wilson, Michael Tebbit, Norman
Elliott, R. W. (N c'tle-upon-Tyne,N.) McNair-Wilson, Patrick (New Forest) Temple, John M.
Eyre, Reginald Madel, David Thomas, John Stradling (Monmouth)
Farr, John Maude, Angus Thomas, Rt. Hn. Peter (Hendon, S.)
Fisher, Nigel (Surbiton) Mawby, Ray Thompson, Sir Richard (Croydon, S.)
Fletcher-Cooke, Charles Meyer, Sir Anthony Trafford, Dr. Anthony
Fortescue, Tim Miscampbell, Norman Tugendhat, Christopher
Foster, Sir John Mitchell, Lt.-Col. C. (Aberdeenshire,W) Turton, Rt. Hn. Sir Robin
Fowler, Norman Mitchell, David (Basingstoke) Vickers, Dame Joan
Fraser, Rt. Hn. Hugh (St'fford & Stone) Monro, Hector Waddington, David
Fry, Peter Montgomery, Fergus Walder, David (Clitheroe)
Gibson-Watt, David More, Jasper Walker, Rt. Hn. Peter (Worcester)
Goodhew, Victor Morgan-Giles, Rear-Adm. Wall, Patrick
Gower, Raymond Morrison, Charles Ward, Dame Irene
Grant, Anthony (Harrow, C.) Mudd, David Warren, Kenneth
Gray, Hamish Murton, Oscar Weatherill, Bernard
Green, Alan Nabarro, Sir Gerald Wells, John (Maidstone)
Griffiths, Eldon (Bury St. Edmunds) Neave, Airey White, Roger (Gravesend)
Grylls, Michael Nicholls, Sir Harmar Wiggin, Jerry
Gummer, J. Selwyn Oppenheim, Mrs. Sally Wilkinson, John
Hall, Miss Joan (Keighley) Owen, Idris (Stockport, N.) Winterton, Nicholas
Hall, John (Wycombe) Page, Rt. Hn. Graham (Crosby) Wolrige-Gordon, Patrick
Hall-Davis, A. G. F. Page, John (Harrow, W.) Woodhouse, Hn. Christopher
Hamilton, Michael (Salisbury) Parkinson, Cecil Woodnult, Mark
Hannam, John (Exeter) Percival, Ian Worsley, Marcus
Hastings, Stephen Pike, Miss Mervyn Younger, Hn. George
Havers, Michael Pink, R. Bonner
Hayhoe, Barney Powell, Rt. Hn. J. Enoch TELLERS FOR THE NOES:
Hiley, Joseph Price, David (Eastleigh) Mr Marcus Fox and
Hordern, Peter Proudfoot, Wilfred Mr. Paul Hawkins.
Hornby, Richard

Question accordingly negatived.

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