Commons Sitting of 11 February 1980

Preamble
The House met at half-past Two o'clock
PRAYERS
[Mr. SPEAKER in the Chair]
ORAL ANSWERS TO QUESTIONS
  ENERGY

    Oil and Gas (Depletion Policy)
    Mr. Viggersasked the Secretary of State for Energy if he will make a statement on the Government's depletion policy for indigenous oil and gas.
    Mr Hannamasked the Secretary of State for Energy when he intends to make a statement on the Government's oil depletion policy.
    The Minister of State, Department of Energy (Mr. Hamish Gray): I refer my hon. Friends to my reply of 26 November to my hon. Friend the Member for Lincoln (Mr. Carlisle) and the hon. Member for Dundee, East (Mr. Wilson).
    Mr. Viggers: Does my hon. Friend accept that it is the Government's duty to lay down guidelines on the rate at which oil and gas should be consumed, in order to ensure that there are adequate supplies for future generations, and that a good starting point for such guidelines would be net self-sufficiency—in other words, not using more oil and gas than is needed for this country's own needs?
    Mr. Gray: My hon. Friend is correct. It will be the Government's intention to try to extend the period of self-sufficiency as far forward as possible. We expect to reach the level of net self-sufficiency in the latter part of this year, and in formulating our policy for depletion in the future we shall take account of my hon. Friend's remarks. It will also be necessary to take other relevant factors into consideration.
    Mr. Hannam: Does my hon. Friend agree that this target of self-sufficiency is proving illusive? Is there not, therefore, a need to maximise exploration activities in the North Sea? How does the seventh licensing round fit into this strategy?
    Mr. Gray: I accept that the seventh licensing round is not, perhaps, as large as the industry would have liked, but, taken with the increase in world oil prices, which has made existing acreage still very attractive, we believe that there is considerable incentive for the industry to explore to the full.
    Mr. Douglas: Is it the Minister's intention to confirm that what have been loosely called the Varley assurances are to be reneged on?
    Mr. Gray: The Varley assurances were given in good faith and the present Government will continue to honourthem, but we must bear in mind that in the changing situation to which the oil industry is constantly subject we must review the position from time to time.
    Mr. Emery: Will my hon. Friend make certain that, whilst listening to the voices of conservationists, he does not adopt a policy that will preclude further extensive exploration, because it must be realised that companies which put large sums of money into exploration wish to obtain a reasonable return from the gas or oil that they find?
    Mr. Gray: I can accept what my hon. points out. We have frequent consultations within the industry, and as a result of these consultations we shall devise a policy that will be beneficial to the nation and also give fair opportunity to those who invest money in our continental shelf.
    Mr. Renton: May I suggest that when the Secretary of State offers shares in the British National Oil Corporation to employees of the BNOC and the British public he should make clear the policy on depletion, as that will be of extreme interest to anyone wishing to invest in BNOC? In those circumstances, would it not be wiser to be a little less coy now and tell us more about the Government's depletion policy?
    Mr. Gray: I think that my hon. Friend would agree that the term "depletion

    1035
    policy" is somewhat misleading, and that what we are really talking about is "resource management". Bearing that in mind, we shall take account of what my hon. Friend has said. In due course my right hon. Friend will make a statement to the House, in which he will clarify the position about BNOC and the future rate at which we shall deplete our resources.

    North Sea Oil
    Mr. Sproatasked the Secretary of State for Energy when next he plans to meet representatives of the oil industry to discuss the latest situation in the North Sea.
    Mr. Gray: I meet representatives of the oil industry frequently.
    Mr. Sproat: In view of the Government's success in achieving an increase of almost 50 per cent. in the number of exploration rigs currently operating in the North Sea since February last year, what consideration is my hon. Friend giving to any new means of making marginal fields commercially viable? When does he anticipate announcing proposals to encourage far greater development of those fields.
    Mr. Gray: My hon. Friend will be aware that in the middle of last year, in conjunction with the oil industry, represented by the UK Offshore Operators Association, the Treasury and the Inland Revenue, we set up a committee to examine the position. Its purpose was to present ideason how we might further encourage the development of marginal fields. The committee has not yet reported, but I hope that it will do so before long. However, the increase in world oil prices has meant that some areas that were formerly considered marginal have become reasonably attractive.
    Mr. Gordon Wilson:How can the Minister justify the intended build-up of staff in the office of the Department of Energy at Millbank, at the expense of the Offshore Supplies Office in Glasgow? That office is expected to lose 40 per cent. of its staff. As a Scottish Member of Parliament, how can he justify such action?
    Mr. Gray: Not for the first time the hon. Gentleman has got it wrong. The
    1036
    number of staff at the Offshore Supplies Office in Glasgow had increased considerably during the last Administration. At their own suggestion they carried out a rationalisation, which has been highly successful. As a result, the Offshore Supplies Office will be more effective. The increase in staff at Millbank has nothing to do with the Offshore Supplies Office. It is purely a consequence of removing responsibility from the British National Oil corporation as special adviser to the Government. That responsibility is now undertaken by the Department, as it should have been before.
    Mr. Eggar: As there is a clear need to encourage further exploration, will my hon. Friend say when we may expect the oil industry to be allowed to explore in the Western areas? Those areas are said to contain significant sedimentary basins in deep water.
    Mr. Gray:My hon. Friend will appreciate that it would not be right if I were to make a positive announcement now. The seventh round arrangements are now under negotiation, and no doubt he will learn of our proposals in due course.
    Mr. Pavitt: In the light of the flow of assets in the general economy, is any consideration being given, in discussions with industry and the special committee, to the possibility of using oil in a positive way? Oil is an expensive component of transport. Because of all the ways in which it is used, it may be possible to bring down the cost of living and thereby lessen wage demands.
    Mr. Gray:Like its predecessors, this Government would dearly like to keep down the price of oil. However, we cannot divorce ourselves from the rest of the world. World oil prices rose by more than 100 per cent. last year. However anxious a Government may be to control prices, it is impossible to do so.

    Coal Industry
    Mr. Gwilym Robertsasked the Secretary of State for Energy if he will take steps to increase the resources available for investment by the coal industry.
    The Under-Secretary of State for Energy (Mr. John Moore): The NCB's capital expenditure this financial year will

    1037
    be about £610 million compared with £464 million in 1978–79. I expect a further increase in 1980–81.
    Mr. Roberts: Does the Minister accept that it is important to go ahead with vital projects such as the Park colliery in South Stafford shire? Does he agree that there must be a public inquiry as soon as possible about that type of pit if mining skills and the continuity of jobs at short-life collieries such as West Cannock are to be maintained?
    Mr. Moore: I fully understand the problems and worries of that case, but it is for the Department of the Environment, in conjunction with the parties involved, to decide the timing of the inquiry. I shall ensure that that Department is made aware of the hon. Gentleman's point.
    Mr. John H. Osborn: Will my hon. Friend comment on the £22 million deal between the National Coal Board and the BSC to stop coking coal imports? Will he also indicate the impact on investment?
    Mr. Moore: If the stories in the press are accurate, the Government will be delighted that the two nationalised industries have been able to come to a commercial arrangement. Such an arrangement will offset the transitional difficulties caused in South Wales and other parts of our coking coal industry by the possibility of further imports. If those reports are accurate, they are to be welcomed.
    Mr. Eadie: The Minister should be more forthcoming. He must know whether there has been an arrangement between the National Coal Board and a nationalised industry about coking coal. We are discussing jobs and employment. As regards Park, I hope that the Minister realises that we are talking about an area that employs highly skilled manpower. Pits do not last for ever. Will the Minister do everything that he can to expedite the Park project, in order to retain that manpower?
    Mr. Moore: The Government are aware of the concern about Park. Where it is in the power of the Department of Energy to do so, we shall ensure that those points get across. I have just been informed that a press release has been issued by the National Coal Board and
    1038
    the British Steel Corporation. Obviously, we welcome their arrangement.

    Nuclear Power Policy
    Mr. van Straubenzeeasked the Secretary of State for Energy what proportion of energy used in the United Kingdom was derived from nuclear power at the latest date for which information is available.
    The Under-Secretary of State for Energy (Mr. Norman Lamont): Figures published in the latest issue of the Department's statistical bulletin "Energy Trends" show that for the period January to November 1979 nuclear electricity constituted 3·9 per cent. of total inland energy consumption.
    Mr. van Straubenzee: Assuming that my hon. Friend's plans for the extension of such an excellent programme come to fruition, what proportion of energy will be derived from nuclear power in the United Kingdom compared with that derived by France and West Germany?
    Mr. Lamont: If our plans come to fruition, by 1990 France will have 60 gigawatts of nuclear-generated electricity, Germany will have 40 GWs and the United Kingdom will have only 12·3 GWs. Therefore, our programme will leave us substantially behind other countries.
    Mr. Dalyell: With regard to the fast breeder programme, did Ministers authorise the recent visit by a Russian delegation to Dounreay?
    Mr. Lamont: The Government were consulted before the visit and agreed that it could go ahead. The visit was made as a result of a co-operation agreement that had been signed in 1961 between the Atomic Energy Authority and the Soviet state committee for the utilisation of atomic energy. The scientists involved were not particularly senior. It has been our policy to review prestige visits by senior politicians. The visit of the Soviet Coal Minister was cancelled as a result of that policy. Had the scientists in this case been more senior, their visit would have been cancelled also.
    Mr. Gummer: Does my hon. Friend agree that we are more likely to reach our target on time if the Central Electricity Generating Board makes its

    1039
    announcement as quickly as possible? In constituencies such as my own there have been non-radioactive leaks about where the new power stations are to be built. It would help if we knew where we are. We could then discuss the matter seriously, and not be bombarded by all sorts of pressure groups, when we do not know what is happening.
    Mr. Lamont: I understand my hon. Friend's opinions and worries. We shall do our best to ensure that uncertainty is removed. Those announcements that can be made will be made as soon as posible.
    Mr. Ashton: Is it not a fact that output will be down this year, because Bradwell and Dungeness B nuclear power stations have closed because of cracks in the reactors? Is the Minister aware that there is great concern because inspectors of British nuclear installations are 20 per cent. below strength? Ice further aware that those inspectors are distressed because their jobs will probably be moved to Liverpool? The nuclear station at Chapel Cross does not have a safety inspector. There is great public concern about the safety of these stations.
    Mr. Lamont: We are aware that the Nuclear Inspectorate is somewhat below strength. We are also acutely aware of the urgent need to make sure that pay and conditions in the inspectorate are sufficient to attract people of the right calibre. The inspectorate needs to be up to strength so that the programme can go ahead. The Government are giving urgent consideration to the matter.

    Nuclear Power Policy
    Mr. Waldegraveasked the Secretary of State for Energy, in the light of recent announcements on nuclear policy, what plans he has to ensure that reactors in the current programme are built to date and to cost.
    Mr. Norman Lamont: In the first instance the construction of nuclear power stations to date and to cost is a matter for the NNC and the generating boards. The Government are, of course, concerned that stations should be built as quickly and economically as possible. As my right hon. Friend said in his statement on 18 December 1979, the Government attach importance to the steady
    1040
    build-up of the NNC into a strong and independent design and construction company, fully able to supply nuclear power stations efficiently, at home and abroad.
    Mr. Waldegrave: I thank my hon. Friend for that reply and, as is necessary, declare an interest. However, does he agree that some time has passed since that announcement and that there has been no noticeable action? Will he consider knocking some heads together to produce action?
    Mr. Lamont: If my hon. Friend is referring to strengthening the management and appointing a new chairman to the NNC, I agree that that is a matter of great urgency. We intend to make an announcement as soon as possible.
    Mr. Palmer: Is the hon. Gentleman aware that doubts have been expressed in all parts of the House about the possibility of fulfilling the programme under present conditions? Is he further aware that those doubts have been expressed to the Secretary of State by the Select Committee on Energy? Will he look into the matter closely and make a statement soon?
    Mr. Lamont: We are well aware of delays in construction. We wish to strengthen the management of the NNC to make it into a free-standing, more efficient and effective company. We have decided that the PWR option should be explored, because of past difficulties. PWR appears to have advantages of time and construction and in regard to the amount of work done off site. We are mindful of what has gone wrong with the nuclear programme, and our policy is to try to overcome those difficulties.
    Mr. Dover: Is not my hon. Friend worried about the monopoly enjoyed by the National Nuclear Corporation? Does he accept that the time has come to ensure that we receive the best possible benefit from the experience of companies in this country and overseas?
    Mr. Lamont: I do not know quite what my hon. Friend has in mind. In this country not one order has been placed for a decade, and it is extremely difficult to think in terms of more than one supplier to the nuclear industry. As my hon. Friend knows, various consortia came together precisely because there was not enough work.
    Mr. Donald Stewart: Bearing in mind the cracks in the Magnox reactors and the fact that the AGRs have been an engineering disaster, does the Minister agree that safety should take precedence over a quick program me?
    Mr. Lamont: Safety is our top priority and takes precedence over all other considerations. The right hon. Gentleman is wrong and irresponsible to describe it as a crash programme. It can in no way be described as that. If the programme is implemented, the proportion of our electricity generated by nuclear power will be substantially less than the forecasts in the Green Paper that was initiated by the right hon. Member for Bristol, South-East (Mr. Benn) when he was Secretary of State.
    Mr. Mike Thomas: It appears increasingly likely that the principal delay will be in getting approval for a PWR. What steps is the hon. Gentleman taking to make sure that in 1982 he can place an order, whether for an AGR or any other type of plant?
    Mr. Lamont: The Government have yet to announce the precise form and scope of an inquiry into the PWR. We understand the need to place orders quickly and make swift progress.

    Combined Heal and Power Scheme
    Mr. Spearingasked the Secretary of State for Energy when he expects to make an announcement concerning the implementation of the Marshall report on schemes for combined heat and power.
    Mr. John Moore: As I said on 14 January, the Government are carefully considering the issues raised in the Marshall report, but expect to be able to make an announcement shortly.
    Mr. Spearing: Will that announcement at least agree in principle that large quantities of energy can be saved by that method? Further, will it pay particular attention to the capital cost of laying hot mains, which is a point at issue?
    Mr. Moore: The Marshall report clearly shows that CHP can save energy. When we first published the report I said that there were many other questions, and capital cost in urban areas is clearly crucial.
    Mr. Rost: Does my hon. Friend agree that it is disappointing that the Department of Energy forecast that heat saved from power stations by the year 2000 will be only 2½million tons coal equivalent, bearing in mind that the amount of heat loss from power stations is between 60 million and 70 million tons coal equivalent, and that the Marshall report states that 15 million tons could be saved by the year 2000?
    Mr. Moore: I approach all forecasts to the year 2000, including our own, with a degree of humility. There is a major difference between recognising the totality of potential energy saving and that which can be saved economically. We should wait just a little longer for the final report.
    Mr. Hooley: Does the Minister agree that, as a priority, we should use the enormous quantity of heat that is going to waste rather than create new capacity for electrical generation, when we already have a surplus?
    Mr. Moore: As I said, there are many other considerations beyond the pure apparent saving in energy, such as technology and institutional planning. Those questions should be answered fully before we proceed in that direction.
    Mr. Forman: Does my hon. Friend agree that it is reassuring that British industry has extensive and satisfactory experience of CHP? Will it be possible for the Government to get EEC funding or support for our efforts with CHP?
    Mr. Moore: I am glad that my hon. Friend drew attention to our experience. About 15 per cent. of privately generated industrial electricity usage comes essentially from CHP. The background of involvement in the industrial sector is substantial. All financial avenues must be examined when we get down to specific proposals.

    Fuel prices
    Mr. Marlowasked the Secretary of State for Energy what has been the increase in domestic gas prices as compared with the commercial gas price, household coal, two star petrol, electricity, heating oil, retail prices and supplementary benefit for the period since December 1975 to the latest convenient

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    date; and what the estimate is for each of these to December.
    The Secretary of State for Energy (Mr. David Howell): It is not possible to give a meaningful summary of fuel prices for the country as a whole. Prices vary according to geographic location, quantities purchased and, in the case of coal, petrol and heating oil, individual merchants. I have arranged for the relevant information related to the Northampton area to be tabulated in the Official Report.
    Mr. Marlow: I am grateful to my right hon. Friend and look forward to reading the remainder of his answer in the Official Report. However, does he agree that even under the new circumstances domestic gas will be a good buy, and that the higher the profit level of the British Gas Corporation the lower the amount of taxation that we shall have to raise? Does he further agree that that is of great benefit to gas and non-gas users?
    Mr. Howell: My hon. Friend is right. Over the past five years, much the lowest price increase of all fuels has been for gas. It has been much lower than for almost all other fuels, and certainly lower than retail prices generally. It is correct that, for the coming year and the years thereafter, a large part of the profits of

    PERCENTAGE INCREASES IN FUEL PRICES*, NORTHAMPTON AREA, DECEMBER 1975 TO DECEMBER 1979

    Fuel

    Consumption level

    Percentage price increase

    Gas (Domestic)

    …

    …

    …

    80 therms/Annum

    …

    …

    …

    27

    400 therms/Annum

    …

    …

    …

    39

    1,200 therms/Annum

    …

    …

    …

    40

    Gas (Commercial)

    …

    …

    …

    5,000 therms/Annum

    …

    …

    …

    87

    Household Coal

    …

    …

    …

    …

    Deliveries of 1 ton

    …

    …

    …

    91

    2 Star Petrol

    …

    …

    …

    …

    —

    53

    Electricity (Domestic)

    …

    …

    …

    750 Kwh/Annum

    …

    …

    …

    70

    5,000 Kwh/Annum

    …

    …

    …

    69

    30,000 Kwh/Annum

    …

    …

    …

    76

    Gas Oil

    …

    …

    …

    …

    …

    Deliveries of 500 gallons

    …

    …

    97

    Retail Price Index

    …

    …

    …

    All Items

    …

    …

    …

    …

    64

    Fuel and Light

    …

    …

    …

    …

    65·3

    Long Term Rate

    …

    …

    …

    …

    Single Householder

    …

    …

    …

    73

    Supplementary Benefits

    …

    …

    …

    Married Couple

    …

    …

    …

    75

    * The estimated increases for fuel prices to December 1980 are not available except for gas to the domestic sector where the figure is 29 per cent. The estimated increase for supplementary benefit is a question for the Secretary of State for Social Services.

    Nuclear Security
    Mr. Dalyellasked the Secretary of State for Energy if he will make a statement on the discussion of the Under-Secretary with Dutch and German
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    the British Gas Corporation will be needed to finance considerable increases in transmission lines and new facilities to meet the large surge in demand for gas caused by oil price rises and the encouragement of the rising demand for gas consumption, which seems to have received unrestrained blessing from the Labour Government.
    Mr. Edwin Wainwright: If the Government are entitled to get from the gas industry a far greater income than is required tomeet the cost of gas, why do they not put an extra price on the oil from producers in the North Sea, to ensure that the £700 million which they are at present receiving can be brought into the Government's coffers? It will be £2,000 million in the next two or three years.
    Mr. Howell: The hon. Gentleman should be aware of the tax regime affecting oil producers in the North Sea, which is, basically, the petroleum revenue tax. This is a fairly assessed and pitched tax and it brings substantial benefits to the Exchequer. It has, I think, been agreed by successive Governments that this is the right approach, and it is one which ensures that the large rent or surplus accruing to the oil producers comes to the Exchequer.
    Following is the information:
    Ministers about security arrangements at Urenco, Almelo, Holland, in the light of the Khan incident.
    Mr. Norman Lamont: I myself have had no discussions with Netherlands or German Ministers, but the Prime Minister

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    has raised this matter with Mr. van Agt, the Netherlands Prime Minister. There have also been official level discussions in the joint committee and through diplomatic channels. As the hon. Member is well aware, the necessary action to strengthen the implementation of troika security procedures throughout the collaboration is being taken to ensure there is no repetition of the Khan affair. I cannot discuss the details.
    Mr. Dalyell: But have the Dutch Government come clean?
    Mr. Lamont: As the hon. Gentleman knows, various representations have been made to the Dutch Government. He knows also that we have received in confidence a report from the Dutch Government discussing the issues. I cannot reveal what the report says, and it is for the Dutch Government to decide whether it is published and whether it is revealed to the Dutch Parliament.
    Mr. Hooley: Are any research workers or other people from South Africa involved in this Urenco set-up?
    Mr. Lamont: I have no reason whatever to think so. I shall raise the question and write to the hon. Gentleman, but I would say that it is extremely unlikely.

    Gas Prices
    Mr. Norman Atkinsonasked the Secretary of State for Energy what level of surplus arising from the sale of gas during the financial year 1980–81 is expected.
    Mr. David Howell: The precise level of forecast profits is a matter for the British Gas Corporation, but on the basis of the recently announced financial target I expect profits in the coming financial year to be of the order of £600 million before tax.
    Mr. Atkinson: That answer means that the Minister took a decision in total darkness, having no idea what the estimates would be. Does he agree that now that he has imposed the tax upon gas, this is tantamount to a declaration of war against both gas consumers and the gas industry, and does it not contradict his whole energy policy when at this moment
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    he is attempting to increase the amount of gas consumed, especially for growth in industry?
    Mr. Howell: The hon. Gentleman should be under no illusion but that the increase in the figure for the coming year which I have just mentioned is in line with what the British Gas Corporation recognised as necessary at the very least to overcome the danger, of which we were warned, that without increases in price of the size proposed for the coming year there would be a clear possibility of supply interruption. That is the danger that we face. Over and above that, the sort of profit that we are talking about for the coming year is needed and is in line with the colossal investment required to put in the new transmission lines and to meet the vast backlog of those who wish to have gas, which at present for both homes and factories is twice as large as normal—70,000 homes and 4,000 industrial concerns all waiting for gas. The money is needed to meet that demand, which, as I say, has been allowed to develop in recent years, apparently with the unrestrained blessing of the previous Government.
    Sir William Clark: Will my right hon. Friend confirm that the bulk of the profit comes from the industrial sale of gas rather than from domestic sales, that until now the domestic sale of gas has shown a loss, and that even with the increased prices for domestic gas the British taxpayer will be getting a return of only about 9 per cent. on his money, whereas the Government are borrowing at some 14 per cent. or 15 per cent.? Is it not about time that we stopped looking on nationalised industry as part of the welfare services?
    Mr. Howell: For domestic gas sales the position is precisely as my hon. Friend puts it. In this present year there would broadly speaking, be a breakeven or zero profit position on sales of domestic gas. If there had not been permission to increase the price in the way that the British Gas Corporation believes to be right for the coming year, domestic gas would have been sold at a loss. If the Opposition are now arguing for subsidised energy prices in an age of energy shortage, this is taking us beyond even the usual level of perception of Socialist economics.
    Mr. Stoddart: Does the Secretary of State realise that the public are beginning to think that the Government have a one-track mind on conservation, which means that they have only one conservation policy, namely, to price energy out of people's reach? Will he give an assurance that some of the excess profits made by the gas industry will be used for genuine conservation methods?
    Mr. Howell: A conservation policy involves both price and encouragement, with the right information about how to respond to that price in the future. One of this Government's aims has been openly to explain to people the realities of the high-cost energy era so that they may know how to plan for the future in order to use energy efficiently instead of being led in a dance from year to year without ever being told the truth about price increases.
    Mr. Skeet: Is my right hon. Friend aware that he has no powers under the Gas Act 1972 to take back the windfall profits of the industry, and should not this be considered extremely carefully since these moneys could be deployed for the future energy requirements of the United Kingdom?
    Mr. Howell: My hon. Friend is right. The present system under which the moneys are returned to the national loans fund is the one for which there are powers, and there are no powers to take them back in tax. If the latter were to be the arrangement, new powers would have to be taken.
    Mr. Ashton: Will the Secretary of State confirm that it is the Government's policy to tax gas? Why has there not been any suggestion of a scheme, either from him or from the Treasury, to give massively increased grants for insulation? Has the right hon. Gentleman seen the reports in the press that the insulation industry is scared that even the existing grant will be reduced? Can he promise any increased grants for industry or domestic users, in order to carry forward a genuine conservation programme?
    Mr. Howell: The Government have recognised, as have the nationalised industry consumer councils, that while it is the right aim to move towards economic energy pricing, for those in hardship there should be extra help to meet that
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    hardship, to encourage both consumption and conservation. That is recognised. On the broader question of how much people should be given in additional grant or incentiveto do what it is anyway in their interests to do, that is a matter which the hon. Gentleman should consider carefully before proposing that hard-pressed wage earners and taxpayers should pay money to others for things that they would do already for themselves.

    British Gas Corporation
    Mr. Chris Pattenasked the Secretary of State for Energy when he plans next to meet the chairman of the British Gas Corporation.
    Mr. Leightonasked the Secretary of State for Energy when next he will meet the chairman of the British Gas Corporation.
    Mr. Dubsasked the Secretary of State for Energy when last he met the chairman of the British Gas Corporation.
    Mr. Sheermanasked the Secretary of State for Energy when next he plans to meet the chairman of the British Gas Corporation.
    Mr. David Howell: I meet the chairman of the British Gas Corporation regularly and whenever necessary.
    Mr. Patten: When he next meets the chairman, will my right hon. Friend be in a position to report substantial progress on working out the details of the fuel allowances scheme to which he referred two weeks ago? When can we expect that scheme to see the light of day?
    Mr. Howell: The details of schemes for additional help are primarily for my right hon. Friend the Secretary of State for Social Services. I told the House that not only will increases be taken into account in next November's up ratings of pensions and supplementary benefit heating additions and family income supplement, but that the Government are reviewing the whole range of help available. I told the House also that proposals will be announced in good time to allow people to plan how they can manage next winter—it is the impact next winter with which we are concerned—and that is still the position.
    Mr. Leighton: When the Minister next meets the chairman to discuss gas prices, will he bear in mind that there has been a startling increase in the number of applications to the social services committee of the London borough of Newham for help with fuel bills, and I have received a letter from the chief executive telling me that the committee has already spent more in the first seven months of the current year than it did in the whole of last year? Will the right hon. Gentleman take it that many people, especially the elderly, the frail and the housebound, are frightened to put on their heating systems, and that there is real fear of deaths from hypothermia as a result?
    Mr. Howell: It is recognised that there are these serious worries. The price increases which we have been discussing affect next winter, but as regards this winter it was recognised last October that for a limited number of people much more help was desirable. That is why the scheme which my right hon. Friend proposed, although that was admittedly for a more limited range of people, made increased allowances available, in some cases up to seven times the average available under the previous Government's electricity discount scheme. I know that the discount scheme was put forward with good motives, but I think that it is recognised by all concerned, including the consumer councils and the fuel poverty groups, that it was not effective and not satisfactory, and my right hon. Friend's scheme provides a far better basis in social policy for developing the right kind of help.
    Mr. Dubs: When the Secretary of State next meets the chairman, will he make clear whether responsibility for future pricing policy lies with the British Gas Corporation or with the Government?
    Mr. Howell: The question of deciding tariffs lies with the nationalised industry corporations. The Government are required to set financial targets, ideally for three years. The previous Government stated in a White Paper that the targets should be set for a three-year period, but when it came to the point they did not face up to it and set the target for one year. The Government have set the targets, which have pricing
    1050
    implications, for three years. Detailed tariffs are a matter for the corporation.
    Mr. Cormack: When my right hon. Friend next sees the chairman, will he discuss the possibility of an inverse tariff for domestic users, which would have the double effect of making cheaper the essential therms which are used by old people and other needy people, and encouraging energy conservation?
    Mr. Howell: That idea has been put forward over the years. It was looked at closely in 1976 and in 1978 by the previous Government, and we have looked at it again recently, as have the nationalised industries consumer councils. In all cases the conclusion is that although inverted tariffs would help some poor small consumers, some poor but large consumers of energy would be grievously hurt by such an inversion—wherever the line was drawn. The natural instinct is to try to look for ways in which any pattern of tariffs will meet the problem, but the idea of inverted tariffs, while it might help some people, will certainly hurt others, who might be very poor.
    Mr. Mike Thomas: Is the right hon. Gentleman suggesting that Sir Dennis Rooke and his colleagues asked the Minister to raise the price of gas? Was it a policy forced upon him by them?
    Mr. Howell: I have made clear that the BGC shares the objective of moving towards economic energy pricing.
    Mr. Mike Thomas: Did it want it? Did it ask for that?
    Mr. Howell: The British Gas Corporation agreed that for the present year an increase of the order proposed was necessary, and it agreed to implement that increase. It believed that for the years thereafter the objective was right, but said that it wished to go slower than the two-year proposals in the financial target. I have set that out. I have also set out the Government's reasons for differing from the BGC about the later two years, which lie primarily in the area of the need to conserve energy in the dangerous world situation, which it would be utterly irresponsible for any Government to ignore in the move towards a more market-related price structure.
    Mr. Trippier: Will my right hon. Friend tell the House how many industrial projects have been held up as a result of the high demand from domestic users of gas?
    Mr. Howell: I cannot give a precise number, but 4,000 industrial customers are now waiting for gas and cannot get it. To some degree that must be related to the supply of and the demand for gas. It is also related to the conditions under which the British Gas Corporation is required to supply to the domestic consumer on a statutory basis. Nevertheless, we face today something akin to mass rationing. We inherited that problem, but to have to apply gas rationing in an island with such extensive gas resources seems to require the sort of genius that belongs to the Labour Party.
    Mr. Allen McKay: When the right hon. Gentleman next meets the chairman of the British Gas Corporation, will he take up the problems of gas supply in rural areas? Will he ask the chairman to use some of the surplus profit to carry the supply into such rural areas as my constituency?
    Mr. Howell: The first problem facing the gas corporation is to connect up the enormous backlog of customers who cannot get gas, and then to cope with the continuing numbers of new customers—now running at about 300,000 each year. The chairman has a major problem of supply to deal with, and he must overcome rationing and interruption. Those must be his priorities.
    Mr. Colvin: In view of the pending increase in the price of gas, there is likely to be a greater demand for solid fuels. Is my right hon. Friend aware that distributors in the Bristol area are already expressing concern about supplies of solid fuel, particularly for domestic use? Is he entirely happy about the National Coal Board's distribution policy? Will he investigate that policy and make sure that there is sufficient solid fuel available for domestic purposes when the price of gas goes up? Will he make a statement in due course?
    Mr. Howell: Distribution is a matter for the chairman of the National Coal Board. I shall look into the point that my hon. Friend raises and write to him.
    Dr. Owen: If we are to move to economic energy pricing, it is vital that the Department of Energy does not absolve itself from the responsibility for gas consumers—whether they are poor, in rural areas or in domestic or industrial areas. Will the right hon. Gentleman make it clear to the House that he accepts that the moneys now being received by some of the energy industries as a result of a pricing policy which is influenced by OPEC will be available to consumers of energy, both in terms of generous schemes for helping the poor and in generous schemes to increase conservation?
    Mr. Howell: The Government have made clear that they believe in developing effective social policies. It is through social policies that the consequences of fuel hardship should be met. That applies as much to those in hardship through supply or consumption of fuel as to those in hardship on the conservation side.
    As to the availability of moneys, the right hon. Gentleman should not overlook the gigantic investments in the energy industries, some through the Exchequer and some through public funds. Britain is Europe's leading energy producer and one of the largest energy investors. That is the Government's policy. We believe that it is the right policy to meet the energy crises ahead.
    Mr. Speaker: I shall allow a minute extra on each of the groups of questions to be answered later.

  HOUSE OF COMMONS

    European Parliamentarians (Facilities)
    Mr. William Hamiltonasked the Chancellor of the Duchy of Lancaster what progress has been made on the question of the provision of facilities in the Palace of Westminster for Members of the European Parliament.
    Mr. Winnickasked the Chancellor of the Duchy of Lancaster what is the latest position over the representations being made for facilities in the Palace of Westminster for Members of the European Assembly.
    Mr. McQuarrieasked the Chancellor of the Duchy of Lancaster what

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    progress has been made in considering the proposal to provide facilities in the Palace of Westminster for Members of the European Parliament.
    Mr. van Straubenzeeasked the Chancellor of the Duchy of Lancaster when he expects to be able to announce a decision on the question of the use of the facilities of the House by Members of the European Parliament.
    The Chancellor of the Duchy of Lancaster and Leader of the House of Commons (Mr. St. John-Stevas): I have nothing at present to add to the reply that I gave to the hon. Member for Walsall, North (Mr. Winnick) on 14 January.
    Mr. Hamilton: That is acceptable as far as it goes. Will the right hon. Gentleman accept that, however desirable increased liaison between the Members of the European Parliament and Members of this House may be, so long as facilities in the House are so grossly inadequate for existing Members it would be intolerable to give facilities to another 81 Members of Parliament and their wives, friends, families and secretaries. If such a proposition were to be put to the House on a free vote, there would be an overwhelming majority against it.
    Mr. St. John-Stevas: I am sorry to have given such ableak reply to the hon. Gentleman, but it seems to have provoked him nevertheless. I cannot agree with his thesis. If it were a question of offering accommodation to Members of the European Parliament there would be something in what he said, but that is not the issue. He cannot extend from that to the general thesis that no access and no facilities should be granted to Members of the European Parliament. The Services Committee is considering the matter, and I hope that it will put forward reasonable recommendations.
    Mr. Winnick: Is the right hon. Gentleman aware of the continued opposition to any proposal that facilities of the House of Commons should be given to people who are not elected to the United Kingdom Parliament? It is not simply a matter of accommodation. It is a constitutional question.
    Mr. St. John-Stevas: I am well aware of the hon. Gentleman's views, but other
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    views are held in the House. It is important that we should not go forward in a doctrinaire manner—though one may call it constitutional if one's doctrine is concerned—but should try to be as reasonable and courteous as possible.
    Mr. Stokes: On this difficult matter, would it not be better to keep out Members of the European Assembly, on the ground that
    "Absence makes the heart grow fonder"?
    Mr. St. John-Stevas: I think that a modicum of presence could lead to happy relations between the two Parliaments, and I hope that my hon. Friend will take his normal civilised, reasonable attitude to this matter.

    Members of Parliament (Insurance)
    Mr. Garel-Jonesasked the right hon. Member for Middlesbrough (Mr. Bottomley), as representing the House of Commons Commission, what changes have been made in the group personal accident insurance for hon. Members and if he will make astatement.
    Mr. Arthur Bottomley: I am pleased to announce that a revised group personal accident policy has been effected, the premiums for which will be met from public funds, to cover risk of death or injury on any day on which a Member of the House of Commons is engaged on parliamentary or constituency business in the United Kingdom or abroad. The policy will not cover bodily injury caused or contributed to by war or sustained whilst flying or taking part in other aerial activities except whilst travelling in an aircraft as a passenger and not as aircrew. Details of the main benefits payable will be circulated in the Official Report, and I have arranged for full details to be included in a memorandum available in the Fees Office.
    These arrangements will operate from today.
    Mr. Garel-Jones: Is the right hon. Gentleman aware that his statement will be welcomed in all parts of the House? Will he confirm that the policy relates to death or injury of an hon. Member and does not cover damage to personal effects or property?
    Mr. Arthur Bottomley: That is the position. It does not apply to personal effects, but only to death or accidents.
    Mr. J. Enoch Powell: Is the right hon. Gentleman aware that this represents what is for many hon. Members a desirable further move towards the status for hon. Members of employed persons? Will he say whether this extends compulsorily and automatically, or whether we can have contracting out?
    Mr. Arthur Bottomley: Having been responsible for this scheme, perhaps I should explain that I had an accident in the House last year and was told that if I had been permanently injured I should have had no claim for compensation. In those circumstances I thought it only reasonable that all hon. Members should be covered by some sort of insurance. That is now the case. If any hon. Member wishes to contract out, he or she is at liberty to do so.
    Mr. Cormack: Can the right hon. Gentleman tell us whether accident or injury on picket lines is covered by the scheme?
    Mr. English: Is my right hon. Friend aware that he is to be congratulated? If we are treated for income tax purposes as if we are employed persons, it seems a little unfair that we should not be so treated in other respects. Will my right hon. Friend circulate in the Official Report a comparison between our scheme and that applying to First Division Association civil servants?
    Mr. Arthur Bottomley: I shall consider that.
    Mr. Peter Bottomley: Is the right hon. Gentleman aware that I welcome the scheme? May I ask him to confirm that no right hon. or hon. Member who dies during his Parliamentary service need apply for compensation if he does not wish to!
    Mr. Arthur Bottomley: Yes. We Bottomleys should hold together.
    Mr. Freud: Will the right hon. Member tell us, first, whether all Members are equal when it comes to meeting their death in an aerial or constituency disaster and, secondly, by what strange alchemy the worth of an hon. Member was computed?
    Mr. Arthur Bottomley: I should welcome the advice of the hon. Member.
    Following are the details:
    The benefits provided by the policy are as follows:
    Death—a lump sum of £60,000.
    Loss of one or more limbs, permanent and total loss of use of one or both hands or feet, or total and irrecoverable loss of sight in one or both eyes—£60,000.
    Permanent total disablement—£60,000.
    Temporary total disablement—£200 per week for so long as such disablement continues subject to a maximum period of 104 weeks.
    Medical expenses—15 per cent. of amount paid for Temporary Total Disablement subject to a limit of £500.

  PAYMASTER GENERAL

    Government Policy (Press Coverage)
    Mr. Canavanasked the Paymaster General whether he is satisfied with press coverage of Government policy.
    The Paymaster General (Mr. Angus Maude): I think that press coverage of Government policy has been reasonably adequate. Comment is another matter, and I do not suppose that any Minister in any Government has ever been wholly satisfied with that.
    Mr. Canavan: In view of press reports of the Chancellor of the Exchequer's weekend speech demanding Draconian powers to clobber the trade unions, will the Paymaster General tell us who is responsible for stating Government policy on industrial relations? Is it the Chancellor of the Exchequer or the Secretary of State for Employment? Or will they both be overruled by a diktat from Attila the Hen?
    Mr. Maude: I do not accept the hon. Gentleman's description of the Chancellor of the Exchequer's speech, but any questions about that must be addressed to my right hon. and learned Friend himself.
    Mr. Robert Atkins: Does my right hon. Friend recognise that when Government policy is spelt out regularly and frequently the people understand and accept it, and will support the Government accordingly?
    Mr. Maude: Yes. I entirely agree with my hon. Friend.
    Mr. John Home Robertson: Is the right hon. Gentleman satisfied with the

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    amount of publicity given to Government policy in my constituency, where public expenditure cuts are leading to the pumping of raw sewage into the River Tweed, in order to have a few coppers on running a pump?
    Mr. Maude:That is a question which should more properly be put to my right hon. Friend the Secretary of State for the Environment.

    Ministerial Broadcast
    Mr. Winnickasked the Paymaster General if he intends to make a ministerial broadcast.
    Mr. Maude: No, Sir.
    Mr. Winnick: Since the Government are so keen to save public expenditure, will the right hon. Gentleman consider making a ministerial broadcast to explainwhy he, as public relations adviser to the Government, is paid out of public funds and not by Conservative Central Office?
    Mr. Maude: I am not a public relations adviser to the Government. My job—which previous Governments have also recognised is a necessary task—is to see that the Government information services do not operate merely in the interests of getting the facts of Government policy over to the public, but that they provide an adequate service of information to the press and the media.
    Mr. Peter Bottomley: Has my right hon. Friend any information on whether the public would prefer to have Labour Party political broadcasts on all three channels at the same time or whether they would rather have a choice?
    Mr. Maude: My hon. Friend's guess is as good as mine on that.
    Mr. Dalyell: If the right hon. Gentleman is not a public relations adviser to the Government, what the heck does he do? In particular, where is his job specification different from that of Lord Wigg in the Labour Government between 1964 and 1967?
    Mr. Maude: I understand that the noble Lord had a job specification which the Government of the day were careful not to reveal to the public.

    Government Policy (Press Coverage)
    Mr Adleyasked the Paymaster General whether he remains satisfied with presentation in the media of Government policy.
    Mr. Maude: I refer my hon. Friend to the reply that I have just given to the hon. Member for West Stirlingshire (Mr. Canavan).
    Mr. Adley: Does my right hon. Friend think that the press is aware of the co-ordinated campaign being run by the Labour Opposition to support every strike on which they can lay their hands, with a view to fomenting bad industrial relations and denigrating the police and security services at every attempt?
    Mr. Maude: Whether or not the press is aware of that—I think that it is—it is becoming increasingly aware that rank and file trade unionists and members of the public generally are well aware of it and that they look to this Government for a remedy.

STEEL INDUSTRY
The Minister of State, Department of Industry (Mr. Adam Butler): With permission, Mr. Speaker, I will make a statement on the position of pay negotiations in the steel industry. First of all, however, I extend to the House the apologies of my right hon. Friend the Secretary of State for not making this statement himself. He is carrying out engagements in South Wales—a visit that has already been postponed twice—and, in view of the special problems of South Wales, he judged that he should not put off his visit for the third time.
The House will know that following private exchanges between the BSC management and union leaders the full negotiating bodies of the Iron and Steel Trades Confederation and National Union of Blastfurnacemen met the British Steel Corporation on Friday. It was soon plain that a misunderstanding between the two parties existed and that there was an important difference between what the BSC had offered in the private discussions and what the union side thought had been offered. The union side promptly withdrew from the meeting.

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Following this breakdown, ACAS, the independent conciliation service, immediately tried to get in touch with both sides. It had discussions with the BSC on Friday afternoon and again this morning. I am told that the ISTC and the NUB have not yet been able to give a positive response to ACAS's invitation for an early meeting.
On Sunday, negotiators from the BSC and the craft and general unions met and agreed a pay formula, which is to be recommended for acceptance. The formula provides for a 10 per cent. pay increase in respect of a central agreement, with provisions for improved productivity, plus 4 per cent. in respect of locally negotiated productivity schemes. The 4 per cent. is a minimum; there is every opportunity to earn more from local productivity schemes.
The BSC's negotiations with the ISTC and the NUB broke down because of failure to agree on the all-important question of productivity improvements. The Government have made it clear from the beginning, and I repeat it again today, that they are not prepared to put more taxpayers' money into the BSC to finance a pay settlement. Therefore, the money has to come from the BSC's own resources. It is there to be earned, and productivity improvements are essential if the BSC is to compete and survive.
This strike is in its sixth week and has already cost the average BSC worker about £650 in gross pay. Unless a settlement is found soon, there will be permanent loss of jobs and permanent damage to our steel industry, and—without question—the risk extends to many other jobs in the rest of British industry.
I hope that all the parties concerned will display a real sense of urgency in trying to reach the settlement that this situation demands.
Mr. John Silkin: With due respect to the Minister, the absence of the Secretary of State is rather like Hamlet without the first grave digger. [Interruption.] Conservative Members seem to prefer the Secretary of State to keep away—I quite understand that—but that is not our view. Our view is that the Secretary of State must make a statement to the House this week, and we shall expect him to do so.
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Leaving aside the general damage to the industry—the Minister of State has again pointed that out—what effect has the cost of this dispute so far had on the Government's cash limits? I think that there are three constituent elements to the cash limits—investment capital, working capital and operating losses. Which of these will suffer as a result of the dispute so far?
Secondly, the hon. Gentleman said:
"It was soon plain that a misunderstanding between the two parties existed".
Has there not been a misunderstanding between the Government and the steel industry right from the beginning? The Opposition warned the Government well before Christmas of the effect of this dispute. The Government have shown complacency. The Prime Minister in her television interview on 6 January talked about days, not weeks. That is the basis on which the Government have dealt with this problem.
The Minister ended by saying:
"I hope that all the parties concerned will display a real sense of urgency in trying to reach the settlement that this situation demands."
The one party not displaying a sense of urgency are the Government. Every person in this country—the press as well—knows perfectly well that the Government are intervening and have intervened all along the line. The time has come for the Government to intervene openly and honestly. They should call the parties together within the next couple of days.
Mr. Butler: I am sure that the majority of hon. Members appreciate the reasons why my right hon. Friend felt it necessary to go to South Wales today, where he will be meeting many local councils and the Welsh Development Agency.
The right hon. Gentleman asked about cash limits. He stated that cash limits were there for the purpose of meeting operating losses next year. We have tried to make plain on many occasions that that is exactly what the £450 million of taxpayers' money will not be doing. It will be meeting some capital investment and some redundancy costs, but not operating losses.
What the right hon. Gentleman still does not appreciate when he charges the Government with complacency and not intervening is that unlike the right hon.

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Gentleman and his right hon. Friends, we see this primarily as a matter between the BSC management and the unions concerned. Therefore, it is not for the Government to become involved in negotiations. We have made that plain previously and I have made it plain again in my statement today. Of course, we are involved to the extent of the £450 million and, as custodians of the taxpayers' money, we have made it clear that we do not intend to put any further cash behind the industry.
Mr. Silkin: The hon. Gentleman has made it perfectly clear that investment capital, redundancy payments and working capital are the three aspects. If so, and if there is only £450 million available—[HON. MEMBERS: "Only?"] only £450 million available, and, incidentally the hon. Gentleman has not told us what the dispute has cost so far—out of which section is the cost of the dispute so far to come: redundancy payments, investment capital or working capital?
Mr. Butler: The cost of the dispute has been given on a previous occasion. The estimate of the British Steel Corporation is that it is running at about £10 million a week. I am glad to say that production generally throughout the country is still only slightly affected. The right hon. Gentleman asks where the money comes from. If there is no more money forthcoming from the Government, the British Steel Corporation has to act like any private sector company. It has to find the money from within its own resources. There are a number of ways in which it can do that.
Mr. Kenneth Baker: Does my hon. Friend not agree that events over the weekend, since the talks broke down on Friday, namely, the 14 per cent. settlement with the craftsmen and the return of the private steel workers today, mean that negotiations should be resumed immediaely and that it is up to Mr. Sirs and Mr. Smith to return to the negotiating table quickly? Does he not also agree that to ask for 20 per cent. without strings in the negotiations when the craftsmen have settled for 14 per cent. is totally unrealistic, bearing in mind that the British Steel Corporation is losing between £5 million and £10 million a week?
Mr. Butler: My hon. Friend is right to draw the attention of the House to the example of the craft and general unions. In reaching this settlement, which is substantially self-financing, I believe that they took the position of the industry into account. Further, the fact that a number of workers in the private sector have either stayed on at work or, in the case of Hadfields, have decided to go back, shows that there is a real desire among the membership of the ISTC to end this strike and to save their industry. I am hopeful that their example will be noted by the leadership.
Mr. Baith: How did so great a misunderstanding arise about the basis of the resumed discussions? Is there not a lesson there?
Mr. Butler: That is very difficult to answer. Private discussions were held. As far as the management was concerned, or so I am told, there was no question about what the offer was. But there was a misunderstanding. It led to a most regrettable breakdown of negotiations.
Mr. Grylls: Will my hon. Friend make clear to the unions and to the country, when talking of new money, that there are only two places from where that money can come—either from the taxpayer paying yet more money to the British Steel Corporation or from improved productivity? That is the realkey. There can be substantially improved and better earnings through improved productivity. Will he press that point whenever possible?
Mr. Butler: I am glad that that voice should come from the Back Benches; it has come from the Dispatch Box on many occasions. There is plenty of scope for improved productivity within the BSC. The money can be earned through increased productivity and the consequence of getting improved productivity is that the industry will move towards a competitive state. Without being competitive, it does not have a future.
Dr. Bray: If there was a misunderstanding, as the Minister said, why did not the Government take steps to try to secure a return to work on an interim settlement in return for the setting up of some sort of inquiry?
Mr. Butler: The Advisory, Conciliation and Arbitration Service—ACAS—exists for the purpose of trying to help in these matters. As I have told the House, ACAS has had two discussions with the British Steel Corporation. For some reason, Mr. Sirs and Mr. Smith—this was my information when I left my office—have still not indicated when they are prepared to undertake talks with ACAS. It is the responsibility of ACAS. That is why it is there. It has to try to find a way forward.
Mr. Patrick McNair-Wilson:Will my hon. Friend assure the House that the Government have no intention whatever of setting up another inquiry into the steel industry? The industry was thoroughly investigated by a Commons Select Committee recently. Such an inquiry would merely delay the taking of vital decisions.
Mr. Butler: The Government agree with my hon. Friend. This is not the time for a court of inquiry. The time is for a settlement of this dispute. The way forward is there.
Mr. Duffy: The Minister mentioned Hadfields, which is in my constituency. Will he accept that whatever differences may exist currently between Hadfields and the BSC workers in Sheffield, as I witnessed this morning, they are completely united in holding his right hon. Friend responsible for their present predicament and believe that only he can now break this deadlock? There is a widespread view in Sheffield and not only in this morning's issue of The Times, that this strike ought now to be settled. Even among lay people there is an instinctive feeling that some give on the Minister's part—no matter how moderate—on cash limits, or the intentions or purposes for which they were arranged, could help break the deadlock. Will the hon. Gentleman convey that to his right hon. Friend.
Mr. Butler: The hon. Gentleman speaks for his constituents. They have, surely, shown that they believe strongly that this strike should not have been spread to the private sector. The hon. Gentleman talks about my right hon. Friend. I believe that the hon. Gentleman, who, I know, wishes, like all of us, to see an end to the strike, could best help by explaining
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to his constituents that the Government are not prepared to put in more tax-money. The hon. Gentleman should explain that this amounts to £700 million in the current year and another £450 million next year. That is all that will be forthcoming. If the hon. Gentleman would explain that to them I believe that the Government's position would be understood.
Mr. John H. Osborn: Does not the experience of Hadfields show that local plant dealing is much more effective where management is close to the shop floor? Is not the British Steel Corporation hopelessly top heavy? Was not the negotiating committee of about 70 or 80 representatives of the Iron and Steel Trades Confederation imposing an impossible burden on smooth consultations? Will my hon. Friend explain what steps are being taken to break up the British Steel Corporation, bearing in mind the reports in the Financial Times about chemicals. bridge building and engineering?
Mr. Butler: Yes, I also saw the reports in the newspapers. I believe that there is considerable merit in decentralisation and local bargaining. One of the features of the agreement now reached with the craft and general unions is that local productivity schemes should prove an important part. I believe that will help for the future.
Mr. Gordon Wilson: Does the Minister not accept that continual drift in relation to this strike is causing a crisis in the Government's credibility? Does he not think, in view of the non-statement made today—that is the only way to describe it—that the time has come for his right hon. Friend the Prime Minister to intervene?
Mr. Butler: I would have thought that the Government's credibility was standing up very well. If one thing was demonstrated by the otherwise regrettable breakdown of negotiations, it was that there is no question of U-turns, silent or otherwise.
Mr. Allen McKay: Does the hon. Gentleman not realise that the Government's credibility in my area is nil? [HON. MEMBERS: "Nonsense."] It is not nonsense. I am being very serious in what I say. In my area, when pits are closed in similar incidents, miners are prepared to

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Say "Let them put the top on". On the picket lines at British Steel, due to the inactivity of the Government, they are saying "Let them close it. We have nothing to lose." Will the Minister not accept that there is need for an inquiry into British Steel after the dispute is over? Any industrial relations department that can announce a loss of 53,000 men and at the same time a nil increase in wages must be out of its cotton-picking mind. Does the hon. Gentleman not realise—[HON. MEMBERS: "Too long:"]
Mr. Speaker: Order. Long questions will prevent my calling some hon. Members who want to be called.
Mr. McKay: I am now finishing. Does the hon. Gentleman not realise that the £450 million about which he talks is derisory against the £1½ billion given away to 6 per cent. of the population?
Mr. Butler: The hon. Gentleman will do best if he takes the view of all his constituents working in steel and not just those on the picket lines. I believe that he will find a different story and that he will find that they wish to return to work.
Mr. David Price: Was not an important question raised by my hon. Friend the Member for Sheffield, Hallam (Mr. Osborn)? In view of the fact that the British Steel Corporation has said throughout that the sort of money that the steel workers aspire to can be got through appropriate local productivity schemes, does my hon. Friend not agree that it would be more sensible to negotiate—where the area or plant is open—rather than nationally? As long as ACAS is asked to act nationally it can do little to help. Locally, it could play an important part in solving this wounding dispute.
Mr. Butler: At present ACAS must work nationally, because it has to bring the leaders of the ISTC and NUB together along with the BSC management. Of course the money can be earned. Indeed, it was a figure that my right hon. Friend gave early on in the strike, which showed that even the first BSC offer would allow the average steel worker to earn about £123 or £124 a week.
Mr. Gregor MacKenzie: Does the Minister accept that many people such as myself are not normally in favour of the Government's intervening in industrial
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disputes, believing that these should be settled by management and trade unions? However, in this case the matter has gone well beyond that stage, in that the average steel worker in my constituency and throughout Scotland is frustrated and bitter because he believes that he is negotiating at second hand and that these directions are being given to the BSC by the Secretary of State. We have only to watch television, where the Secretary of State appears with monotonous regularity, to see that that is the case. A serious situation has now developed, and the Secretary of State and his Government colleagues will have to give just a little in order to settle the steel strike and so maintain a steel industry in this country.
Mr. Butler: Like many of his hon. Friends the right hon. Gentleman continues to ask for more taxpayers' money. Why should the steel workers ask for more taxpayers' money when the money is there to be earned? It is not as though the productivity cannot be gained; it can. That is the answer to that question.
Mr. Renton: Is there not general unrest and uncertainty in the steel industry at the fact that the productivity schemes proposed by the BSC are complicated, with the result that the details are not fully understood? Without in any way asking my hon. Friend to intervene, may I suggest that he should ask the BSC management to go out of its way to make the details of local productivity schemes known to all its employees?
Mr. Butler: I am sure that the BSC management will take note of all that has been said, including my hon. Friend's suggestion. I remind him that the craft and general unions have just settled for a proposal that was similar to that which was on the table on Friday. One part of it is to offer 4 per cent. against local productivity schemes being worked out and agreed to. In the case of the craft unions, it has been agreed that these agreements shall be worked out by the middle of May. I think that that will help to meet my hon. Friend's point.
Mr. Tinn: Is the Minister aware that even the BSC makes no complaint of the co-operation that it has received from the two main production unions concerned, including my own—the National Union of Blastfurnacemen? On the other

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hand, the craftmen's unions have dragged their feet considerably. Therefore, they have more concessions to make and are able to receive benefits from productivity schemes. Does not the hon. Gentleman know that the Redcar complex, in my constituency, is fully competitive and can compete with the best foreign plants? Even at this late stage, will he take action to enable the two unions, which never wanted to strike and do not want to strike, to settle?
Mr. Butler: I hope that the hon. Gentleman will play his part in trying to achieve that. There is certainly scope for increased productivity in relation to the craft and general unions, but as far as I am aware there is comparable productivity to be gained by the two unions to which the hon. Gentleman referred.
Mr. Aitken: Will my hon. Friend confirm that the latest BSC offer means that a steel worker would get an increase of about £14 a week if it were accepted? Does he further agree that most workers would regard that as a generous increase, particularly if they worked for an industry that was effectively bankrupt?
Mr. Butler: My hon. Friend confirms what I said a few minutes ago—that even BSC's first offer would have given £12 or £13 a week extra to the average steel worker.
Mr. Flannery: If, as the Minister said, these men have lost an average of £650 each at a time when they urgently needed money, after Christmas, does he not realise that something must be seriously wrong, because without any strike pay they are now more determined than ever to go on? If at the end of this strike we are to have a viable steel industry for the whole of our community, does not the Minister realise that the community must sustain it? The Government must intervene and put more money on the table in order to get the workers back to work. That is the only way. There is no other.
Mr. Butler: If the steel workers decided to go on strike against an offer of 12 per cent. minimum, and have lost the sort of sums in gross pay to which I have just referred, why should the taxpayer, who generally earns less than a steel worker, now be asked to put his
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hand in his pocket in order to find more money for the steel workers?
Mr. Peter Bottomley: Has my hon. Friend received, either from the right hon. Member for Deptford (Mr. Silkin) or the hon. Member for Sheffield, Hillborough (Mr Flannery), any indication that they would prefer more taxpayers' money to go as a greater subsidy to Britishsteel even though it is taken out of the same pocket as that which provides funds for child benefit, maternity grants, education, health and pensions?
Mr. Butler: It is true that the £450 million is greater than the gross cash limit on the capital side for the NHS in 1979–80.
Mr. Barry Jones: Is it not the case that there are Ministers in the Cabinet who now favour intervention? Is not intervention the only way in which to save not only the industry but also the country?
Mr. Butler: If by "intervention" the hon. Gentleman still means providing more taxpayers' money, I can tell him that the Cabinet and the Government are united on that point and that it shall not be so.
Mr. Marlow: Does my hon. Friend agree that steel workers, who in large measure did not want to go on strike and were not asked whether they wanted to go on strike, have a greater interest in a viable and productive steel industry than they have in the industrial virility of Mr. Bill Sirs and his executive?
Mr. Butler: I am sure that the membership is well aware that if the strike were to go on for much longer the damage would become very serious indeed, not only with regard to their own industry and job prospects but in relation to the whole of British industry. I am certain that the membership is aware of that, and I believe that pressure will start to build up on the leaders of the two unions concerned.
Mr. Stott: Is the Minister aware that as of Friday of last week, 500 of my constituents who work at the Metal Box Company were laid off? In spite of what he or the Government may say, my constituents believe that the Government are inextricably bound up in this dispute. Is it not now time that Ministers in the

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Department of Industry discharged their responsibilities to the taxpayers, who after all pay their ministerial salaries, and got this dispute settled quickly?
Mr. Butler: The hon. Gentleman's constituents at the Metal Box Company have been laid off because of the picketing that was carried out against their company. If one was to inquire of the constituents at Metal Box, and particularly at Neath, I believe that they would be full supporters of the Government's intention with regard to secondary picketing.
Mr. Emery: Will my hon. Friend drive home the fact that the largest support for Mr. Sirs at present, and for the continuation of the strike, comes from the Opposition in this House? The Opposition are leading the view that the Government should put more money on the table. So long as that view is put forward they are the strongest supporters of the continuation of the strike. That fact must be pushed home to the public at large.
Mr. Butler: If, despite what Ministers have said, there is a feeling that there is a prospect of more taxpayers' money coming forward, the blame for that lies fairly and squarely on the shoulders of Opposition spokesmen. However, I repeat what I have already said—there is no such prospect.
Mr. John Silk in: Does not the Minister understand that he is dealing with a trade union that has not had a national strike for 53 years? If it calls a strike at this stage, does it not occur to him that there must at least be some deep reason why? In the light of that, is it not the Government's duty to bring the parties together and to ensure that at least there is no misunderstanding in the Government's mind?
Mr Butler: It is a matter of great regret that an industry with such a good strike-free record should now be on strike. The Advisory, Conciliation and Arbitration Service is in touch with the parties and is trying to bring them together. One hopes that the unions will respond more quickly than they did over the weekend to a meeting to see whether there is a way forward. In that way they will gain the respect of the public.
Mr. Crowther: Is it not obvious that without putting in any extra money the Government could enable the strike to be settled tomorrow and that they could have prevented it by simply allowing part of the £450 million allocated for redundancies and closures to be used for wages? Is it not more sensible to get these men back making steel than to save that money for a few months in order to close down half the industry?
Mr. Butler: The hon. Gentleman does not realise that this money is liable to be paid out under statutory schemes. If that money were to be transferred further money would have to be found from the taxpayer. It is the same answer. More money will be required from the taxpayer.
Mr. Speaker: If hon. Members will be very brief, I will call them all, but I cannot do so if there are long questions, which will cut out some of those who wish to speak.
Mr. English: The hon. Gentleman quoted the figure of £650 as representing the loss by sustained strikers. His chief information officers quoted something similar to the Sunday papers. What Tory Member would reject the return on investment that the strikers already have on their £650? At present rates of interest a return on £650 is £2 a week. The strikers have been offered more than that, since they were offered a 2 per cent. increase.
Mr. Butler: The hon. Gentleman is trying to perpetrate a myth. The initial offer was not 2 per cent. It has been made clear that the initial offer was 2 per cent. plus 10 per cent. The 10 per cent. was to be earned by productivity. That is still the message.
Mr. James Hamilton: Will the hon. Gentleman take it from me, as one who met the general secretary of the ISTC last week, along with other Opposition Members, that there was no doubt that at that meeting calling together both sides would result in a conclusion to this serious problem? Will the Government recognise that the general council of the TUC has intervened and that ACAS has intervened on several occasions? Obviously they have not met with success. The only person who can possibly intervene with a reasonable chance of success

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is the Secretary of State for Industry? Will the hon. Gentleman give that message to the Secretary of State when he returns from Wales?
Mr. Butler: I shall certainly give that message to my right hon. Friend. His door is open, should Mr. Bill Sirs, Mr. Hector Smith or a member of the management of the British Steel Corporation wish to see him. However, such a meeting would be for information only. The Secretary of State will not enter into negotiations to settle this strike.
Mr. Homewood: Will the Minister accept that the BSC productivity scheme is complicated? Will he also accept as my hon. Friend the Member for Redcar (Mr. Tinn) said, that there are greater opportunities for productivity among some groups of workers than among others? Will the hon. Gentleman further accept that many claims and counter-claims in this dispute have not been considered by the Select Committee? Because it was said to be the first step towards a settlement, does the hon. Gentleman agree that it is time that an inquiry into this dispute was set up?
Mr. Butler: I have already said that I do not believe that an inquiry would be beneficial in attempting to settle this dispute. A settlement can be reached round the table. I agree with the hon. Gentleman that if the details of the BSC offer are not known to the members of the two unions concerned, the BSC has a duty to make sure that the terms are absolutely clear. The unions themselves should also make it quite clear what the terms of the offer are.
Mr. Stoddart: Is the hon. Gentleman aware that many workers outside the steel industry believe that the Government wilfully precipitated the steel strike? What is more, those people are now becoming increasingly worried about the effects on their own jobs because of the shortage of steel. Will the hon. Gentleman tell me what is the level of steel stocks in the car industry, particularly in Swindon, where there is a car body pressing factory?
Mr. Butler: First of all, I deny absolutely the malicious suggestion—not made by the hon. Gentleman—from some quarters that the Government
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deliberately precipitated this strike. That is nonsense. The House knows that it is not true. Up to now, manufacturing production in this country has barely been affected by the strike, but clearly steel stocks have started to run down. If there is a specific example in the hon. Gentleman's constituency I suggest that he inquires about it. If stocks there are low, I suggest that he makes that clear to the workers so that they can put pressure on the steel unions to settle. That is what will save the jobs of his constituents.
Mr. Spriggs: Is the Minister aware that Bill Sirs originally said that the 2 per cent. offer to the trade union leaders at the start of the negotiations was an insult to the trade union movement? In view of that, will the Minister tell the House where the extra money, that the BSC has now offered to the trade unions will come from?
Mr. Butler: The hon. Gentleman knows that the original 2 per cent. was through consolidation. It was not a new offer. The British Steel Corporation has made it clear on every occasion that the money on offer—the 10 per cent. that has recently been increased, if one puts the two components together—is to be self-financing from improvements in productivity.
Mr. James Callaghan: Having listened to the Minister's answers, it is quite clear that the Government have dug themselves into a deep trench on finance. It is also clear that the steel workers are extremely obdurate about this matter. So that the House and the country can begin to assess what is at stake here, will the Minister tell us what 1 per cent. on pay would cost the Government if they were to go over the £450 million? Are we talking about another £10 million or £20 million? I am not expressing a view about it. I want to see, and the country would want to see, what is the cost of the Government's present position.
Mr. Butler: I would have to let the right hon. Gentleman know the figure. I would not like to mislead the House. The right hon. Gentleman is talking of a hypothetical possibility. We have made it clear—it should be plain by now—that no more money is forthcoming for the pay settlement. What we are attempting

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to do, amongst other things, is to ensure that we have an efficient, competitive and viable steel industry. That will not come about by pursuing the policies that the right hon. Gentleman and his right hon. Friends pursued when they were in government. That policy was to put in more taxpayers' money on every occasion. That is not the way forward.
Mr. Callaghan: I recognise that there is a difference between the Minister and ourselves. However, I believe that we and the country are entitled to know what sum we are talking about. I am not espousing any claim, because it is not our responsibility. It is for the Government to negotiate the claim and bring the two sides together. That is the difference between us. I heard Mr. Sirs say on television that he believes that that 17·5 per cent. claim is right, because that is the level of the retail price index. How much extra money will be involved in such a claim? The Government are putting in £450 million. Are we talking about an extra £10 million or £20 million? What figure are we talking about, because in the end that figure has to be set against the damage being done to industrial relations and to industry as a whole?
Mr. Butler: I have told the right hon. Gentleman that I will let him have the figure. I cannot give it at the moment. I ask the right hon. Gentleman where the money is to come from. Would it come by reducing the moneys available to schools or the Health Service? Where would it come from? We have taken the view, looking at expenditure priorities, that the figure of £450 million—in itself equivalent to 1 per cent. on the rate of income tax is enough.
Mr. Callaghan: It is not for me to answer questions; therefore, I shallreply interrogatively. Is the Minister aware that the public sector borrowing requirement can be at least £1 billion out in its estimate in any one year? If the cost of settling the strike is to put another £20 million on the PSBR it would not matter a tuppenny damn.
Mr. Butler: If we were to take that line we would be dealing with real money from the taxpayer. It is because of such an imprudent attitude to the nationalised industries that we must try to rescue the economic situation from the mess in which we found it.

STANDING ORDERS (BUSINESS OF THE HOUSE)
Mr. Maxwell-Hyslop: On a point of order, Mr. Speaker. I should be most grateful if, at your leisurely convenience, you would be good enough to rule on the following matters. On Tuesday 5 February and Wednesday 6 February there appeared on the Order Paper as private business to be called before Prayers a series of motions the effect of which was to alter the Standing Orders of the House that affect private business. When the House is pleased to alter its Standing Orders this must necessarily be of the nature of an act of public business. That a motion affects private business does not and cannot transmute an act of public business into an act of private business. For instance, a timetable motion whose effect was confined to private business would not be taken with private business before Prayers but under Orders of the Day.
Apart from its technical error, the malpractice of taking that category of public business as private business means that, presumably, if it is opposed persistently it must be set down for debate in the rare time allocated for taking opposed private business rather than in the generality of time allocated to public business.
The effect of taking what is properly public business in time allocated for opposed private business is to prejudice the progress of Private Bills awaiting consideration by the House. It offers the opportunity of prolonging debate on that public business as a means of delaying consideration of the Private Bills which should receive the consideration of the House then instead. That a malpractice has continued for some time has not in the past interdicted Mr. Speaker from correcting it once that malpractice has been drawn to his attention.
Therefore, I respectfully ask you, Mr. Speaker, not to allow motions altering Standing Orders, whether for public or private business, to appear on the Order Paper so as to be taken before Prayers, and to decline to put the Question on any such motion so appearing, as undoubtedly it lies within the power of Mr. Speaker to decide

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Mr. Speaker: I am much obliged to the hon. Member for Tiverton (Mr. Maxwell-Hyslop) who, this morning, was kind enough to send me in writing the statement that he has just made. I shall rule on it tomorrow.

BROADCASTING OF DEBATES
Mr. Marlow: On a point of order, Mr. Speaker. On Friday a small contingent of the great unwashed infiltrated the Gallery of this Chamber. Like other right hon. and hon. Members, I neither know nor care about the purpose of that intrusion. Suffice it to say that the persistent services of blind men from Bedlam would be required before there was any likelihood that those concerned had any personal interest in the subject of the debate.
Hon. Members are worried not so much about the activities, dismal though they were, as about the response by the broadcasting media. Within hours the sub-human noises and caterwauling that interrupted the speech being made by my hon. Friend the Member for Devizes (Mr. Morrison) were relayed to every television and radio in the land. Such far-reaching and quick-acting publicity must give encouragement to any group of fanatics prepared to abuse the procedures of the House for their own ill-conceived and perverted purposes. The great bulk of marches and demonstrations—
Mr. Speaker: Order. The hon. Member for Northampton, North (Mr. Marlow) must make a point of order on which he wishes me to rule.
Mr. Marlow: If such interruptions are relayed throughout the media other people will be encouraged to make similar interruptions. That would be detrimental to the dignity of the House. It is a grave matter and it may eventually be detrimental to the safety of hon. Members. After all, shouts and screams are far more diverting to the public than the catcalls and caterwauls that we put up
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with on Friday. I would be grateful if you, Mr. Speaker, could explain how we can prevent the broadcasting media from usurping their privileges in future.
Mr. Speaker: I understand the hon. Gentleman's feeling. He should refer this issue to the Select Committee on Sound Broadcasting, which the House set up, so that it can consider what happened. We must be jealous of the way in which we are reported. Broadcasting is an extraneous influence in our Chamber and we all have a right to be concerned about the way in which it is operated. I did not hear the broadcast.

STATUTORY INSTRUMENTS, &c.
Ordered,
That the draft Export Guarantees (Limit on Foreign Currency Commitments) Order 1980 be referred to a Standing Committee on Statutory Instruments, &c.—[Mr. St. John-Stevas].

Ordered,
That the Insurance Companies Bill [Lords] be referred to a Second Reading Committee—[Mr. Nott.]

EDUCATION (No. 2) BILL (ALLOCATION OF TIME)
Ordered,
That paragraph 7 of the Order of the House [29th January] be varied as follows—
(1) For sub-paragraph (1) there shall be substituted—
'(1) Paragraph (1) of Standing Order No. 3 (Exempted business) shall apply to the Proceedings on the Bill—

(a) on the first allotted day, for four hours after Ten o'clock;

(b) on the second allotted day, for two hours after 10 o'clock.'

(2) In sub-paragraphs (2) and (3) for the words 'the said period of two hours' there shall be substituted the words 'the said period of four hours or two hours'.—[Mr. St. John-Stevas.]

ORDERS OF THE DAY
  BRITISH AEROSPACE BILL
  As amended (in the Standing Committee), considered.
  BRITISH AEROSPACE BILL

LOANS TO SUCCESSOR COMPANY TO RANK AS PRIORITY CREDITOR
The Secretary of State shall stipulate as a condition prior to its nomination under this Act that the successor company shall have included in its initial articles and memorandum the necessary provisions to ensure that where the Secretary of State or any other Secretary shall advance moneys by way of loan to the successor company the loan shall rank as a priority creditor in any winding-up, after the claims for salaries and wages.'—[Mr. Les Huckfield.]
Brought up, and read the First time.
4.17 pm
Mr. Les Huckfield: I beg to move, That the clause be read a Second time.
Mr. Speaker: With this we may discuss the following:
New clause 15—Government funding.
Government amendment No. 22.
Amendment No. 23, in clause 5, page 5, line 8, after 'company', insert
'except that he shall not subscribe for or acquire such shares while the company is making losses, unless so authorised pursuant to affirmative resolutions of each House of Parliament'.
Amendment No. 24, in clause 5, page line 11, at end insert'; or
(c) make loans to the successor company for capital investment, for the development of a particular project, or for long term research on such terms as may be agreed between the Secretary of State and that company when the prevailing rate of interest on the open market would prevent or inhibit such investment project or research.'.
Government amendment No. 28.
Amendment No. 36, in clause 7, page 6, line 35, leave out 'as a member' and insert
'as an existing holder of shares or other securities of the successor company or of any subsidiary'.
Government amendment No. 51.
Mr. Huckfield: We wish to stick strictly to the wishes of the House, but
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there is a difficulty because we have not yet been presented with the memorandum and articles of association for the publicly quoted company, British Aerospace Limited. We have pressed the Minister and the Under-Secretary of State in Standing Committee since 27 November but all that the Government have done is to present us with the memorandum and articles of association for the private company.
We have been assured that the memorandum and articles of association of the public company are not dissimilar to those of the private company. However, the purpose of the Bill is to pave the way for the setting up of a publicly quoted company.
Mr. Arthur Lewis: Will my hon. Friend give way?
Mr. Huckfield: If my hon. Friend intends to be helpful, I shall give way.
Mr. Lewis: There is no need for sarcasm. I was going to be helpful.
Mr. Huckfield: I am sorry if my hon. Friend thought that I was being sarcastic. I was trying to be faintly humorous.
Mr. Lewis: Why make the remark? Why not wait and see? I was about to suggest that perhaps this is a matter for Mr. Speaker because his duty is to help hon. Members obtain relevant papers. I intend to suggest that Mr. Speaker can decide whether the House is entitled to those papers.
Mr. Speaker: I am deeply grateful to the hon. Member for the point that he has raised, because it gives me an opportunity to tell the House that I looked at this matter before we turned to our present stage in considering the Bill. I am satisfied that I can rule only on the content of the Bill. That is the reason for my selection of amendments. I understand that the hon. Member for Nuneaton (Mr. Huckfield) has his difficulties, but it is no good his looking to me to help him over that hurdle. Perhaps he will be kind enough to turn to the long group of new clauses and amendments being considered together.
Mr. Huckfield: I do not of course wish in any way to question your selection of amendments, Mr. Speaker, and

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I thank my hon. Friend the Member for Newham, North-West for his helpful intervention. He realises the problems we face.
If my hon. Friends and I apppear to be groping for information occasionally, it is because we are still dealing with a nebulous concept—a publicly quoted company that we cannot understand because we cannot examine its memorandum and articles of association.
Dr. M. S. Miller:: Does my hon. Friend accept that, although no one is trying to cast doubt on the fact that Mr. Speaker has made a right and fair selection of amendments, if the memorandum and articles of association had been available, it might have influenced Mr. Speaker in the kind of amendments that he selected?
Mr. Speaker: Order. If this is not a private quarrel, perhaps I may join in. In selecting amendments I am influenced solely by the Bill that is before us. On that basis, if the hon. Member for Nuneaton is groping in the course of the day, all will be well so long as he gropes in order.
The Minister of State, Department of Industry (Mr. Adam Butler): I am not sure whether the hon. Member for Nuneaton (Mr. Huckfield) was raising a point of order, but I think that it might be helpful to explain what the hon. Gentleman knows well—that the draft memorandum in the Library, which was put there deliberately to assist our proceedings, is the draft memorandum of the successor company, as it is called in the Bill. That draft has been there since the Christmas Recess and has been available for reference.
Secondly, it might be helpful—
Mr. Speaker: Order, I did not call the hon. Gentleman to address the House. Is he raising a point of order?
Mr. Butler: I said, Mr. Speaker, that I was not sure whether the hon. Member for Nuneaton was raising a point of order. However, he gave way to me.
Mr. Speaker: Order. It is clear that I do not have the control I thought I had. I thought that the hon. Member
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for Nuneaton had submitted a point of order to me before beginning his speech. However, if he has now given way to the Minister we can continue.
Mr. Huckfield: I think that we are reaching the point at which I should intervene in my own speech, Mr. Speaker. I am not blaming you for intervening.
The explanation given by the Minister of State is indicative of the general range of replies that he has given throughout the Committee stage since 27 November. It is monstrous for him still not to have provided the memorandum and articles of association for the publicly quoted company, British Aerospace Ltd. It is an insult for him to ask the House to proceed with the remaining stages of the Bill when we do not know what kind of company it will be, the activities in which it will engage or the shape, structure, form and aspirations that it will have. The Minister's action is an insult to the House and to workers in the industry and taxpayers who may well have to suffer the consequences of the Government's folly.
The crushing insult occurred when the most crucial part of the draft articles of association—the part that was supposed to prevent the company being taken over by foreigners, which many of us consider to be the most vital part of the Bill—was made available in the Library only last Friday. For the Government not to have put that in its final revised form into the Library before last Friday indicates a callous disrespect for the House and a monumental disregard for those who work in British Aerospace. The Minister of State is concealing information from us—information that we and our constituents need in order to make a judgment on the Government's proposals.
Mr. Butler: I am sorry that the hon. Member for Nuneaton should make these charges so early in the Report stage. However, he must not misrepresent the situation. He knows as well as I do that the draft article on foreign ownership and control was lodged in the Library during the Christmas Recess. The hon. Gentleman was sent a copy. A further draft was lodged in the Library at the end of last week—the hon. Gentleman was sent a copy of that, too—and that took into account certain points that the Opposition made in Committee. I hope that the hon.

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Gentleman will not continue to mislead the House in this way.
Mr. Huckfield: The Minister of State is misleading the House outrageously. In the intervening stages the company that he calls the shell company will have the Secretary of State as sole shareholder. As such the right hon. Gentleman can totally change the memorandum and articles of association while the company remains in that form. The only way in which these articles and the memorandum have yet appeared is in relation to the private company.
Before we can debate the serious issues that are raised by the Bill we have to see the memorandum and articles of association of the publicly quoted, fully fledged successor company. The Minister of State has not seen fit to provide them and that is an insult to the House. To ask the House to give the Billa Third Reading when we cannot understand it because we do not know what is intended is completely wrong. We have been placed in that position by the Minister's concealment and inactivity. We shall not let him get off this hook because we are sick and tired of his concealing information and we shall take serious note of this further inactivity on his part.
Mr. Deputy Speaker (Mr. Richard Crawshaw): Order. The hon. Member has made the point that the documents are not available to the House. He has said that he will be returning to this matter time and again. If the documents are not available, the Chair cannot help him. He has made the point forcibly but the House will have to manage with what is before it. We have already been 15 minutes on this and we havenot even started on the new clause. I hope that the hon. Gentleman will now get on with it.
4.30 pm
Mr. Huckfield: Obviously, Mr. Deputy Speaker, I am anxious to make progress, but I thought it only right to describe our difficulties, because my hon. Friends will be groping for information when dealing with the new company because they do not have the articles. That is the mood in which we are forced to approach this debate.
We are concerned in these debates with the developing financial relationship
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between the Department of Industry and the new company. The amendments and new clauses have been adequately grouped to enable us to deal with more wide-ranging aspects.
In new clause 6, for example, we have tried to provide a formula to ensure that the Government get their money back. This company will be privileged—it will be tantamount to a private monopoly over large areas of industry, with completely inadequate accountability. We do not want to give it any more privileges. The company would not exist at all but for the large amounts of money put into the industry by the last Labour Government. We hope that it will be successful; if it is, it will be because of that money. New clause 6 would give the taxpayers'interests the necessary priority.
Newclause 15 deals with one of the most criticial issues. Unless we get satisfaction here, we do not see how we can have civil aircraft projects in this country again. We cannot see how there will be sufficient money for research and development under the Industry Act, the Civil Aviation Act 1949 or the Science and Technology Act 1965. The Government have an overriding requirement to reduce what they call the public sector borrowing requirement so we wanted some provision for payments for the launching of new projects in the national interest. That is the object of new clause 15(2).
We also want the Secretary of State to have a general power to put money into the company. Under amendment No. 3, clause 1(2)(b) would refer to the Aircraft and Shipbuilding Industries Act and I am sorry if the drafting of the new clause fails to make that clear. This company will face research and development costs of at least £500 million and possibly £1,000 million over the next five years. We do not see how that money will be obtainable without a Treasury guarantee.
The Airbus entry fee—we may not see a pay-off on that for seven or 10 years—was at least £250 million. The 146 project required a commitment of £250 million and the continuation of the series of copies of the BAC 111 provided for by the last Government also required substantial injections of public money.
We do not see that sort of money coming from the moneylenders and private

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sources. As the Financial Times said in its editorial on 24 July, no civil aircraft project has been launched since the war in this country without some Government assistance. That is the reason for this provision in new clause 15.
On amendment No. 23, our concern is that the new fully fledged successor company will be privileged to have the money put in by the previous Labour Government. Also, it will be a privately owned, non-publicly accountable monopolicy in many areas of its own production.
Because of the relationship which we understand will obtain for a short time between the Department of Industry and the new successor company, we are concerned that, because, for a transitional period, the Secretary of State will be a minority shareholder, he may be tempted to increase his shareholding, with the result, if the company was not making adequate returns, that he could be bolstering private shareholding interests. If the company is having a difficult period, it will not be in the taxpayers' interest to bail out private interests in that way. The Secretary of State may think that that decision is in the public interest, but if so we should be able to debate it.
That is the purpose of amendment No. 23. If the Secretary of State feels impelled to put more money into the company or acquire more shares—I am not sure how he will do that under the investment limit he intends to fix for himself under clause 7—we want to know in what circumstances it will be beneficial to the country to bail out private shareholders. For that reason, we want an adequate opportunity under the affirmative resolution procedure to debate these matters.
The other important amendment we should like implemented is amendment No. 24. To many of us this is a key amendment. It deals with the vital question of how private money lending sources, bank loans, hot money—I presume there may be some hot money going into and out of this company—or the market mechanism will deal with long-term projects which may not make a profit for 15 or 20 years. Many of those projects will not show an adequate return during the whole time they are in operation.
In aviation terms, we are dealing with projects which take a long time to deve-
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lop and, when developed they may fail. The Secretary of State has acknowledged that that kind of high risk project exists in the sectors of industry in which the National Enterprise Board has interests. He has already said that the market mechanism cannot adequately deal with that. We are not sure that the market mechanism or the Government's monetary policies will be able to deal with projects of that kind. For that reason, we want the Secretary of State to be able to make available moneys to assist longer term research projects when the prevailing rate of interest or the conditions of the money market prevent those projects going ahead.
This batch of amendments and new clauses is critical. We said thoroughout the Committee stage that we could not understand how the new company would be able to continue in its entirety. Without an adequate Treasury guarantee, often faced with extremely high short-term rates of interest and a lack of investment or loans because of the longer term gestation period of projects, we can see all kinds of difficulties, culminating in the company being forced to sell off its more profitable parts. We are led to that conclusion because of the inclusion on the Amendment Paper of further Government amendments that will pave the way for precisely that.
We did not hear much reference by the Minister of State in Committee to the setting up of further subsidiary companies of the successor company. But it is significant that over the weekend there appeared on the Notice Paper, for the first time, provision for the Secretary of State to take up shares in subsidiaries of the successor company. It appears to us, therefore, that the Secretary of State has perhaps foreseen the possibility of the splitting up of certain of the activities of the new company. That is what we are confronted with, and that is what concerns us.
We cannot understand how the Secretary of State is able to insist, as he has tried to do, that the company will not be split up and that parts of it will not be hived off or flogged to friends of the Conservative Party. We cannot understand how the successor company will be able to remain intact in the market conditions in which it will operate.

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We are dealing with an industry in which Governments all over the world are becoming more and more involved. We cannot escape the fact that in the United States of America, the land of free-ranging capitalism, even McDonnell Douglas and Boeing sell almost 80 per cent. of their products to the Government. [Interruption.] The hon. Member for Dorking (Mr. Wickenden) was not involved in the Committee stage and has not taken any interest in the Bill so far, but if he doubts me let me tell him that I am only quoting from publicly available research sources. If he has some better information I will certainly give way to him. Clearly he has not because he has not involved himself with the Bill until today.
4.45 pm
There is a great deal of Government involvement in this industry in the United States. It is almost totally nationalised in France, and the German Government are increasingly involving themselves in their private companies. There is also Government involvement in Italy, and in most other European aerospace industries. Just at the time when most other Governments are increasing their involvement, and when there is a real threat of American dominance of aviation markets all over the world—through, for example, the success of the Airbus project and European collaboration on the basis of nationalised aerospace industries—this Government have decided that it is time to pull out.
That threatens the future interests of aerospace workers and the aerospace industry. We believe that we shall see a pull-out by this Government just at the time when the British aerospace industry is beginning to match up to its full capacity and range of capabilities. We are dealing with a highly successful industry and it is highly successful because of public money. The hon. Member for Preston, North (Mr. Atkins) chuckles. We know that he spent approximately 19 sittings of the Committee in Committee Room 9 filling out his share applications. We know that he has not yet spoken on the Bill and that the people he represents are waiting to hear him speak.
Mr. Robert Atkins: That is not true. I made a speech on
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Second Reading of the Bill, so would the hon. Member care to withdraw that last remark?
Mr. Huckfield: I know that the hon. Gentleman pays only scant attention to the House. I was referring to our proceedings in Standing Committee G in Committee Room 9.
Mr. Atkins: The hon. Gentleman did not say that.
Mr, Huckfield: The hon. Gentleman ought to listen more carefully. He did not listen to one word in Committee, and he is not listening now.
Mr. Atkins: No, because the hon. Gentleman is so boring.
Dr. M. S. Miller: In any case, is not the hon. Member for Preston, North (Mr. Atkins) exemplifying the great phrase of golfers that one does not drive for show but putts for dough? When the hon. Gentleman spoke on Second Reading he was speaking for show, and he ought to have involved himself in the Committee proceedings. That was the more important aspect of the Bill.
Mr. Deputy Speaker: Order. The point has been made. It is not customary to make continuing references to other hon. Members who were on the Committee.
Mr. Huckfield: I do not intend to continue with those references, Mr. Deputy Speaker, but we have to get certain things on record for the sake of the constituents of the hon. Member for Preston, North.
This batch of amendments and new clauses deals with the critical question of the financial relationship between the Government and the new successor company. I wish that we could know what kind of company it will be, what the Government's intentions are regarding their percentage of shareholding, their intentions about the directors they want to appoint, and the reporting responsibilities and accountability the Government will expect from them. We do not know those things. We spent 19 Committee sittings trying to get that information. I hope that we shall get some enlightenment now that we have returned to the House.

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I know that my hon. Friends are anxious to press these points, though I doubt whether the Minister's hon. Friends are because they have shown no interest in them so far; they did not speak on the Bill in Committee. I hope that the Minister will provide us with more information. If we do not get more information this afternoon, I shall be forced to ask my hon. Friends to join with me in the Division Lobby tonight in support of the new clause.
Mr. Stan Thorne: What concerns many Opposition Members and, I am sure, many Conservative Members is that we should have a full consideration of these amendments without incurring your wrath, Mr. Deputy Speaker, because we are rehashing arguments that we had in Committee. But it is very difficult not to be guilty of doing that. I have just been looking through the amendments again. Most are Government amendments. One wonders why some of them were not dealt with in Committee and why we are now faced with the wide-ranging discussions that they involve.
My hon. Friend the Member for Nuneaton (Mr. Huckfield) raised the question of the research commitment that the aerospace industry will have in the future, the need for finance for innovation, and the tremendous cost involved in producing aircraft today, with rising inflation which affects not only ourselves but other countries competing in this market. My hon. Friend asked particularly where the massive sums necessary were to come from.
I think that it is true to say—and obviously the Ministers have the responsibility of proving what I am about to say to be false, if that is so—that prior to the public ownership of this industry, massive inputs of public funds, taxpayers' money, went into it. Then there was no quarrel. Even the Conservative Governments prior to 1964 and post-1970 put finance into the industry. Indeed, it would have been difficult for the aircraft industry to compete favourably in the world without the injection of State funds.
That is why Labour Members are perturbed about the argument that we heard in Committee, that in some ways we are protecting public funds by instituting
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this legislation, when we know from both history and experience that no aircraft industry, throughout the world, can continue to produce in the world market and to compete without a major Government input.
It seems to me that Conservative Members are relying on a tremendous investment from the public, investors generally, in the successor company, which will enable them to offset some of the money that they would have been called upon to provide, on the basis that this is a highly profitable industry. As you know, Mr. Deputy Speaker, it is a highly profitable industry because it has guaranteed Government contracts for military aircraft. That is what makes it highly profitable. Part of the industry is involved in aerodynamics—again, a highly profitable and, in the past, highly subsidised part of the industry.
The absence of investment in the industry, which faces great competition from some industries, at any rate, will inevitably mean that the industry will turn back to the Government for investment. That is why some of these amendments raise the question whether, it having been made a private company and having been loaned money, there will be any guarantee that loans will be repaid should that become necessary at some future date, and in what way we are guaranteeing that the successor company will not be as dependent on Government funds as, previously, private companies in this country have been.
You will be readily aware, Mr. Deputy Speaker, that there is no way in which we can guarantee the successor company not making approaches for further loans from the Chancellor of the Exchequer. At present, several British manufacturing industries face difficulties—in some cases, because of the penetration of imports. They face losses. In those circumstances, they seek Government aid. Daily in this Chamber we have evidence that the present Government have no intention of assisting some of those industries in this period of recession in the Western capitalist world. More evidence of that emerged from earlier questions today about the steel industry.
If the Government are right, investors who plough funds into the aircraft industry clearly do so in search of high profits. What concerns many workers in

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the industry is whether, with the sort of greed that promotes this major investment—we are not talking about the £100 sums from various people who think that they can spare that sort of amount for a little flutter; we are talking about millions of pounds—the sort of people who are prepared to put millions of pounds into the aircraft industry are the people who will, in a short time, be looking for an improvement in the return on their investment.
What will that mean? Will it mean a major confrontation in industrial relations terms with the workers in the industry about whether productivity is at a level that will gain investors the sort of profit that they anticipate?
It is for this reason and several others that we are concerned to get a very clear picture from the Government of their intentions in terms of the financial support that this industry will need.
I make no apology for raising the question whether an industry that relies so heavily on the manufacture of military aircraft and other weapons connected with the arms race today should be in private hands. It is totally immoral for private profit to be made out of this sort of investment in military aircraft and subsequently the use of public funds when, as will be inevitable, the private owners in the successor company come back to this House cap in hand for further millions of pounds to innovate and to develop, perhaps, further military weapons in the aircraft industry.
You will recall, Mr. Deputy Speaker, the old saying that war is a terrible thing, but it is a terribly profitable thing in the present world situation. With the sort of language that we hear from the Government Front Bench in terms of the cold war, in this type of industry there are those who are looking to making a killing in terms of massive profits.
I deplore the fact that we are having this debate on a Bill of this type, because it should never happen. We should not, in any circumstances, allow this industry to go into private hands, for some of the reasons that I have indicated.
As you would probably say at this juncture, Mr. Deputy Speaker, my remarks have been like a Third Reading speech, and perhaps I can develop them when we reach Third Reading.
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Dr. M. S. Miller: My hon. Friend the Member for Preston, South (Mr. Thorne) has forcefully pointed out that we do not want this Bill. We believe that the industry is viable and that it does great credit to its 68,000 employees. It is a credit to the country. Indeed, the Minister paid tribute to it. It is on record that the chairman of British Aerospace is proud of the way in which the industry has developed. That was made clear in his recent new year message, both to the workers of that industry and to the country.
However, we must accept the unpalatable fact that, as a result of the Government's adequate majority, they can enact such a Bill. That was evident in Committee. Apart from one minor issue, the Bill was not amended. It is strange that the Government have brought forward several amendments that could have been discussed in Committee.
The Under-Secretary of State for Industry (Mr. Michael Marshall): If the hon. Gentleman looks down the list of amendments, he will notice that a Government amendment has been brought forward in order to implement his suggestion of tidying up some of the English in the Bill.
Dr. Miller: I am grateful for that small amount of consideration. However, the amendment will have no effect on the implications of the Bill.
I wish to confine my remarks to supporting new clause 15. If the industry is to be taken out of public hands and denationalised, we must ensure that it remains intact. One way of realising that possibility would be if finance were made available. New clause 15 sets out ourintention to make payments available to the new company should it require them.
I recently received a letter from the Aerospace Association—a group within the Engineers' and Managers' Association—which says:
"In reponse to our representationsthe Minister of State has said that the future of the Company will be a matter for the successor company to decide."
That is what we are worried about. Although we accept that statements made by the Minister are made in good faith, they do not bind the Government or any

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successor to the Minister or Secretary of State. The letter points out that the Minister does not regard hiving off as a probable course. However, we must accept that the affairs of the new company will be entirely in its hands. Therefore, anything can happen.
Apart from our total objection to denationalising a successful industry, one of our main arguments in Committee that is at the root of this new clause was that hiving off might take place. The lucrative parts of the industry could be sold into private hands or to private groups. The other aspect of our major onslaught on the Bill concerns the possibility—no more than that—that the industry could be eaten into by foreign interests. There is no adequate safeguard to prevent the industry from being taken over—at least, from the point of view of influence—by foreign interests.
The first pillar of our argument concerns the articles of association. The new company, as well as the old, has a vast range of activities that must be encouraged. The present company is carrying out many of those activities and they are far too numerous to mention. However, any activity in the engineering, woodworking, paint, glass or ceramic industries—among others—can be carried out by the new company. We know from worldwide experience that when one is dealing with the ramifications of such an industry, and with the tremendous sums of money necessary for research and development, it is essential that the industry should not be jeopardised through lack of finance. Money must be spent without any regard for short-term returns, because many of those returns cannot be expected for a long time. Therefore, the Government should commit themselves to ensuring that finance is available.
The famous money market appears to be playing a greater part in the lives of everyone. If that market is unable to comply with demand, Treasury finance should be made available. It is possible that money will be made available from the market on certain conditions. Those conditions might be based on two situations. An investor might be happy with an immediate or short term return of 5 per cent. That is bad. Whatever one says about the industry, it would never have achieved what it has, not only in
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this country but elsewhere, if it did not take risks. Risks must be taken. The 5 per cent. mentality is not necessarily right for the company.
On the other hand, a larger dividend might be preferred, but the money may not be available unless returns can be expected in a short time. It is a distinct possibility that the market will be touchy about making large sums of money available to the industry without being sure of an almost immediate profit.
We can look at the position in other countries to validate the request that the Government should assist the company should it be required. In France, the largest company is a nationalised company—Aerospatiale. Although there is no nationalised airframe company in the United States, Lockheed and Boeing depend to a great extent on Government contracts. Without them, they would be in great difficulty. Not long ago Lockheed was in great difficulty until a large sum of money was underwritten by the American Government.
The Government are wrong to leave the company entirely to the fluctuations, vagaries and ups and downs of the money market. If they are not prepared to make finance available, in spite of the Minister's feelings that the lucrative parts of the new British Aerospace company should not be hived off, we are afraid that, in the future, a Government may be forced, because of pressing considerations, to hive off certain parts of the company.
Those parts may concern defence—for instance, missiles. In the world today it is not difficult to dispose of what are called weapons of defence but which are, in fact, weapons of war. All over the world there are people who will form companies—and I can see no way to prevent them from coming to this country—specifically to grab parts of the denationalised aerospace industry that they will find lucrative, and immediately lucrative. They will not need to be patriotic and invest money and wait for many years until dividends accrue.
Government Members, in their anxiety to see the Bill through Committee unhampered, untrammeled and untouched, did not speak. Many of them represent constituents with aerospace industries.
Mr. Les Huckfield: Has my hon. Friend noticed that the hon. Member for

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Welwyn and Hatfield (Mr. Murphy), I think it is, with a particularly important British Aerospace interest at Stevenage, has not even bothered to turn up?
Mr. Bowen Wells: Will the hon. Gentleman give way?
Mr. Deputy Speaker: Order. The hon. Gentleman cannot give way: he has not eot the Floor.
Dr. Miller: I hope that hon. Gentlemen who took no part in Committee but merely graced the Conservative Benches will defend the Government's attitude in a way that the aerospace workers in their consistuencies will appreciate. I have no aerospace industry in my constituency, but I have a large Rolls-Royce factory. Rolls-Royce and British Aerospace are tied closely together.
I hope that the Minister will listen to the blandishments of my hon. Friends, and the support that I believe we shall get from Conservative Members, and consider favourably the implications, if not the exact wording, of the new clause.
Mr. Ernie Ross: I also wait anxiously to hear the hon Member for Preston, North (Mr. Atkins). I hope that he will show interest in something other than visits to his constituents in Cyprus or filling out his share forms. The people of Preston would like to know what the hon. Gentleman has been doing in Committee. We found it difficult to get him to speak, and his constituents in the aerospace industry find it difficult to meet him.
Mr. Les Huckfield: Has my hon. Friend noticed that the hon. Member for Preston, North (Mr. Atkins), who did not say a single word in Committee, has just walked out of the Chamber?
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Mr. Deputy Speaker: Order. All Opposition Members make these points, and they are probably equally irrelevant in every case. I believe that we have dealt with the matter. May we proceed with the Bill?
Mr. Ross: My interest is more of a trade union one. My union is the largest in British Aerospace. If the Bill goes through, it is doubtful whether there will be many members of any union in aerospace.
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Aeronautical engineers are at a high premium. All over the world companies are attempting to recruit them. If British Aerospace is broken up and denationalisation removes the long-term prospects of these engineers, some of my members may, reluctantly, leave British Aerospace, and that will be detrimental to the company.
Aerospace is a high technology, long-term investment industry, as many of my hon. Friends said. A modern commercial aircraft takes approximately 10 years to break even. In Committee, I made the point that the leading aircraft company, Boeing, estimated that future demand for jet air liners would continue to be strong. It is believed that the total market for commercial jet airliners between now and the end of 1989 will amount to £103 billion at today's values.
In that context, we have grave suspicions about the future viability of research and development in civil aircraft if the industry is denationalised. We cannot see large investment companies being particularly interested in investing in a project on which the return may take anything from 10 to 20 years. In our view—the majority of aerospace industries throughout the world accept it—on the civil aircraft side there is a requirement for massive investment and such investment can come only through Government assistance. That is our purpose in presenting new clause 15.
It is crucial that we retain a highly skilled technical work force in British Aerospace. Even if the Bill is to reach the statute book, it is essential that those at present working in British Aerospace feel secure about their own future and the future of the contracts in which they will be involved. There is a requirement upon us also to assure them that we shall not involve them only in the production of weapons of war, whether they be satellites, military aircraft or missiles.
There are a number of people working in British Aerospace today who strongly object to working on military projects of that kind which they do not believe to be for the good of our country. Admittedly, such projects may give them work, but they are not for the good of the country and, at a time of massive cuts in sectors of public expenditure of vital importance for the good of the British people, these workers would not wish to stay in British

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Aerospace if all that the corporation was engaged in was the manufacture of military aircraft and weapons.
For all those reasons, it is right that the Secretary of State should accept responsibility to ensure that civil research and development continues. Private investors adopt a simple criterion. They are after the "quick buck", the fast profit. The new British Aerospace company will have to convince such people of the benefit of investing in long-term civil projects, and that will not be easy.
In committee, I pointed out that some of the large multinational finance companies which the Government might regard as likely to invest in British Aerospace had a record of investing in British industry which was just about the worst we had seen for many years. There are three major companies which one supposes might be attracted to invest in British Aerospace—the Imperial Group, Lucas, and Milner and Newall—but all have had substantial redundancies in Britain while increasing their work force overseas. There will be no incentive for those three companies to invest as one presumes the Government would wish them to do.
I imagine that the Government are looking to such finance companies to take up some of the investment in British Aerospace, but their present track record gives no guarantee that they would be concerned about British industry since at least over the past few years their interest has been to run down their work force and to cut back their investment in Britain while increasing their work force overseas to compete directly with their workers in this country. This also is cause for the concern which leads us to put the new clause to the House. We recognise the need to retain a viable British aerospace industry.
We on these Opposition Benches do not see the need for the Bill. If this were an ailing company, a lame duck company, the Government might have some vestige of reason behind their Bill, but there is no reason whatever to denationalise one of the most profitable enterprises in our land. In fact, there is nothing behind it save Tory dogma and a failure to recognise that in any modern industrial country the Govern-
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ment must have a major stake in industry if that country is to have a secure industrial base at all. Each of our competitors accepts that. There is not one of our European partner countries in which the Government do not have a major stake in this industry, but the present Tory Government, with their non-interventionist policy, seem to think that the free market forces of which they are so proud will come in and supply the level of investment required for British Aerospace.
We were not convinced in Committee, and I think it most unlikely that we shall be convinced tonight. The truth is that we are now beginning to see the end of British Aerospace as a British company in that sense. We shall see it slowly run down. The first cuts will come in the research and development on which British Aerospace is at present engaged, since those who might be expected to invest will not wish to spend the money needed or recognise that sometimes at the end of the day a project should not go ahead or perhaps should not go ahead in the form originally suggested.
The money needed is high-risk money. Private investors in this country do not have a record of putting up massive amounts of capital for research and development in high-risk projects, and certainly not in British aerospace. One need look only at the situation in the British aerospace industry prior to nationalisation to understand that that is precisely what did not happen. Indeed, had it not been for nationalisation, the Hawker Siddeley 146 would not have been with us. It was only because the Government were prepared to put in their stake to back the project that the HS146 is going ahead, providing employment and showing a good prospect of being a major selling asset for British Aerospace.
I shall be interested to hear the Minister's efforts to convince us that the new clause and the proposals associated with it should not be incorporated in the Bill. We heard nothing in Committee to suggest that he had consulted those who know best, the people in the industry concerned, the engineers involved in research and development and the manufacture of the projects. In spite of his assurances, he did not consult the trade

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unions—we know that, and we shall return to it later—and the very same engineers about whom I am talking belong to the unions. They have given their working life to the British aerospace industry and would rather work for British Aerospace, but they might not feel inclined to carry on doing so if British Aerospace was denationalised so that they were then working for a company which in a short time would have no research and development in which they would think it worth being involved. In such circumstances, they would not see any need to stay with the company.
I repeat that there is a need for Government involvement in British Aerospace itself. I ask the Minister to tell us who will invest in British Aerospace. Which are the companies to which he looks to ensure that the vital research and development in our British aerospace industry continues? If he says that the Government will not do it, we can have little confidence that anyone else is likely to do it.
Mr. Bowen Wells:On a point of order, Mr. Deputy Speaker. There have been several interventions by the hon. Member for Nuneaton (Mr. Huckfield), which you have deplored, and they had a specific political intention. They will be on the record, and I wish to correct the inaccurate suggestions made in those interventions to the effect that I, for example, the Member for Hertford and Steven age, was not present. Would you tell me, Mr. Deputy Speaker, how I can have such inaccuracies corrected for the record?
Mr. Deputy Speaker:As the allegation was made, if the hon. Gentleman wishes during his speech merely to point out that he was in fact present, that will be in order. But it is because of the nature of such suggestions and the points which arise from them that the Chair deprecates references to what happened in Committee. Whatever happened in Committee in that connection has nothing to do with the Bill before the House now, but, if the hon. Gentleman takes the course which I suggest, the Chair will not, I am sure, object.
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Mr. Adam Butler: Much of the ground covered by the new clauses and amendments has been covered before, so I hope that we can proceed apace.
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The hon. Member for Preston, South (Mr. Thorne) mentioned that we had been round the course covered by new clauses 6 and 15 on a number of occasions.
Before dealing with the new clauses and amendments, I wish to refer to the question of certain papers being laid before the House—a point which the hon. Member for Nuneaton (Mr. Huckfield) raised, in the way that he raised the same matter in Committee on a large number of occasions. It would be helpful for all Members who were not in Committee to know that the draft memorandum of the successor company is available, and has been available for some time in the Library. We have debated it, which is evidence that it is there.
We have made clear that the articles of association of the company will follow the standard table A articles—brought up to date—with two
important exceptions. Table A articles are available for hon. Members to study. One of the exceptions is the question of the limitation of foreign shareholding in British Aerospace, which we shall debate later. That draft article has been in the Library since the Christmas Recess, and a new revised amended article is now also in the Library. The amendments were drawn, at least in part, from the suggestions put forward in Committee.
The second exception concerns the question of Government directors. On Second Reading my right hon. Friend the Secretary of State made clear the position of Government directors. Although the draft article has not been placed in the Library, we made clear in Committee that we would follow exactly what my right hon. Friend said. Therefore, we felt that that was sufficient for our purposes when discussing the position of Government directors.
Mr. Les Huckfield: I wish to put on record once more our profound dissatisfaction with the Government's inability to put before the House or in the Library the memorandum and articles of association of the fully fledged, publicly quoted new company, British Aerospace Limited. The hon. Gentleman makes constant reference to the private company. He knows that in the transitional period—the shell company period, as he calls it—the memorandum and articles of association

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can be totally changed by the Secretary of State. For the Minister to rely on that—it is true that they have been in the Library for some time is to mislead the House.
The Minister said that the most important draft article on the exclusion of foreign control had been in the Library for a long time. After a cursory legal glance, that article was found to be full of holes. The new, more watertight version—I hope that it is more watertight I have had no time to take legal advice on it—has been in the Library only since Friday. It is the most important part of the articles. We shall not allow the hon. Gentleman to get away with misleading the House in that way.
Mr. Adam Butler: We found it almost impossible in Committee to satisfy the hon. Member for Nuneaton, largely because he finds it difficult to accept that what a Minister says—either in Committee or from the Dispatch Box—is likely to be kept to. I hope that not only will he listen to what I am saying now but that occassionally he will listen to Ministers and give them credit for intending to do what they say they will do. It was my impression in Committee that his hon. Friends were more frequently ready to accept that simple proposition than he was.
It has been asked why there are so many Government amendments on the Amendment Paper. Hon. Members will have studied them, and we shall deal with them in due and proper course. They are largely technical amendments, but some seek to shorten and clarify the Bill. I shall deal first with the Government amendments and then I shall revert to the various points which have been made by Labour Members.
Government amendment No. 22 seeks to change clause 5. It is a technical and drafting amendment. The purpose of clause 5 is to give the Secretary of State power—if he chooses to exercise it—to maintain a particular proportional shareholding in the successor company. To do that, he must be able to acquire shares or securities convertible into shares, or securities carrying rights to subscribe to shares, or such rights themselves.
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The hon. Member for Nuneaton asked on what occasion the Government might wish to acquire shares. They would do so to retain the proportion which they had set themselves—perhaps up to the current investment limit, or to retain 25 per cent. of the shares so that any change to the articles could be blocked if the Government so chose.
Clause 5(1) is deficient in two respects, hence the Government amendments. Although it covers securities convertible into ordinary shares, and rights to subscribe to ordinary shares, it does not cover securities which carry rights to subscribe. Therefore, it would not allow the Secretary of State to acquire loan stock or preference shares that carried with them share warrants. The first purpose of amendment No. 22 is to fill the gap. The second purpose is to overcome the narrowness in the subsection.
On further study, we believe that the Government should be empowered to take up securities of a subsidiary of the successor company, which provides a means of acquiring ordinary shares in the successor company. I am advised that it is not unknown for a company to put out a loan via a subsidiary finance company, and for that to be convertible into, or to carry rights to subscribe for, ordinary voting shares in the parentcompany. We are trying to ensure that there are no loopholes, no ways in which the Government would be prevented from acquiring shares under clause 5 in order to retain their proportionate shareholding.
Amendment No. 28 seeks to shorten and clarify the Bill. We want the Secretary of State to be able to acquire the shares or securities. As the word "acquire" embraces "subscribe for" or "take up", we can rely on the word "acquire"without further elaboration.
Amendment No. 36 is a little more complicated. It is partly consequential on the Government amendments to clause 5, dealing with the types of security that the Government will be able to acquire. Clause 7 provides for an upper limit to be set on the size of the Government shareholding in the successor company. Subsection (5) imposes a duty on the Secretary of State to exercise his powers to secure that the limit is not exceeded. Subsection (6) provides a derogation from that

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duty in circumstances where it is necessary for the Government to take action, if they wish, to be sure of retaining a given shareholding, but where it is possible, because of the unforeseen behaviour of other people, that the action will result in the Government's shareholding being increased. If that happens, the Government are required to comply with the limit, that is, in practice, to sell the excess shares, as soon as reasonably practicable.
As we have previously explained, though not on the Floor of the House, the most obvious case where that outcome might occur is in a rights issue where the Government subscribe to the full extent of their existing shareholding, but other existing shareholders decide not to do so. That is the only case covered by the subsection as drafted.
However, I am advised that a similar problem could arise with Government-held securities either in the successor company or a subsidiary, which were convertible into, or carried rights to subscribe for, ordinary shares in the successor company. For example, the terms of convertible stock might provide for conversion on a particular day or within a particular period. If the Government wished to be sure of retaining their existing proportionate shareholding, they would have to convert all their stock in the expectation that all other holders would convert theirs.
In fact, some might decide not to exercise conversion rights, with the result that the Government's shareholding would have been increased so that inadvertently the target investment limit was exceeded. The amendment is designed to deal with that eventuality.
Mr. Stan Thorne: Does what the Minister has said mean that in certain circumstances the Government would continue to maintain a majority of the shareholdings?
Mr. Butler: No. The hon. Gentleman will remember that once the initial flotation has taken place an investment limit will be fixed.
I have indicated previously that the Government are likely to retain about half the shares, though the figure may be below 50 per cent., because we hope that shares will be taken up by employees. The investment limit will be set, as I
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say, probably just below 50 per cent., and it will not be proper for the Government to exceed the limit. If they do so, in the circumstances that I have described, for example, the Secretary of State will be required to dispose of the shares in order to bring them down at least to the investment limit.
Mr. Thorne: Therefore, in spite of, rather than because of, certain actions, the Government could find themselves with a majority of the shares. They would have to get rid of them. Who would they give them to—the hon. Member for Preston, North (Mr. Atkins)? Would we all get some, free, gratis and for nothing?
Mr. Butler: It would be difficult for the Government to arrive at that position, but to take as an example the rights issue—probably the easiest example—if the other shareholders did not exercise their rights, the Government would, for a short period, hold a majority under the rights issue and they would be required to dispose of the excess shares on the market.
Since the shares would be quoted on the market, there would be a market price for them and they would be absorbed back into the market in the normal way. There would be no problem there.
Mr. Les Huckfield: We have always forecast that the Government would get themselves into that sort of difficulty, because they have been rigid in clause 7 (4)(a) in insisting that any new target investment limit must be lower than the one that it replaced. The Secretary of State could, as a result, find himself having to sell shares.
I do not want to question the selection of amendments, Mr. Deputy Speaker, but it would be for the convenience of the House to take amendment No. 37 with the group under discussion. That amendment concerns the Government's disposal of shares and the price at which they might dispose of them, rather than foreign ownership. Is it possible to debate amendment No. 37 with this group? This is the place in the Bill where I envisaged that it would come.
Mr. Deputy Speaker: I am in some difficulty. I could have considered the hon. Gentlemen's application if it had

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been made earlier, but I understood that the debate was coming to a close.
Mr. Huckfield: On a point of order, Mr. Deputy Speaker. Amendment No. 37 is part of this debate. We had always realised that the Minister and the Government might get themselves into difficulty because of what we called the ratchet mechanism and we wanted to clarify what would happen when the Government found themselves having to increase the investment limit in the new company. That is what amendment No. 37 is about.
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Mr. Deputy Speaker: It would be difficult to do as the hon. Gentleman requests, because hon. Members would need to speak again, which is not customary in this sort of debate. We shall have to leave amendment No. 37 to a later debate so that hon. Members who have already spoken on the group under discussion will be able to speak again. They would not be allowed to do so if the amendment were taken with the group presently before the House.
Mr. Butler: Amendment No. 37 is down for debate in the third group of amendments.
I do not see why the hon. Member for Nuneaton should say that he always foresaw that the Government would get themselves into a muddle. As always, the hon. Gentleman misunderstands the Bill and what happens when dealing with shares. If he would prefer the Government not to bid in a rights issue, thus reducing their shareholding, he should say so. Since it is the Government's intention that there should be an investment limit, it is right that there should be a means in the Bill for the Government to dispose of their shareholding if, inadvertently, in the sort of circumstances that I have described, they exceed that limit.
Clause 5 as reported from Committee already provided for the Secretary of State to acquire convertible securities of the successor company. As amended, clause 5 will provide also for the acquisition of securities of the successor company which carry rights to subscribe for ordinary shares, and for the acquisition of securities of a subsidiary which are
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convertible into, or carry rights to subscribe for, ordinary shares in the successor company. It would be wrong for the Secretary of State to be inhibited from exercising the rights conferred by those securities for fear of exceeding the target investment limit. That confirms what I have said. The amendment will ensure that he can exercise them without restriction, provided that any excess shares acquired as a result are disposed of.
Government amendment No. 51 is straightforward. It provides that the word "subsidiary" has the same meaning in the Bill as in the Companies Act 1948.
Dr. M. S. Miller: It is commendable that some of the Government amendments tidy up the Bill, even though we do not necessarily agree with the provisions involved. However, since the Government are adding a new word to the definition clause, are they sure that no other words need to be added for clarification? I am not being facetious. The Opposition do not frame the Bill; that is the Government's job. Is the Minister certain that, for the sake of clarity, no other definitions need to be included in the Bill?
Mr. Butler: The hon. Gentleman helped us to go through the Bill with a fine toothcomb. I hope that there are no omissions. This point arises out of amendment No. 36, where the word "subsidiary" appears. Because people have different views about subsidiary companies, we felt it wise to put a clear definition in the Bill and to state that it has the same meaning as in the Companies Act 1948. That seemed to us to be a wise precautionary move.
I turn now to the points made by the hon. Member for Nuneaton and others of his hon. Friends. We heard today a number of the arguments that we heard in Committee. It is probably fair to say that most Opposition Members spoke to new clause 15. We discussed a similar clause in Committee.
The problems associated with funding the new company were considered by Opposition spokesmen from different viewpoints. They raised yet again the question whether private sector companies and investors are suitable for long lead time companies. They seemed to ignore that there are many examples of

1105
long lead time companies in the private sector in the chemical, metal processing, oil and power plant industries. They are almost legion household names: ICI, Shell, Rio Tinto-Zinc, British Aluminium. Those are all long lead time companies. I suggest that the lead times are as long in many instances as those for the production of aircraft or defence weapons.
Mr. Ernie Ross:The Minister mentioned ICI, Rio Tinto-Zinc and British Aluminium as examples of companies that would take up the shares in British Aerospace. Has any of those companies invested substantially in the aircraft industry up to this time?
Mr. Butler: The hon. Member for Dundee, West (Mr. Ross) questions whether these companies will take up shares in British Aerospace Limited. That was not the point that I was making, but perhaps I may deal with it now. If such companies wish to subscribe, it will be up to them to do so. As far as I know, their principal objective in life is not to be involved in holding equity in aerospace projects. However, they and doubtless their pension funds will be free to invest in British Aerospace Ltd. The point is not whether they should but whether it is possible for companies with long lead times to survive in the private sector.
Mr. Ross: The difference is that those companies are investing in areas in which they are confident that the lead times will pay off at the end of the day. They have no experience in aerospace. How are they to engender confidence in something they know nothing about? Are hon. Members and the workers in British Aerospace to believe that ICI, for example, which is not involved in aerospace, will suddenly divert millions of pounds into British Aerospace because it is practical for it to do so? Is it not more likely to keep its money for its own long lead time investment projects?
Mr. Butler: The hon. Gentleman is barking up not one wrong tree but a host—a wood—of wrong trees. No one is talking in terms of British Aluminium or ICI investing massively in British Aerospace. They may, if they wish, apply for shares, but they will not be involved in the management of the company. Those involved in the management of British
1106
Aerospace will be those at present involved in its management. There is no reason why they should not continue to make the success of it that they have made in the past both before and after nationalisation.
Dr. M. S. Miller: The hon. Gentleman gave examples of companies which invest in long lead projects. I accept that there are long lead projects in those companies. I do not propose to be led along the path of suggesting that these companies will invest in British Aerospace. However, there is a difference. If a company invests in its own projects, it takes the rough with the smooth, the good with the bad, and it may have long lead processes going on. But if the company does not have to do that, because it knows that after a little time the Government will hive it off and it can then invest in the lucrative parts of that company, is that not different from the situation in the companies mentioned by the Minister?
Mr. Butler: The hon. Gentleman and his hon. Friends have the idea in their minds that private sector companies do not succeed. The evidence is that private sector companies succeed whereas nationalised industries do not.
Mr. Les Huckfield: Absolute rubbish.
Mr. Butler: The hon. Member for Nuneaton says "Absolute rubbish". But the vast majority of nationalised industries are suppliants to the British taxpayer. They are kept afloat with the taxpayers' money and taxes paid by the profitable private sector.
Mr. Stan Thorne: How many hundreds of millions of pounds were put into private aerospace companies—for example, BAC and GEC—prior to 1977?
Mr. Butler: I am coming to that vital point, because it is fundamental to new clause 15. I am trying to answer the points that have been made, because anxieties have been expressed about them. One anxiety was that no private sector company could succeed in areas where there are long lead times, such as in British Aerospace. I referred to ICI, Shell, Esso, RTZ and so on. The significant thing is that they are not high-risk companies for investors. They are the blue chips, the safe companies. The definition of a blue chip is that it is as safe

1107
as it is possible to be. Such companies yield less on investments than other companies. That surely serves to prove not only that private companies can exist in high lead time industries but that they can do so successfully and can be considered safe investments with secure futures.
Mr. Thorne: The hon. Gentleman mentioned Esso. As far as I am aware, Esso is owned by Rockefeller. Is the Minister happy that Rockefeller should take a main interest in British Aerospace?
Mr. Butler: I think that deals with the question whether—
Mr. Les Huckfield: Answer the point.
Mr. Butler: If any individual wishes to subscribe to British Aerospace, I hope that, subject to the foreign ownership limitation, he will do so. Indeed, I believe that he, as an individual or as an investment manager, will be encouraged to do so because of the fine future that, despite the moaning minnies on the Opposition Benches, we see for British Aerospace.
Mr. Thorne: I have not been called a moaning minnie before.
Mr. Butler: From a number of Labour Members we had the old scare about successful parts of British Aerospace being hived off. I am glad to be able to state on the Foor of the House again, as we did on Second Reading, that that is not the Government's intention.
Mr. Huckfield: Will the hon. Gentleman give way?
Mr. Butler: No; I shall develop my argument. The hon. Gentleman can then say what he wishes.
6 pm
We made clear at an early stage last summer that we had a strong preference for keeping British Aerospace together because we believed that this would be to the benefit of British Aerospace. At that time we retained in our minds the possibility that it would be right and better for the industry as a whole if part of it were hived off. But we continued to take advice from many of those concerned in the industry—from the unions, management and many others—and came to the firm
1108
conclusion that it would be wrong to split up British Aerospace. We therefore produced the Bill which we are now discussing, which allows for one only successor company to be formed.
If we had intended to split up British Aerospace in the way that I sometimes think Opposition Members would like us to—they have pressed this point despite repeated assurances from Government Ministers—we should have needed to provide for more than one company.
Mr. Huckfield: The hon. Gentleman must not get so irate. It is difficult for the Labour side of the House to accept some of the ministerial assurances that we get from this Government—
Mr. Robert Atkins: Why?
Mr. Huckfield: The hon. Member for Preston, North (Mr. Atkins) has actually returned. I wonder how long he will stay this time. When the Government are doing their best to kill off British Leyland, and when they have made public what we have thought all along were their real intentions, namely, to denationalise British Steel—that is what it is all about—how does the Minister expect us to accept from him assurances that the Government will retain British Aerospace Ltd. as a single entity? How on earth can we accept that assurance from this Government? If the hon. Gentleman is so determined to prevent the break-up of British Aerospace, why does he not put it in the Bill?
Mr. Butler: The hon. Gentleman's presence on the platform with a man better known as Red Robbo—
Mr. Stan Thorne: That is irrelevant
Mr. Butler: —who has done his best to break up British Leyland, is evidence of his attitude towards that company.
Mr. Nicholas Winterton (Macclesfield): Game, set and match.
Mr. Butler: I hope that the House will accept the repeated assurance that it is not the Government's intention to break up British Aerospace and that it will be kept as an entity under the new successor company.
The next scare, re-run, is that there is a threat of the Government pulling out. In the context of shareholding, we have made clear that it will be the intention

1109
of the Government to retain about half of the shares in British Aerospace and that if, in the future, some of those shares are sold we shall retain at least 25 per cent. for the purpose of blocking any change in the articles of association, such as that on foreign shareholding, due for debate later, which we believe would not be in the interests of the company.
The most important consideration is whether it will be possible, in the future, for funds to be made available to British Aerospace Ltd. This is the purpose, I understand, of new clause 15. It is significant that the nationalisation Act of the Labour Government deliberately made it impossible for funds to be made available to British Aerospace, under the Civil Aviation Act 1949, which had been used expressly for the purpose of funding projects. It is interesting that new clause 15 chooses to use virtually the same wording as appears in the Civil Aviation Act 1949 about the design, development and production of civil aircraft. The same words appear in the new clause.
Since the Labour Government chose not to use the Civil Aviation Act 1949 for the purpose of putting money in, but made provision for that in the nationalisation Act, we felt it right, in removing the provisions of the 1977 Act, that we should be able to refer to the provisions of the 1949 Act. In consequence, it will be possible, as happened before aerospace was nationalised in 1977, for Government money to continue to be made available. I have said that this would cover such forms of aid as launching aid for new projects.
I made it clear in Committee that any project put before the Government, who are not spendthrift with taxpayers' money, would have to be justified, but the fact that Conservative Governments have made money available for this sort of project in the past should remove any anxieties about the future.
The hon. Member for Dundee, West made the same speech as he had made in Committee about research and development. He emphasised the fact that new clause 15 refers to the design, development and production of civil aircraft. If he had chosen to look at the Civil Aviation Act 1949, he would have found the same words. So far as research and development can be covered by the
1110
Words "design and development", moneys would be availale under that Act.
One of the features of British Aerospace at the moment is that it has to find its own research money. Under the 1977 Act, the 1949 Act was not effective. One could perhaps argue that the 1949 Act, plus the Science and Technology Act 1965, provide more opportunities for research and development finance to be made available to British Aerospace in the future. The hon. Gentleman, however, expects the investors to take a quick buck, and that research and development will be the first to suffer cutbacks. The hon. Gentleman even suggested that there would be no research and development in British Aerospace. Was that the situation before nationalisation?
Mr. Les Huckfield: That is what it is all about.
Mr. Butler: Who thinks that the HS146 owed anything to nationalisation in its development? Who thinks that the BAC111 or any of the aircraft flying today owe one penny in research or development to nationalisation? As we are reminded frequently, this is a long-lead time business. One cannot tell me that research and development on aircraft flying in 1977, or even today, started three or four years ago. Of course not. Research and development was put into British Aerospace, or into British Aerospace companies, when it was in private hands. It has continued to be put in under nationalisation. It will continue to be put in in the future.
Mr. Huckfield: Cannot the hon. Gentleman learn to recover from his own business experience in Courtaulds, which seemed to consist of closing down Courtaulds factories? Cannot he understand that Sir Arnold Hall, of Hawker Siddeley, told the previous Labour Government that he was not willing to proceed with the Hawker Siddeley 146, as it was then called, with private money? It was only the Labour Government's public money that enabled that project to succeed. Cannot the hon. Gentleman get that into his head?
Mr. Butler: What I do know is that the board of British Aerospace, in full knowledge of the fact that within a few months it would be a limited company, acting as far as possible as a private

1111
sector company, with the Government standing back, recently decided it could continue to develop the 146 to a successful aeroplane, and to produce and fund it in the knowledge that it would have to find its money in the private sector. That is proof of confidence about the future by the management of British Aerospace, because it understands these things.
Mr. Ernie Ross Mr. Ernie Ross rose—
Mr. Butler: I was about to say something about the hon. Gentleman. I hope that he will not continue to produce this scare in regard to research and development for those members of the union which, I believe, sponsors him. The hon. Gentleman mentioned particularly that a number of them were being tempted away by better offers, perhaps overseas. I shall tell him why they were tempted away. It was because the previous Labour Administration operated a pay policy which made it impossible to reward them in the way that they should have been rewarded. The information that I have is that fortunately, the drain that has taken place in the last year or two has been very much less than previously.
Mr. Ross: One of the reasons why some engineers have been tempted abroad is contained in the Finniston report. I hope that the Minister who is responsible for the recommendations of that inquiry will introduce them, because they will ensure that engineers are sufficiently rewarded.
The point that I was making was that if private money is invested in British Aerospace, the emphasis on research and development will be two fold. There will be research and development on military aircraft, which will be guaranteed in the sense that the military or missile programme will be supported by Government. Civil aircraft development is an area that has always been under strain, whether under nationalisation or in the private sector. I believe that that sector will be pushed to the side. There are workers in British Aerospace who perhaps do not agree with a policy of producing weapons that can only injure people. They want to be involved in something that will assist in improving
1112
our lives. We may lose those people if all the money that is used for research and development—I am not suggesting that research and development will stop—is devoted to military and missile projects.
Mr. Speaker: Order. I hope that the hon. Gentleman has finished his intervention.
Mr. Butler: It would be difficult to persuade the hon. Gentleman to forgo his prejudice. I tried for a long time during our debates in Committee. I refer him to those various large companies, which were not companies of recent start-up. They go back a long time in our industrial history. If the hon. Gentleman thinks that they would not have survived today without devoting expenditure to research and development, he is wrong. That is further evidence to him that in a private sector situation research and development expenditure goes in, and will continue to go in, because those who run the business have an interest in its future.
We debated new clause 15 in Committee. At that time I made it clear that various pieces of legislation could be used for funding British Aerospace. The Civil Aviation Act 1949, the Science and Technology Act 1965, and the Industry Act 1972 would all be available, although, as is the case under new clause 15, actual expenditure would be at the discretion of the Secretary of State. That does not change.
I end by quoting what was said by the hon. Member for East Kilbride (Dr. Miller), who, it will be remembered, did not press the equivalent of new clause 15 because:
"As the Minister has made clear, beyond any reasonable doubt,…what we have set out to achieve in the new clauses can be achieved by other means". [Official Report, Standing Committee G, 24 January 1980; c. 1207.]
In consequence, the hon. Gentleman withdrew the equivalent new clause. I hope that we have satisfield Labour Members, just as we did in Committee, and that they will not find it necessary to proceed to a Division on this subject.
Mr. Les Huckfield: The only thing that I can say is that it gets worse. Each time the Minister of State comes to the Dispatch Box he indicates—as he did

1113
each time he rose to his feet in Committee—even more desperately his lack of real knowledge about the true facts of this industry. As well as revealing the true depth of his real ignorance, he also seems to think that ignorance pervades this side of the House. It is significant that even though the draft article of association, which was supposed to prevent foreign takeovers, was submitted in Committee at short notice, we were able to find legal flaws in it with just a cursory legal glance from a cursory legal eye. If we can do that with our meagre resources, I like to think that the vast repository of wisdom which the hon. Gentleman seems to proclaim over this industry at least occasionally pervades this side of the House. Given adequate time, I have no doubt that we shall find a few legal loopholes in the new draft article of association which is supposed to exclude foreign control. Unfortunately, it does not look as if we shall have time to do that.
We were able to find flaws, and no doubt will find others, in the draft article, even though we are backed by diminished and meagre resources. We do not have the resources which are at the Minister's command. All he has to do is read his brief. If he gets into difficulty the hon. Member for Ruislip-Northwood (Mr. Wilkinson), who is sitting behind him, is able to go backwards and forwards and get further flashes of inspiration. We are unable to get those flashes of inspiration; nor are we able to come to the Dispatch Box and read it all out as the Minister does.
6.15 pm
Despite our lack of resources, and despite the fact that we have already found some legal loopholes in the draft article, we foresaw the need for the amendments which the Government have tabled today. I refer to Government amendments Nos. 22 and 28. We told the hon. Gentleman in Committee that with the inclusion of the ratchet mechanism—I refer particularly to clause 7(4)(a) in which the Government categorically insist that
"any new limit must be lower than the one it replaces"—
we foresaw all kinds of difficulties. We repeatedly told him that that would place too tight a restriction on the Government's sphere of operations.
Similarly, we saw difficulties for the Government in other respects, again with our meagre resources. I am not suggesting that my hon. Friends are meagre, but we do not have a vast number of civil servants and HEODs in the Department of Industry to back us up. We foresaw the situation that would arise under clause 7(5). If the Government got into a tight corner they might have to dispose of some of their shares and lose some of their voting rights. We warned that the Minister would get himself into that kind of tight situation. We told him then of the need to introduce an amendment along the lines of the one that he has introduced today.
The monopoly of wisdom about this industry does not lie on the Conservative Benches. I think that it pervades the Labour Benches from time to time. In his sometimes scathing and derogatory remarks about my hon. Friends, I hope that the Minister will bear in mind the fact that we have already amended the draft article to prevent foreign ownership, and also that we have foreseen the need to introduce amendments which were rendered necessary by the tight drafting of clause 7, following the provisions in clause 5 which enable the Government to take up further shares.
The other interesting thing is that each time theMinister speaks he makes comparisons with other industries and reveals a little more of what he thinks the new company will be like and what kind of a company it will be. It is interesting to note that the hon. Gentleman thinks that the new British Aerospace Ltd. will be like ICI. But ICI makes paint. It is involved in chemicals and fertilisers. I should not have thought that that was the same as the 146 project. The Minister also compared the company with Rio Tinto-Zinc and Shell. Shell is particularly famous for exploration, extraction and production of North Sea oil. The significant thing about North Sea oil exploration is that it promises a high and immediate pay-off. In other words, the comparisons made by the hon. Gentleman demonstrates that he does not understand the aerospace industry.
The hon. Gentleman's most foolish remark was that all the other private companies, because they were private companies, had funded their own research

1115 1
and development programmes. The important point that he failed to mention was that most foreign Governments pay the research and development costs of military projects undertaken by companies in their countries. Perhaps the hon. Gentleman deliberately failed to mention that. Much of the research and development expenditure of McDonnell Douglas, Boeing and Lockheed is paid for by the American Government. Much of the research and development costs of Aerospatiale and SNECMA are provided by the French Government. The bulk of research and development expenditure of Messerschmidt and other German aircraft manufacturers is paid for either by the German Federal or the German State Governments.
If the hon. Gentleman believes that the new company will be like ICI, Rio Tinto-Zinc, or Shell, he must examine the context of international competition within which British Aerospace Ltd. will operate. In that international competition most other Governments back their aerospace industries to the hilt. That is precisely what this Government have chosen not to do.
The hon. Gentleman made his usual speech about British Aerospace being retained as a single entity company, but he destroyed his own argument. The hon. Gentleman usually does things at the last minute in the hope that we shall not see what he is up to. Over the weekend he has put on the Amendment Paper a provision for the Government to take up shareholdings in subsidiary companies of the successor company. The hon. Gentleman is talking about the creation of more companies. With his new amendments he is paving the way for the creation of more than one company, and he expects us to accept his assurances about British Aerospace Ltd. being a single company. It is precisely because of his tactics that we cannot accept his assurances. The amendments that he has recently put on the Amendment Paper pave the way for British Aerospace to go into joint partnerships by the formation of subsidiary companies.
I hope that the hon. Gentleman will listen to our case. It is difficult for us to ask him to give us the benefit of his understanding, but if he will listen, that will be a start. The hon. Gentleman was
1116
right when he said that new clause 15 was based on some of the provisions of the Civil Aviation Act 1949 and that the Government wished to get back to the spirit of that Act. There is nothing wrong with that, except that the hon. Gentleman must remember that previous Governments, operating under the Civil Aviation Act 1949, and realising the nature of the industry, chose to assist the launching of new projects with Government money. We learn daily of examples of how this Government are not prepared to assist new industrial ventures with public money.
If the hon. Gentleman believes that British Aerospace Ltd. will be like ICI, Rio Tinto-Zinc and Shell, and since we know that Conservative Members do not believe in assisting companies such as those, why should the Government be prepared to assist British Aerospace? It is all very well for the hon. Gentleman to say that the Government wish to revert to the practices of previous Administrations. No previous Conservative Administration have been as dogmatic as this one in their endeavours to reduce the public sector borrowing requirement.
We shall continue to say that because of the Government's lack of public commitment to the aerospace industry we may well have seen the launching of the last new civil aviation project in this country. We believe the case to be as desperate as that as a result of what the hon. Gentleman said in response to our new clause 15.
The hon. Gentleman omitted to say, when he spoke of the last Labour Government having chosen not to operate under the provisions of the Civil Aviation Act 1949, that that Government, in the Aircraft and Shipbuilding Industries Act 1977, made adequate provision for money from the national loans fund and other money to be injected into the new corporation in the form of public dividend capital. If that money had not been made available the HS 146 project could not have been launched, nor could our entry fee to the Airbus industry project have been paid. The atttempts of the hon. Gentleman to mislead the House in that way show that he does not understand the kind of capital structure and the mechanism which the last Labour Government created for putting public money into the aerospace industry.
We shall divide the House on new clause 15. We recognise that because the hon. Member for Preston, North (Mr. Atkins) has turned up we might be in a minority. We recognise that because the hon. Member for Hitchin (Mr. Stewart) has seen fit to take an interest in these debates we might be in a minority. Who knows? Before the night is out we might even see the hon. Member for Welwyn and Hatfield (Mr. Murphy). That would not be a sight to delight our eyes, but we presume that since he represents a large number of British Aerospace workers he might see fit to turn up for five minutes of this critical debate.
Because we believe in the British aerospace industry and want to see new civil aviation projects launched in this country, and because we wish to see Britain retain as much as possible of its independent aerospace manufacturing capacity, we shall press new clause 15 to a Division. We hope that the hon. Gentleman, even late in the day, will think again on what he has said.
Question put and negatived.
Mr. Huckfield: On a point of order, Mr. Speaker. There must have been a misunderstanding. I had assumed that we would have a Division on new clause 15.
Mr. Speaker: We are dealing with new clause 11. We shall reach new clause 15 in due course, and then have a Division formally. When we reach new clause 15 on the Order Paper I shall provide an opportunity for a Division. The hon. Gentleman will call it.
Mr. Huckfield: Further to that point of order, Mr. Speaker, may I put in a bid for a Division on new clause 15?
Mr. Speaker: I have given a guarantee that I shall put the Question. When I put that Question, if the hon. Member for Nuneaton (Mr. Huckfield) shouts "Aye", I should not be a bit surprised if someone on the Government Benches shouted "No". There will then be a Division.

New Clause 11
GOVERNMENT SHAREHOLDING
'It shall be the duty of the Secretary of State so to exercise his powers under this Act
1118
as to secure that shares for the time being held by him or his nominees in the successor company carry at least 51 per cent. of the voting rights exercisable at general meetings of that company.'.—[Mr. Stan Thorne.]
Brought up, and read the First time.
6.30 pm
Mr. Stan Thorne: I beg to move, That the clause be read a Second time.
The clause gives 51 per cent. of the voting rights at a general meeting to the Secretary of State. Important decisions are taken at general meetings. An examination is made of what has happened and future policy is discussed. The policy of a company is often determined at such general meetings. That is why we have tabled new clause 11.
On Second Reading the Secretary of State said that he was anxious that the Government should not have control within the industry. Our view is that it is important for some power over the new company to be exercised by the Secretary of State. If the Secretary of State has a 51 per cent. holding, and if he is answerable to the House, it might be possible for hon. Members to ask about certain aspects of the industry which cause them anxiety.
With a 51 per cent. holding the Secretary of State could influence decisions within the industry. I put it no stronger than that. Unfortunately, the selection of amendments—which I do not question—does not permit us to discuss industrial democracy. However, in the 1977 Act there is a suggestion that an organic growth of industrial democracy should take place. That will wither away, because even if he had 51 per cent. of the voting rights the Secretary of State would have no intention of placing any obligations on the successor company. We must not forget the involvement with the manufacturing industries which the successor company will have, whatever its other interests.
The British aerospace industry competes with other world aerospace manufacturing industries. Decisions affecting its marketing activities will involve the Secretary of State. The successor company will manufacture military aircraft. Will that company have the right to sell military aircraft to Egypt, Israel, China or South Africa? Will a decision to sell

1119
to other countries be left to the successor company? If the Secretary of State had 51 per cent. of the voting rights he would have some measure of control over such decisions.
There are other political aspects of international trading which affect the aerospace industry. This Government are, and the previous Government were, involved in weighing up the pros and cons of linking with McDonnell Douglas or with companies in the European Economic Community. Sometimes the aerospace industry is involved in deals which are not necessarily the most profitable in terms of pounds and pence. Sometimes they act according to the Government's political aspirations. I do not quarrel with that. Obviously any Government have the right to determine their allies.
I am worried because a whole range of decisions could be made by a private company which might be against the national interest. That is why the Secretary of State must have a 51 per cent. holding. The right hon. Gentleman has paid tribute to the industry for its productivity, inventiveness, organisation and administration. In the interests of the work force, it is vital that hon Members should be able to question the Secretary of State for Industry about the British aerospace industry, its conditions, policies, marketing and industrial relations. The best way to ensure that is for the House to agree to the new clause.
Dr. M. S. Miller: It is astonishing and sinister that the Government do not intend to take up a 51 per cent. interest in the new company. The Secretary of State and the Minister of State have made it clear that the Government's holding will be relatively minimal. The Government are about to denationalise the British aerospace industry. That is doctrine gone mad. The Government will not even consider taking 51 per cent. of the voting rights. What is the reason for that? Their dogmatic assertion has gone to extremes.
The Government would not have to exercise their right if they had a 51 per cent. holding. No one would press them to act to overthrow the new board's decisions. However, such a holding would ensure that if matters got out of hand the
1120
Government could exert pressure as a last resort. The sanction is needed, even though it may not have to be used. With an industry that is extremely important in terms of defence and security, it is dangerous for the Government not to retain a last-resort authority to take action if they think that the new company is heading in a direction that is not in the public interest. For that reason alone, the Minister should think twice before rejecting the clause.
Perhaps the Government do not want the clause because the Secretary of State has already been told by the people that he wants to come into the new company that they will not do so unless they are given a free hand without what they would call Government interference. Perhaps some of the Government's big industrial friends and cohorts have indicated that unless the government keep their nose out they will not participate. That aspect confirms us in our belief that there is something rotten in the State of Denmark in relation to the provision that the Secretary of State has seen fit to write into the Bill.
Even Conservative Members who have no regard for public enterprise and who repeat the stupidity that all nationalised industries lose money—most of them actually earn large amounts—must have some feeling of patriotism and fear that problems could arise with the new company were it to follow the wrong course. I urge the Minister to consider the implication of rejecting the clause.
Mr. Bob Cryer(Keighley): If we could rely upon good intentions, we should never need to legislate. Equally, if we were dealing with people of universal good will, we should not bother to legislate. But legislation gives a guarantee that certain actions will be followed. The Minister of State said earlier that the Government had no intention of hiving off parts of the industry. I imagine that they had no intention of having a steel strike, although that has happened and it is largely their responsibility. I imagine that they had no intention of embarking upon such a disastrous economic policy, but that is what is falling about their ears and causing such deep splits in the Cabinet. Therefore, the Minister of State's statement that the Government do not intend to hive off parts of the industry

1121
is in no way inconsistent with possible future hiving off.
The Minister said that the Government would keep at least 25 per cent., and perhaps around a half of the shares, to block foreign control. That may be their intention, but there is often a large gap between intention and action. That is why we have legislation. We must legislate to see that intentions are translated into action and to close the gap between intention and reality. In this modest clause we say that the intention that the Government have espoused of protecting the position of the aerospace industry should be translated into legislation.
6.45 pm
The clause is necessary for several reasons. The first is confidence in the industry. The Minister might say that we are scare mongering and that we should not talk about a possible loss of jobs, but the very fact that the Bill has been introduced and is going through the House causes uncertainty among people in the industry. The Minister travels the country telling the workers not to worry, but the very fact that he has to do that indicates the need for people to be reassured. The clause would give them the certainty they require by enshrining the certainty in legislation.
The workers are not daft. They see how Governments change—and I do not mean from one side of the House to the other. Ministers are shuffled around every year or two in the same Government, and one Minister might put different emphasis from another on a particular issue. They are entitled to do that unless they are bound by legislation. An emergency might arise, and a Minister might decide to sell off shares. If the Minister talked to the public he would find that they have a deep cynicism towards statements by politicians. That is born of the shifting sands of political attitudes over the years. The clause would help in those circumstances to generate confidence in the industry.
There is another reason. The industry is composed of thousands of small firms supplying components and services to the major concerns. How often is a small firm placed in difficulties when a large company to which it devotes a considerable part of its production runs into trouble?
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Its investment, stock building and employment plans grind to a halt. Its training plans are placed in jeopardy. If the Government accept the clause they will help to create confidence among the cornponertt suppliers and the workers employed by those firms.
The House is being asked to authorise an extraordinary process. It is significant that the Government are having to embody in the Act the procedure that is to be followed. If they want the company to be enshrined in the law, why not the control of it? The Government are setting up a £100 company whose capital will be held by two civil servants on behalf of the Secretary of State. He will allow the public corporation to emerge in the second stage.
We are given no guarantees. We do not have the memorandum and articles of association for the public company—only the straightforward memorandum and articles for a private company, as provided for in the Companies Act 1948, as amended. There are elements in common between the two, but there is no safeguard.
The Minister has said that at least 25 per cent. of the company will be retained but how much better for the nation as a whole, if rather than just the relatively tiny component of the aerospace industry—it is of course important—this new component were written into law! It should not depend on vagaries or on articles that we do not have for a company which does not exist. This is all cloudy and remote. Why cannot we have a legislative guarantee? That is what the House of Commons is best at.
The development of these companies will involve a close relationship with senior civil servants. I am not happy about that. My fears are based on the examples that we have seen of civil servants departing readily for the boardrooms of big corporations. This legislation involves the Civil Service even more closely. Without the new clause the Civil Service might press for a closer relationship between the Government and the companies with which they deal every day—such as GEC and ICI. The Civil Service should be at arm's length with companies, to ensure that they are treated equally. In this case, however, two senior civil servants will be shareholders on the Secretary of State's behalf.
It is true that the Minister has the last word, but the senior Civil Service is intimately involved in advising and influencing Ministers. Civil servants might give advice, which they thought was in the best interests of the commercial realities, to sell more than 75 per cent.
This industry depends massively on public funds. The Minister rehearsed the various Acts which have enabled hundreds and thousands of millions of pounds to be given since the war in this industry's support. This company will be virtually the sole contractor, or a major partner in any contractor, to the British Government for military supplies. An example is Panavia, of which British Aerospace is a key component. In any joint Western European effort this private company will play a major role as virtually a monopoly supplier of military hardware.
I put forward this argument with reservations, because I am not a militarist. I believe that we should disarm, but if we do not disarm, we shall at some time use these dreadful weapons. A large portion of our expenditure goes on arms and aerospace instruments of death. This company will be a major recipient of that money—not a free-standing private enterprise, as the Minister so often says. Like British Aerospace before nationalisation, it will depend massively on public funds for military projects and for civil projects such as the 146. Concorde, mistakenly, in my view, was enormously supported by the taxpayer. This company will have a unique relationship with the British Government.
We accept the Minister's reservations, but let us get them down in black and white. When people are nonplussed, they say that there should be a law about something. People sometimes believe rubbish printed in The Sun or say "I saw it in black and white. It was in the Daily Mail". That is a doubtful source of anything. But few people query Acts of Parliament. There are sometimes differences of interpretation, but there will be fewer with this clause. There might be differences at the margin, but these will be no problem if the courts are sensible. In a case only recently the House of Lords said that Parliament, and not the Court of Appeal,
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should change the law. That is a sensible view.
I do not like to use patriotism as an argument, because it is frequently the last resort of the scoundrel, as we have seen from the Tories over the last few weeks, but there is a national interest here. We are a nation State, with the same language and cultural attitudes, and nations come together as equals to exchange ideas. In that context we should retain the British aerospace industry and civil manufacturing capacity. This company should be kept within our control.
In 1956 the Governor of the nationalised Bank of England was involved in selling shares because it was thought that he had special information about the increase in interest rates. He said to the Bank rate tribunal:
"Although it is anti-British and derogatory to sterling, it makes sense to me."
That man was not a Communist shop steward, a militant or an activist. He was not a working man who clocked in. He was one of the toffee-nosed gents who have run our country for so long. He was a man of the City. He was probably a member of Lloyd's and of other notable institutions. He was Governor of the Bank of England. There are not many such high level posts, and those who hold such office are supposed to be dedicated to the interests of this country. His definition of the national interest was a fine one if ever there was one.
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It is probable that there are more such fine gentlemen involved with British Aerospace. They might say the same, and add "We will make sure that the articles and memorandum of this company are changed so that we can sell more shares and line our pockets". When it comes to a choice between the national interest and lining their own pockets, those toffee-nosed gentlemen in the City, who are supposed to be a symbol of all that is best in this country, choose to line their own pockets. That is what that famous statement by the Governor of the Bank of England was all about.
Let us eradicate that sort of thing by including this clause in the Bill, so that workers, industrialists, component suppliers and City gents have confidence in this vital industry, which employs

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70,000 people. That will ensure that the company remains of this country, where it belongs.
Mr. Bowen Wells: At the risk of trespassing on the Minister's territory, I urge him to make sure that the Government, instead of taking 51 per cent. control of this company, divest themselves entirely of shareholder control. The Government should not reduce their holding below 25 per cent., for the good reason—put forward by Opposition Members—that that will enable us to keep control over the memorandum and articles of association of the company. If the Government retain 51 per cent. of the company, that will defeat the whole objective they have set themselves in setting up a limited liability company. It will ensure that politicians interfere in the commercial considerations that a properly run commercial company should take into account. The fact that political, social and other considerations have impinged on commercial decisions largely explains the lack of success among nationalised industries as a whole.
The hon. Member for Nuneaton (Mr. Huckfield) has travelled up and down the country, and visited the constituency of my hon. Friend the Member for Preston, North (Mr. Atkins), saying that those Members of Parliament who were not on the Committee have taken no interest in the Bill. However, I know from the reports of the Committee proceedings that my hon. Friend the Minister of State said that the reason he cannot say exactly what percentage the Government will take in the shareholding of the new company is that he wants to make provision for employee participation, enabling them to purchase shares.
I welcome that assurance from my hon. Friend. I hope that the difference between a 51 per cent. and a 25 per cent. holding by the Government will soon be owned by the employees, despite the wrecking tactics of Opposition Members who have asked their friends in the trade unions not to purchase, directly or indirectly, any shares in this company.
Mr. Les Huckfield rose—
Mr. Wells: I am certainly not going to give way.
Mr. Huckfield rose—
Mr. Wells: The hon. Member for Nuneaton has made such scurrilous and sarcastic remarks today and up and down the country that it would be fruitless to allow him to intervene. It would be inviting him to make more sarcastic remarks of a derogatory kind if I were to give way to him.
When I discussed this Bill with the trade unions in Stevenage, I was asked why they were not consulted about or able to take part in the discussion on the nationalisation of the industry and why they, as members of the company, were not taking part in the consideration of the Bill in the House.
Mr. Huckfield: Name them.
Mr. Wells: The reason why those trades union members were unable to take part in these considerations was that they did not own any shares in the company. State ownership does not mean ownership by the employees or by individual members. It means ownership by the State, controlled by the small party caucus of whichever party is in government. That is exceedingly dangerous, especially when such industries are in the hands of Opposition Members.
We saw how industrial democracy was perverted under the nationalisation legislation in 1977. In the industrial democracy exercise demanded by that legislation almost 50 per cent. of employees of the aerospace industry were completely eliminated from discussions on and control over their own future. The highly technically skilled engineers, administrators and technologists are still excluded as a bargaining unit by British Aerospace. The trade union movement and trade unions recognised by and affiliated to the TUC were the only ones, under those clauses of the 1977 legislation, that were able to be elected and to take part in the industrial democracy exercise. That is the sort of perversion that goes on when industrial democracy is introduced by Opposition Members.
I hope that the Minister will reinforce that we want this industry to be largely in the hands and under the control of its employees. That will result in those employees having a direct interest in making the company successful and prosperous. Their families and successors will benefit from having a shareholding in the

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company, and the employees will have an interest in making the company profitable. That is the way I hope we shall see increasing ownership of shares in companies, especially in British Aerospace
If that is done, the company will be more commercially focused and will be a happier company. All those who wish to participate will be able to do so. They will contribute to the prosperity of the company. That is the truest and strongest guarantee to enable this limited liability company to be of great benefit to its employees and the nation.
Mr. Ernie Ross:We said earlier that one of the high points of the debate on this aspect of Government legislation would be that those of us who took part in the Committee would be able to hear Government Members make some contribution. We have just heard such a contribution from the hon. Member for Hertford and Stevenage (Mr. Wells). It is clear that he does not know much about the British aerospace industry.
British Aerospace is already a highly competitive international company. If that were not so, there would be no attempt by the Government to sell the shares because they would not be sellable. The State corporation has an order book of about £3,000 million. In 1977 aerospace represented 16 per cent. of the gross domestic product. That was a far bigger proportion than in any other aerospace nation. From 1970 to 1977, the companies which made up the British aerospace industry grew at 4·7 per cent. per annum, as compared with the gross domestic product rate of 1·9 per cent. That is the successful organisation—made so by the trade unions and the workers and the management working together in a nationalised industry over the last two years—that the hon. Member for Hertford and Steven age and his Government are wishing to dismantle and to sell off.
That is why we are attempting to insert the new clause, which will ensure that in this very highly profitable and successful company we shall be able to retain some control over the private concerns that may come into the industry.
The hon. Member also said that Labour Members had been advising
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workers not to buy shares. We have not been advising workers to do anything except to continue working in a nationalised industry. What we have said is that when we return to power we shall renationalise this industry without compensation. We are making it quite clear.
Mr. Bowen Wells: Stealing.
Mr. Ross: We are spelling it out so that no one will make any mistakes or be in any doubt. That is exactly what we shall do when we return to power.
The mistake that the hon. Member makes is in not speaking to the workers in the industry. If he did that, they would tell him how they contribute their share to the success of British Aerospace. They do it through something called a productivity scheme—of which I am sure the hon. Gentleman must be aware if he speaks to workers in the industry. I am sure that he will be able to intervene at this stage and tell me exactly howthat scheme works. The hon. Gentleman obviously does not want to intervene, but I shall tell him how the scheme works. It is quite simple. Of all the money earned, 50 per cent. goes to the workers who earn it and 50 per cent. goes to British Aerospace, which uses it.
In the chairman's comments in the annual report, he makes it quite clear that
"British Aerospace is unique among major aerospace manufacturers in the western world in being required to fund all its own civil research. The United States funding by Government was previously some ten times that of the United Kingdom. Clearly their privately owned industries will now be further advantaged against their United Kingdom competitor."
But who are they really taking on? They are taking on the productivity of the ordinary workers in British Aerospace who have created the profits which have allowed that company to invest and to continue investing.
The hon. Member makes some claim to have spoken to some workers in British Aerospace who claim that they did not participate in the debates surrounding the nationalisation in 1977. I refer the hon. Member to a Labour Party publication in 1974 on the nationalisation of the aircraft industry. Long before we nationalised British Aerospace we consulted all those relevant

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within that industry. We asked them what type of British aerospace industry they would like, and the people who were relevant at the time numbered among them Lord Beswick, the TUC and the Confederation of Shipbuilding and Engineering Unions—which is the relevant union within the industry.
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If the hon. Member was talking to some workers who do not think that they made a contribution, perhaps it is because they are not members of a union at all, In an overwhelming minority, they can hardly expect to affect the decisions of the majority. Clearly, long before we formed British Aerospace and British Shipbuilders, we consulted the people concerned—the management and the workers in those industries.
The new clause seeks to ensure that the Secretary of State will have at least 51 per cent. of the voting rights exercisable at general meetings of the company. I would not claim to know the intricate workings of companies at their board meetings because I have not attended very many, but I know that at any general meeting of any company, or of any club—a golf club, a football club or a friendly association—decisions for the following year are taken, decisions on how the company or club will spend its money, and decisions on the areas into which it may wish to venture, whether it is to build a new extension to the club or to invest in a new civil aircraft. These decisions are all taken at the annual general meeting. They are taken in the sense that one has to allocate funds at that time if one intends to branch out.
That is why the annual general meeting takes other decisions. Concerning British Aerospace, it takes decisions with regard to re-equipment, about the basic research funding and about relations with the Government—all absolutely vital areas.
It is for that reason that we are suggesting that the new clause should be accepted. We believe that this is one of the most vital industries of the country.
Like my hon. Friend the Member for Keighley (Mr. Cryer), in Committee I was also concerned about the small business man. This is not a concern solely of Conservative Members. We are concerned about small businesses because
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there are many small businesses which supply British Aerospace at present. We want to ensure that when the Bill becomes law they continue to supply British Aerospace, because once the company begins to be sold off to private investors there will certainly be a possibility that they may take a decision not to use the same suppliers and vendors, which are at present, in the main, small British companies employing British workers. It may very well be that they will start using their French, Swedish or German subsidiaries. That is what concerns us and that is why we believe, on behalf of the small business men, that it is important that the Government should stay there. We have often heard from Conservative Members that the Government are the guardians of the small business man. We should like to think that we, too, are concerned with the small business man. If the Government agree with us, they should accept the new clause.
I am not a warmonger. I do not believe that the policies being pursued by Conservative Members, and certainly by the Prime Minister, will bring peace and detente within the next few years.
Mr. Robert Atkins: What about Russia?
Mr. Ross: Does the hon. Member wish to intervene?
Mr. Atkins: No: I am asking about Russia.
Mr. Ross: I know that it is absolutely vital that if we are to have a defence system it must be under the control of British nationals. I should certainly be concerned—we shall go on to debate this matter on another amendment—if any form of foreign ownership, however hidden, were to be introduced into British Aerospace. The only way in which we can have that guarantee is to ensure that the Secretary of State retains 51 per cent. of the shareholding in the company. It is not the articles of association that are the crucial area. The crucial question is, who owns and controls British Aerospace?
What we are saying in the amendment is that clearly British Aerospace is a vital part of the British economy which should be controlled by the Government through the Secretary of State. That is why we

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shall be asking Labour Members to divide the House if the Government do not accept the new clause.
Mr. Michael Marshall: We have had an interesting debate on the new clause and the suggestion that British Aerospace should have 51 per cent. of its shares held by the Secretary of State. I think that it is fair to say that we have had a slight problem, because we debated precisely the same new clause in Standing Committee. Those who wish to study these matters in detail may find it helpful to look at columns 701–10 and 711–38 of the Official Report of the twelfth sitting of Standing Committee G, in which these arguments were deployed very fully.
It was, therefore, with a certain fascinated interest and curiosity that I awaited the first remarks of the hon. Member for Preston, South (Mr. Thorne). I have to give him his due. I enjoy listening to him. He is an hon. Member who brings a certain enjoyment and relish to our proceedings in the House, which we can all enjoy. I must praise him, because he asked some new questions. That was a great joy to me and is in stark contrast to the speech of the hon. Member for Nuneaton (Mr. Huckfield). In a contest such as "Just a Minute", the hon. Member would be penalised again and again for tedious repetition.
Mr. Robert Atkins: May I point out that the hon. Member for Nuneaton (Mr.Huckfield) has not seen fit to hear the remarks of my hon. Friend? Perhaps the hon. Gentleman would care to comment on that, in view of his past remarks.
Mr. Les Huckfield rose—
Mr. Marshall: I shall reply to my hon. Friend. The hon. Member for Nuneaton sometimes seems to think that the proceedings are run solely for his benefit. My hon. Friend fairly made the point that the hon. Member for Nuneaton has been skipping in and out. The hon. Gentleman has made the same point in regard to my hon. Friend. It will not get us very far if we spend all day arguing about who is in the Chamber. According to my calculations it averages eight to five in our favour. The House has not been packed, but the quality of the
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debate is high. I hope that the hon. Member for Nuneaton will drop the dispute.
The hon. Member for Preston, South had the courtesy to raise one or two new questions. That was manna from Heaven to those of us who have listened to questions on this clause time and time again. One of his questions concerned the degree of parliamentary accountability. He thought that a 51 per cent. holding would strengthen accountability to the House. However, that is not true. If the Government were to hold 25 per cent., 50 per cent., or 51 per cent., accountability would still be in terms of the Government's responsibility to their shareholding.
The hon. Member for Preston, South also mentioned industrial democracy. There is no provision in the Bill for industrial democracy. We strongly believe that industrial democracy should not be provided by legislation. However, the hon. Gentleman would prefer to employ legislation for that purpose. He also inquired about sales to foreign powers and so on. With his experience, the hon. Gentleman will realise, on reflection, that whether the Government held 51 per cent., 49 per cent., or 25 per cent., it would not affect the way in which foreign trade might be controlled. That is dependent upon other factors, such as export licensing and so on. Governments can exercise their influence in other directions. However, I am grateful that he had the courtesy to ask new questions.
Hon. Members tend to suffer from a lingering misconception that a shareholding of 51 per cent. can be related to control. They use that concept as premise and they therefore argue in favour of a fixed shareholding. The hon. Member for Keighley (Mr. Cryer) had to join us rather late in the day. I do not mean that in a carping sense, but he missed several arguments. However, he did introduce some reasonably fresh material. He gave us a tourďhorizon and, as usual, he wore his red glasses through which he sees the world so darkly. He attempted to stir the waters yet again. He wishes to argue about the principles of nationalisation. However, the new clause does not provide effective control. The hon. Gentleman is well aware of that argument, but he took the opportunity to argue the case for nationalisation. That

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argument was decided on Second Reading.
I shall pick up some of the hon. Gentleman's points, as they are worthy of comment. He mentioned confidence in the industry. He suggested that some of us had to give reassurances as we travelled round the country. That is a fair point. However, part of the reason for doing that is that we must overcome the difficulties and doubts that he and his hon. Friends attempt to stir up. If he looked at the problem in a more fair-minded fashion, he would accept that the process of nationalisation is unsettling. His arguments can therefore, be used against nationalisation.
The burden of my argument is that the Government have been given a mandate, yet they have moved with moderation. I think that that is the view of most thinking people. The hon. Gentleman faces that opinion when he tries to whip up arguments about denationalisation and confidence. He also mentioned the problems of political credibility. Many of us are sympathetic to his arguments. Politicians face a problem of credibility. That is why we adopt a reasonably moderate approach. We need to maintain the stability of the industry. We seek to ensure that British Aerospace does not suffer from the deprivations of politicians. I speak as one who has suffered ad nauseam from some of the bitter fruits of failure, such as can be found in the steel industry.
The hon. Member for Dundee, West (Mr. Ross) is inclined to suggest that some strange and wonderful new world has been born since British Aerospace became a State enterprise. He cannot seriously put forward that argument. He and his colleagues have played some part in building up the industry over many years. The lead times and order book that he quoted were not created in the two years since State ownership.
Mr. Ernie Ross rose—
Mr. Marshall: They are the brain child of engineering skills about which the hon. Member is passionately concerned. I am happy to share that interest. They were created by the work of people at all levels. Success will not stop, or disappear overnight when the company is half-owned by the Government.
Mr. Ernie Ross: The Minister and the Secretary of State are trying to make a nice quiet case. They have both deliberately attempted to mislead the House and the country. Until nationalisation took place, all those involved in the aircraft industry complained of political interference. Since nationalisation, everyone in British Aerospace has said that it works well. The relationship between Government and British Aerospace means that problems can be discussed. British Aerospace can manage on its own. The present board of British Aerospace does not agree that a major private shareholding should be reintroduced. The Minister has failed to convince British Aerospace that it is a good idea.
Mr. Marshall: I understand why the hon. Gentleman has made that point. It is a fact of life that people prefer the devil they know. That is a natural fact of human nature. However, one must consider political intervention over the past two years. It is a fortuitous circumstance that intervention has not been a factor during that short period. If the hon. Gentleman were to look ahead and to consider the possibility of competing claims on public expenditure by different parts of industry—some declining and some growing—he would see that those in the industry are afraid that the nationalised sector lends itself to far greater political argument about where priorities lie.
The nub of the argument about the shareholding is that it will give a degree of flexibility to British Aerospace when it seeks to raise its own funding. It will have the assurance of a Government shareholding that reflects our interest in the strategic aspects of defence and so on. That is a fair balance.
Mr. Ernie Ross: The Minister fails to understand my point. The civil side of British Aerospace is funded by British Aerospace. Government funding is required for the defence side, which will in any case receive that funding as long as this Government are in power. That is guaranteed by this Government's commitment to defence spending.
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Mr. Marshall: I accept that. That is a basic reason for proposing that a Government shareholding should be retained.

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It is part of the argument about defence and the national interest.
The hon. Member for Keighley said that he had five or six points to raise, but I counted about nine. Regarding small firms and the confidence of small firms, I could not help thinking wryly of one late evening in this Chamber, in the previous Parliament, when one of his hon. Friends asked who the Minister with responsibility for small businesses was. The hon. Gentleman said that he was almost too modest to reply but that it was himself.
Credibility of small businesses is a topic that should sometimes be approached with care. The hon. Gentleman falls into the trap of suggesting that there is magic in the 51 percent. figure, which I believe he understands is not so. When he talked of control he was misleading himself. In Committee, in an exchange with the Minister of State, the hon. Gentleman pointed out that BP, even when it was 51 per cent., Government-owned, was freestanding. That is the point. Whether it be 49 per cent., 25 per cent. or 51 per cent., it will be free-standing. In the sense of a Companies Act company, the 51 per cent. does not give a magic sense of control.
The hon. Gentleman's point about dependency on public funds has already been covered. The Government take the view that they should retain a shareholding because of defence and in the strategic and national interest.
The hon. Member for Nuneaton attempted to tweak a few tails and have a bit of fun and games about the lack of a speech from my hon. Friend the Member for Welwyn and Hatfield (Mr. Murphy) in Committee. The answer is simple, On the Conservative Benches we are at one on these matters. We have rehearsed the arguments. We had discussions and consultations. We are not in the position of the divided ranks on the Labour Benches. We do not have the various factions that the hon. Gentleman has to steer his uneasy way through. I have sympathy for him. We pull together.
My hon. Friend the Member for Hertford and Stevenage (Mr. Wells), who, sadly, was not with us in Committee, has a major part of British Aerospace in his constituency, and his contribution was
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welcome. It would be churlish not to welcome contributions from hon. Members who did not sit with us for the long hours in Committee. My hon. Friend gave us balanced and sensible views. It is precisely because of such views that my hon. Friend was reflecting, particularly in regard to Stevenage, the fact that the Government recognise the case for keeping British Aerospace as one entity. We recognise the need to maintain the relationship between the dynamics and the airframe side.
I am happy to see my hon. Friend the Under-Secretary of State for Defence for the Royal Air Force here. He has had many opportunities to look into the matter. We have travelled together to look into the way in which the relationship between the dynamics and the airframe side is working effectively in British Aerospace. It is interesting to see the way in which the defence procurement side is working closely with British Aerospace to ensure a long-term future and understanding.
My hon. Friend the Member for Hertford and Stevenage gave an effective demonstration of his concern to look after the interests of his constituents in that part of British Aerospace that he has the honour to represent. He spoke of the danger of legislation in regard to industrial democracy. I agree that this is not to be enshrined in statute. My hon. Friend made many valid points.
In Committee the arguments have been rehearsed many times. The 51 per cent. is equated in the minds of some hon. Gentlemen with effective control, but that is not so. A fixed shareholding does not provide for that with a Companies Act company. The interesting development is to see a Companies Act company in which the Government seek to hold about half the shares but with a minimum of 25 per cent., because of the blocking mechanism. That is relevant to the foreign control aspect, which, perhaps, we shall debate later. The BP argument is often deployed, but we are, in a sense, breaking new ground.
A key element in the whole plan is the employee shareholding. We cannot be certain of the precise level of Government shareholding until we see what the level of employee shareholding will be. I hope that the hon. Member for Dundee, West will think carefully and

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seriously before he casts aside such an opportunity.
We are continuing to consult not only the management and directors of British Aerospace but the trade unions on the way in which that proposed employee shareholding should work in practice. The hon. Gentleman should have a care before he makes blanket assurances about renationalisation without compensation. If employees have an important stake in their own company, they should be regarded with absolute fairness by any Government. I hope that the hon. Gentleman will share that philosophy.
Mr. Ernie Ross: It is difficult to put together the component parts of the argument put forward by the Government for the proposed employee shareholding. Conservative Members decry workers in British industry for lack of productivity. We assumed that the proposals would be built around that supposed lack of productivity. However, there is no lack of productivity. In spite of the argument that the Government have put forward about lack of productivity in other areas, British Aerospace workers wish to contribute to their future through increasing productivity and sharing the benefits between themselves and the company.
Mr. Marshall: I appreciate that the hon. Gentleman is speaking from experience about productivity schemes. Nothing that I have said inhibits such a development. It is welcome. In these matters it is wise to keep an open mind. I hope that the hon. Gentleman will do that.
We have looked at the argument many times, and it would be wrong not to state firmly that we are talking of a fundamental change. We are trying to combine stability with change. We have deliberately set our face against extreme forms of nationalisation, and that is why we talk about half. We hope that our proposals will defuse not just the argument about the industrial structure but the political argument.
I recognise that certain hon. Gentlemen take a strong, passionate view about State ownership and control and the means of production and exchange, and that some will never accept our arguments. However, some hon. Gentlemen accept that in a mixed economy, with all the problems and pressures that face us
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in the world today, we have to try to find an effective mechanism. Throughout the country—and this includes British Aerospace—many people feel that our proposals are reasonably fair, balanced and moderate.
We stress continuity of employment. We wish to ensure continuity of direction and management between the corporation and the new company. More importantly, we wish to establish a continuing and robust company, and that lies behind our decision to maintain a substantial Government shareholding.
We have said that the Government will retain about half the shares. We are seeking to create a mix between the Government and the private sector—a British Aerospace of the type that we have and that has proved so successful. The precedent is there. It is a hopeful and stirring precedent. On reflection, recognising that the precedent has promise for the future, and, finally, in the narrow sense that many hon. Gentlemen would wish to argue, recognising that the new clause would not provide any effective control in the terms that have been put to us, I hope that hon. Gentlemen will withdraw it.
Mr. Les Huckfield: The Under-Secretary of State always comes on at this time of the evening, like the good guy in the play, and he tries to set at naught the concerns which the Opposition have expressed. I do not think that he ever convinces any of us. I know that my hon. Friends the Members for Dundee, West (Mr. Ross), for Preston, South (Mr. Thorne) and for Keighley (Mr. Cryer) are never convinced by his arguments. We admire the hon. Gentleman's guile in presenting them, though we do not think much of their content and we think less of the impression which they create.
When the Under-Secretary talks about the industry in the tone which he has just used, he arouses greater concern among us because he does not seem to realise what sort of animal will be created by the Bill. Indeed, one is led to the conclusion that at this stage no one can envisage the sort of animal which will ultimately be created. I am beginning to despair of ever seeing the memorandum and articles of association of the new company. I wonder whether

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they will ever see the light of day. We have seen nothing of the private articles either in committee or in the House thus far, and we should be able to understand a little better what the hon. Gentleman says if we were furnished with more detail of what he is trying to put across.
The hon. Gentleman's most worrying comments come when he talks about the way in which influence and control will be exercised over the company. His right hon. Friend the Secretary of State, who is frequently to be heard on the radio, on television and elsewhere making pronouncements, summed the matter up when he said:
"Ministers are specifically eschewing responsibility…The whole purpose is to move the responsibility for decision-making from Ministers, who are not equipped for the role"—
that is certainly true in the present case—
"to shareholders and their managements."
Is it said that we can treat a great industry in that way? Can we eschew responsibility for a manufacturing industry which is responsible for 16 per cent. of our total gross national product? Can we eschew responsibility in an industry which has 68,000 workers directly employed and perhaps some 300,000 employed in component and other supplying industries? Can we eschew responsibility for an industry of that kind? That is the sort of responsibility which the Government are apparently prepared to cast aside and set at naught.
It is that approach which is leading to the rapid de-industrialisation of Britain. That is what it is all about. After Leyland and British Steel will come British Aerospace, because this Government do not care. They do not care if we suffer gradual de-industrialisation so that import penetration and the import bill take us and our balance of payments deeper and deeper into the red.
It is possible for two major shareholders with interests totally inimical to those of the Government to gain a shareholding of more than 51 per cent. and consequently to control the company. Two major shareholders could do it. Heaven forbid that one of them might be Lord Robens. Heaven forbid that the other might be Sir Arnold Weinstock. Yet two such people and corporations such as the ones they represent could
1140
acquire a majority shareholding and domination over this company. From time to time their interests are totally at variance with those of the Government and sometimes at variance with the country's interests as well. Yet that is the kind of control and domination into which the Government are prepared to let this company fall.
7.45 pm
Ministers say that they intend to retain a 25 per cent. stake in order to exercise what they loosely call a blocking mechanism to prohibit a change in the articles of association, and it is on the articles of association that they pin their hopes because they say that under the articles they can prohibit foreigners from taking more than a 15 per cent. stake. But the significant omission from the Bill is that there is no floor to the Government's investment holding. They can put a ceiling on but there is no floor. If they really believe that the Government ought to retain a controlling interest for some sort of national interest, strategic or security reason, why do they not put that 25 per cent. floor in the Bill?
That is why we get ever more worried the more that Ministers talk, since it becomes patently obvious—it will become more obvious to the country at large before long—that they just do not care. They will have no means of preventing this industry gradually drifting abroad. They will have no means of preventing it falling into hands whose interests are totally at variance with those of the country, of the workers and of the manufacturing base which we sorely need.
Mr. Robert Atkins: Absolute rubbish.
Mr. Huckfield: I am pleased that the hon. Member has been provoked into some kind of reaction. That is the most constructive reaction we have had from him since 27 November. It is a significant improvement, since he spent the whole of the Committee stage filling out his share applications and he has not spoken once on Report. Incidentally, I know why the hon. Member for Hertford and Stevenage (Mr. Wells) does not speak very often. Now that we have heard him once, we can well understand why.
Hon. Members: Cheap.
Mr. Ray Mawby (Totnes): Get on with it.
Mr. Hackfield: I am glad that hon. Gentlemen are actually showing some interest in an industry which is about to be lost to our nation's economy.
Mr. Deputy Speaker (Mr. Bernard Weatherill): Order. I would rather that they did not show vocal interest from a sedentary postion.
Mr. Huckfield: We know that at this time of the evening the hon. Member for Totnes (Mr. Mawby) may find it inconvenient to rise from that position.
What worries us is not only that two major private shareholders could acquire domination over the company but that what is being done here is leading to the creation in our economy of a privately owned and very privileged monopoly industry. It will not be subjected to any of the checks and balances of public accountability.
I shall be interested to know what sort of interest is taken by the Minister for Consumer Affairs who from time to time talks about consumer matters. I do not say that she speaks as though she is responsible for consumer matters but she occasionally talks about them. I wonder what she will say about this new company. It will be a highly significant company in the economy. It will have almost a monopoly in broad areas of industry. That is why we should have at least—our new clause says "at least"—a 51 per cent. holding so that we can ensure some protection of the public interest. After all, since so much public money is involved, the public interests should be regarded and protected.
But the Bill does precisely the opposite. Under clause 9 the Government permit the new company to take all the risks but the Secretary of State pays all the debts. Of course, it will be private venture capital which can have its fling, of course it can be private money engaged in the risk taking, but under clause 9 it will be the Secretary of State liable for the debts. The Secretary of State will have to carry the can. That is why we say that this company would be in a privileged borrowing and privileged monopoly position, and that is why there must be a much bigger shareholding than the Government are prepared so far to admit.
1142
Ministers frequently make the point—they made it from time to time in Committee and they have referred to it again tonight—that this is their way of taking the industry out of politics. That is what they have said. The hon. Member for Arundel (Mr. Marshall), in his milder nicer moments, says it.
Mr. Robert Atkins: And quite right.
Mr. Huckfield: Once again, the hon. Gentleman takes a fleeting interest in our proceedings.
If the Government want to take the industry out of politics, and if they really believe in the magnificence, eminence, dignity and solemnity of the BP solution, why do they not write that in the Bill? Why do they not say that the Government shareholding must be approximately half? Why do they not say that there should be a majority Government stake in the company? That could be written into the Bill, and into the articles of the new company. When they say that they want to take the industry out of politics by putting forward this sort of half and half solution, we are loth to take them at their word because each time that we press them on the meaning of half and half they back-track, they are vague, and on most occasions they back down.
My hon. Friend the Member for Preston, South is right to press for an assurance that at least 51 per cent. of those shares will be retained by the Government. If Conservative Members will not accept what my hon. Friend the Member for Preston, South and Labour Members said in Committee, will he please refer to the Plowden report of 1965? I do not think that there was a Tribune group majority on the Plowden committee or that there was a set of "Militant" infiltrators. The Plowden committee carried out an independent examination of the requirements and the relationships in our aerospace industry. I note that the Under-Secretary is nodding his head. I hope that he is agreeing with me.
The Plowden committee put forward the same arguments 15 years ago. Its report stated:
"The Government is becoming more and more deeply involved in the industry's affairs: it is the source of most of the industry's finance it makes critical decisions on projects, while the managements have to deal

1143
with the industrial consequences of these decisions; its financial and technical control duplicates the industry's own control and hampers efficiency."
Plowden's final conclusion is that:
"Of the possible means of remedying the situation, the balance of advantage…is in favour of the Government acquiring a shareholding in BAC and in the airframe elements of Hawker Siddeley, including their guided weapons interests."
The Plowden committee suggestions are the same as those put forward my my hon. Friend the Member for Preston, South in his new clause. If the hon. Member for Bristol, North-West (Mr. Colvin) is about to make the first intervention in our affairs since 27 November 1979, I shall give way to him.
Mr. Michael Colvin: The hon. Member for Nuneaton (Mr. Huckfield) is wrong. Plowden did not specify whether there should be a 50 per cent. shareholding, or whether the shareholding should be above or below that level. It favoured a shareholding of less than 50 per cent.
Mr. Huckfield: The hon. Gentleman made one speech in Committee. He stood up, moved an amendment, and sat down again. The hon. Gentleman is wrong about the Plowden report. A majority of the Plowden committee was in favour of nationalisation. The only difficulty with its recommendations was that it thought that outright and immediate nationalisation
isation would have taken too long to get through the House.
That is why my hon. Friend the Member for Preston, South tabled his new clause, and why we think that there should be Government control over and Government responsibility for the industry. If the Government will not take control and responsibility and give more than the assurances that we have been given today, I hope that my hon. Friend will press his new clause to a Division.
Mr. Stan Thorne: Labour Members form various attitudes to Tories, on te basis of their experience. The Under-Secretary is not one of the worst Tories, but the spectacle of him and his colleagues pulling together over the passive body of British Aerospace is too much. It strains my credulity beyond breaking point, particularly when I hear the barrage of words spoken by the Minister, with the highly plausible gentility for which he is well known. Nothing that he said will protect the workers in the industry from the decisions that will be taken at annual general meetings, in the absence of a 51 per cent. shareholding. For those reasons, I urge the House to vote for the new clause.
Question put, That the clause be read a Second time:—
The House divided: Ayes 235, Noes 296.

Division No. 167]

AYES

[7.56 pm

Abse, Leo

Carter-Jones, Lewis

Duffy, A. E. P.

Adams, Allen

Cartwright, John

Dunn, James A. (Liverpool, Kirkdale)

Allaun, Frank

Clark, Dr David (South Shields)

Dunnett, Jack

Archer, Rt Hon Peter

Cocks, Rt Hon Michael (Bristol S)

Eadie Alex

Armstrong, Rt Hon Ernest

Cohen, Stanley

Eastham, Ken

Ashley, Rt Hon Jack

Concannon, Rt Hon J. D.

Edwards, Robert (Wolv SE)

Ashton, Joe

Conlan, Bernard

Ellis, Raymond (NE Derbyshire)

Atkinson, Norman (H'gey, Tott'ham)

Cook, Robin F.

Ellis, Tom (Wrexham)

Barnett, Guy (Greenwich)

Cowans, Harry

English, Michael

Barnett, Rt Hon Joel (Heywood)

Craigen, J. M. (Glasgow, Maryhill)

Ennals, Rt Hon David

Benn, Rt Hon Anthony Wedgwood

Crowther, J. S.

Evans, Ioan (Aberdare)

Bennett, Andrew (Stockport N)

Cryer, Bob

Evans, John (Newton)

Bidwell, Sydney

Cunliffe, Lawrence

Ewing, Harry

Booth, Rt Hon Albert

Cunningham, George (Islington S)

Faulds Andrew

Boothroyd, Miss Betty

Cunningham, Dr John (Whitehaven)

Field, Frank

Bottomley, Rt Hon Arthur (M'brough)

Dalyell, Tam

Fitch, Alan

Bradley, Tom

Davidson, Arthur

Flannery, Martin

Bray, Dr Jeremy

Davies, Rt Hon Denzil (Llanelli)

Fietcher, Ted (Darlington)

Brown, Hugh D. (Provan)

Davies, Ifor (Gower)

Foot, Rt Hon Michael

Brown, Robert C. (Newcastle W)

Davis, Terry (B'rm'ham, Stechford)

Forrester, John

Brown, Ronald W. (Hackney S)

Deakins, Eric

Foster, Derek

Brown, Ron (Edinburgh, Leith)

Dean, Joseph (Leeds West)

Foulkes, George

Buchan, Norman

Dempsey, James

Fraser, John (Lambeth, Norwood)

Callaghan, Rt Hon J. (Cardiff SE)

Dewar, Donald

Freeson Rt Hon Reginald

Callaghan, Jim (Middleton & P)

Dixon, Donald

Garrett, John (Norwich S)

Campbell, Ian

Dobson, Frank

Garrett, W. E. (Wallsend)

Canavan, Dennis

Dormand, Jack

George, Bruce

Cant, R. B.

Douglas, Dick

Gilbert, Rt Hon Dr John

Carmichael, Neil

Dubs, Alfred

Golding, John

Gourlay, Harry

Maclennan, Robert

Sheerman, Barry

Graham, Ted

McMahon, Andrew

Sheldon, Rt Hon Robert (A'ton-u-L)

Grant, George (Morpeth)

McMillan, Tom (Glasgow, Central)

Short, Mrs Renée

Grant, John (Islington C)

McNally, Thomas

Silkin, Rt Hon John (Deptford)

Hamilton, James (Bothwell)

McNamara, Kevin

Silkin, Rt Hon S. C. (Dulwich)

Hamilton, W. W. (Central Fife)

McWilliam, John

Silverman, Julius

Harrison, Rt Hon Walter

Magee, Bryan

Smith, Rt Hon J. (North Lanarkshire)

Hart, Rt Hon Dame Judith

Marks, Kenneth

Snape, Peter

Hattersley, Rt Hon Roy

Marshall, David (Gl'sgow, Shettles'n)

Soley, Clive

Haynes, Frank

Marshall, Dr Edmund (Goole)

Spearing, Nigel

Healey, Rt Hon Denis

Martin, Michael (Gl'gow, Springb'rn)

Spriggs, Leslie

Heffer, Eric S.

Mason, Rt Hon Roy

Stallard, A. W.

Hogg, Norman (E Dunbartonshire)

Maxton, John

Stewart, Rt Hon Donald (W Isles)

Holland, Stuart (L'beth, Vauxhall)

Maynard, Miss Joan

Stoddart, David

Home Robertson, John

Meacher, Michael

Stott, Roger

Homewood, William

Mellish, Rt Hon Robert

Strang, Gavin

Hooley, Frank

Mikardo, Ian

Straw, Jack

Horam, John

Millan, Rt Hon Bruce

Summerskill, Hon Dr Shirley

Howell, Rt Hon Denis (B'ham, Sm H)

Miller, Dr M. S. (East Kilbride)

Taylor, Mrs Ann (Bolton West)

Huckfield, Les

Mitchell, R. C. (Soton, Itchen)

Thomas, Dafydd (Merioneth)

Hudson Davies, Gwilym Ednyfed

Morris, Rt Hon Alfred (Wythenshawe)

Thomas, Jeffrey (Abertillery)

Hughes, Mark (Durham)

Morris, Rt Hon Charles (Openshaw)

Thomas, Mike (Newcastle East)

Hughes, Robert (Aberdeen North)

Morris, Rt Hon John (Aberavon)

Thorne, Stan (Preston South)

Hughes, Roy (Newport)

Moyle, Rt Hon Roland

Tilley, John

Janner, Hon Greville

Newens, Stanley

Tinn, James

Jay, Rt Hon Douglas

Oakes, Rt Hon Gordon

Torney, Tom

Johnson, Walter (Derby South)

O'Halloran, Michael

Urwin, Rt Hon Tom

Jones, Rt Hon Alec (Rhondda)

O'Neill, Martin

Varley, Rt Hon Eric G.

Jones, Barry (East Flint)

Orme, Rt Hon Stanley

Wainwright, Edwin (Dearne Valley)

Jones, Dan (Burnley)

Owen, Rt Hon Dr David

Walker, Rt Hon Harold (Doncaster)

Kaufman, Rt Hon Gerald

Palmer, Arthur

Watkins, David

Kerr, Russell

Park, George

Weetch, Ken

Kilroy-Silk, Robert

Parker, John

Welsh, Michael

Kinnock, Neil

Pendry, Tom

White, Frank R. (Bury & Radcliffe)

Lambie, David

Powell, Raymond (Ogmore)

White, James (Glasgow, Pollok)

Lamborn, Harry

Prescott, John

Whitehead, Phillip

Lamond, James

Price, Christopher (Lewisham West)

Whitlock, William

Leighton, Ronald

Rees, Rt Hon Merlyn (Leeds South)

Williams, Rt Hon Alan (Swansea W)

Lewis, Arthur (Newham North West)

Richardson, Jo

Williams, Sir Thomas (Warrington)

Lewis, Ron (Carlisle)

Roberts, Allan (Bootle)

Wilson, Gordon (Dundee East)

Litherland, Robert

Roberts, Gwilym (Cannock)

Wilson, Rt Hon Sir Harold (Huyton)

Lofthouse, Geoffrey

Robertson, George

Wilson, William (Coventry SE)

Lyon, Alexander (York)

Robinson, Geoffrey (Coventry NW)

Winnick, David

Lyons, Edward (Bradford West)

Rodgers, Rt Hon William

Woodall, Alec

Mabon, Rt Hon Dr J. Dickson

Rooker, J. W.

Wrigglesworth, Ian

McCartney, Hugh

Roper, John

Young, David (Bolton East)

McDonald, Dr Oonagh

Ross, Ernest (Dundee West)

McElhone, Frank

Rowlands, Ted

TELLERS FOR THE AYES

McKay, Allen (Penistone)

Ryman, John

Mr. Austin Mitchell and Mr. George Morton.

McKelvey, William

Sandelson, Neville

MacKenzie, Rt Hon Gregor

Sever, John

NOES

Adley, Robert

Brocklebank-Fowler, Christopher

Dean, Paul (North Somerset)

Aitken, Jonathan

Brooke, Hon Peter

Dorrell, Stephen

Alexander, Richard

Brotherton, Michael

Douglas-Hamilton, Lord James

Ancram, Michael

Brown, Michael (Brigg & Sc'thorpe)

Dover, Denshore

Arnold, Tom

Browne, John (Winchester)

du Cann, Rt Hon Edward

Aspinwall, Jack

Bruce-Gardyne, John

Dunn, Robert (Dartford)

Atkins, Robert (Preston North)

Bryan, Sir Paul

Durant, Tony

Atkinson, David (B'mouth, East)

Buchanan-Smith, Hon Alick

Dykes, Hugh

Baker, Nicholas (North Dorset)

Budgen, Nick

Eden, Rt Hon Sir John

Banks, Robert

Bulmer, Esmond

Eggar, Timothy

Beaumont-Dark, Anthony

Burden, F. A.

Elliott, Sir William

Beith, A. J.

Butcher, John

Emery, Peter

Bell, Sir Ronald

Butler, Hon Adam

Fairbairn, Nicholas

Bendall, Vivian

Cadbury, Jocelyn

Fairgrieve, Russell

Benyon, Thomas (Abingdon)

Carlisle, John (Luton West)

Faith, Mrs Sheila

Benyon, W. (Buckingham)

Carlisle, Kenneth (Lincoln)

Farr, John

Best, Keith

Carlisle, Rt Hon Mark (Runcorn)

Fell, Anthony

Biffen, Rt Hon John

Chalker, Mrs Lynda

Fenner, Mrs Peggy

Biggs-Davison, John

Channon, Paul

Fisher, Sir Nigel

Blackburn, John

Chapman, Sydney

Fletcher, Alexander (Edinburgh N)

Blaker, Peter

Clark, Hon Alan (Plymouth, Sutton)

Fietcher-Cooke, Charles

Body, Richard

Clark, Sir William (Croydon South)

Fookes, Miss Janet

Bonsor, Sir Nicholas

Clarke, Kenneth (Rushcliffe)

Forman, Nigel

Boscawen, Hon Robert

Cockeram, Eric

Fowler, Ht Hon Norman

Bottomley, Peter (Woolwich West)

Colvin, Michael

Fox, Marcus

Bowden, Andrew

Cope, John

Fraser, Peter (South Angus)

Boyson, Dr Rhodes

Cormack, Patrick

Fry Peter

Braine, Sir Bernard

Corrie, John

Galbraith, Hon T. G. D.

Bright, Graham

Costain, A. P.

Gardiner George (Reigate)

Brinton, Tim

Cranborne, Viscount

Gardner, Edward (South Fylde)

Brittan, Leon

Crouch, David

Garel-Jones, Tristan

1146

1147

Gilmour, Rt Hon Sir Ian

Madel, David

Sainsbury, Hon Timothy

Glyn, Dr Alan

Major, John

St. John Stevas, Rt Hon Norman

Goodlad, Alaslair

Marland, Paul

Scott, Nicholas

Gorst, John

Marlow, Tony

Shaw, Giles (Pudsey)

Gow, Ian

Marshall, Michael (Arundel)

Shaw, Michael (Scarborough)

Gower, Sir Raymond

Mates, Michael

Shelton, William (Streatham)

Grant, Anthony (Harrow C)

Mather, Carol

Shepherd, Colin (Hereford)

Gray, Hamish

Maude, Rt Hon Angus

Shepherd, Richard (Aldfidge-Br'hills)

Greenway, Harry

Mawby, Ray

Shersby, Michael

Grieve, Percy

Mawhinney, Dr Brian

Silvester, Fred

Griffiths, Eldon (Bury Rt Edmunds)

Maxwell-Hyslop, Robin

Sims, Roger

Griffiths, Peter (Portsmouth N)

Mayhew, Patrick

Skeet, T. H. H.

Grist, Ian

Mellor, David

Smith, Dudley (War. and Leam'ton)

Grylls, Michael

Meyer, Sir Anthony

Speed, Keith

Gummer, John Selwyn

Miller, Hal (Bromsgrove & Redditch)

Speller, Tony

Hamilton, Hon Archie (Eps'm&Ew'll)

Mills, Iain (Meriden)

Spence, John

Hamilton, Michael (Salisbury)

Mills, Peter (West Devon)

Spicer, Jim (West Dorset)

Hampson, Dr Keith

Miscampbell, Norman

Spicer, Michael (S Worcestershire)

Hannam, John

Mitchell, David (Basingstoke)

Squire, Robin

Haselhurst, Alan

Moate, Roger

Stainton, Keith

Hastings, Stephen

Molyneaux, James

Stanbrook, Ivor

Havers, Rt Hon Sir Michael

Monro, Hector

Stanley, John

Hawksley, Warren

Montgomery, Fergus

Steen, Anthony

Hayhoe,Barney

Moore, John

Stevens, Martin

Heddle, John

Morgan, Geraint

Stewart, Ian (Hitchin)

Henderson, Barry

Morris, Michael (Northampton, Sth)

Stewart, John (East Renfrewshire)

Haseltine, Rt Hon Michael

Morrison, Hon Charles (Devizes)

Stokes, John

Hicks, Robert

Morrison, Hon Peter (City of Chester)

Stradling Thomas, J.

Higgins, Rt Hon Terence L.

Mudd, David

Tapsell, Peter

Hill, James

Murphy, Christopher

Taylor, Robert (Croydon NW)

Hogg, Hon Douglas (Grantham)

Myles, David

Temple-Morris, Peter

Holland, Philip (Carlton)

Neale, Gerrard

Thatcher, Rt Hon Mrs Margaret

Hooson, Tom

Needham, Richard

Thomas, Rt Hon Peter (Hendon S)

Hordern, Peter

Nelson, Anthony

Thompson, Donald

Howell, Rt Hon David (Guildford)

Neubert, Michael

Thornton, Malcolm

Howell, Ralph (North Norfolk)

Newton, Tony

Townend, John (Bridlington)

Hunt, David (Wirral)

Onslow, Cranley

Townsend, Cyril D. (Bexleyheath)

Hunt,John (Ravensbourne)

Osborn, John

Trippier, David

Hurd, Hon Douglas

Page, Rt Hon Sir R. Graham

Trotter, Neville

Irvine, Charles (Cheltenham)

Page, Richard (SW Hertfordshire)

Vaughan, Dr Gerard

Jenkin, Rt Hon Patrick

Parkinson, Cecil

Viggers, Peter

Johnson Smith, Geoffrey

Parris, Matthew

Waddington, David

Jopling, Rt Hon Michael

Patten, Christopher (Bath)

Wainwright, Richard (Colne Valley)

Kershaw, Anthony

Patten, John (Oxford)

Wakeham, John

King, Rt Hon Tom

Pattie, Geoffrey

Waldegrave, Hon William

Kitson, Sir Timothy

Pawsey, James

Walker, Rt Hon peter (Worcester)

Knight, Mrs Jill

Percival, Sir Ian

Walker, Bill (Perth & E Perthshire)

Knox, David

Peyton, Rt Hon John

Walker-Smith, Rt Hon Sir Derek

Lamont, Norman

Pink, R. Bonner

Walters, Dennis

Lang, Ian

Pollock, Alexander

Ward, John

Langford-Holt, Sir John

Porter, George

Warren, Kenneth

Latham, Michael

Powell, Rt Hon J. Enoch (S Down)

Watson, John

Lawrence, Ivan

Price, David (Eastleigh)

Wells, John (Maidstone)

Lawson, Nigel

Prior, Rt Hon James

Wells, Bowen (Hert'rd & Stev'nage)

Lee, John

Proctor, K. Harvey

Wheeler, John

Lennox-Boyd, Hon Mark

Pym, Rt Hon Francis

Whitelaw, Rt Hon William

Lester, Jim (Beeston)

Ralson, Timothy

Whitney, Raymond

Lewis, Kenneth (Rutland)

Rathbone, Tim

Wickenden, Keith

Lloyd, Peter (Fareham)

Rees, Peter (Dover and Deal)

Wiggin, Jerry

Loveridge, John

Rees-Davies, W. R.

Wilkinson, John

Luce, Richard

Renton, Tim

Williams, Delwyn (Montgomery)

Lyell, Nicholas

Rhodes James, Robert

Winterton, Nicholas

McCrindle, Robert

Ridley, Hon Nicholas

Wolfson, Mark

Macfarlane, Neil

Ridsdale, Julian

Young, Sir George (Acton)

MacGregor, John

Rifklnd, Malcolm

Younger, Rt Hon George

MacKay, John (Argyll)

Roberts, Wyn (Conway)

McNair-Wilson, Michael (Newbury)

Rossi, Hugh

TELLERS FOR THE NOES:

McNair-Wilson, Patrick (New Forest)

Rost, Peter

Mr. Spencer Le Marchant and

McQuarrie, Albert

Royle, Sir Anthony

Mr. Anthony Berry.

Question accordingly negatived.

New Clause 12
FOREIGN INVESTMENT LIMIT

(1) The Secretary of State shall by order made by statutory instrument fix a limit for investment by non-United Kingdom residents (the foreign investment limit) in the successor company.

(2) Any issue or transfer of shares which would cause the foreign investment limit to be exceeded shall be void and any moneys paid pursuant to such issue or transfer shall be recoverable as an ordinary debt.

(3) The foreign investment limit shall be expressed as a proportion of the voting rights exercisable at general meetings.

(4) The powers under paragraph (1) above shall not be exercised so as to fix the limit above 15 per cent.

(5) In this section "investment" means the legal ownership or ownership through nominees.'.—[Mr. Austin Mitchell.]

Brought up, and read the First time.
Mr. Austin Mitchell (Grimsby): I beg to move, That the clause be read a Second time.
Mr. Deputy Speaker: With this it will be convenient to take the following amendments:
No. 16, in clause 3, page 3, line 39, at end add—
'(6) The company shall not issue or register any shares to any person who is not a resident of the United Kingdom except by consent of the Treasury. No person who is so resident shall act as the nominee for any person who is not.
(7) Any shares issued or registered in contravention of the fore-going subsection shall be deemed, for all purposes, to be owned by the Secretary of State.'.
No. 37, in clause 7, in page 6, line 40, at end insert
'Where the Secretary of State proposes to exercise any power to dispose of shares in the successor company either directly or through nominees he shall, subject to the provisions of this Act and subject to the need to prevent more than 15 per cent. of the shares in the successor company being owned directly or indirectly by any person not resident in the United Kingdom, take steps to ensure that he obtains an adequate price for them'.
Mr. Mitchell: The purpose of the new clause is clear, straightforward and self-evident. It seeks to safeguard the new organisation against a major foreign stake or influence in the new company. Such a safeguard is vital. Given the importance of this safeguard, we believe
1150
that it is essential that it should be written into the legislation and not left to the company's articles.
The Government are proposing to sell off a major national asset for entirely doctrinaire reasons—the change to the new concept of privatisation. Those doctrinaire reasons disguise the real reason for the sale, which is that the Government are desperate for cash. They are anxious not to cook the books, but to make them look as good as possible. They want to make it appear as though they have cut Government spending more than they have done, by selling off such assets.
I contend that the Government, being desperate for cash to make the books look better, will not be unduly concerned about the purchasers of the shares that they will be selling off. In other words, their proper preoccupation—that of responsibility for national interests and preventing foreign influence or control of the organisation—will take a back seat because of their desire to raise money, by selling off this asset.
8.15 pm
We should be concerned to prevent foreign control and influence over this organisation which is a vital national interest in an industry which plays a major role in defence. It operates in an area in which our competitors work closely with their national Governments. Indeed, in most instances those competitors are State-owned and controlled.
British Aerospace, having been launched into the private sector in this fashion, might find it difficult to raise money on the commercial market for long-term research. The Government indicated in Committee that they were not prepared to give any special financial help to the new company: it has to brave the rigours of the market; it has to operate in a strictly commercial fashion; and it will not get any Government preference for loans or backing by way of guarantees for loans. It may have to look for foreign help or co-operation with overseas aircraft firms. Therefore, it is important that we have this safeguard against foreign influence written into the legislation, and not into the company's articles which can be altered. It is important to have a watertight guarantee against foreign influence or control. The

1151
new clause would achieve that objective and make the position crystal clear.
I am aware that the Government have proposed safeguards in the company's articles. The Opposition do not regard such safeguards as a satisfactory guarantee against the kind of eventualities that we fear. Indeed, the Government have already agreed to change the articles by taking on board the points made by my hon. Friend the Member for Nuneaton (Mr. Huckfield). If the articles can be so readily changed, we prefer to see the guarantee written into the legislation. An expensive team of lawyers have prepared the articles, but what is the argument against putting this important guarantee against foreign influence or control into the legislation?
We must face the fact that BritishAerospace—competitive and productive as it is and a jewel in the crown of nationalisation—is an attractive investment not only to foreign companies and money but to foreign competitors. We fear that that kind of investment might give rise to eventual foreign domination. Therefore, we feel that this vital organisation should be controlled and safeguarded as a national asset, with the ownership maintained strictly within this country. The only guarantee of that position is to incorporate the safeguard in the legislation rather than in the company's articles. If the Government agree that it is important to have this safeguard, what is their argument against putting it in the legislation? Why do they want to restrict the safeguard to the company's articles? Why not make it a cast-iron, watertight safeguard by putting it in the Bill?
Dr. M. S. Miller: I have in my hand a six-page foolscap document containing the articles referred to by my hon. Friend.
Mr. Tristan Garel-Jones (Watford): Read it out.
Dr. Miller: If I were to read it out I should be here for quite a long time.
I am not satisfied that the articles cover the position that occasioned such worry and fear in Committee. I appreciate that the Minister is in a difficulty in this respect. I think that he has tried, as far as possible, to allay our fears about the possibility of the company coming
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under foreign influence and domination, but the more I look at this paper, the more I become extremely confused.
The articles, at the beginning, state:
"It is a cardinal principle that the company should be, and remain, under United Kingdom control."
That is a good object. I have no qualms about or fears in saying that I applaud the Minister's patriotic national feelings in this respect, but how to achieve it is an entirely different matter. I am not satisfied that this does it. Nor am I satisfied that anything in a legal form can guarantee the position that we would like. I indicated that to the Minister in Committee.
However legally tight something is drawn, there will be smart lawyers who will find ways round it, or, if they cannot do that, will make all kinds of problems and difficulties. This is not a game of cricket. We are not dealing with gentlemen's agreements and gentlemen's laws. We are dealing with hard-headed business men from overseas. Millions of dollars are involved. I use "dollars" advisedly. That was the currency used in the Lockheed scandal. In that scandal, as the House and the country know, more than mere politicians were involved. A royal family was involved. In such a situation, it is up to those in this country to ensure, by every means possible, that this industry, which is vital to the security of the country, does not come under the influence or the domination of foreigners.
I fail to see why it should be considered impossible for foreign nationals to form a company in this country. I defy anyone—other than a detective agency—who is willing to work from now until doomsday, to discover the people behind the company. It may sound a simple task, but, as I indicated in Committee, a man in Scotland, John McEwan, has spent a lifetime trying to find out who owns the land of Scotland. He still cannot find out. Behind one man there is another, and behind him another, and so on.
Mr. Adam Butler: We have heard this before.
Dr. Miller: The Minister says that we have heard this before, but he has not answered me. I am still not satisfied that, whatever action he takes, we can safeguard ourselves in this respect. It will do no harm for the Minister to have

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a clear indication from the Opposition that we have the interests of the people at heart and not merely—I am not using the word "merely" in a denigratory sense—the 68,000 workers in the industry. This is a vital industry for the country's security and safety.
The Minister can do little more to satisfy me that there is no possibility of this company coming under foreign influence and domination. Influence is bad enough. A situation could arise in which a number of directors did not have the interests of Britain at heart. They could be people from Lockheed, Boeing or another competitor of British Aerospace. They might be people who were concerned not so much with the fast buck that could be earned as with other considerations, even military considerations, involving this country.
I cannot allow the Report stage to proceed without once again voicing my utmost concern about possibilities that could arise unless we are extremely careful. My hon. Friend the Member for Grimsby (Mr. Mitchell) said that this matter should be included in the Bill so that when it became an Act of Parliament it could not be changed by the people who controlled the company. Even though the intentions of the Government are stated in the articles, there is nothing to stop the directors of the company from changing the articles.
Although the 'Government assure us that they will do ever thing in their power to make sure that a situation could never develop that would not be in the interests of this country, I cannot see how they can totally allay our fears. The least that can be done is to write into the Bill the kind of safeguards which the Minister envisages. We are not playing a game. There was reference earlier to tennis and to cricket, but this is not a game. We are not dealing with people who are playing tennis, golf or cricket.
I believe that, in general, British business men, with some notable exceptions such as those mentioned by my hon. Friend the Member for Keighley (Mr. Cryer), tend to act with a considerable degree of honour and uprightness. That does not necessarily apply to everyone. We should not believe that because we have taken a stand and declared that it is a cardinal principle that the company
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should remain under United Kingdom control it will necessarily remain so.
Mr. Cryer: I want to say a few brief words in support of my hon. Friend the Member for Grimsby (Mr. Mitchell), particularly in regard to new clause 12. First, it is quite useful that where the Secretary of State acts in this matter—that is, to control foreign investment—he should do so by statutory instrument.
The Minister will no doubt recall that Labour Members have stressed the importance of parliamentary accountability. I do not believe that Secretaries of State should be given carte blanche. I never have done, be they in a Labour or a Conservative Government. I believe that there should be some element of public accountability through the House of Commons. Therefore, new clause 12(1), which states that
"The Secretary of State shall by order made by statutory instrument fix a limit for investment by non-United Kingdom residents" is part of the process of ensuring that there is some element of public accountability. That is important.
We are talking about the emerging company that will face enormous international competition. Safeguards are necessary and important for two reasons: first, for the company itself—that is, British Aerospace Ltd. or whatever it is called—because it will face competition of a vigorous sort, which it has done over the years; secondly, for the maintenance of a sound United Kingdom market for Rolls-Royce 1971 Ltd.
Conservative Members may recall that that was the company which the previous Conservative Government nationalised because it failed under private enterprise. Ministers have assured us time and again that private enterprise breeds only success. As we now know, that is not true. Indeed, in a debate last week on the Industry Bill the Minister pointed out that private enterprise meant both success and failure. Failure is often exacerbated by the abolition or erosion of a United Kingdom market. Rolls-Royce would certainly find itself in a difficult position if there were no aerospace industry, or if that industry were no longer in a position to place orders for engines, as a result of which it was left to the dominant manufacturers—the American companies, Lockheed and Boeing—to place those orders.

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In that situation, it will almost certainly follow that there will be a preference for Pratt and Whitney engines rather than those of Rolls-Royce, and that Rolls-Royce will become very much a second-rate, second-best company in relation to orders. I emphasise that this is in relation to orders, because, happily, Rolls-Royce can make engines which are equal to or better than those of any other manufacturer in the world. Long may that remain the case.
However, Rolls-Royce requires a United Kingdom market in order to retain some sort of capacity which is not subject to the extreme vagaries of international competition. Therefore, to safeguard institutions such as Rolls-Royce at Barnoldswick, where some of my constituents work, it is necessary to ensure that the British aerospace industry retains a majority British shareholding and control.
The best way of doing that is through public ownership, and the best ownership is ownership in common through public ownership. However, we are not discussing that aspect. We are putting bits of sticking plaster over the cracks in this shoddy measure to hive off these important national assets. That bit of sticking plaster is simply to ensure the control remains in the hands of the United Kingdom.
Clearly, we shall not get the sort of statutory control by the Secretary of State in regard to shareholding that we desire. At least we can say to the Secretary of State through legislation that the number of shares that he can sell abroad will be limited. We have in mind principally Boeing, Lockheed and other great companies throughout the world. Such legislation would ensure that there would be no erosion of control of that important company by the sale of shares to its competitors.
8.30 pm
My hon. Friend the Member for East Kilbride (Dr. Miller) said that the aerospace industry had shown—though it might not be its norm—an element of unscrupulousness that shattered even the onlooker used to stories of the esoteric arrangements for bribes in the allocation of contracts. The Lockheed bribe scandal involving the Dutch royal family shocked the world. Such a scandal is an indica-
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tion of the ruthless attitude of a company determined to buy its way into contracts.
Will that attitude end? Can we be sure that that kind of ruthlessness will not raise its head again? Can we be sure that that underhand behaviour has gone for good? Or, in five or 10 years, will bribe scandals and the echoes of Watergate—which, in the event, have probably improved the public and corporate image of life in America—have simply become footnotes in the history books? Will the same kind of ruthlessness continue? In 10 years we shall no doubt have a Labour Government coming up for a second term of office, having successfully carried through Labour policies. In that case the problem may not arise.
But what of the shorter term? We must ensure in the shorter term that Lockheed does not recognise the crumbling economic policies of the present Government and, at the same time, recognise the fast fading support for this Government. We must ensure that Lockheed is not able to say "We must seize the opportunity to obtain a foothold in British Aerospace as quickly as we can".
These are conundrums we cannot answer except through legislation. However, we recognise the existence of these dangers. We know that ruthless international competition has in the past behaved in a highly unscrupulous manner and may do so again. In those circumstances, it behoves Parliament to lay down safeguards, through legislation, to prevent any transfer of control to the hands of our international competitors who, perhaps, have behaved unscrupulously.
Subsection (5) of new clause 12 refers to
"legal ownership or ownership through nominees".
We have said that the provisions for shareholdings are by no means satisfactory and that shareholdings can be manipulated through nominees. That means that holdings can be built up without ownership being clearly and fully known to the company even as the shares are being purchased.
Subsection (5) is a useful safeguard because the Companies Bill which is going through the House is not the sort of legislation which will provide safeguards beyond a peradventure. That being so,

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I believe that it would be of great benefit to accept the clause.
We must have safeguards against the multinationals. The Conservative Government, no less than the Labour Government, will be blackmailed by the multinationals if we allow them to put their tentacles around such an important industry. They can threaten to close and tell the Government that if they want to save 50,000 or 60,000 jobs they must provide £Xmillion. That is the course on which Chrysler embarked in 1975. The multinationals can insist on preferential tax treatment. By virtue of their multinational base such companies can play off one country against another, for grants, for the retention of jobs and for tax advantages. They can shift money, through transfer pricing, from one country to another.
Such international competition makes Governments fall over themselves to give assistance. Governments play into the hands of the multinationals. However, an indigenous company has a loyalty to its base country. We should ensure that the Government are not subject to the power of the multinationals. Only by safeguarding our position and preventing that can we exert our sovereignty as a nation and a democracy. If we do not ensure that we have some protection against the multinationals, they will take us over.
Without much hope of success, I urge the House to accept the new clause. It will provide a statutory safeguard to ensure confidence in the industry. It will provide that the company is owned largely by the United Kingdom, ready for the next Labour Government to take it back into public ownership and so ensure continuity of aircraft production in Britain.
Mr. Stan Thorne: I shall not make a lengthy speech because I do not want to repeat the arguments.
It is a pity that yet again important legislation involving one of our major industries is being debated when only about a dozen hon. Members are in the Chamber. I do not wish to devalue the contribution by my hon. Friend the Member for Nuneaton (Mr. Huckfield), but there has been little representation on the Opposition Front Benches by my right hon. Friends who should be leading the
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fight against this measure. I have a feeling that some of my right hon. and hon. Friends are not particularly perturbed about the loss of the aerospace industry. I believe that it is a tragedy that a publicly owned enterprise such as this is to be passed to private hands.
It is estimated that 75 per cent. of the world's production will be in the hands of 300 companies by 1985. It is possible that the control of the aerospace industry will shift outside the United Kingdom to one of those 300 multinational companies. I hope that the Minister will reassure us that that cannot happen. Time alone will tell.
I am sorry to have to dissociate myself from amendment No. 16. It could lead to our being misunderstood. We could subsequently be accused of having been racialist in our proposal. I represent a constituency with a considerable number of Asians and others who have come to reside in Britain.
Dr. M. S. Miller: My hon. Friend may be accused of being xenophobic, but that does not mean that he is racialist.
Mr. Thorne: I do not know what xenophobic means. I did not have the advantage of an erudite education such as my hon. Friend the Member for East Kilbride (Dr. Miller) enjoyed.
There are those who argue that it is racialist—and I fully agree—to prevent a non-British subject from entering this country to marry a resident here. I understand that that is part of a proposal contained in orders that we shall subsequently discuss in this House. I accept that that is not the thinking behind the amendment. There are those who at some future time may accuse us of having been associated with an amendment that appeared to imply that persons outside the United Kingdom did not enjoy equal rights with those here, even though they were married to United Kingdom residents.
Mr. Robert Atkins: I oppose the clause and in doing so I wish to deal briefly with the conduct of some Labour Members. I came to the Chamber today expecting to hear new information, new discussion and a new contribution from the Opposition. However, nothing has changed. We have heard no new questions or answers from the Labour Benches and I find that typical.
Mr. Deputy Speaker (Mr. Richard Crawshaw): Order. I hope that the hon. Gentleman will get on to the new clause. I made observations about this matter earlier. We are now dealing with a specific new clause.
Mr. Les Huckfield: Does the hon. Member for Preston, North (Mr. Atkins) accept that there is an established convention in this House that amendments that were called in Committee are usually not acceptable in exactly the same form on Report? If the hon. Gentleman looks carefully at the amendments which have been tabled and selected for tonight's debate he will see some important new proposals. If he cannot read the Amendment Paper, I am sorry for him.
8.45 pm
Mr. Atkins: I take note of that intervention. I support the Government's rejection of the new clause and shall have no fear of voting against it.
We have been criticised for lack of consultation with union leaders. However, we have met, for example, Rolls-Royce from Coventry, Bristol, Derby and Anstey and British Aerospace from Brough, Woodford, Bristol, Stevenage and Weybridge. We have met joint staff unions and joint staff councils and other manual workers and combined committees to discuss parts of the Bill, including this new clause.
Mr. Huckfield: But did not the majority of those representatives come to see the hon. Gentleman at the same meeting?
Mr. Atkins: No, that is not the case. We have already had three meetings with union leaders and representatives from℃
Dr. M. S. Miller: When one talks about consulting unions, one should give the name of the branch, the name of the secretary and the name of whomever one talks to. One does not just say "I met union branches or leaders." The hon.Gentleman should say whom he means. I expect that the people he has met are members of staff associations and not unions.
Mr. Atkins: I will read the hon. Gentleman some of the names and branches and the backgrounds of the people with whom we have discussed this
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clause—Ron Ford, secretary of the joint staff unions combined committee of British Aerospace, Woodford, Manchester; Mr. Alexander, secretary of the joint staff council of British Aerospace at Kingston-upon-Thames, Surrey; Mr. Cooper, chairman of the joint staff committee of British Aerospace, Weybridge—
Mr. Huckfield Mr. Huckfield Same meeting.
Mr. Atkins: Another meeting. We also met Mr. Harrison from Rolls-Royce, Coventry, AUEW vice-chairman; Mr. Bell, British Aerospace, Brough; Mr. Ingram, Rolls-Royce, Anstey.
Mr. Huckfield: Same meeting.
Mr. Atkins Mr. Atkins That is not true. The hon. Gentleman repeats something many times in the hope that it will become true. These were separate meetings with union representatives or those unions which wrote asking to speak to us about this clause and others. It is no good hon. Members muttering across the Chamber that this was one meeting; it was a series of meetings—
Mr. Huckfield: The hon. Member is trying to establish that there was adequate consultation before and throughout the preparation of the Bill. Does he not admit that the people and branches that he is now listing were part of the same meeting with representatives of the national aerospace shop stewards liaison committee one Wednesday afternoon inthe House with the Conservative Party avatiation group? Is that not a fact?
Mr. Atkins: I repeat, for the benefit of the hon. Member for Nuneaton (Mr. Huckfield), who clearly is either deaf or incapable of understanding English, that we have had more than one meeting.
Mr. Huckfield: Two.
Mr. Atkins: Three, actually.
Mr. Huckfield: Two.
Mr. Atkins: We had three meetings with the various representatives and the names of them can be provided for hon. Members to see.
The level of debate and the constructive comments that were made during the course of those metings were of a high order. We parted on good terms, having

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discussed some of the problems, of which this clause was one. The House may not be surprised to learn that we did not agree on everything that was put forward. That is understandable. It is right and proper, in a democracy, that we should argue about various aspects of a Bill that is going through Parliament. Nevertheless, we parted on excellent terms and made arrangements to meet on a regular basis in future to dicuss the special problems and interests of aerospace generally.
I believe that it is important to get on record that all the details of our discussions, through the kind auspices of my hon. Friend the Member for Ruislip-Northwood (Mr. Wilkinson), were passed back in full reports—
Mr. Huckfield: Tape recorded.
Mr. Atkins:—of all that was discussed to my hon. Friends the Minister of State and the Under-Secretary so that they could take note of them and, if they felt inclined, constructively comment on them when they came before the House.
That proves, above all, that all the snide stories put around by those, within and without this House, about Conservative Members' refusal to take consultations on this clause and others are no more than party political propaganda. I want to get on the record that we are firmly prepared to discuss on a regular and continuing basis those problems that affect the industry, about which we care deeply. This clause is but one part of the discussions we have had.
It is worth reminding the House that my constituency, as the hon. Member for Preston, South (Mr. Thorne) indicated, is strongly involved in the aerospace industry in the military context. The company in my constituency is profitable and well-organised. It was profitable before nationalisation and will be after denationalisation.
I welcome the Government's attitude in opposing this clause and I hope that it, along with others, will be rejected by the House.
Mr. Adam Butler: I thank my hon. Friend the Member for Preston, North (Mr. Atkins)—
Mr. Huckfield: What for?
Mr. Butler:—for his contribution. He has spoken probably more sense, and kept closer to the facts, than have most Opposition Members this afternoon or in Committee. On the question of foreign ownership, I have had some constructive meetings with unions and have been able to set their minds at rest. Trade union members, unlike, Opposition Members, take note of what a Government Minister says and accept his word asthat of someone who intends to keep it.
There are two separate parts to this debate which, like other debates, we have had at considerable length in Committee. The first point is what the Government intend to do to safeguard the position on foreign shareholding, and the second is whether this should be done through the articles of association or by incorporating some declaratory clause of the kind the Opposition want in the Bill.
Let me make it clear that the Government are determined that British AerospaceLtd. shall not fall into undesirable foreign hands. We believe that foreign shareholding should be kept to a limited amount and not be allowed to resemble control. We made the Government's intention clear during Second Reading on 20 November 1979, and on 23 July when my right hon. Friend the Secretary of State made his initial statement. We repeated it frequently in Committee, as I have said. If one were to look at reports of our debates on 18 December and 15 and 24 January, one would find words to prove that.
But, again, I should like formally to set on record the Government's determination to prevent the company from falling into foreign control. This is particularly important because of its defence interests.
The hon. Member for Keighley (Mr. Cryer)—I occasionally agree with him—said that control must remain in the United Kingdom. Provided that we can at least agree on that point, what matters clearly is how we achieve it. The Government intend to use a mixture of three approaches. The first is to use the articles of association to provide an article of the successor company which restricts foreign ownership to not more than 15 per cent. of the voting rights in the company. The second, as we have made

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clear, is that we should use the Government's shares either to stop any attempt to change this article or to remove it altogether, and to use the Government's shares to oppose the election of directors representing foreign interests. Then, as a fallback, we would be prepared to use part II of the Industry Act 1975 to stop a change of control of this key manufacturing enterprise.
Mr. Huckfield: Ah.
Mr. Butler: The hon. Member makes a noise which is difficult to interpret.
Mr. Huckfield: Read it in Hansard tomorrow and you will see that it says—
Mr. Deputy Speaker: Order. If the hon. Gentleman wishes to intervene, he must stand up to do so.
Mr. Butler: We can either assume that the hon. Member was not present in Committee with us when we made this clear, on probably two or three occasions, or, as so frequently happened, he conveniently forgot what was said from the Government Benches.
We believe that these three mechanisms working together will be foolproof. The most important of them is the restriction in the company's articles of association. As I have made clear in this debate, we lodged in the Library a draft article during the Christmas Recess. We debated that article at considerable length in Committee. I am not quite sure why the hon. Gentleman should complain that a new amended draft article was put in the Library some few days ago, in the middle of last week, when that resulted from our debates in Committee. I should have thought that a few days after the Committee stage would not be an unreasonable length of time to take to amend a draft article and put it in the Library. There it is, and it spells out what we believe to be the right provisions for dealing with this point.
As I have previously made clear, certain powers will be given to the directors to challenge shareholding. Unlike the problem which the hon. Member for East Kilbride (Dr. Miller) cited in regard to Mr. McEwan and the ownership of land in Scotland, the law of Scotland is not well known to us Sassenachs, but, even so, the point with regard to the shares is
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that they first have to be registered and, secondly, it will be necessary for a shareholder in British Aerospace Ltd. to prove that he is not a foreigner as defined in the article. If the directors have reason to suppose that a share is foreign-held and if this were to bring the proportion of shares held by foreigners above 15 per cent., they would be empowered to disenfranchise those shares, and if the proportion of shares was found to be above 15 per cent. the excess proportion would have to be sold off.
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The question then is whether it is safe to put such a safeguard in the articles of association. It would not be safe to do so if all the shareholders determined to change the articles in this respect. It is the intention of the Government to hold a shareholding of no less than 25 per cent. The purpose of that 25 per cent. is to block any attempted change in the articles of association in respect of a foreign holding or anything that might be damaging to the interests of the company. If a general meeting is called for the purpose of amending the articles, 25 per cent. of the shares would be necessary. If the Government retain, as we shall, a 25 per cent. holding, and if they are prepared to use that shareholding to oppose any change, that will provide a sufficient safeguard.
Mr. Ernie Ross: I apologise to the Minister, as I missed the earlier part of his statement. He says that we should accept his statement that the Government will retain 25 per cent. of the shareholding, and that they will thereby be able to block any foreign shareholding. However, Government policy on a number of issues has been determined by their wish not to intervene. Therefore, we are worried that if there were a foreign takeover the Government would not intervene.
Mr. Butler: It is possible for the Government to stand back from British Aerospace and to allow it to operate as a private sector company while retaining a 25 per cent. shareholding and the power and intention to block any change in the articles of association.
I turn to the question whether it would be better to attempt to safeguard the company from foreign control. We have good evidence that the articles of association should not be incorporated in

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the Bill. If they were incorporated in the Bill, no improvements could be made. That is a small but important point.
Should there be some declaratory pro-provision? New clause 12 is defective on various grounds. If the hon. Member for Nuneaton (Mr. Huckfield) consults his legal advisers, he will find that he will have to cover the point in much greater detail and complexity in order to achieve his objective. In the Industry Bill, 10 clauses and seven pages were necessary to restrict foreign ownership. As the hon. Member for East Kilbride pointed out, our draft article on foreign ownership amounts to six pages. Therefore, such a small clause will not be effective.
The main argument concerns whether it is helpful to include such a provision in the Bill. In theory, the articles of association could be changed if a majority of shareholders so wished, and if the Government were not prepared to exercise their 25 per cent. blocking vote. Equally, if a provision were enacted, the Government of the day could change it. In either case—whether one uses the articles, or the Bill to safeguard the company—if a Government are determined to change the position, one will be no better off.
The hon. Member for Nuneaton has some association with members of the Communist Party. I am bound to say that there could be circumstances in which a Government of this country, possibly of the persuasion of the hon. Member for Nuneaton and the hon. Member for Keighley, might find that they wanted to sell part of British Aerospace Ltd. to a foreign Power. If safeguards were incorporated solely in legislation, such a Government would be able to do so. If we incorporate safeguards in the articles, control would be in the hands of the shareholders. If 25 per cent. of the shareholders did not want such a thing to happen, they would have control. As we are ceaselessly told, shareholders are interested in the future of the company.
If I were an employee of British Aerospace, I would prefer to have the safeguard in the hands of a Conservative Government who were prepared to exercise their 25 per cent. voting power. However, if that 25 per cent. was held by a Government of the persuasion of the hon. Member for Nuneaton, I should at least know that I was safe in the hands of my shareholders.
Mr. Les Huckfield: We usually hear comments like that at this time of the evening. It is typical of the totally unwarranted remarks that the hon. Gentleman makes.
We are making a plea to include a preventative mechanism on prohibition in the Bill. We recognise that if a Government, of whatever persuasion, wanted to change that provision, the matter would have to come before the House. If the hon. Gentleman does not believe in the traditions of the House and majority rule, let him say so now.
Mr. Butler: The hon. Gentleman knows that I have the deepest respect for the House, its traditions, the Chair and our two-Chamber system.
Mr. Huckfield: This Chamber.
Mr. Butler: I believe that the hon. Member for Nuneaton and some of his hon. Friends believe in abolishing the House of Lords and operating a unicameral system, and that would add to the dangers that I described.
Mr. Stan Thorne: The hon. Gentleman made reference to my hon. Friend the Member for Nuneaton (Mr. Huckfield) having friends who are Communists. I too, have friends who are Communists, and am proud of it. I deprecate the fact that the hon. Gentleman omitted me from his references to my hon. Friend the Member for Nuneaton and, vaguely, my hon. Friend the Member for Keighley (Mr. Cryer). I feel somewhat jilted. We should be under no illusions. Some Communists today put up a tremendous fight in the interests of their colleagues in the trade union movement.
Mr. Butler: I apologise to the hon. Member for Preston, South (Mr. Thorne) for leaving him out. We know his position on defence Votes. His constituents will take special note of the occasions of which he may be proud—and he is entitled to his views—when he voted for reduced defence expenditure, thus voting to put his constituents out of work. That is why his majority is small—
Mr. Speaker: Order. I have not been here throughout the debate on this new clause, but I know that that is not related to it.
Mr. Cryer: On a point of order, Mr. Speaker. The Minister made an unwarranted imputation on my hon. Friend the Member for Nuneaton (Mr. Huckfield) as well as on others of my hon. Friends and myself, suggesting that by association with Communists or members of that political party we were in some way acting as dishonourable traitors to our country. May I point out that on an occasion when such an implication was made it was specifically withdrawn by the right hon. Member concerned, and you accepted that?
Mr. Speaker: Order. It would be quite out of order if the word "traitor" was used—
Mr. Cryer: No, Mr. Speaker, it was not.
Mr. Speaker:—but it seems to me that there has probably been an exchange of views across the Floor not strictly related to new clause 12 and the amendments grouped with it, and we must now keep to that.
Mr. Butler: I was envisaging a hypothetical situation in which a British Government of a certain political persuasion might wish for the shares in British Aerospace Ltd. to be sold to a foreign Power. I was going on to suggest that if the safeguard were incorporated in the articles of association it would be a greater safeguard in that possible circumstance than if a provision were written into the Bill.
Mr. Martin Flannery (Sheffield, Hillsborough): A disgraceful imputation.
Mr. Butler: I have spelt out what the Goverment intend to do. I have ackowledged—correctly, I believe—that the Opposition are at one with the Government in intending that there shall be no foreign control, and there is possibly some difference of opinion about the means of achieving that end. I have given one sound reason why, in the interests of British Aerospace, it is better for the safeguard to be incorporated in the articles, and I therefore ask my hon. Friends to reject the new clause.
Mr. Ernie Ross: I shall be brief and speak with particular reference to amendment No. 16. In Committee we pressed the Government to recognise that
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there were many people outside this place interested in the future of British Aerospace, and we showed that the Government's denationalisation proposals in no way reflected the aspirations and wishes of the workers in the industry. We did not accept that the Government's plans in any way met the needs, wishes and aspirations of those workers, but the Government chose to ignore our case.
We pointed out that one of the greatest fears among those whose interests we sought to represent was about the extent to which foreign investment might come into British Aerospace, with the consequent loss of jobs in the industry in this country.
We were concerned also, as the workers were, that the role played by the trade union movement was being ignored by the Government in their attempts to denationalise British Aerospace. We have shown throughout that the trade union movement has put forward ideas for the improvement of British Aerospace, despite their being ridiculed by hon. Members on the Government Benches. They have obviously failed to recognise the crucial role played by the workers in the industry in making British Aerospace successful. If there is to be a viable British Aerospace after denationalisation, the good will of the workers is required.
Everyone—from management down to the shop floor—has made it clear that he is concerned that foreign shareholding could severely damage British Aerospace, as it is now constituted. They have also made it clear that they do not believe that any foreign shareholding will be in the interest of British Aerospace. The foreign shareholding may take the form of a multinational corporation that is determined that there will be only one aerospace industry—the American aerospace industry. We are concerned that there will be hiving off of sectors of the industry if the foreign investor demands that the work be channelled elsewhere.
For those reasons, the work force has asked us to oppose the Government, and to attempt to write into the Bill some control over foreign investments. If the Minister believes that a 25 per cent. Government shareholding is sufficient, he has failed to satisfy the workers or management of British Aerospace, who have made the point on numerous

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occasions that they are happy with the industry as it is now.
9.15 pm
Mr. Cryer: I would not have intervened but for the remarks of the Minister of State regarding my hon. Friend the Member for Nuneaton (Mr. Huckfield). Labour Members have tabled constructive amendments in Committee and on Report that are designed to stop British Aerospace falling into foreign hands. It does not matter whether it is the American multinationals or the Comecon multinationals. This important and valuable industry, which employs 68,000 directly, should stay in the control of the United Kingdom. It is disgraceful for the Minister of State to imply that, because my hon. Friend the Member for Nuneaton has walked in defence of a sacked shop steward—whose politics are irrelevant, but whose position has been brought about by victimisation—somehow my hon. Friend does not support new clause 12. That was the imputation.
On a point of order I raised the propriety of a right hon. Member of this House implying that Labour Members are not loyal. The right hon. Member later apologised to the House. I hope that those Members who are starting the "Reds under the beds" scare will bear that in mind. We shall stand up and defend the interests of the people with more determination than members of the Conservative Party have ever done. They and their kind are prepared to sell out the workers of the country for the fastest profit. In 1972–74—
Mr. Speaker: Order. I am sorry to interrupt the hon. Gentleman. I have just discovered that the hon. Gentleman has already made a speech on new clause 12. I am sorry to rob the House, but hon. Members cannot have more at this stage.
Mr. Cryer: I was under the impression that one could speak twice on Report, but, having spoken twice, I shall not indulge the House any further.
Mr. Speaker: I may say that everyone falls into the same error. That applies to Committee stage, but not to Report stage.
Mr. Les Huckfield: We should thank my hon. Friend the Member for Keighley (Mr. Cryer) for setting this constitutional precedent. Although I do not wish to counter your ruling, Mr. Speaker, I note that he was speaking in my defence when he resumed his seat.
Mr. Speaker: Order. I believe that the hon. Gentleman has also spoken before. If he has not—and I can tell by the look on his face that he has not—I shall call the hon. Gentleman.
Mr. Huckfield: I can give you, Mr. Speaker, and the House a categoric assurance that I have not yet spoken in this debate.
The amendments are relevant to the most crucial issue in our consideration of the Bill. We make no secret of the fact that the new clause is taken from the Industry Act 1975.
I hope that the hon. Member for Enfield, North (Mr. Eggar) is listening, because in his last speech in the House he sounded only too anxious to see more and more industry leaving this country. That is the sort of speech that he makes.
Mr. Robert Atkins: That is a disgraceful accusation.
Mr. Huckfield: It is a pity that the hon. Gentleman was not in the House to hear his hon Friend.
Mr. Tim Eggar: Will the hon. Gentleman give way?
Mr. Huckfield: No.
Mr. Eggar rose—
Mr. Speaker: Order. We can have only one hon. Member on his feet at a time.
Mr. Huckfield: The hon. Member for Enfield, North pays scant attention to any of our proceedings, so I am not giving way to him.
New clause 12 seeks to insert into the Bill a declaratory provision which we have unashamedly taken from the 1975 Act which was put on the statute book by the previousLabour Government. We are firm in our belief and convinced that the best way of inserting a preventive mechanism and a prohibition is to put it into the Bill. That is not to say that we accept the Bill, but if we are to do anything to prevent foreign control and

1171
domination, the mechanism should be inserted in the Bill.
My hon. Friend the Member for Preston, South (Mr. Thorne) referred to the possibility of a racist interpretation of amendment No. 16. The amendment was not drafted with any such intention. We simply do not wish to see the transfer of control or share ownership from this country to other countries. I recognise that the amendment is, to a certain extent, an alternative to the new clause, but we wished to test the Government's responses, and that is why we tabled the amendment.
As I mentioned earlier, I do not wish to challenge the selection of amendments, but we thought that it might have led to a speedier passage of the remaining stages if amendment No. 37, which is included in the group under discussion, had been taken with the first group. We felt that it was more relevant to that debate.
The amendment makes the point that the Secretary of State must be guided by the need to have no more than 15 per cent. of the shares owned by one foreigner or a collection of foreigners. We seek to insert a preventive mechanism in the Bill so that if any future Government wished to amend such a provision they would have to come to the House for approval. I was worried about what the hon. Gentleman said. He seemed to suggest that he might not be prepared to accept the vote of a future Government who had a majority in the House. That was the worrying imputation of what the hon. Gentleman said.
Mr. Stan Thorne: Remember Chile.
Mr. Huckfield: We can now see why at every stage at which we have tried to insert a provision for a debate under the affirmative resolution procedure the Minister has opposed it. From the way that he spoke tonight, it does not appear that he is prepared to accept majority verdicts in the House if they do not agree with his views or suit his convenience. That is a dangerous doctrine to follow. It is dangerous for a Minister of State in this Government to say anything like that in the House.
We sought to insert that provision because we believe in a democratic majority vote in the House. We felt that the best way to guard against any kind of change
1172
was to put this provision in the Bill so that any future amendment would have to be debated in the House.
The Government have chosen a somewhat different route. [Interruption.] The hon. Member for Plymouth, Sutton (Mr. Clark) has come to join in with his usual banter across the gangway, but I hope that he will listen to the occasional sentence.
The Government have chosen a different route. First, they say that they have made provision in an article of association of this company that there will be no more than a 15 per cent. foreign shareholding or shareholdings. We have already taken legal advice on the amended draft article which the Minister placed in the Library last Friday. That advice is that the article of association which the Government intend to submit as one of the articles of association of the new company is not watertight. The main mechanism on which the hon. Gentleman is relying for the prevention of foreign ownership, control and domination of the company is not watertight. My information is that it is sloppily and loosely drafted.
I direct the Minister's attention to page 6 of the draft article, paragraph (I):
"The Directors shall not be required to give any reasons for any decision or declaration taken or made in accordance with this Article."
I want to know why that provision was inserted in this article. I have to say to the Minister—
Mr. Alan Clark: Will the hon. Gentleman give way?
Mr. Huckfield: I shall give way to the hon. Gentleman at my convenience, not his.
Every time we have sought to correct the draft article placed before the House by the Minister he has gone back to his Department and then come forward with an apology to the effect that he has found that the draft article is not watertight, after all, and that he feels the need to take on board some of the amendments suggested by the Opposition.
As the Government appear to be relying on this draft article to prevent some kind of foreign takeover or control, I hope that we shall not get a whole series of occasions on which the Minister puts newly drafted articles in the Library

1173
about which we have to take legal advice and show him how to amend them. This is the second time that he has put a draft article before the House to which we have had to suggest amendments and to which he has to say that the amendments are good because they make the draft article more watertight.
Mr. Clark: Will the hon. Gentleman give way?
Mr. Huckfield: If the hon. Gentleman has a sensible point to make, I shall give way to him.
Mr. Clark: I am grateful to the hon. Gentleman for giving way. As he knows, I have been unable to be present throughout the whole of the debate. I suggest that the whole tenor of his argument is the purest hypocrisy. If the assets of the concern are physically located in the United Kingdom, the fact that the Tribune Group, of which the hon. Gentleman is a member, has committed itself to nationalisation without compensation means that unless he wishes to repudiate that declaration the niceties of the shareholders' register are the last things that he will consider in the future.
9.30 pm
Mr. Huckfield: I am sorry that I gave way. The hon. Gentleman is not on form tonight.
The other mechanism which the Government say they will use to ensure that the new company does not fall into the hands of foreigners is their own shareholding, but until the Government hastily drafted their amendment over the weekend they did not even possess a mechanism in the Bill to ensure that they could keep a 25 per cent. shareholding. They had to put an amendment into the Bill over the weekend to ensure that if certain City manipulations had the consequence of their shareholding falling below 25 per cent. their share of voting rights could be restored to 25 per cent.
The Government had to make that amendment because they realised that their Bill, as originally drafted, would not have enabled them to maintain, or to increase, their percentage of voting rights in the company. When the Minister says that he will use the Government's percentage of shareholdings and that the Government intend to use their stake in the company as a blocking mechanism
1174
under the Companies Act 1948, I say to him that we would have been far more convinced of that kind of intention had they made adequate provision in the Bill to enable them to take that action. In Committee we warned the hon. Gentleman that he was getting himself into a ridiculous straitjacket in clause 7. He was insisting that each new Government target investment limit—I see that there is a piece of paper waiting for him, which will perhaps tell him what to say next—had to be lower than the last one and that if they took up additional shares and put in more money under clause 5, then, because of what we call the ratchet mechanism in clause 7, they would be forced to dispose not only of those shares but of the voting rights.
Under the originally drafted Bill, the combined effect of clause 5 and the ratchet mechanism in clause 7 would not have enabled the Secretary of State to maintain the 25 per cent. shareholding, and thus the blocking mechanism that he needs under the Companies Act 1948. I am glad that the Government have amended the Bill. They will now be able to try to do something like that. If they had inserted a figure for that shareholding, we should have been far more convinced.
We accept that the fallback of the Industry Act 1975—the belt and braces approach—is a good point for the Government to make. We should like to see the mechanism based on the 1975 Act developed, enhanced and extended so that it would stretch out to equal what we proposed in new clause 12. Our criticism is that there is too much emphasis and onus, and too great a burden, placed on the directors of this company to find out the beneficial owner of the shares. The Minister knows as well as I do that there is no way on earth that directors can prove that a shareholder or shareholder's nominee is under the influence, control or domination of someone who does not live in this country.
There is no way on earth that the directors, even if they employ the CIA, BOSS, or any type of private investigator, can prove that somebody is, or is not, under the control, influence or direction of someone who does not live in this country.
Mr. Keith Wickenden Mr. Keith Wickenden (Dorking) rose—
Mr. Huckfield: If the hon. Gentleman will allow me to finish this point, I shall be glad to give way. I am glad that the hon. Gentleman has finally considered that he has a point to make. That is why we say that there is nothing in the Bill, nothing in the draft articles, nothing in the ministerial assurances that we have so far received, and nothing that we have heard during the passage of this Bill that will prevent this industry, lock stock and barrel, from leaving these shores. That is why we shall continue to oppose the Bill. There is nothing in the Bill itself, nothing in the articles so far submitted, and nothing in the assurances that we have so far received that will prevent this industry from coming under the kind of foreign control and domination that we fear.
Mr. Wickenden: Does the hon. Gentleman agree that the Office of Fair Trading, through the Monopolies and Mergers Commission, has considerable powers to say whether a company shall fall under foreign control? For example, will he consider the case last year of Furness Withy, where that company was prevented from coming under overseas control?
Mr. Huckfield: The hon. Gentleman ought to realise that the Minister responsible for that commission is the right hon. Member for Gloucester (Mrs. Oppenheim). That does not exactly enthral us or lead us that to believe that she will be goaded to move into action the provisions to which the hon. Gentleman has referred.
The Minister knows that it is impossible to prove whether a shareholder or a shareholder's nominee is or is not under the control, influence or direction of someone who does not live in this country. The Minister knows that as well as I do.
Mr. Wickenden rose—
Mr. Huckfield: I shall not give way, because I have already given way to the hon. Gentleman. If new clause 12 or amendment No. 16 does not go far enough, the Minister should show us how they could be amended. He should give
us an understanding that they can be amended and brought back in another place. We do not claim any kind of monopoly of parliamentary draftmanship or wisdom. If the amendment is in some way technically defective, or if it needs to be enlarged or enhanced, I hope that the Minister will take it on board, but he has not said that. He has said that he will not even try to do that.
We feel that any kind of change in the ownership, control or domination of this company ought to be referred to this House. After all, we are talking about a significant industry and a significant part of our gross national product.
I must, finally, make reference to the cheap jibe that was made about my association with the chairman of the Leyland joint shop stewards. I say to the House and to the Minister that I shall continue to stand by Derek Robinson and the Leyland joint shop stewards for a very simple reason, which fits in very much with what I have said about the new clause. The Leyland shop stewards and Derek Robinson have shown much more determination to keep a manufacturing industrial base in this country than Conservative Members have ever chosen to do.
When the Minister spoke in our last textile debate, he actually said that he wanted jobs to go abroad.
Mr. Eggar rose—
Mr. Huckfield: When Conservative Members infrequently come to this House, they ought to recognise that we want to see this industry kept in this country. We do not want to become subcontractors to the Americans. We want to maintain an independent aerospace manufacturing capability in this country. That is what new clause 12 is all about and that is why, following the complete lack of reassurance from the Minister, we feel bound to press it to a Division.
Question put, That the clause be read a Second time:—
The House divided: Ayes 237, Noes 302.

Division No. 168]

AYES

[9.40 pm

Abse, Leo

Armstrong, Rt Hon Ernest

Barnett, Guy (Greenwich)

Adams, Allen

Ashley, Rt Hon Jack

Barnett, Rt Hon Joel (Heywood)

Allaun, Frank

Ashton, Joe

Benn, Rt Hon Anthony Wedgwood

Archer, Rt Hon Peter

Atkinson, Norman (H'gey, Tott'ham)

Bennett, Andrew (Stockport N)

Bidwell, Sydney

Grant, John (Islington C)

O'Halloran, Michael

Booth, Rt Hon Albert

Hamilton, W. W. (Central Fife)

O'Neill, Martin

Boothroyd. Miss Betty

Harrison, Rt Hon Walter

Orme, Rt Hon Stanley

Bottomley, Rt Hon Arthur (M'brough)

Hart, Rt Hon Dame Judith

Owen, Rt Hon Dr David

Bradley, Tom

Hattersley, Rt Hon Roy

Palmer, Arthur

Bray, Dr Jeremy

Haynes, Frank

Park, George

Brown, Hugh D. (Provan)

Healey, Rt Hon Denis

Parker, John

Brown, Robert C. (Newcastle W)

Heffer, Eric S.

Pavitt, Laurie

Brown, Ronald W. (Hackney S)

Hogg, Norman (E Dunbartonshire)

Pendry, Tom

Brown, Ron (Edinburgh, Leith)

Holland, Stuart (L'beth, Vauxhall)

Powell, Raymond (Ogmore)

Buchan, Norman

Home Robertson, John

Prescott, John

Callaghan, Rt Hon J. (Cardiff SE)

Homewood, William

Price, Christopher (Lewisham West)

Callaghan, Jim (Middleton & P)

Hooley, Frank

Race, Reg

Campbell, Ian

Horam, John

Rees, Rt Hon Merlyn (Leeds South)

Canavan, Dennis

Howell, Rt Hon Denis (B' ham, Sm H)

Richardson, Jo

Cant, R. B.

Huckfield, Les

Roberts, Alian (Bootle)

Carmichael, Neil

Hudson Davies, Gwilym Ednyfed

Roberts, Gwilym (Cannock)

Carter-Jones, Lewis

Hughes, Mark (Durham)

Robertson, George

Cartwright, John

Hughes, Robert (Aberdeen North)

Robinson, Geoffrey (Coventry NW)

Clark, Dr David (South Shields)

Hughes, Roy (Newport)

Rodgers, Rt Hon William

Cocks, Rt Hon Michael (Bristol S)

Janner, Hon Greville

Rooker, J. W.

Cohen, Stanley

Jay, Rt Hon Douglas

Roper, John

Concannon, Rt Hon J. D.

Johnson, Walter (Derby South)

Ross, Ernest (Dundee West)

Conlan, Bernard

Jones, Rt Hon Alec (Rhondda)

Rowlands, Ted

Cook, Robin F.

Jones, Barry (East Flint)

Ryman, John

Cowans, Harry

Jones, Dan (Burnley)

Sandelson, Neville

Craigen, J. M. (Glasgow, Maryhill)

Kaufman Rt Hon Geralo

Sever, John

Crowther, J. S.

Kerr, Russell

Sheerman, Barry

Cryer, Bob

Kilroy-Silk, Robert

Sheldon, Rt Hon Robert (A'ton-u-L)

Cunliffe, Lawrence

Kinnock, Neil

Short, Mrs Renée

Cunningham, George (Islington S)

Lambie, David

Silkin, Rt Hon John (Deptford)

Cunningham, Dr John (Whltehaven)

Lamborn, Harry

Silkin, Rt Hon S. C. (Dulwich)

Dalyell, Tam

Lamond, James

Silverman, Julius

Davidson, Arthur

Leighton, Ronald

Smith, Rt Hon J. (North Lanarkshire)

Davies, Rt Hon Denzil (Llanelli)

Lestor, Miss Joan (Eton & Slough)

Snape, Peter

Davies, Ifor (Gower)

Lewis, Arthur (Newham North West)

Soley, Clive

Davis, Terry (B'rm'ham, Stechford)

Lewis, Ron (Carlisle)

Spearing, Nigel

Deakins, Eric

Litherland, Robert

Spriggs, Leslie

Dempsey, James

Lofthouse, Geoffrey

Stallard, A. W.

Dewar, Donald

Lyon, Alexander (York)

Stoddart, David

Dixon, Donald

Lyons, Edward (Bradford West)

Stott, Roger

Dobson, Frank

Mabon, Rt Hon Dr J. Dickson

Strang, Gavin

Dormand, Jack

McCartney, Hugh

Straw, Jack

Douglas, Dick

McDonald, Dr Oonagh

Summerskill, Hon Dr Shirley

Dubs, Alfred

McElhone, Frank

Taylor, Mrs Ann (Bolton West)

Duffy, A. E. P.

McKay, Allen (Penistone)

Thomas, Dafydd (Merioneth)

Dunn, James A. (Liverpool, Kirkdale)

McKelvey, William

Thomas, Jeffrey (Abertillery)

Dunnett, Jack

MacKenzie, Rt Hon Gregor

Thomas, Mike (Newcastle East)

Eadie, Alex

Maclennan, Robert

Thorne, Stan (Preston South)

Eastham, Ken

McMahon, Andrew

Tilley, John

Edwards, Robert (Wolv SE)

McMillan, Tom (Glasgow, Central)

Tinn, James

Ellis, Raymond (NE Derbyshire)

McNally, Thomas

Torney, Tom

Ellis, Tom (Wrexham)

McNamara, Kevin

Urwin, Rt Hon Tom

English, Michael

McWilllam, John

Varley, Rt Hon Eric G.

Ennals, Rt Hon David

Magee, Bryan

Wainwright, Edwin (Dearne Valley)

Evans, Ioan (Aberdare)

Marks, Kenneth

Walker, Rt Hon Harold (Doncaster)

Evans John (Newton)

Marshall, David (Gl'sgow, Shettles'n)

Watkins, David

Ewing, Harry

Marshall, Dr Edmund (Goole)

Weetch, Ken

Faulds, Andrew

Martin, Michael (Gl'gow, Springb'rn)

Welsh, Michael

Field, Frank

Mason, Rt Hon Roy

White, Frank R. (Bury & Radcliffe)

Fitch, Alan

Maxton, John

White, James (Glasgow Pollock)

Flannery, Martin

Maynard, Miss Joan

Whitehead, Phillip

Fletcher, Ted (Darlington)

Meacher, Michael

Whitlock, William

Foot, Rt Hon Michael

Mellish, Rt Hon Robert

Williams, Rt Hon Alan (Swansea W)

Forrester, John

Mikardo, Ian

Williams, Sir Thomas (Warrington)

Foster, Derek

Millan, Rt Hon Bruce

Wilson, Gordon (Dundee East)

Foulkes, George

Miller, Dr M. S. (East Kilbride)

Wilson, Rt Hon Sir Harold (Huyton)

Fraser, John (Lambeth, Norwood)

Mitchell, R. C. (Soton, Itchen)

Wilson, William (Coventry SE)

Freeson, Rt Hon Reginald

Morris, Rt Hon Alfred (Wythenshawe)

Winnick, David

Garrett, John (Norwich S)

Morris, Rt Hon Charles (Openshaw)

Woodall, Alec

Garrett, W. E. (Wallsend)

Morris, Rt Hon John (Aberavon)

Wrigglesworth, Ian

George, Bruce

Morton, George

Young, David (Bolton East)

Gilbert, Rt Hon Dr John

Moyle, Rt Hon Roland

Golding, John

Newens, Stanley

TELLERS FOR THE AYES:

Gourlay, Harry

Oakes, Rt Hon Gordon

Mr. Austin Mitchell and

Graham, Ted

Ogden, Eric

Mr. James Hamilton.

Grant, George (Morpeth)

NOES

Adley, Robert

Atkins, Robert (Preston North)

Bell, Sir Ronald

Altken, Jonathan

Atkinson, David (B'mouth, East)

Bendall, Vivian

Alexander, Richard

Baker, Nicholas (North Dorset)

Benyon, Thomas (Abingdon)

Ancram, Michael

Banks, Robert

Benyon, W. (Buckingham)

Arnold, Tom

Beaumont-Dark, Anthony

Best, Keith

Aspinwall, Jack

Beith. A. J.

Biffen, Rt Hon John

1178

1179

Biggs-Davison, John

Grant, Anthony (Harrow C)

Montgomery, Fergus

Blackburn, John

Gray, Hamish

Moore, John

Blaker, Peter

Greenway, Harry

Morgan, Geraint

Body, Richard

Grieve, Percy

Morris, Michael (Northampton, Sth)

Bonsor, Sir Nicholas

Griffiths, Eldon (Bury St Edmunds)

Morrison, Hon Charles (Devizes)

Boscawen, Hon Robert

Griffiths, Peter (Portsmouth N)

Morrison, Hon Peter (City of Chester)

Bottomley, Peter (Woolwich West)

Grist, Ian

Mudd, David

Bowden, Andrew

Grylls, Michael

Murphy, Christopher

Boyson, Dr Rhodes

Gummer, John Selwyn

Myles, David

Bradford, Rev. R.

Hamilton, Hon Archie (Eps'm&Ew'll)

Neale, Gerrard

Braine, Sir Bernard

Hamilton, Michael (Salisbury)

Needham, Richard

Bright, Graham

Hampson, Dr Keith

Nelson, Anthony

Brinton, Tim

Hannam, John

Neubert, Michael

Brittan, Leon

Haselhurst, Alan

Newton, Tony

Brocklebank-Fowler, Christopher

Hastings, Stephen

Nott, Rt Hon John

Brooke, Hon Peter

Havers, Rt Hon Sir Michael

Onslow, Cranley

Brotherton, Michael

Hawkaley, Warren

Osborn, John

Brown, Michael (Brigg & Sc'thorpe)

Hayhoe, Barney

Page, Rt Hon Sir R. Graham

Browne, John (Winchester)

Heddle, John

Page, Richard (SW Hertfordshire)

Bruce-Gardyne, John

Henderson, Barry

Parkinson, Cecil

Bryan, Sir Paul

Haseltine, Rt Hon Michael

Parris, Matthew

Buchanan-Smith, Hon Alick

Hicks, Robert

Patten, Christopher (Bath)

Buck, Antony

Higgins, Rt Hon Terence L.

Patten, John (Oxford)

Budgen, Nick

Hill, James

Pattie, Geoffrey

Bulmer, Esmond

Hogg, Hon Douglas (Grantham)

Pawsey, James

Burden, F. A.

Holland, Philip (Carlton)

Percival, Sir Ian

Butcher, John

Hooson, Tom

Peyton, Rt Hon John

Butler, Hon Adam

Hordern, Peter

Pink, R. Bonner

Cadbury, Jocelyn

Howell, Rt Hon David (Guildford)

Pollock, Alexander

Carlisle, John (Luton West)

Howell, Ralph (North Norfolk)

Porter, George

Carlisle, Kenneth (Lincoln)

Hunt, David (Wirral)

Powell, Rt Hon J. Enoch (S Down)

Carlisle, Rt Hon Mark (Runcorn)

Hunt, John (Ravensbourne)

Price, David (Eastleigh)

Chalker, Mrs Lynda

Hurd, Hon Douglas

Prior, Rt Hon James

Channon, Paul

Irvine, Charles (Cheltenham)

Proctor, K. Harvey

Chapman, Sydney

Jenkin, Rt Hon Patrick

Pym, Rt Hon Francis

Clark, Hon Alan (Plymouth, Sutton)

Johnson Smith, Geoffrey

Raison, Timothy

Clark, Sir William (Croydon South)

Jopling, Rt Hon Michael

Rathbone, Tim

Clarke, Kenneth (Rushcliffe)

Kershaw, Anthony

Rees, Peter (Dover and Deal)

Cockeram, Eric

King, Rt Hon Tom

Renton, Tim

Colvin, Michael

Kitson, Sir Timothy

Rhodes James, Robert

Cope, John

Knight, Mrs Jill

Ridley, Hon Nicholas

Cormack, Patrick

Knox, David

Ridsdale, Julian

Corrie, John

Lamont, Norman

Rifkind, Malcolm

Cosiam, A. P.

Lang, Ian

Roberts. Wyn (Conway)

Cranborne, Viscount

Langford-Holt, Sir John

Ross, Wm. (Londonderry)

Critchley, Julian

Latham, Michael

Rossi, Hugh

Crouch, David

Lawrence, Ivan

Rost, Peter

Dean, Paul (North Somerset)

Lawson, Nigel

Royle, Sir Anthony

Dickens, Geoffrey

Lee, John

Sainsbury, Hon Timothy

Dorrell, Stephen

Lennox-Boyd, Hon Mark

St. John Stevas, Rt Hon Norman

Douglas-Hamilton, Lord James

Lester, Jim (Beeston)

Scott, Nicholas

Dover, Denshore

Lewis, Kenneth (Rutland)

Shaw, Giles (Pudsey)

du Cann, Rt Hon Edward

Lloyd, Ian (Havant & Waterloo)

Shaw, Michael (Scarborough)

Dunn, Robert (Dartford)

Lloyd, Peter (Fareham)

Shelton, William (Streatham)

Durant, Tony

Loveridge, John

Shepherd, Colin (Hereford)

Dykes, Hugh

Luce, Richard

Shepherd, Richard (Aldridge-Br'hills)

Eden, Rt Hon Sir John

Lyeil, Nicholas

Shersby, Michael

Eggar, Timothy

McCrindle, Robert

Silvester, Fred

Elliott, Sir William

Macfarlane, Neil

Sims, Roger

Emery, Peter

MacGregor, John

Skeet, T. H. H.

Fairbairn, Nicholas

MacKay, John (Argyll)

Smith, Dudley (War. and Leam'ton)

Fairgrieve, Russell

McNair-Wilson, Michael (Newbury)

Speed, Keith

Faith, Mrs Sheila

McNair-Wilson, Patrick (New Forest)

Speller, Tony

Farr, John

McQuarrie, Albert

Spence, John

Fell, Anthony

Madel, David

Spicer, Jim (West Dorset)

Fenner, Mrs Peggy

Major, John

Spicer, Michael (S Worcestershire)

Fisher, Sir Nigel

Marland, Paul

Squire, Robin

Fletcher, Alexander (Edinburgh N)

Marshall, Michael (Arundel)

Stainton, Keith

Fletcher-Cooke, Charles

Marten, Neil (Banbury)

Stanbrook, Ivor

Fookes, Miss Janet

Mates, Michael

Stanley, John

Forman, Nigel

Mather, Carol

Steen, Anthony

Fowler, Rt Hon Norman

Maude, Rt Hon Angus

Stevens, Martin

Fox, Marcus

Mawby, Ray

Stewart, Ian (Hitchin)

Fraser, Rt Hon H. (Stafford & St)

Mawhinney, Dr Brian

Stewart, John (East Renfrewshire)

Fraser, Peter (South Angus)

Maxwell-Hyslop, Robin

Stokes, John

Fry, Peter

Mayhew, Patrick

Stradling Thomas, J.

Galbraith, Hon T. G. D.

Mellor, David

Tapsell, peter

Gardiner George (Reigate)

Meyer, Sir Anthony

Taylor, Robert (Croydon NW)

Gardner, Edward (South Fylde)

Miller, Hal (Bromsgrove & Redditch)

Temple-Morris, Peter

Garel-Jones, Tristan

Mills, Iain (Meriden)

Thatcher, Rt Hon Mrs Margaret

Gilmour, Rt Hon Sir Ian

Mills, Peter (West Devon)

Thomas, Rt Hon Peter (Hendon S)

Glyn, Dr Alan

Miscampbell, Norman

Thompson, Donald

Goodlad, Alastair

Mitchell, David (Basingstoke)

Thornton, Malcolm

Gorst, John

Moate, Roger

Townend, John (Bridlington)

Gow, Ian

Molyneaux, James

Townsend, Cyril D. (Bexleyheath)

Gower, Sir Raymond

Monro, Hector

1180

1181

Trippier, David

Ward, John

Wilkinson, John

Trotter, Neville

Warren, Kenneth

Williams, Delwyn (Montgomery)

Vaughan, Dr Gerard

Watson, John

Winterton, Nicholas

Viggers, Peter

Wells, John (Maidstone)

Wolfson, Mark

Waddington, David

Wells, Bowen (Hert'rd & Stev'nage)

Young, Sir George (Acton)

Wakeham, John

Wheeler, John

Younger, Rt Hon George

Waldegrave, Hon William

Whitelaw, Rt Hon William

Walker, Rt Hon Peter (Worcester)

Whitney, Raymond

TELLERS FOR THE NOES:

Walker, Bill (Perth & E Perthshire)

Wickenden, Keith

Mr. Spencer Le Marchan' and

Walker-Smith, Rt Hon Sir Derek

Wiggin, Jerry

Mr. Anthony Berry.

Walters, Dennis

Question accordingly negatived.

New Clause 15
GOVERNMENT FUNDING

'(1) For the put-pose of promoting the design, development or production of civil aircraft, the Secretary of State with the consent of the Treasury may at any time after the appointed date make payments in accordance with this section to the successor company or any of its wholly owned subsidiaries.

(2) No payments may be made under this section unless—

(a) the Secretary of State is of opinion that it is in the national interest that payments on the scale and in the way proposed should be made; and

(b) it appears to the Secretary of State that, if the payments are not made, it would be inconsistent with the objects of the com-

pany imposed by or under section 1(2)(b) of this Act for the company or any of its wholly owned subsidiaries to undertake the design, development or production in question.

(3) Payments under this section may be made on any terms and conditions, and, without prejudice to the generality of this subsection, by way of fees or by any description of investment or lending or by the making of grants.

(4) There shall be defrayed out of moneys provided by Parliament any sums required by the Secretary of State for making payments under this section and any sums received by the Secretary of State in pursuance of the terms and conditions on which payments are made under this section shall be paid into the Consolidated Fund.'.—[Mr. Les Huckfield.]

Brought up, and read the First time.
Question put, That the clause be read a Second time:—
The House divided: Ayes 238, Noes 304.

Division No. 169]

AYES

[9.52 pm

Abse, Leo

Crowther, J. S.

Foulkes, George

Adama, Allen

Cryer, Bob

Fraser, John (Lambeth, Norwood)

Allaun, Frank

Cunliffe, Lawrence

Freeson Rt Hon Reginald

Archer, Rt Hon Peter

Cunningham, George (Islington S)

Garrett, John (Norwich S)

Armstrong, Rt Hon Ernest

Cunningham, Dr John (Whitehaven)

Garrett, W. E. (Wallsend)

Ashley, Rt Hon Jack

Dalyell, Tarn

George, Bruce

Ashton, Joe

Davidson, Arthur

Gilbert, Rt Hon Dr John

Atkinson, Norman (H'gey, Tott'ham)

Davies, Rt Hon Denzil (Llanelli)

Golding, John

Barnett, Guy (Greenwich)

Davies, Ifor (Gower)

Gourlay, Harry

Barnett, Rt Hon Joel (Heywood)

Davis, Terry (B'rm'ham, Stechford)

Grant, George (Morpeth)

Beith, A. J.

Deakins, Eric

Grant, John (Islington C)

Benn, Rt Hon Anthony Wedgwood

Dean, Joseph (Leeds West)

Hamilton, James (Bothwell)

Bennett, Andrew (Stockport N)

Dempsey, James

Hamilton, W. W. (Central Fife)

Bidwell, Sydney

Dewar, Donald

Harrison, Rt Hon Walter

Booth, Rt Hon Albert

Dixon, Donald

Hart, Rt Hon Dame Judith

Boothroyd, Miss Betty

Dobson, Frank

Hattersley, Rt Hon Roy

Bottomley, Rt Hon Arthur (M'brough)

Dormand, Jack

Haynes, Frank

Bradley, Tom

Douglas, Dick

Healey, Rt Hon Denis

Bray, Dr Jeremy

Dubs, Alfred

Heffer, Eric S.

Brown, Hugh D. (Provan)

Duffy, A. E. P.

Hogg, Norman (E Dunbartonshire)

Brown, Robert C. (Newcastle W)

Dunn, James A. (Liverpool, Kirkdale)

Holland, Stuart (L'beth, Vauxhail)

Brown, Ronald W. (Hackney S)

Dunnett, Jack

Home Robertson, John

Brown, Ron (Edinburgh, Leith)

Eadie, Alex

Homewood, William

Buchan, Norman

Eastham, Ken

Hooley, Frank

Callaghan, Rt Hon J. (Cardiff SE)

Edwards, Robert (Wolv SE)

Horam, John

Callaghan, Jim (Middleton & P)

Ellis, Raymond (NE Derbyshire)

Howell, Rt Hon Denis (B'ham, Sm H)

Campbell, Ian

Ellis, Tom (Wrexham)

Huckfield, Les

Canavan, Dennis

English, Michael

Hughes, Mark (Durham)

Cant, R. B.

Ennals, Rt Hon David

Hughes, Robert (Aberdeen North)

Carmichael, Neil

Evans, Ioan (Aberdare)

Hughes Roy (Newport)

Carter-Jones, Lewis

Evans, John (Newton)

Janner, Hon Greville

Cartwright, John

Ewing, Harry

Jay, Rt Hon Douglas

Clark, Dr David (South Shields)

Faulds Andrew

Johnson, Walter (Derby South)

Cocks, Rt Hon Michael (Bristol S)

Field, Frank

Jones, Rt Hon Alec (Rhondda)

Cohen, Stanley

Fitch, Alan

Jones, Barry (East Flint)

Concannon, Rt Hon J. D.

Flannery, Martin

Jones, Dan (Burnley)

Conlan, Bernard

Flotcher, Ted (Darlington)

Kaufman, Rt Hon Gerald

Cook, Robin F.

Foot, Rt Hon Michael

Kerr, Russell

Cowans, Harry

Forrester, John

Kilroy-Silk, Robert

Craigen, J. M. (Glasgow, Maryhill)

Foster, Derek

Kinnock, Neil

Lambie, David

Morton, George

Spearing, Nigel

Lamborn, Harry

Moyle, Rt Hon Roland

Spriggs, Leslie

Lamond, James

Newens, Stanley

Slallard, A. W.

Leighton, Ronald

Oakes, Rt Hon Gordon

Stoddart, David

Lestor, Miss Joan (Eton & Slough)

Ogden, Eric

Stott, Roger

Lewis, Arthur (Newham North West)

O'Halloran, Michael

Strang, Gavin

Lewis, Ron (Carlisle)

O'Neill, Martin

Straw, Jack

Litherland, Robert

Orme, Rt Hon Stanley

Summersklll, Hon Dr Shirley

Lofthouse, Geoffrey

Owen, Rt Hon Dr David

Taylor, Mrs Ann (Bolton West)

Lyon, Alexander (York)

Palmer, Arthur

Thomas, Dafydd (Merioneth)

Lyons, Edward (Bradford West)

Park, George

Thomas, Jeffrey (Abertillery)

Mabon, Rt Hon Dr J. Dickson

Parker, John

Thomas, Mike (Newcastle East)

McDonald, Dr Oonagh

Pavitt, Laurie

Thorne, Stan (Preston South)

McElhone, Frank

Pendry, Tom

Tilley, John

McKay, Allen (Penistone)

Powell, Raymond (Ogmore)

Tinn, James

McKelvey, William

Prescott, John

Torney, Tom

MacKenzie, Rt Hon Gregor

Price, Christopher (Lewisham West)

Urwin, Rt Hon Tom

Maclennan, Robert

Race, Reg

Varley, Rt Hon Eric G.

McMahon, Andrew

Rees, Rt Hon Merlyn (Leeds South)

Wainwright, Edwin (Dearne Valley)

Macmillan, Rt Hon M. (Farnham)

Richardson, Jo

Walker, Rt Hon Harold (Doncaster)

McNally, Thomas

Roberts, Allan (Bootle)

Watkins, David

McNamara, Kevin

Roberts, Gwilym (Cannock)

Weetch, Ken

McWilliam, John

Robertson, George

Welsh, Michael

Magee, Bryan

Robinson, Geoffrey (Coventry NW)

White, Frank R. (Bury & Radcliffe)

Marks, Kenneth

Rodgers, Rt Hon William

White, James (Glasgow, Pollok)

Marshall, David (Gl'sgow, Shettles'n)

Rooker, J. W.

Whitehead, Phillip

Marshall, Dr Edmund (Goole)

Roper, John

Whitlock, William

Martin, Michael (Gl'gow, Springb'rn)

Ross, Ernest (Dundee West)

Williams, Rt Hon Alan (Swansea W)

Mason, Rt Hon Roy

Rowlands, Ted

Williams, Sir Thomas (Warrington)

Maxton, John

Ryman, John

Wilson, Gordon (Dundee East)

Maynard, Miss Joan

Sandelson, Neville

Wilson, Rt Hon Sir Harold (Huyton)

Meacher, Michael

Sever, John

Wilson, William (Coventry SE)

Mellish, Rt Hon Robert

Sheerman, Barry

Winnick, David

Mikardo, Ian

Sheldon, Rt Hon Robert (A'ton-u-L)

Woodall, Alec

Millan, Rt Hon Bruce

Short, Mrs Renée

Wrigglesworth, Ian

Miller, Dr M. S. (East Kilbride)

Silkin, Rt Hon John (Deptford)

Young, David (Bolton East)

Mitchell, Austin (Grimsby)

Silkin, Rt Hon S. C. (Dulwich)

Mitchell, R. C. (Soton, Itchen)

Silverman, Julius

TELLERS FOR THE. AYES

Morris, Rt Hon Alfred (Wythenshawe)

Smith, Rt Hon J. (North Lanarkshire)

Mr. Ted Graham and

Morris, Rt Hon Charles (Openshaw)

Snape, Peter

Mr. Hugh McCartney

Morris, Rt Hon John (Aberavon)

Soley, Clive

NOES

Adley, Robert

Buck, Antony

Fell, Anthony

Aitken, Jonathan

Budgen, Nick

Fenner, Mrs Peggy

Alexander, Richard

Bulmer, Esmond

Fisher, Sir Nigel

Ancram, Michael

Burden, F. A.

Fletcher, Alexander (Edinburgh N)

Arnold, Tom

Butcher, John

Fletcher-Cooke, Charles

Aspinwall, Jack

Butler, Hon Adam

Fookes, Miss Janet

Atkins, Robert (Preston North)

Cadbury, Jocelyn

For man, Nigel

Atkinson, David (B'mouth, East)

Carlisle, John (Luton West)

Fowler, Rt Hon Norman

Baker, Nicholas (North Dorset)

Carlisle, Kenneth (Lincoln)

Fox, Marcus

Banks, Robert

Carlisle, Rt Hon Mark (Runcorn)

Fraser, Rt Hon H. (Stafford & St)

Beaumont-Dark, Anthony

Chalker, Mrs Lynda

Fraser, Peter (South Angus)

Bell, Sir Ronald

Channon, Paul

Fry, Peter

Bendall, Vivian

Chapman, Sydney

Galbraith, Hon T. G. D.

Benyon, Thomas (Abingdon)

Clark, Hon Alan (Plymouth, Sutton)

Gardiner George (Reigate)

Benyon, W. (Buckingham)

Clark, Sir William (Croydon South)

Gardner, Edward (South Fylde)

Berry, Hon Anthony

Clarke, Kenneth (Rushcliffe)

Garel-Jones, Tristan

Best, Keith

Cockeram, Eric

Gilmour, Rt Hon Sir Ian

Bevan, David Gilroy

Colvin, Michael

Glyn, Dr Alan

Biffen, Rt Hon John

Cormack, Patrick

Goodlad, Alastair

Biggs-Davison, John

Corrie, John

Gorst, John

Blackburn, John

Costain, A. P.

Gow, Ian

Blaker, Peter

Cranborne, Viscount

Gower, Sir Raymond

Body, Richard

Critchley, Julian

Grant, Anthony (Harrow C)

Bonsor, Sir Nicholas

Crouch, David

Gray, Hamish

Boscawen, Hon Robert

Dean, Paul (North Somerset)

Greenway, Harry

Bottomley, Peter (Woolwich West)

Dickens, Geoffrey

Grieve, Percy

Bowden, Andrew

Dorrell, Stephen

Griffiths, Eldon (Bury St Edmunds)

Boyson, Dr Rhodes

Douglas-Hamilton, Lord James

Griffiths, Peter (Portsmouth N)

Bradford, Rev. R.

Dover, Denshore

Grist, Ian

Braine, Sir Bernard

du Cann, Rt Hon Edward

Grylls, Michael

Bright, Graham

Dunn, Robert (Dartford)

Guramer, John Selwyn

Brinton, Tim

Durant, Tony

Hamilton, Hon Archie (Eps'm&Ew'll)

Brittan, Leon

Dykes, Hugh

Hamilton, Michael (Salisbury)

Brocklebank-Fowler, Christopher

Eden, Rt Hon Sir John

Hampson, Dr Keith

Brooke,Hon Peter

Eggar, Timothy

Hannam, John

Brotherton, Michael

Elliott, Sir William

Haselhurst, Alan

Brown, Michael (Brigg & Sc'thorpe)

Emery, Peter

Hastings, Stephen

Browne, John (Winchester)

Fairbairn, Nicholas

Havers, Rt Hon Sir Michael

Bruce-Gardyne, John

Fairgrieve, Russell

Hawksley, Warren

Bryan, Sir Paul

Faith, Mrs Sheila

Hayhoe, Barney

Buchanan-Smith, Hon Alick

Farr, John

Heddle, John

1184

1185

Henderson, Barry

Mills, Peter (West Devon)

Shepherd, Richard (Aldridge-Br'hills)

Haseltine, Rt Hon Michael

Miscampbell, Norman

Shersby, Michael

Hicks, Robert

Mitchell, David (Basingstoke)

Silvester, Fred

Higgins, Rt Hon Terence L.

Moate, Roger

Sims, Roger

Hill, James

Molyneaux, James

Skeet, T. H. H.

Hogg, Hon Douglas (Grantham)

Monro, Hector

Smith, Dudley (War. and Leam'ton)

Holland, Philip (Carlton)

Montgomery, Fergus

Speed, Keith

Hooson, Tom

Moore, John

Speller, Tony

Hordern, Peter

Morgan, Geraint

Spence, John

Howell, Rt Hon David (Guildlord)

Morris, Michael (Northampton, Sth)

Spicer, Jim (West Dorset)

Howell, Ralph (North Norfolk)

Morrison, Hon Charles (Devizes)

Spicer, Michael (S Worcestershire)

Hunt, David (Wirral)

Morrison, Hon Peter (City of Chester)

Squire, Robin

Hunt, John (Ravensboume)

Mudd, David

Stainton, Keith

Hurd, Hon Douglas

Murphy, Christopher

Stanbrook, Ivor

Irvine, Charles (Cheltenham)

Myles, David

Stanley, John

Jenkin, Rt Hon Patrick

Neale, Gerrard

Steen, Anthony

Johnson Smith, Geoffrey

Needham, Richard

Stevens, Martin

Jopling, Rt Hon Michael

Nelson, Anthony

Stewart, Ian (Hitchin)

Kershaw, Anthony

Neubert, Michael

Stewart, John (East Renfrewshire)

King, Rt Hon Tom

Newton, Tony

Stokes, John

Kitson, Sir Timothy

Nott, Rt Hon John

Stradling Thomas, J.

Knight, Mrs Jill

Onslow, Cranley

Tapsell, peter

Knox, David

Osborn, John

Taylor, Robert (Croydon NW)

Lamont,Norman

Page, Rt Hon Sir R. Graham

Temple-Morris, Peter

Lang, Ian

Page, Richard (SW Hertfordshire)

Thatcher, Rt Hon Mrs Margaret

Langford-Holt, Sir John

Parkinson, Cecil

Thomas, Rt Hon Peter (Hendon S)

Latham, Michael

Parris, Matthew

Thompson, Donald

Lawrence, Ivan

Patten, Christopher (Bath)

Thornton, Malcolm

Lawson, Nigel

Patten, John (Oxford)

Townend, John (Bridlington)

Lee, John

Pattie, Geoffrey

Townsend, Cyril D. (Bexleyheath)

Le Merchant, Spencer

Pawsey, James

Trippier, David

Lennox-Boyd, Kon Mark

Percival, Sir Ian

Trotter, Neville

Lester, Jim (Beeston)

Peyton, Rt Hon John

Vaughan, Dr Gerard

Lewis, Kenneth (Rutland)

Pink, R. Bonner

Viggers, Peter

Lloyd, Ian (Havant & Waterloo)

Pollock, Alexander

Waddington, David

Lloyd, Peter (Fareham)

Porter, George

Wakeham, John

Loveridge, John

Powell, Rt Hon J. Enoch (S Down)

Waldegrave, Kon William

Luce, Richard

Price, David (Eastleigh)

Walker, Rt Hon Peter (Worcester)

Lyell, Nicholas

Prior, Rt Hon James

Walker, Bill (Perth & E Perthshire)

McCrindle, Robert

Proctor, K. Harvey

Walker-Smith, Rt Hon Sir Derek

Macfarlane, Neil

Pym, Rt Hon Francis

Walters, Dennis

MacKay, John (Argyll)

Raison, Timothy

Ward, John

McNair-Wilson, Michael (Newbury)

Rathbone, Tim

Warren, Kenneth

McNair-Wilson, Patrick (New Forest)

Rees, Peter (Dover and Deal)

Watson, John

McOuarrie, Albert

Rees-Davies, W. R.

Wells, John (Maidstone)

Madel, David

Renton, Tim

Wells, Bowen (Hert'rd & Stev'nage)

Major, John

Rhodes James, Robert

Wheeler, John

Marland, Paul

Ridley, Hon Nicholas

Whitelaw, Rt Hon William

Marlow, Tony

Ridsdale, Julian

Whitney, Raymond

Marshall, Michael (Arundel)

Rifkind, Malcolm

Wickenden, Keith

Marten, Neil (Banbury)

Roberts, Wyn (Conway)

Wiggin, Jerry

Mates, Michael

Ross, Wm. (Londonderry)

Wilkinson, John

Mather, Carol

Rossi, Hugh

Williams, Delwyn (Montgomery)

Maude, Rt Hon Angus

Rost, Peter

Winterton, Nicholas

Mawby, Ray

Royle, Sir Anthony

Wolfson, Mark

Mawhinney, Dr Brian

Sainsbury, Hon Timothy

Young, Sir George (Acton)

Maxwell-Hyslop, Robin

St. John Stevas, Rt Hon Norman

Younger, Rt Hon George

Mayhew, Patrick

Scott, Nicholas

Mellor, David

Shaw, Giles (Pudsey)

TELLERS FOR THE NOES:

Meyer, Sir Anthony

Shaw, Michael (Scarborough)

Mr. John MacGregor and

Miller, Hal (Bromsgrove & Redditch)

Shelton, William (Streatham)

Mr. John Cope.

Mills, Iain (Meriden)

Shepherd, Colin (Hereford)

Question accordingly negatived.
It being after Ten o'clock further consideration of the Bill stood adjourned.
Ordered,
That, at this day's sitting, the British Aerospace Bill may be proceeded with, though opposed, until any hour.—[Mr. Waddington.]
Bill, as amended (in the Standing Committee), again considered.

New Clause 18
AUDIT COMMITTEES
'The Secretary of State shall stipulate as a condition prior to its nomination under this Act that the successor company shall have included in its initial articlesand memorandum the necessary provisions to ensure that—

(1) The successor Company shall designate at least three members of the Board as their Audit Committee. It shall be a requirement that the majority of the members of the Audit Committee shall be non-executive directors. It shall be their function to report to the main Board that they have examined the Accounts and the Forecast of the Company or any other

1187
results and have satisfied themselves that they represent a correct view of the Company's affairs. This report shall be at least annually or at lesser intervals.

(2) Copies of this report shall be sent to the Secretary of State at the same time as to the main Board.'.—[Mr. Les Huckfield.]

Brought up, and read the First time.
10.4 pm
Mr. Les Huckfield: I beg to move, That the clause be read a Second time.
Mr. Speaker: With this we are to take new clause 19—Auditors.
Mr. Huckfield: I do not wish to delay the House, because—[HON. MEMBERS: "Oh."]—I detect that there is probably a majority in favour of making progress.
Mr. Speaker: Order. I should like to appeal to the House not to provoke the hon. Gentleman.
Mr. Huckfield: Hon. Members do not have to rise to do that, Mr. Speaker. I thought that it was the other way round.
I shall be very brief on these new clauses. I certainly intend to be as brief as I possibly can in this whole—[HON. MEMBERS: "Oh."] I am touched by this small display of—I shall leave hon. Members to fill in the missing word because I am not sure what that shows—gratitude, I hope.
The point that we seek to make in the new clauses is that if this is to be a newly privatised company and if the Government are to have something of a relationship with it—although we are not happywith the relationship that they will have with the new company—we thought that it ought to be a new company which ought to set an example and some precedents in company organisation and administration. Consequently, the proposal in new clause 18 for the formation of an audit committee whereby the non-executive directors can accurately monitor the activities of the full-time directors was an idea which we thought ought to be incorporated in the articles of the new company. I think that it is well known that at full board meetings, very often those directors who would like to probe the financial affairs of the company more deeply are not afforded adequate time.
New clause 19 contains an idea which is gaining currency in some circles. I have
1188
to admit that there will be resistance to it in some of the professional organisations, but we have sought to make a provision whereby there will be a regular turnover of auditors, because, frankly, we do not want to get into the situation that arose over Rolls-Royce, where the same auditors had been doing the books of Rolls-Royce for year after year. In that kind of circumstance we feel that fresh auditors might have discovered far earlier that something was going wrong.
The fact that when the five-year period was up new auditors would be appointed would have a very salutary effect upon the efficiency and the productivity—dare I say it?—of the current auditors. That is why we seek to insert that in the articles of the new company.
I know that the Under-Secretary will probably be able to say some kind words about this new clause. We do not feel strongly enough about it to force it to a Division, but I hope that he will be able to look favourably upon it.
Mr. Michael Marshall: I am very happy to respond in the spirit in which the hon. Gentleman has put forward the new clauses. Indeed, like him, I share the view that it would be helpful to make progress at this stage.
In new clause 19 it is suggested that provision should be provided for the appointmentof auditors by companies at their annual general meetings. Having heard what the hon. Gentleman had to say, I understand what is in his mind now, in so far as the turnover, as it were, is related. As the clause is drafted, the objection, which he will readily recognise, is that while the Government do not in any way object to the principle of the appointment of auditors by the company—indeed, that is required now under general company law—the successor company would be having imposed upon it special requirements to which other companies are not subject under present companies law.
In that sense, in simple equity, I think that the hon. Gentleman will agree that, while I understand what he wishes to achieve, he may well feel on reflection that this needs to be a matter for general legislation rather than specifically picking out British Aerospace on this occasion.

1189
On the question of audit committees, I can go even further in my friendliness. I have consistently supported the principle of audit committees. Some of us have previously argued that this should apply to the British Steel Corporation and we were pleased when an audit committee was set up for it. In the case of British Aerospace, I would not dispute the principle at issue. However, I should be unhappy to see that principle enshrined by statute as it would impose a requirement through the articles of association that would be unique among public limited companies. In addition, British Aerospace might appear to be treated differently from other companies under the Companies Act.
It would therefore be unduly restrictive to legislate. I agree with the hon. Gentleman that the objective is good. A good case can be made for audit committees and therefore—
Dr. M. S. Miller: I am glad that the Minister has responded in this way. If he is considering some form of restriction, would it not be better if the audits were done at shorter intervals? One of the great problems of auditing is that matters may go too far before an audit takes place.
Mr. Marshall: I accept the hon. Gentleman's point, and I am sure that it will be considered by those who manage British Aerospace. Many people would accept that the time lag is a problem. There is therefore some merit in the hon. Gentleman's argument.
I am sure that any future British Aerospace company will have taken careful note of the suggestions that have been made. I hope, therefore, that the hon. Gentleman will feel able to withdraw his new clause.
Mr. Les Huckfield: Just as we discovered in Committee, when the Minister of State is away, we make faster progress. The Under-Secretary has been allocated the role of "good guy" in this long-running saga. His response is encouraging. I therefore beg to ask leave to withdraw the new clause.
Motion and clause, by leave, withdrawn.

Clause 1
VESTING OF PROPERTY, ETC., OF BRITISH AEROSPACE IN A COMPANY NOMINATED BY THE SECRETARY OF STATE
Amendment made: No. 5, in page 2, line 21, at end insert:
'(3A) Any liability of British Aerospace under section 40(4) of the Act of 1977 shall not vest in the successor company by virtue of this section, but the Secretary of State shall be liable to indemnify the Bank of England against any loss suffered by them arising out of, or in connection with, the issue of compensation stock under Part II of that Act in respect of the vesting of any securities in British Aerospace (and any sums required by the Secretary of State for the purpose shall be paid out of moneys provided by Parliament).'.—[Mr. Michael Marshall.]

Clause 2
CANCELLATION OF CERTAIN GOVERNMENT INVESTMENT IN BRITISH AEROSPACE
Amendments made: No. 6, in page 3, line 5, leave out 'and'.
No. 7, in page 3, line 9, at end insert:
'and
(c) in respect of the capital amounts outstanding immediately before that day in respect of sums paid to British Aerospace under section 45 of that Act but treated in accordance with the terms and conditions applicable to the payment as if they had been paid under section 16 of that Act'.—[Mr. Michael Marshall.]
10.15 pm
Mr. Les Huckfield: I beg to move amendment No. 8, in page 3, line 10, at end insert:
'and such entitlement and liability shall rest in the successor company on that day'.
I am sure that we would withdraw the amendment if the hon. Gentleman could give us some reassurance. He has been cast in one of the better roles in the saga, and I hope that he can find some comforting words for us.
Mr. Michael Marshall: Anxious as I am in view of his genial mood, to meet the hon. Gentleman, the amendment, as drafted, would make nonsense of clause 2. If the amendment were made, the clause would provide both for extinguishing liabilities and for their continuance. I am sure that those conflicting objectives were not in the hon. Gentleman's mind. In his reasonable mood at this hour of the night, perhaps he will

1191
recognise the difficulties in drafting. I hope that, on reflection, he will not wish to cause that problem. I am sure that this is not intended to be a wrecking amendment
Mr. Huckfield: On one view, I believe that theamendment has the effect of totally reversing the intention of clause 2. I therefore realised that the hon. Gentleman would raise objections.
We are not entirely happy about the transfer of liabilities, entitlements, rights and obligations to the successor company. We have heard a great deal today about the transfer and believe that the Government will be intransigent. Bearing in mind the tone in which the hon. Gentleman replied, I do not believe that we shall make much progress at this juncture. However, we may feel the need to press the matter in another place. Accordingly, I beg to ask leave to withdraw the amendment.
Amendment, by leave, withdrawn.

Clause 3
INITIAL GOVERNMENT SHAREHOLDING IN THE SUCCESSOR COMPANY
Amendment proposed: No. 9, in page 3, line 11, leave out 'On' and insert 'As a consequence of'.—[Mr. Michael Marshall.]
Mr. Deputy Speaker (Mr. Richard Crawshaw): With this we may take Government amendment No. 10.
Mr. Cryer: We should not rush through these amendments at breakneck speed. The Minister should give us a brief account of amendment No. 10, which allows the Secretary of State to give directions on the allotment terms. Why are they necessary? I understand that the Secretary of State already has powers regarding the issue of shares.
Amendment No. 9 would insert the words "As a consequence of" instead of "On", so that the phrase would read:
"As a consequence of the vesting in the successor company".
It is simply a straightforward clarification. I assume it has no further implications.
Amendment No. 10 states that shares shall be issued
"at such time or times and on such terms (as to allotment) as the Secretary of State may direct".
What will the Secretary of State have regard to in issuing shares? Will that provision allow him to direct that some proportion of the shares may go to employees of the company? Are there other reasons, or is it merely a tidying up amendment?
Mr. Michael Marshall: The hon. Member for Keighley (Mr. Cryer), with his prescient approach to these matters, has jumped ahead of me slightly. I had not come to amendment No. 10, but it may be convenient if I speak to both amendments, as they go together.
On 18 December, in Committee, in columns 482–483 of the Official Report, I explained that shares will initially be allotted to the Secretary of State on one or more renounceable letters of allotment. The Secretary of State will then renounce those which he intends to offer for sale in favour of the issuing house. The issuing house will in turn issue its ownrenounceable letters of allotment to successful applicants for shares, and during the renunciation period the holder of such a letter who wishes to sell his rights may renounce the letter in favour of someone else. At the end of the period, the shares will be issued, that is, entered on the register of holders.
The hon. Gentleman asks how these allotments will relate to that process. The amendments deal with a number of aspects of the process and they are in that sense technical, since we debated the principle of renounceable letters of allotment earlier.
The two amendments together provide that the allotment or issue of shares as a consequence of vesting is to take place at such time or times as the Secretary of State may direct. This ensures that the Government have flexibility to follow the renounceable letter of allotment procedure which I have outlined.
The existing subsection (1) alone could be narrowly interpreted. The words on the vesting "might be understood as requiring a single issue on the appointed day itself. The new words "As a consequence of" vesting ensure that the Secretary of State will have no continuing

1193
power under clause 3 to direct the successor company except in relation to the initial flotation.
Second, on amendment No. 10, the new subsection (1A) provides that the terms of the allotment are to be
"as the Secretary of State may direct".
The terms of the issue are already dealt with in the existing subsection (2).
Finally, in the clause as amended, subsections (1) and (1A) together will make absolutely clear that the Secretary of State can direct the successor company to allot shares to him.
I hope that the hon. Gentleman will agree that these technical amendments clarify the effect of the clause. I commend them to him and to the House.
Amendment agreed to.
Amendment made: No. 10, in page 3, line 19, at end insert—
'(1A) Shares required to be issued in pursuance of this section shall be issued or allotted at such time or times and on such terms (as to allotment) as the Secretary of State may direct.'.—[Mr. Michael Marshall.]

Clause 4
FINANCIAL STRUCTURE OF THE SUCCESSOR COMPANY AND ITS SUBSIDIARIES
Mr. Michael Marshall: I beg to move amendment No. 19, in page 4, line 3, leave out 'issued' and insert 'allotted'.
This amendment represents no change of policy but merely reflects a technical amendment intended to be made to the Companies Bill. The principle was, I think, well understood and established in Committee when it was made clear that, where the provisions of the Companies Bill before the House were relevant to our own proceedings, we should seek on Report to tidy up matters.
I understand that it is intended to make clear in the Companies Bill that bonus shares need be only allotted to members. That is why we seek to bring matters into line by the present amendment, which I commend to the House.
Amendment agreed to.
Amendment made: No. 20 in page 4, line 40, after '2(b)', insert 'and (c)'.—[Mr. Michael Marshall.]

Clause 5
GOVERNMENT INVESTMENT IN SHARES AND SECURITIES OF THE SUCCESSOR COMPANY
Amendment made: No. 22, in page 5, line 7, leave out from beginning to end of line 11 and insert—
'acquire—

(a) ordinary voting shares in the successor company;

(b) securities of the successor company or of any subsidiary of the successor company which are convertible into or carry rights to subscribe for ordinary voting shares in the successor company; or

(c) rights to subscribe for any such shares.'.—[Mr. Michael Marshall.]

Mr. Michael Marshall: I beg to move amendment No. 25, in page 5, line 17, at end insert:
'(but the right to participate in distributions need not extend to a dividend declared out of profits earned during any period falling wholly or partly before the date of acquisition of the shares).
(2A) The Secretary of State may not dispose of any shares or other securities or rights acquired under this section without the consent of the Treasury.'.
This amendment deals with two separate points and it will be helpful if I explain them separately.
The purpose of the first part of the amendment, which inserts the words in brackets at the end of subsection (2) is to modify the definition of ordinary voting shares so that it does not impose unduly onerous restrictions on the ability of the Secretary of State to subscribe for rights issues or to acquire shares in other ways.
It is perhaps worth reminding the House that the essential characteristics of ordinary voting shares are that they carry voting rights at general meeting and carry an unlimited right to participate in any distribution of dividend or of capital. These are the criteria embodied in the present definition in clause 5(2)(b).
However, the criterion of an unlimited right to participate in dividends is in one small but important respect unnecessarily restrictive. It is quite usual for an issue of ordinary shares to be made at the same time as the dividend or interim dividend for the year is declared. In these circumstances, it is common practice for the new shares to be issued on

1195
terms which entitle the holder to participate in any dividend except the dividend which is declared contemporaneously with the issue. It may help the House if I give an example.
There could be an issue of shares in November, but the terms of the issue would not entitle the holder to participate in the dividend to be declared at the end of the year, in respect of the period ending 31 December. It would be inconsistent with the general policy of the clause for the Secretary of State to be debarred from subscribing for such shares. The amendment will ensure that he can subscribe for them, and by providing that for shares to qualify as ordinary voting shares the right to participate in distributions need not extend to a dividend declared out of profits during any period falling before the date of acquisition.
The second part of the amendment inserts a new subsection (2A). It is intended to bring this part of the Bill into line with other parts of the Bill. It is customary for legislation to provide that decisions which have financial implications are made either after consultation with, or with the consent of the Treasury. In general, this practice is followed in the Bill. In clause 5, for example, the power to acquire shares, securities or rights is subjected to Treasury consent. The power in clause 3 to dispose of shares or rights is similarly subject to Treasury consent. It is entirely consistent with those examples to include a provision requiring Treasury consent before shares, securities and rights acquired under clause 5 are disposed of. This part of the amendment is intended to promote consistency. In reality, through administrative practice, the Treasury would be consulted and its consent obtained.
A me ndment agreed to.

Clause 6
EXERCISE OF SECRETARY OF STATE'S FUNCTIONS UNDER SECTIONS 3 AND 5 THROUGH NOMINEES
Mr. Les Huckfield: I beg to move amendment No. 27, in page 5, line 26, after 'persons', insert
'provided that they shall be and shall continue to be members of Her Majesty's Home Civil Service'.
1196
We tabled this amendment because we wish to find out the names of the nominees of the Secretary of State and the relationship that might obtain between him and his nominees. If they are to be members of the Home Civil Service, presumably they will be in his employ and we will be able to understand the relationship. If the Minister can give some information about the relationship, we may be able to withdraw the amendment.
Mr. Michael Marshall: I should like to set at rest any fears that the hon. Gentleman may have. I repeat that it is our intention, as my right hon. Friend the Secretary of State made clear on Second Reading, that shares or securities held by nominees are to be held by civil servants, particularly the Treasury Solicitor. That is largely for convenience. It would not make any difference to the Secretary of State's powers if the shares were held by nominees who were not civil servants.
Clause 6(2) requires that the nominees hold and deal with, that is, convert or not convert, securities or sell shares. It requires that they should act in this way and on such terms and in such a manner as directed. In other words, by law the nominee can do only what he is told to do. It would make no difference if the nominee were the hon. Member for Nuneaton (Mr. Huckfield) or any of my officials. The hon. Member may feel that if he had the opportunity he would find a great deal of scope, but I assure him that under the Bill he would be required to act as instructed, as would any nominee. In that sense, I do not think that the hon Gentleman need have any fear that some sort of privilege is involved. The nominee will act purely in terms of the Bill.
Mr. Cryer: Will the Minister assure the House that the people who hold the shares—even though they can do only what they are instructed to do under the directions of the Secretary of State—will be members of Her Majesty's Civil Service? I should be hesitant about allowing to be nominees people whose normal duty was not to carry out the Government's instructions and orders. If for example, persons from outside were brought in as nominees they would be placed in an intimate position within the company, which might give them an advantage.

1197
Throughout our proceedings we have been concerned that the formation of the company and its subsequent progress should be at arm's length, and I should not like to see a member of the GEC board of directors appointed as a nominee. Even though he would carry out precisely what the Secretary of State told him to do, his intimate involvement in the company would put him in a much more advantageous posiltion when the company emerged as a public company.
Will the Minister repeat the assurance that he and the Minister of State gave in Committee, namely, that they confidently anticipate that the nominees will be civil servants in order to convince us that we should not push the amendment to a vote?
10.30 pm
Mr. Marshall: Certainly I confirm that, in practice, the nominees will be civil servants, but I have already made clear that as nominees they will know no more than would any other shareholder. I do not want to imply that there will be any special privileges, but I confirm that they will be civil servants, and I hope that that meets the Opposition's fears and queries.
Mr. Les Huckfield: In view of what the Minister has said, I beg to ask leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Amendment made: No. 28, in page 5, line 36, leave out 'subscribe for or'.—[Mr. Michael Marshall.]

Clause 7
TARGET INVESTMENT LIMIT FOR GOVERNMENT SHAREHOLDING UNDER SECTIONS 3 AND 5
Amendment made: No. 36, in page 6, line 35, leave out 'as a member' and insert:
'as an existing holder of shares or other securities of the successor company or of any subsidiary'.—[Mr. Michael Marshall.]

Clause 8
LIABILITY OF THE SUCCESSOR COMPANY FOR DEFAULTING SUBSIDIARY WHERE CAUSE OF ACTION AROSE BEFORE APPOINTED DAY
Mr. Michael Marshall: I beg to move amendment No. 39, in page 7, line 11,
1198
leave out 'only applies' and insert 'applies only'.
It gives me pleasure to move the amendment, because, as hon. Members who served on the Committee will recall, it was salutary for us all to feel the stern and skilful application of the effective use of English by the hon. Member for East Kilbride(Dr. Miller). It was his suggestion that the order of the words "only applies" should be reversed. Shamefaced officials admitted that the hon. Gentleman had a point, and I am happy to put the amendment forward in the spirit in which it was suggested.
Mr. Les Huckfield: As this is the first reverse that we have secured from the Government since we started our consideration of the Bill, we gladly accept what the Minister says.
Amendment agreed to.
Mr. Les Huckfield: I beg to move amendment No. 40, in page 7, line 17, leave out
'at the time when the contract was made'
and insert
'when the breach took place'.
This amendment follows on from amendment No. 38 and seeks to establish the principle of the law of continuous liability. We debated the matter in Committee, and I know that the Under-Secretary will probably not feel yielding at this time of the evening, but he may be able to say something that will enable us not to press the amendment to a Division.
Mr. Michael Marshall: The purpose of clause 8 is to continue, in relation to obligations undertaken before the appointed day, the effect of section 53(1) of the Aircraft and Shipbuilding Industries Act 1977; which provides that British Aerospace is to be liable for the judgment debts of it wholly owned subsidiaries.
Creditors have done business with British Aerospace's wholly owned subsidiaries in the knowledge of the protection afforded by section 53(1), and on the basis of the general doctrine that the Government stand behind nationalised industries and will not allow them to default.
Hon. Members who served on the Standing Committee will recall that this was debated at considerable length.

1199
Clause 9 reproduces, as nearly as possible, the doctrine I have mentioned by making the Secretary of State liable, in the event of the successor company being wound up, to meet those, but only those, obligations that British Aerospace undertook before the appointed day—in other words, the traditional obligations under the rules that then applied.
Clause 8 reproduces section 53(1) by making the successor company liable to meet the judgment debts of wholly owned subsidiaries where, and only where, the obligations arose before the appointed day.
As the clause stands, wherever a company becomes a wholly owned subsidiary of the successor company on the appointed day, the successor company will be liable to pay any debts of the subsidiary arising under a contract made before the appointed day. In this way, people who did business with a wholly owned subsidiary of British Aerospace, before or after nationalisation, will permanently enjoy the same sort of protection as they do at present under the Aircraft and Shipbuilding Industries Act 1977.
The amendment would be restrictive. It would mean that the successor company was liable only where the default had occurred before the appointed day. The position of creditors in respect of contracts entered into with subsidiaries of British Aerospace would be worsened. The protection afforded them would be less than under section 53(1)of the 1977 Act.
I do not believe that that is what the hon. Gentleman seeks to achieve. Having explained how we see this matter, I hope that he will feel disposed to withdraw the amendment.
Mr. Huckfield: As I explained that we thought amendment No. 40 was consequential to amendment No. 38, the hon. Gentleman is right in stating that, standing by itself, it has the effect he has described. We shall need to consider further what the hon. Gentleman has said. It would therefore be best if we did not push the matter to a Division on this occasion. I beg to ask leave to withdraw the amendment.
Amendment, by leave, withdrawn.

Clause 10
DISSOLUTION OF BRITISH AEROSPACE AND TRANSITIONAL PROVISIONS
Amendments made: No. 43, in page 8, line 13, after 'sections', insert 40(4)'.
No. 44, in page 8, line 14, after '1977', insert
'and paragraphs 3(2) and 9 of Schedule 5 to that Act'.
No. 45, in page 8, line 15, leave out from 'in' to second 'in' in line 16 and insert
'those provisions or in paragraph 14 of Schedule 6 to the Act of 1977'.—[Mr. Michael Marshall.]

Clause 14
INTERPRETATION
Amendment made: No. 51, in page 11, line 4, at end insert
' "Subsidiary" has the same meaning as in the Companies Act 1948'.—[Mr. Michael Marshall.]
Mr. Les Huckfield: I beg to move amendment No. 52, in page 11, line 12, after 'may', insert 'not'.
The reason for this amendment is that we did not want to give the Secretary of State permission to change his mind after he had nominated the company that was to become the successor company under Clause 1. Our difficulty is that we do not have the articles or the memorandum of association of the publicly quoted company, but we thought that we could pin down the Secretary of State by inserting the word "not" after "may".
If the Minister can give some guidance on how he sees the transitional period, it is possible that we shall be convinced that the word "not" is not required. We look forward to hearing his remarks.
Mr. Michael Marshall: It may be helpful to spell out the amendment indetail. We consider that it is extremely unlikely that it will be necessary to vary or revoke an order nominating a company or appointing a day. We already know in what company we intend the undertakings of British Aerospace to vest. British Aerospace Ltd. was set up on 31 December 1979 as a private limited company for that purpose, known as the "shell" company to many of us who served on the Standing Committee. We shall not appoint a day until very close to the time

1201
when we are sure that a flotation will be feasible very shortly afterwards. However, there are hypothetical circumstances in which it may be necessary to vary or revoke an order.
Perhaps first and most important, clause 1(2) provides that on the appointed day, the company nominated as thesuccessor company must be a company limited by shares which are wholly owned by the Crown. If on the appointed day it was found that the company did not meet that criterion, vesting under the Bill could not go ahead. If it was impossible to nominate a new company, and to appoint a new day, the vesting could never take place. In practice, it is inconceivable that the company will fail to meet the criterion since the Government, as 100 per cent. owner, will be able to ensure that it does. Nevertheless, it is a theoretical possibility and must, therefore, be provided for.
Secondly, the subsection is a safeguard lest it be discovered that the company nominated under clause 1 is not a "clean" company for the purposes of flotation. The hon. Member for Nuneaton (Mr. Huckfield), with his deep knowledge of the subject, will immediately appreciate the significance of the clean company for the purposes of flotation. It could perhaps have incurred liabilities which might jeopardise the public issue. Again, this is inconceivable in practice since the Government will ensure that the company does not engage in any business at all, as has been made clear on many occasions when we were asked about the activities of the shell company. Therefore, it should not incur any kind of liability whatever before vesting. Again, this is a theoretical possibility which should be dealt with.
Finally, it is conceivable that between the order appointing a day and the day itself there could be some financial disaster which made an early flotation impractical. In those circumstances, we might well wish British Aerospace to remain a nationalised industry until a flotation was possible, and, therefore, temporarily to revoke the order appointing a day. I do not want to buoy up the hopes of Labour Members, but I have to say that this is a highly unlikely eventuality. Apart from anything else, I would expect the interval between the order appointing a day and the day itself
1202
to be very short indeed. Nevertheless, subsection (2) would enable us to deal with the situation if it arose.
Clearly, those arguments are put forward for the avoidance of doubt, and in the light of that explanation I hope that the hon. Gentleman will withdraw the amendment.
Mr. Huckfield: My hon. Friends and I concur with the hon. Gentlemen in his search to find a clean company. That is something that we would certainly endorse. In view of the fact that he admits that there is a possibility that the clause as it stands may permit a 100 per cent. Government ownership of the new company—I am glad to hear him say that that could happen—that is something which we would like to leave open.
I accept that there probably is a technical need for the facility that the Minister has illustrated. We understand the kind of circumstances in which the Government may need to change their mind. Provided that it is that kind of circumstances that the hon. Gentleman seeks to facilitate, and not the kind of circumstances which sometimes my hon. Friends and I fear, I think that we can accept what the hon. Gentlemen says. We shall, of course, look carefully at what he has said about the flexibility which is now permitted, if so desired, for this company to be 100 per cent. Government owned.
Having said that, and again noting that we always seem to make better progress when the Minister of State is not saying anything, I beg to ask leave to withdraw the amendment.
Amendment, by leave, withdrawn.

Schedule 2
TRANSITIONAL PROVISIONS
Amendments made: No. 60, in page 13, line 45, after "extinguish", insert "(a)".
No. 61, in page 14, line 2 leave out from "day" to end of line 3 and insert
"or
(b)any liability of British Aerospace under section 45 of that Act (other payments to British Aerospace) to make any payment in respect of the capital amounts mentioned in section 2(c) of this Act corresponding to

1203
a payment under section 16(2) and relating to a period falling before the appointed day;
and any sums received by the Secretary of State from the successor company in discharge of any such liability shall be paid into the Consolidated Fund.".—[Mr. Michael Marshall.]
10.45 pm
Mr. Michael Marshall: I beg to move amendment No. 62, in page 14, leave out lines 4 to 10.
We come to the end of this group of technical amendments and we appreciate the opportunity to make progress. We are bringing together a number of matters that have been discussed on many occasions in Committee. Nevertheless, they are important.
This amendment reflects the intention of the Government that all dividends on British Aerospace's public dividend capital should have been determined before the appointed day. In other words, it is part of the tidying up process that we believe is necessary. Our expectation is that a final dividend will be agreed between the Government and the corporation and paid by the corporation before the appointed day. If, for example, the appointed day were 1 July 1980 the final dividend would be in respect of the first half of 1980.
Paragraph 3(1) of schedule 2 provides that if a dividend has been determined but not paid before the appointed day the successor company is liable to pay it. Paragraph 3(2), however, provides that if a dividend has not been determined before the appointed day it may be determined thereafter. We believe that it would be wrong for the successor company to be saddled with an indeterminate liability which in the last resort might be imposed unilaterally by the Secretary of State.
Section 16 of the 1977 Act provides for the corporation initially to propose a dividend, but if it makes no proposal or if the proposal is not acceptable to the Secretary of State he may impose a dividend himself. Indeed, investors could be discouraged from buying shares if the flotation took place without a final dividend having been determined because if the commencing capital is fixed the proportion of public dividend capital could be substantial.
We therefore believe that it would be wrong to retain the power to determine
1204
a dividend after the appointed day and accordingly propose the deletion of paragraph 3(2). The corollary of this is that it is essential that the final dividend should be settled before the appointed day and provision was originally included in the Bill before we put this to British Aerospace.
We have made the position clear to the present board of British Aerospace and we therefore believe it proper that paragraph 3(2) should be deleted. I commend the amendment to the House.
Amendment agreed to.
Amendments made: No. 64, in page 14, leave out lines 22 to 28.
No. 65, in page 14, line 28, at end insert—

"5A.—(1) Any record kept in accordance with arrangements made by British Aerospace before the appointed day under paragraph 3(2) of Schedule 5 to the Act of 1977 shall be maintained by the Secretary of State during such part of the period specified in paragraph 3(1) as falls after that day; and paragraph 9 of that Schedule shall apply to the Secretary of State as it applies to British Shipbuilders.

(2) The reference in paragraph 14 of Schedule 6 to the Act of 1977 to any record kept by British Shipbuilders under Schedule 5 shall include a reference to any record maintained by the Secretary of State in accordance with this paragraph."—[Mr. Michael Marshall.]

10.48 pm
Mr. Adam Butler: I beg to move, That the Bill be now read the Third time.
We have spent many hours of debate on the Bill and I will try to deal briefly with what I see as its achievements and why I believe that this Bill holds out the best prospects for the future of British Aerospace and for the employees who work in it.
The change brought about by this Bill is simply stated. The whole business of a statutory corporation is to be transferred to a Companies Act company initially owned entirely by Government in which the public will be able to purchase shares. The end product will be a new company, British Aerospace Ltd., jointly owned by the Government, the employees of the company and by the general public. That is a simple description of the Bill.
The effects of the Bill are far greater than that. The most important change brought about by the Bill will be to put responsibility for a key manufacturing

1205
industry firmly where it should lie, in the hands of those who manage and work in the industry. In a nationalised industry, however hard the Government try to achieve this, there is always the temptation to intervene.
Again and again we have seen that what is politically attractive and what is necessary for national economic reasons replaces what is commercially sound and in the best interests of the company. We are confident that in the private sector the skills, the technology, the experience and the dedication of those who work in the industry will flourish unencumbered by the controls and influence of the Government that are unavoidable in the nationalised industries. We are confident that they will succeed.
The Opposition have repeatedly and unsuccessfully attempted to cast doubt upon the ability and resources of the new company, British Aerospace Ltd. It is a slur that will be bitterly resented by thousands of men and women who work for British Aerospace, who appreciate the ability—human and technological—that makes up the strength of the corporation and which will be transferred in total to the new company. They know, as we know, the success that British Aerospace has shown in fighting for and winning business in this, the fiercest of international markets.
I wish to take this opportunity to set out not views or misrepresentations, but undisputed facts. The financial figures speak for themselves. The last published accounts for British Aerospace—those for the year ending 31 December 1978—showed a business with a turnover of over £890 million, and trading profits of nearly £80 million. The corporation target for 1979 was to increase those trading profits to £90 million.
These are objective measures of the continuing profitability of the business. The return on assets employed has been above 20 per cent. in each year since the corporation was formed. However, the constituent companies that formed British Aerospace showed on aggregate a return on assets employed of above 20 per cent. in every year since 1972—sometimes markedly higher than that.
Mr. Les Huckfield: Why change it?
Mr. Butler: That is what we said to the hon. Member for Nuneaton (Mr. Huckfield) during debates on the nationalisation Bill. We asked "Why change it?" Thank goodness this Bill comes quickly so that the dead hand of nationalisation is not allowed to rest for too long on this precious and vital industry.
The figures which I have mentioned give the lie—if any refutation is required—to any suggestion that the future company will not be strong and to any suggestion that aerospace is a business which can operate only under the umbrella, and in the possession of Government. Such an idea will be rejected out of hand by those who remember with pride the great achievements of the aircraft industry in private hands. Hon. Members may mock at that, but they will remember the aircraft that helped to win the Second World. War. They were produced by private industry. It produced the world's first jet airliner and the first and only operational vertical take-off aircraft. Those aircraft were the products of the industry under private ownership. [HON. MEMBERS: "What about the public money?"] Of course public money was put into the industry. There is a legislative vehicle for investing more public money. But those were the products of an industry in private hands. The planes flying now are not the products of nationalisation. They were made by workers in a nationalised industry but they are the products of the research and development going back many years before nationalisation was dreamt of.
The previous aircraft companies have shown that the industry can succeed in private ownership. There is all the more reason to be confident in the ability of British Aerospace Ltd. to compete and succeed. We have set our face against any split of the present business and against any suggestion that particularly profitable activities might be hived off. British Aerospace Ltd. will carry on the whole of the business presently carried on by British Aerospace. The Bill provides for only one universal successor to the present nationalised industry. Much of the strength of British Aerospace derives from its balanced business—civil and military aircraft, guided weapons and dynamics systems, and the as yet small but growing space business. Its spread

1207
of business in different markets—different commercial and geographical markets—helps to protect it against downturn in any one of those markets.
The Government will stand behind the existing commitments to British Aerospace Ltd., which will enable it to play its full part in international projects. Where the Government have entered into specific agreements relating to contracts entered into by British Aerospace, they will maintain the agreements and honour their obligations in respect of contracts to be carried out by British Aerospace Ltd. In particular, as we have mentioned in our debates many times, the Government will continue to support the participation by the United Kingdom airframe industry in the Airbus programme, the most important civil aircraft undertaking which benefits from a specific Government commitment of support. More generally, the new company will not be debarred from receiving any form of Government support generally available to industry. At least three Acts could be used for funding. In particular, there will be no limitation on British Aerospace Ltd., as there now is for the statutory corporation, preventing it from receiving launch aid, if that were appropriate. It would be for British Aerospace Ltd., if money could not be raised in the market, to justify a new project to the Government.
In these, and other ways, the new company will be treated like any other company in the private sector. There is, however, a particular aspect of British Aerospace which demands special treatment. British Aerospace Ltd., like the present nationalised industry, is of critical importance to the defence of this country. We are determined therefore that there should be no question of this key British asset falling into undesirable foreign hands. To prevent this, we have devised a restriction in the constitution of the company—in its articles of association—to limit foreign ownership to not more than 15 per cent. of the voting rights. Our legal advice is that the provisions of the article concerned are satisfactory. However, if the hon. Member for Nuneaton can show that the article is deficient, perhaps he will do so. His interests on this and ours are the same. We do not want foreign ownership to
1208
extend beyond the percentage we have stated.
Dr. M. S. Miller: Will the Minister clarify one point? He said that the Government are certain that the industry will not fall into undesirable foreign hands. Does he stick by the description "undesirable foreign hands"? Can he imagine foreign hands that would not be undesirable?
Mr. Butler: If the hon. Gentleman and the House need clarification, I will say foreign hands which would be undesirable, but at this late hour I ask the hon. Gentleman again to read the article. He knows perfectly well that we are talking about foreign ownership.
Mr. Austin Mitchell: Why does not the Minister just say "foreign hands"?
Mr. Butler: We do not just say "foreign hands" if we want to say that would be undesirable. I agree that it is slightly tautologous, but I make it quite clear that, like Labour Members, we would find it quite undesirable that control or influence should fall into foreign hands.
We are determined as a Government to exercise our voting shares to ensure that this restriction continues, and we shall retain a shareholding of at least 25 per cent. which would enable us to prevent that restriction on foreign ownership lapsing. I am confident that British Aerospace Ltd. will continue to justify in all senses of the word the national title that it so proudly wears.
The Bill provides for the transfer of business from the corporation to a new limited company. Continuity is the essence of that transfer. It will continue as the same enterprise in its present form, with no question of its being split up. There will be continuity of management because the same directors will serve on the board of the new company. There will be continuity of employment because the same workers will work for the new company and their contracts of employment will be carried forward. There will be continuity of important measures such as pension entitlement.
It will almost seem as though nothing has changed when the transfer takes place, but the benefits of freedom will

1209
soon be felt. Management will immediately be free of the shackles of its present politicalmasters—even of a Government who pride themselves on nonintervention. Management will take decisions in the best interests of the company and not those of the Government of the day.
Of course, the company will be subject to the challenging disciplines of the market, but it is responsiveness to those disciplines which is the basis for survival of any company and the basis of vitality and viability. Jobs are not secure in nationalised industries—
Mr. Les Huckfield: Not under you lot.
Mr. Butler:—which can run to Government for help. Jobs are not secure when monopolies are not subject to the pressure of competition. They are secure only when a company can show that it can provide the goods the customers want at the price and of the quality they want.
A nationalised industry with a good management and a willing work force can, I agree, provide this service for a while, but all the evidence of recent history is that slowly the effects of a monoply and of political interference begin to show themselves. That has regrettably been the history of our nationalised industries.
I say to the House and to the employees of British Aerospace that the only real prospect of a long-term future for this company is for it to be in the private sector, proving that it can survive in competition with its domestic and international competitors. That is the prospect that we hold out for the future of British Aerospace. That is the best guarantee that we can give to the employees. In the confident hope that British Aerospace Ltd. will have a magnificent and proud future, I commend the Bill to the House.
11.3 pm
Mr. Cryer: It is interesting that the Chief Secretary to the Treasury should bring his lugubrious presence to bear on the ending of the nationalised British aerospace industry—counting up as he eagerly does the money he will get to save cutting social services, education and all the decent welfare services that this nation has built up. That is the rationale behind the sale of British Aerospace.
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It suits the Government's philosophy to say that they are putting the industry into the position of free enterprise, that it will face domestic competition. That is nonsense. It will, in fact, face international competition with one hand tied behind its back. It will be supported, to the degree that it has been supported for many years, from public funds. The Minister went out of his way to say that this company will have access to public funds, so that the friends of the Conservative Party—
Mr. Bowen Wells:On a point of order. Mr. Deputy Speaker. Does the ten-minute rule apply to speeches on Third Reading?
Mr. Cryer: If the hon. Member came here often enough to know when the ten-minute rule applied, it would help us all. This is a precious national asset and the Minister described it as such in his speech. He told us that in its last year the company made a profit of £80 million. That is precisely why it is being sold off. The national assets that provide a social service will not be touched. For example, the railways will not be sold off and the Government cannot touch the coal mining industry because they fear industrial havoc.
The friends of the Conservative Party who hope for get-rich-quick schemes anticipate advantage from this change. It will be of no advantage to the nation or the 68,000 directly involved in the industry and the other 68,000 and more who work for it indirectly.
The Minister talked about the dead hand of nationalisation in almost the same breath that he was talking about profits of £80 million. Earlier this evening he said that no nationalised industry makes a profit. The very industry that he has been busy selling off over the past few weeks by piloting the Bill through the House has been making a profit of £80million. The Minister is fully aware that, to cut down the public sector borrowing requirement, the Government have imposed the shackles of which he is so critical and directly intervened and forced the gas and electricity industries, and the postal service, to increase their prices.
As said earlier, the industry will depend massively on public funds. The Minister said that the industry will not

1211
be debarred from receiving public assistance. He also said that it will be free from the shackles of Government. I wonder how massive military contracts will be supervised. Will it be that the aircraft industry will never make excessive profits? Is that our experience as a nation? Of course it is not; excessive profits have been made on Government contracts. Will the Government impose shackles to ensure that a contract is adhered to and that only a fair and reasonable profit is made?
As the Bill goes through its Third Reading let the good old fashioned doctrine of caveat emptor apply. Let the buyer beware. We know, as we have clearly said, that this industry will be nationalised without compensation. So let those who indulge in this adventure adopt that principle which is widely adopted in legal circles. Let them beware.
One of the enormously sad results of the Bill is the ending of the provisions for industrial democracy. The Government have put forward the idea that the purchase of shares—where the employees can afford to buy them—is some sort of substitute for involvement in the daily routine of the work place. That is an illusion. Government Members may laugh but myself and some of my hon. Friends consider that a vote every four or five years is not the peak of democratic achievement.
There should be opportunities for workers to have some involvement in the direction and shaping of their lives. They spend most of their time at work. The 1977 Act contained industrial democracy provisions which were slowly moving in the right direction and achieving further benefits for the workers by involving them in decision making.
Naturally, one cannot change society overnight. The development of industrial democracy will not be achieved overnight. But, given certainty in the industry and a long-term future for public ownership, there is no doubt that it would work. The interest and determination of the workers involved, expressed through their trade unions, indicates that industrial democracy would have developed. It is important for us as a nation to involve workers in the decision-making process.
Lastly, there is the illusion that the Government have again promoted on
1212
Third Reading—that this will be a freestanding private enterprise company. It will be a privileged organisation with direct access to hundreds of millions of pounds of public money and direct access to very lucrative contracts for the manufacture of military equipment and aerospace products, just as it has been in the past. It will have access to all the apparatus of the Civil Aviation Act 1949, the Industry Act 1972 and the Science and Technology Act 1965. The Minister has said that over and above the important contracts that the company will have, it will have additional access to the money provided by that legislation. The company will be in a very privileged position indeed.
We say that that amount of public money should be accompanied by some form of public ownership. It will not be too long before another Labour Government take this company into public ownership. In the meantime, I can only hope that the provisions which the Minister has insisted are sufficient to prevent the drift of this company into foreign ownership are a sufficient safeguard, that they are exercised, and that we do not have, over the next two or three years, pressure from the Chief Secretary on to the Secretary of State for Industry—who has egg all over his face from time to time on these matters—pressing further and further to sell off more and more shares, because there is no statutory protection provision. We have assurances. I hope that the Chief Secretary understands that those assurances not to sell shares below the 25 per cent. shareholding mark have been solemnly and clearly given to the House and should not be broken.
All in all, however, the lesson of this legislation is that the sooner we get a Labour Government to restore the company to public ownership, to give confidence to the workers in the industry and to give them the opportunity to shape their industry, the sooner will the industry benefit the nation as a whole. With the disastrous economic policies of the present Government, every day that passes brings nearer the day when we shall have this industry in public ownership once again.
11.12 pm
Mr. Cranley Onslow: I make only two short points. The first is to

1213
congratulate the Ministers who have been responsible for taking the Bill through the Committee and my hon. Friends who were fortunate enough to be members of the Committee. I missed that privilege. But, having occasionally looked in on their proceedings and listened to Opposition speeches there, and having heard the same speakers make the same speeches more than once in Committee, and again here this afternoon, I am put in mind of the late lamented Sidney Smith, who once said of a bishop whom he disliked that he deserved to be preached to death by wild curates. The wild curates of Keighley and other places can go bashing on with their boring old line and their doctrinaire rubbish.
The second and the important point I make is that all Labour Members do when they trot out that tired old stuff is to indicate how far away they are from knowledge of the thoughts and aspirations of the people who work in this industry. They are the people about whom we should be thinking this evening. They are the people who have made the profits and have got on with running the industry under the dead hand of the nationalised management they have had to suffer since the ridiculous Act brought in by the late Labour Government. They are the people who will be carrying the burden in the years ahead. They can best be served by this House passing this Bill and by our expressing our confidence in their ability.
If the honourable curate from Keighley thinks that any of them will ever vote Labour again, he needs his head seen to.
11.15 pm
Mr. Ernie Ross: Opposition Members have raised many debates and discussions, because the points that we make are true. The trouble about those Conservative Members who were on the Committee is that we still have not heard what they think about the Bill. The only time that we missed the hon. Member for Preston, North (Mr. Atkins) was when he visited his constituents in Cyprus.
The Government's proposals must be judged in the light of our national interests. The world aerospace industry is dominated by three American corporations—Boeing, Lockheed and McDonnell Douglas. Our European partners have aerospace industries. However, apart
1214
from the United States, Britain has the largest aerospace industry. At least one of those American companies has declared its intention of destroying all other independent aerospace industries.
If the Bill is enacted, it will assist that corporation and it will lead to the demise of British Aerospace. The independence and strength of British Aerospace acts as a barrier to its complete take-over by multinational companies. We have frequently said that British Aerospace is a highly competitive and internationally successful company. That is why it is being sold. The Minister cannot deny that it is highly profitable and successful. Norcan he deny that that is why the Government are selling it off. They are not attempting to sell off British Shipbuilders.
In 1977, British Aerospace represented 16 per cent. of the gross domestic product. From 1970 to 1977 that percentage grew at a rate of 4·7 per cent. per annum. The national gross domestic product grew by only 1·9 per cent. during the same period. That proves that British Aerospace was hardly unsuccessful after two years of nationalisation. It did not demand private finance. Indeed, in his report of 1978, the chairman clearly pointed out that:
"British Aerospace is unique among major aerospace manufacturers in the western world in being required to fund all its own civil research."
He drew an analogy between our aerospace industry and that of the United States. The latter is heavily funded by the American Government.
Although British Aerospace has to find its own finance, it is still a successful company. That is why Conservative Members are so interested in denationalisation. They wish to get their hands on it. Asset strippers on the Stock Exchange will then be able to benefit from years and years of taxpayers' money. That money will be abused by Conservative Members.
Aerospace is a high technology industry. It therefore needslong term investment. Investment in civil aircraft will take about 10 years before breaking even. Historically, private investment has been notoriously hostile to anything other than low risk, short-term investment. There is no guarantee that Conservative Members will be able to convince their friends to invest in civil aircraft.

1215
Who will concern themselves with the national interest? Certainly not privately funded capital, which is bound to argue for concentration on guaranteed profits from Ministry of Defence contracts. We are not opposed to that. We would rather not make weapons of war, but accept that we must have defences and therefore that we require a military capability in British Aerospace. The profits are made on defence contracts. That is where taxpayers money guarantees profit. The emphasis in British Aerospace will move towards Ministry of Defence aircraft. We are probably seeing the last civil aircraft being built in this country now. Once the company begins to be taken over by private shareholding, there will no longer be a thrust towards building civil aircraft.
Private investors want immediate profit. Once the company is divided up, we shall not have the overall balance and benefit from the civil or military side of the business in general planning. There will be a push towards association with American companies and the lucrative subcontracting work. That is where British Aerospace is heading under the Bill.
We are seeing the ratchet being put into operation—a winding down of Government interest in this nationalised industry. Government interest will be slowly pushed back, until little remains. There will certainly be no ability to control the industry. The Government have failed to convince anyone in British Aerospace and British industry generally that the Bill makes sense. The management made that clear that it said that continuity of operation and concentration on organisational efficiency would have been preferable, without the distraction of changes effected by Parliament—and they were talking of the changes in the Bill. The Government have failed to convince British Aerospace management that the Bill will do anything except cause further and continuing problems.
I mentioned the problems faced by skilled engineers and craftsmen in British Aerospace. As the industry begins to deteriorate, they will have no confidence in remaining with British Aerospace. It will be detrimental to the whole country if these people are bribed away by offers of better, more interesting and rewarding jobs in other companies.
1216
The hon. Member for Ruislip-Northwood (Mr. Wilkinson) is indicating that I should wind up. I assure the hon. Gentleman that I do not intend to be wound up. This is a serious debate. I know that the hon. Gentleman would like to get home. The workers in British Aerospace would like to keep their jobs and maintain their industry, which is what we are talking about.
The divisive attempts by hon. Gentlemen to convince workers to buy shares, and pretend that that shall give them a say in British Aerospace, are ludicrous. Not many workers in British Aerospace can afford to buy a sufficient number to give them a say. The Government can convince the workers that they have a stake in the industry by encouraging them to continue to participate in productivity schemes. The workers are contributing to the future of British Aerospace by increased productivity and sharing the benefits. Tonight we are seeing Tory ideology put above the interests of the workers. Everyone, including management and unions, is opposed to these proposals.
All is not well, even within the Conservative Party, because not everyone agrees with the Government's policy of non-intervention by the State in industry. It is a pity that the Lord Privy Seal did not give his lecture earlier, instead of last Thursday in Cambridge, because we might have been able to use passages from it in Committee. The right hon. Gentleman was quoted in The Observer on Sunday as saying:
"In the Conservative view, economic liberalism ála Professor Hayek, because of its starkness and its failure to create a sense of community, is not a safeguard of political freedom but a threat to it."
This Bill poses a threat to the workers in British Aerospace. We have already made clear that when the next Labour Government are returned we shall renationalise the industry. That is the best safeguard for the workers in it. They can have confidence that, on the return of a Labour Government, we shall take the industry back into public ownership. Thatis the only way we shall ensure that those who work in it will stay there and continue to maintain a viable and healthy British aerospace industry.
11.26 pm
Mr. Christopher Murphy: Having listened to many hours

1217
of discussion on the Bill, I can with accuracy say that there has been the usual deliberate attempt by the Opposition to build upon that Socialist myth—the superiority of nationalisation.
In my constituency, the vast majority of aerospace workers entered the industry when it was in private hands. They built their careers when it was in private hands. They achieved their skills and job satisfaction when it was in private hands. In other words, they had confidence in private enterprise. That confidence was not ill-founded.
Hatfield can boast a De Havilland Close, a Comet Road, and large buildings on the A1still referred to as Hawker Siddeley—all examples of the significance and importance of this key industry over the years.
The Bill is a recognition of the value of aerospace to our country. It seeks to learn the lessons of the past which have given us such a great aviation history and thereby gain advantage for the future by once more allowing commercial judgments to be based upon commercial funds. I believe that the British Aerospace Bill will do much to back the judgment of aerospace employees who have put their faith in this vital industry.
11.27 pm
Mr. Stan Thorne: I do not know whether I should pay the usual tributes to a maiden speech having just listened to that short contribution from the hon. Member for Welwyn and Hatfield (Mr. Murphy).
Mr. Murphy: For the sake of accuracy, I am sure that the hon. Gentleman will wish to know that that was not the first speech that I have made on the subject.
Mr. Thorne: All I can say—to put it in the vernacular—is "You could have fooled me". The hon. Gentleman certainly did not make a speech even of that mild length in Committee, but probably the less said about that the better.
In moving the Third Reading, the Minister of State referred to the interests of the workers in the industry. He did not tell us of his own experience some weeks ago when he went to speak to the workers in the Preston area. The exchanges then made fairly clear that they disagreed with the Government's intention embodied in the Bill. I have had
1218
the pleasure of seeing a draft of the record of the exchanges which took place, and the hon. Gentleman's final comment to the meeting was "We will have to agree to differ".
That brings me to one of the most important aspects of the Bill. The workers in the industry have in no way been consulted. There is no confidence in the industry that the Bill is in their interest in terms of their future. In fact, the contrary is true. Throughout the whole period from Second Reading to today, there has been uncertainty and anxiety, and that anxiety was reflected in the Preston area at a meeting of workers who instructed their shop stewards to choose the appropriate time to stage a one-day stoppage in order to demonstrate their opposition to the Bill.
Mr. Colvin rose—
Mr. Thorne: I do not wish to give way to yet another hon. Member from the Government Benches who finds it appropriate now to try to get in on the act but who had little to say about the industry in Committee. I understand his reasons for being reluctant in Committee. He was under the control of a most active Whip, who ensured that the business went through without delay. I said on Second Reading that, having heard the predecessor of the hon. Member for Bristol, North-West (Mr. Colvin) on the subject of British Aerospace, I could only view the hon. Member as a very poor substitute.
There has been talk tonight of the ideological divide. We all know what happened with Rolls-Royce. There are certainly ideological differences on this and similar measures. The Government are anxious to serve their masters in industry. They were put into government to protect the economic interests of the capitalist class and that is what this exercise tonight is all about. Earlier, the Secretary of State referred to the industry, and it could have been said that a consensus existed within the Chamber about the viability of the industry, its efficiency, the dedication of its workers and many other matters.
Tory Members have argued that this state of affairs existed prior to public ownership. It certainly did. We have heard of the hundreds of millions of pounds of public money that went into

1219
the private sector to make it the efficient concern that it was. It was not a question of private enterprise by itself achieving the type of industry that we took into public ownership in 1977. The bankruptcy of the economic policies of the industry then was illustrated by the fact that it had to come, cap in hand, to Tory and Labour Governments for financial assistance to enable it to compete with its overseas rivals.
Against that background the Minister had the temerity to say that it was incumbent upon the Government to lift the dead hand of nationalisation from the industry's back. Yet he has given us the figures showing that it was highly profitable when it was in public ownership. We are faced with Conservative dogma. Private profit is the god of the Conservative Party. As a result of that we are faced with this Bill.
Our position is well known to you, Mr. Deputy Speaker. It is well known to the House. We believe that it is impossible to plan our economy effectively as long as we are prepared to leave industry in the hands of private enterprise, subject to market forces, which it is incapable of controlling. Without planning there can be no economic stability in the industry. That fact—and I repeat this because I know that Conservative Members do not like it—is illustrated by the need for the industry to come to the House for financial assistance. It would not have been necessary to pour hundreds of millions of pounds of public money into the aerospace industry if private enterprise had been successful. It patently and obviously was a failure.
During the last two years a tremendous feeling has grown up, and I am particularly conscious of it because about 12,000 to 14,000 aerospace workers live in my area. They are extremely proud of their skill and the product that they make. [Interruption.] My majority is 621, and I might add that that is 592 votes more than are in the hands of the hon. Member for Preston, North (Mr. Atkins). He is another of those who had little to say in Committee because he, too, was controlled by the Whips.
There were many occasions in the previous Parliament when the Whips, who were trying to ensure that that Government's measures went through, were dis-
1220
satisfied with some of us who sought to express our opinions in Standing Committees, but they did not prevent us from doing so, because we had a commitment to our constituents to represent their views.
I am sorry to have to end—
Mr. Deputy Speaker: Order. The hon. Member is going very wide of the Third Reading.
Mr. Thorne: I suggest, Mr. Deputy Speaker, that you might go very wide of the subject if you were under considerable pressure from workers who feel that their livelihood will be affected by this measure.
Mr. Deputy Speaker: Order. If the hon. Gentleman is out of order, he is out of order, whatever the pressures. I ask him to return to the Third Reading.
Mr. Thorne: I appreciate that, Mr. Deputy Speaker. Out of order I may be, but nevertheless I speak with some feeling on this matter.
Aerospace workers did not vote at the last election, and have not voted since, for this industry—in which they have invested a tremendous amount of their energy and their skill—to be squandered away by Conservative Members in the interests of their friends in the CBI, or elsewhere, who cannot move quickly enough to take advantage of a highly profitable industry which is profitable only because of the tremendous work put into it by ordinary working people who will be exploited even more under private enterprise than they have been hitherto.
11.39 pm
Mr. Les Huckfield: I hope that it will be noted that there is only one speech from the Opposition Front Bench on Third Reading—not two as from the Government Front Bench—and that the total time taken by the Opposition Front Bench today has been considerably shorter than many of the contributions by Ministers.
We have resisted the Bill strongly, because we are dealing with probably the most successful publicly owned manufacturing industry that this country has known. The Minister of State paid tribute to that when he pointed out that the trading profits of British Aerospace last year were about £90 million. The hon.

1221
Gentleman also paid tribute to its return of about 24 per cent.
The Minister might also have mentioned the order book of £3,000 million, stretching way into the future, and the fact that the aerospace industry is one of the few that are still taking on substantial numbers of workers. If, as the Minister of State says, it is so successful, why change it now? Why reverse all that and put it in jeopardy? The workers in the industry know that the success and profitability was not achieved through the activities or investment of the private owners. The achievements of British Aerospace have been sustained and aspired to only because the previous Labour Government put in public money.
There would not have been a 146 project or a continuing BAC111 project and we would not have joined the Airbus Industries projects as a full partner if the previous Labour Government had not put in public money. Workers in the industry know that private ownership failed the industry last time and we are determined to resist it this time. We do not want it put back in the hands of those who failed the industry and the nation before.
Every aircraft project launched in this country since the war has required the support of public money. The Financial Times said on 24 July last year, when the Secretary of State announced his intentions:
"If the Government follows a totally commercial policy in its attitude towards British Aerospace, then the British aircraft industry will almost certainly contract in size."
Workers in the aerospace industry fear that we could already have seen the launching of the last civil aircraft project in this country. That is why from this night on every worker in the aerospace industry in this country should start to worry about his future. That is the result of the Bill.
The dynamic side is where the money is, but there is nothing in the Bill or in what Ministers have said that will prevent the splitting up of the industry. In fact, because the industry cannot get the Treasury guarantees or raise the money elsewhere, it will be forced to sell its more profitable manufacturing parts. Not only is there no guarantee that the industry will not be split up, but there is
1222
no guarantee that we shall keep it under the control of this country. It is as bad as that.
The Government have said that they intend to maintain a 25 per cent. shareholding. If they are so determined to do that, in order to prevent change in the articles of association of the new company and so hell-bent on preserving that sort of blocking mechanism, why do they not put it in the Bill? Why did they not insert the blocking mechanism by tabling their own amendment or accepting one of our proposals?
The Government do not intend to maintain any control. The Government know, even in the articles of association they have drafted, that they cannot keep the industry in this country. This is happening at the worst possible time. Other Governments are increasing their involvement in their aerospace industries. The American aerospace giants are beginning to fear the competition that British Aerospace can mount. Airbus Industrie is starting to be successful. This is the time that the Government choose to pull out the rug. The downfall that could befall British Aerospace because this Government withdraw their support is that, at a most critical time, it will be handed over on a plate to become an American sub-contractor.
The same Government who intend to kill off our car industry, and to denationalise the steel industry, intend to hand over our successful, publicly owned aerospace industry on a plate to foreigners, having abolished all exchange controls to make the process even easier. If they cannot accept what the Opposition say, why cannot they accept the Plowden committee's view, that the one thing that would save the industry is a substantial Government stake in its ownership, management and operation? Why cannot they accept what The Economist said on 8 July 1967—that
"it may take something as draconian as an effective nationalisation to produce this change of heart. Or 250,000 aircraft workers had better start looking for other jobs"?
If the Government cannot accept what the Plowden report said or what The Economist said, will they accept that the policy of the Labour Party and the TUC is that the next Labour Government will renationalise this industry without compensation? That is the policy of

1223
this party. That is the policy of the TUC. That is why we say that, on an essentially temporary basis, we may lose the vote in the House tonight but we dare not lose the argument in the country.
11.47 pm
Mr. Michael Marshall: We have had a long run on this Bill since the Standing Committee began on 27 November. It is, perhaps, understandable that some of the arguments today have seemed familiar to those who have attended all the Bill's stages. I do not intend to detain the House for long. The arguments of both sides are well understood.
There are those, like the Government, who take the view that this industry can thrive and will survive under private enterprise. We have come forward with a moderate proposal that commands a good deal of interest because of the employee shareholding. Yet we encounter many of the tired, old arguments. I do not intend to rebut them. My hon. Friend the Member for Woking (Mr. Onslow) has firmly identified the kind of party political argument that the Opposition were putting forward. My hon. Friend the Member for Welwyn and Hatfield (Mr. Murphy) has spoken, as he did on a number of occasions in Committee. When Opposition Members tweak their tails and suggest that my hon. Friends should have spoken, I have to say, yet again, that we, on the Government side, are together. We understand the arguments. We have a united view. We understand the problems of the hon. Member for Nuneaton (Mr. Huckfield) and his divided Benches. The hon.
Gentleman should not try to draw us into this kind of "aggro".
There is agreement on both sides of the House about the vital importance of the British aerospace industry. There is agreement on the contribution that the industry makes to defence. There is agreement on the human and technological skills that are involved. Disagreement arises over how the skills of that vital industry are to be sustained and how they are to thrive in the future. Those hon. Members who accept the mixed economy—there are some on the Opposition Benches—and recognise that this is a reasonable package, have been silent. We have heard instead some of the more violent voices of those who do not want a mixed economy. They want State control. That is what we are determined to reverse in the Bill.
Our aim is that British Aerospace, in the years to come, should take its place and be accepted in the industrial scene, like any other private company, and like any mixed enterprise, such as British Petroleum.
I find it difficult not to feel that in a sense this is an important moment. From a personal point of view, I feel a great sense of pride in having taken part in a Bill which will prevent this industry from going down the wrong track. Having lived through the nationalisation, denationalisation and renationalisation of steel, I know what it can do to an industry. The Bill comes in the nick of time, and I commend it to the House.
Question put, That the Bill be now read the Third time:—
The House divided: Ayes 302, Noes 235.

Division No. 170]

AYES

[11.50 pm

Adley, Robert

Bilfen, Rt Hon John

Bryan, Sir Paul

Aitken, Jonathan

Biggs-Davison, John

Buchanan-Smith, Hon Alick

Alexander, Richard

Blackburn, John

Buck, Antony

Ancram, Michael

Blaker, Peter

Budgen, Nick

Arnold, Tom

Bonsor, Sir Nicholas

Bulmer, Esmond

Aspinwall, Jack

Boscawen, Hon Robert

Butcher, John

Atkins, Robert (Preston North)

Bottomley, Peter (Woolwich West)

Butler, Hon Adam

Atkinson, David (B'mouth, East)

Bowden, Andrew

Cadbury, Jocelyn

Baker, Kenneth (St. Marylebone)

Boyson, Dr Rhodes

Carlisle, John (Luton West)

Baker, Nicholas (North Dorset)

Braine, Sir Bernard

Carlisle, Kenneth (Lincoin)

Banks, Robert

Bright, Graham

Carlisle, Rt Hon Mark (Runcorn)

Beaumont-Dark, Anthony

Brinton, Tim

Chalker, Mrs Lynda

Beith, A. J.

Brittan, Leon

Channon, Paul

Bendall, Vivian

Brocklebank-Fowler, Christopher

Chapman, Sydney

Benyon, Thomas (Abingdon)

Brooke, Hon Peter

Clark, Hon Alan (Plymouth, Sutton)

Benyon, W. (Buckingham)

Brotherton, Michael

Clark, Sir William (Croydon South)

Berry, Hon Anthony

Brown, Michael (Brigg & Sc'thorpe)

Clarke, Kenneth (Rushcliffe)

Best, Keith

Browne, John (Winchester)

Cockeram, Eric

Bevan, David Gilroy

Bruce-Gardyne, John

Colvin, Michael

Cope, John

King, Rt Hon Tom

Proctor, K. Harvey

Cormack, Patrick

Kitson, Sir Timothy

Pym, Rt Hon Francis

Corrie, John

Knight, Mrs Jill

Raison, Timothy

Costain, A. P.

Knox, David

Rathbone, Tim

Cranborne, Viscount

Lamont, Norman

Rees, Peter (Dover and Deal)

Critchley, Julian

Lang, Ian

Rees-Davies, W. R.

Crouch, David

Langford-Holt, Sir John

Renton, Tim

Dean, Paul (North Somerset)

Latham, Michael

Rhodes James, Robert

Dickens, Geoffrey

Lawrence, Ivan

Ridley, Hon Nicholas

Dorrell, Stephen

Lawson, Nigel

Ridsdale, Julian

Douglas-Hamilton, Lord James

Lee, John

Rifkind, Malcolm

Dover, Denshore

Le Marchant, Spencer

Roberts, Wyn (Conway)

du Cann, Rt Hon Edward

Lennox-Boyd, Hon Mark

Ross, Wm. (Londonderry)

Dunn, Robert (Dartford)

Lester, Jim (Beeston)

Rossi, Hugh

Durant, Tony

Lewis, Kenneth (Rutland)

Rost, Peter

Dykes, Hugh

Lloyd, Ian (Havant & Waterloo)

Royle, Sir Anthony

Eden, Rt Hon Sir John

Lloyd, Peter (Fareham)

Sainsbury, Hon Timothy

Eggar, Timothy

Loveridge, John

St. John Stevas, Rt Hon Norman

Elliott, Sir William

Luce, Richard

Scott, Nicholas

Emery, Peter

Lyell, Nicholas

Shaw, Giles (Pudsey)

Fairbairn, Nicholas

McCrindle, Robert

Shaw, Michael (Scarborough)

Fairgrieve, Russell

Macfarlane, Neil

Shelton, William (Streatham)

Faith, Mrs Sheila

MacGregor, John

Shepherd, Colin (Hereford)

Farr, John

MacKay, John (Argyll)

Shepherd, Richard (Aldridge-Br'hills)

Fell, Anthony

McNair-Wilson, Michael (Newbury)

Shersby, Michael

Fenner, Mrs Peggy

McNair-Wilson, Patrick (New Forest)

Silvester, Fred

Finsberg, Geoffrey

McQuarrie, Albert

Sims, Roger

Fisher, Sir Nigel

Madei, David

Skeet, T. H. H.

Fletcher, Alexander (Edinburgh N)

Major, John

Smith, Dudley (War. and Leam'ton)

Fletcher-Cooke, Charles

Marland, Paul

Speed, Keith

Fookes, Miss Janet

Marlow, Tony

Speller, Tony

Forman, Nigel

Marshall, Michael (Arundel)

Spence, John

Fowler, Rt Hon Norman

Marten, Neil (Banbury)

Spicer, Jim (West Dorset)

Fox, Marcus

Mates, Michael

Spicer, Michael (S Worcestershire)

Fraser, Rt Hon H. (Stafford & St)

Maude, Rt Hon Angus

Squire, Robin

Fraser, Peter (South Angus)

Mawby, Ray

Stainton, Keith

Fry, Peter

Mawhinney, Dr Brian

Stanbrook, Ivor

Gardiner George (Reigate)

Maxwell-Hyslop, Robin

Stanley, John

Gardner, Edward (South Fylde)

Mayhew, Patrick

Steen, Anthony

Garel-Jones, Tristan

Mellor, David

Stevens, Martin

Gilmour, Rt Hon Sir Ian

Meyer, Sir Anthony

Stewart, Ian (Hitchin)

Glyn, Dr Alan

Miller, Hal (Bromsgrove & Redditch)

Stewart, John (East Renfrewshire)

Goodlad, Alastair

Mills, Iain (Meriden)

Stokes, John

Gorst, John

Mills, Peter (West Devon)

Stradling Thomas, J.

Gow, Ian

Miscampbell, Norman

Tapsell, Peter

Gower, Sir Raymond

Mitchell, David (Basingstoke)

Taylor, Robert (Croydon NW)

Grant, Anthony (Harrow C)

Moate, Roger

Tebbit, Norman

Gray, Hamish

Molyneaux, James

Temple-Morris, Peter

Greenway, Harry

Monro, Hector

Thatcher, Rt Hon Mrs Margaret

Grieve, Percy

Montgomery, Fergus

Thompson, Donald

Griffiths, Eldon (Bury St Edmunds)

Moore, John

Thorne, Neil (Ilford South)

Griffiths, Peter (Portsmouth N)

Morgan, Geraint

Thornton, Malcolm

Grist, Ian

Morris, Michael (Northampton, Sth)

Townend, John (Bridlington)

Grylls, Michael

Morrison, Hon Charles (Devizes)

Townsend, Cyril D. (Bexleyheath)

Gummer, John Selwyn

Morrison, Hon Peter (City of Chester)

Trippler, David

Hamilton, Hon Archie (Eps'm&Ew'll)

Mudd, David

Trotter, Neville

Hamilton, Michael (Salisbury)

Murphy, Christopher

van Straubenzee, W. R.

Hampson, Dr Keith

Myles, David

Vaughan, Dr Gerard

Hannam, John

Neale, Gerrard

Viggers, Peter

Haselhurst, Alan

Needham, Richard

Wakeham, John

Hastings, Stephen

Nelson, Anthony

Waldegrave, Hon William

Havers, Rt Hon Sir Michael

Neubert, Michael

Walker, Bill (Perth & E Perthshire)

Hawksley, Warren

Newton, Tony

Waller, Gary

Hayhoe, Barney

Nott, Rt Hon John

Walters, Dennis

Heddle, John

Onslow, Cranley

Ward, John

Henderson, Barry

Osborn, John

Watson, John

Haseltine, Rt Hon Michael

Page, Rt Hon Sir R. Graham

Wells, John (Maidstone)

Hicks, Robert

Page, Richard (SW Hertfordshire)

Wells, Bowen (Hert'rd & Stev'nage)

Higgins, Rt Hon Terence L.

Parkinson, Cecil

Wheeler, John

Hill, James

Parris, Matthew

Whitelaw, Rt Hon William

Hogg, Hon Douglas (Grantham)

Patten, Christopher (Bath)

Whitney, Raymond

Holland, Philip (Carlton)

Patten, John (Oxford)

Wickenden, Keith

Hooson, Tom

Pattie, Geoffrey

Wiggin, Jerry

Hordern, Peter

Pawsey, James

Wilkinson, John

Howell, Rt Hon David (Guildford)

Penhaligon, David

Williams, Delwyn (Montgomery)

Howell, Ralph (North Norfolk)

Percival, Sir Ian

Winterton, Nicholas

Hunt, David (Wirral)

Peyton, Rt Hon John

Wolfson, Mark

Hunt, John (Ravensbourne)

Pink, R. Bonner

Younger, Rt Hon George

Hurd, Hon Douglas

Pollock, Alexander

Irvine, Charles (Cheltenham)

Porter, George

TELLERS FOR THE AYES:

Jenkin, Rt Hon Patrick

Powell, Rt Hon J. Enoch (S Down)

Mr. Carol Mather and

Johnson Smith, Geoffrey

Price, David (Eastleigh)

Mr. David Waddington.

Jopling, Rt Hon Michael

Prior, Rt Hon James

Kershaw, Anthony

1226

1227

NOES

Abse, Leo

Garrett, W. E. (Wallsend)

Moyle, Rt Hon Roland

Adams, Allen

George, Bruce

Mulley, Rt Hon Frederick

Allaun, Frank

Gilbert, Rt Hon Dr John

Newens, Stanley

Anderson, Donald

Golding, John

Oakes, Rt Hon Gordon

Archer, Rt Hon Peter

Gourlay, Harry

Ogden, Eric

Armstrong, Rt Hon Ernest

Graham, Ted

O'Halloran, Michael

Ashley, Rt Hon Jack

Grant, George (Morpeth)

O'Neill, Martin

Ashton, Joe

Grant, John (Islington C)

Owen, Rt Hon Dr David

Atkinson, Norman (H'gey, Tott'ham)

Hamilton, James (Bothwell)

Palmer, Arthur

Barnell, Guy (Greenwich)

Hamilton, W. W. (Central Fife)

Park, George

Barnett, Rt Hon Joef (Heywood)

Harrison, Rt Hon Walter

Pavitt, Laurie

Benn, Rt Hon Anthony Wedgwood

Hart, Rt Hon Dame Judith

Pendry, Tom

Bennett, Andrew (Stockport N)

Hattersley, Rt Hon Roy

Powell, Raymond (Ogmore)

Bidwell, Sydney

Haynes, Frank

Prescott, John

Booth, Rt Hon Albert

Healey, Rt Hon Denis

Price, Christopher (Lewisham West)

Boothroyd, Miss Betty

Heffer, Eric S.

Race, Reg

Bradley, Tom

Hogg, Norman (E Dunbartonshire)

Rees, Rt Hon Merlyn (Leeds South)

Bray, Dr Jeremy

Holland, Stuart (L'beth, Vauxhall)

Richardson, Jo

Brown, Hugh D. (Provan)

Home Robertson, John

Roberts, Allan (Bootle)

Brown, Robert C. (Newcastle W)

Homewood, William

Roberts, Ernest (Hackney North)

Brown, Ronald W. (Hackney S)

Hooley, Frank

Roberts, Gwilym (Cannock)

Brown, Ron (Edinburgh, Leith)

Horam, John

Robertson, George

Buchan, Norman

Howell, Rt Hon Denis (B'ham, Sm H)

Robinson, Geoffrey (Coventry NW)

Callaghan, Jim (Middleton & P)

Huckfleld, Les

Rodgers, Rt Hon William

Campbell, Ian

Hudson Davies, Gwitym Ednyfed

Rooker, J. W.

Canavan, Dennis

Hughes, Mark (Durham)

Roper, John

Cant, R. B.

Hughes, Robert (Aberdeen North)

Ross, Ernest (Dundee West)

Carmichael, Neil

Hughes, Roy (Newport)

Rowlands, Ted

Carter-Jones, Lewis

Janner, Hon Greville

Ryman, John

Cartwright, John

Jay, Rt Hon Douglas

Sandelson, Neville

Clark, Dr David (South Shields)

Johnson, Walter (Derby South)

Sever, John

Cocks, Rt Hon Michael (Bristol S)

Jones, Rt Hon Alec (Rhondda)

Sheerman, Barry

Cohen, Stanley

Jones, Barry (East Flint)

Sheldon, Rt Kon Robert (A'ton-u-L)

Concannon, Rt Hon J. D.

Jones, Dan (Burnley)

Short, Mrs Renée

Conlan, Bernard

Kaufman Rt Hon Gerald

Silkin. Rt Hon John (Deptford)

Cook, Robin F.

Kerr, Russell

Silkin, Rt Hon S. C. (Dulwich)

Cowans, Harry

Kilroy-Silk, Robert

Silverman, Julius

Craigen, J. M. (Glasgow, Maryhill)

Kinnock, Neil

Smith, Rt Hon J. (North Lanarkshire)

Crowther, J. S.

Lambie, David

Snape, Peter

Cryer, Bob

Lamborn, Harry

Soley, Clive

Cunliffe, Lawrence

Lamond, James

Spearing, Nigel

Cunningham, George (Islington S)

Leighton, Ronald

Spriggs, Leslie

Cunningham, Dr John (Whitehaven)

Lestor, Miss Joan (Eton & Slough)

Stallard, A. W.

Dalyell, Tam

Lewis, Arthur (Newham North West)

Stott, Roger

Davidson, Arthur

Lewis, Ron (Carlisle)

Strang, Gavin

Davies, Rt Hon Denzil (Llanelli)

Lofthouse, Geoffrey

Straw, Jack

Davies, I for (Gower)

Lyon, Alexander (York)

Summerskill, Hon Dr Shirley

Davis, Terry (Brm'ham, Stechford)

Lyons, Edward (Bradford West)

Taylor, Mrs Ann (Bolton West)

Deakins, Eric

Mabon, Rt Hon Dr J. Dickson

Thomas, Dafydd (Merioneth)

Dempsey, James

McCartney, Hugh

Thomas, Jeffrey (Abertillery)

Dewar, Donald

McDonald, Dr Oonagh

Thomas, Mike (Newcastle East)

Dixon, Donald

McElhone, Frank

Thorne, Stan (Preston South)

Dobson, Frank

McKay, Allen (Penistone)

Tilley, John

Dormand, Jack

McKelvey, William

Torney, Tom

Douglas, Dick

MacKenzie, Rt Hon Gregor

Urwin, Rt Hon Tom

Douglas-Mann, Bruce

Maclennan, Robert

Varley, Rt Hon Eric G.

Dubs, Alfred

McMahon, Andrew

Wainwright, Edwin (Dearne Valley)

Duffy, A. E. P.

Macmillan, Rt Hon M. (Farnham)

Walker, Rt Hon Harold (Doncaster)

Dunn, James A. (Liverpool, Kirkdale)

McNally, Thomas

Watkins, David

Dunnett, Jack

McNamara, Kevin

Weetch, Ken

Eadie, Alex

McWilliam, John

wellbeloved, James

Eastham, Ken

Magee, Bryan

Welsh, Michael

Ellis, Raymond (NE Derbyshire)

Marks, Kenneth Marshall,

White, Frank R. (Bury &Radcliffe)

Ellis, Tom(Wrexham)

David (Gl'sgow, Sheltles'n)

White, James (Glasgow, Pollok)

English, Michael

Marshall, Dr Edmund (Goole)

Whitehead, Phillip

Ennals, Rt Hon David

Martin, Michael (Gl'gow, Springb'rn)

Whitlock, William

Evans, Ioan (Aberdare)

Mason, Rt Hon Roy

Williams, Rt Hon Alan (Swansea W)

Evans, John (Newton)

Maxton, John

Williams, Sir Thomas (Warrington)

Ewing, Harry

Maynard, Miss Joan

Wilson, Rt Hon Sir Harold (Huyton)

Faulds Andrew

Meacher, Michael

Wilson, William (Coventry SE)

Field, Frank

Mellish, Rt Hon Robert

Winnick, David

Flannery, Martin

Mikardo, Ian

Woodall, Alec

Fletcher, Ted (Darlington)

Millan, Rt Hon Bruce

Wrigglesworth, Ian

Foot, Rt Hon Michael

Miller, Dr M. S. (East Kilbride)

Young, David (Bolton East)

Forrester, John

Mitchell, Austin (Grimsby)

Foster, Derek

Mitchell, R. C. (Soton, Itchen)

TELLERS FOR THE NOES:

Foulkes, George

Morris, Rt Hon Alfred (Wythenshawe)

Mr. James Tinn and

Fraser, John (Lambeth, Norwood)

Morris, Rt Hon Charles (Openshaw)

Mr. Joseph Dean.

Freeson, Rt Hon Reginald

Morris, Rt Hon John (Aberavon)

Garrett, John (Norwich S)

Morton, George

Question accordingly agreed to.
Bill read the Third time and passed.

PETITION

  Court Proceedings (Parliamentary Papers)
  Mr. Christopher Price (Lewisham, West): I beg to present a petition from Robert Anthony Joy, the borough solicitor to the London borough of Lewisham. As I propose to move a motion in respect of the petition, I ask that it be read.
  The Clerk of the House read the petition, which was as follows:
  To the Honourable the Commons of Great Britain and Northern Ireland in Parliament assembled.
  The humble Petition of Robert Anthony Joy sheweth
  That the Petitioner is the borough solicitor to the London borough of Lewisham, representing the London boroughs of Lambeth, Southwark and Lewisham in an application pending in the Queen's Bench Division of the High Court under No. D.C. 429/79 in which they are the applicants;
  That in the said application the applicants seek an order of judicial review directed at a direction of the Secretary of State for Social Services dated 1st August 1979 and raised on 6th August 1979 appointing commissioners to perform the functions for the Lambeth, Southwark and Lewisham area health authority (teaching);
  That in the said action issues arise as to whether the powers of the Secretary of State under section 86 of the National Health Service Act 1977 to appoint such commissioners were applicable to the Lambeth, Southwark and Lewisham area health authority (teaching) in this instance;
  That on 19th December 1979 the Secretary of State for Social Services spoke on the Second Reading of the Health Services Bill;
  That the said speech is reported in the following Report of Debates: 1979 Volume 976, columns 648 to 665;
  That the above Report of Debates relates directly to the issues referred to in paragraph 2 hereof and reference is desired to be made in the case referred to in paragraph 1 hereof to the said Report of Debates. Wherefore your Petitioner humbly prays that your Honourable House giveleave for reference to be made to the said Report of Debates.
  And your Petitioner, as in duty bound, will ever pray, etc.
  Robert A. Joy.
  Ordered,
  That leave be given for reference to be made to the said Report of Debates.—[Mr. Christopher Price.]

SEX EQUALITY LEGISLATION
Motion made, and Question proposed, That this House do now adjourn.—[Mr. Cope]
12.6 am
Mr. Ivor Stanbrook: I wish to draw the attention of the House to the folly of basing policies on a false and irrelevant notion of equality of the sexes. I hold what I regard as the sensible view about this. Institutionalised prejudice which owes its origin to nothing more than differences of sex is wrong, unjust, causes unhappiness and prevents a section of our population from achieving its full potential.
So, I have no patience with the Jockey Club, the Stock Exchange Lloyd's, City aldermen or any other body which operates a "men only" rule in circumstances where the sex of a candidate should be completely irrelevant. But beyond that I will not go.
The manifest physical differences between the sexes, leading to differences in function, interest and outlook result in different levels of achievement in fields of endeavour. It is impossible for these levels ever to be the same.It is foolish to compel human beings to act so as to achieve this impossible objective, and attempts to do so by legislation merely make the law ridiculous—
Mr. Nicholas Winterton (Macclesfield): A fool.
Mr. Stanbrook: Indeed, a fool, as my hon. Friend says.
A recent example of this was an attempt by the Equal Opportunities Commission, which is almost wholly led and staffed by female busybodies, to discipline a character in a children's comic for saying that girls are for looking after boys.
The commission costs £2 million a year and employs 170 people. It is, of course, one of the laughing stocks of British national life. My hon. Friends may agree that it provides light relief, however, in times of need. Its guidelines to publishers contain gems of bizarre humour. Grownup women must not be referred to as girls. The word "housewife" must not be used. It should tell that to the Passport Office, where a member of the staff changed my wife's application for a passport on

1231
which she gave her occupation as "homemaker". The word "housewife" was inserted instead with the explanation that it was impossible to describe her as a homemaker. The Equal Opportunities Commission could not do more for the anti-women's rights cause if it was specifically created for the purpose.
A lot could be done to remove institutionalised prejudice between men and women. There is the question for example, of the pensionable age, which is 60 for women and 65 for men. There is no justification for that difference. It should be organised according to actuarial considerations on the basis of the pro rata level of pension justified at the time of retirement which ought not to be fixed at any particular age.
It is present, too, in our tax arrangements which are crying out for reform. Spinsters and women who stay at home to look after their families, are unjustly treated. Our tax system gives an allowance to wives who go out to work. That is an indefensible discrimination. Enhancement of family life is and should be higher in the order of priorities—higher, that is, than any notice of theoretical equality. We should help mothers of young children to look after them at home. Instead, under our tax system, they suffer compared to mothers who go out to work. The EOC has an obsession about women in employment.
Recently, the hon. Member for Wolverhampton, North-East (Mrs. Short) asked for more support to enable women to go out to work. The Minister who replied treated the question seriously. He should have told her that the country needs an order of priority and that it is more necessary in these days of high unemployment for breadwinners to be assisted, whatever their sex. Homes and families should come first. The notion of sex equality is far less important in a time of mass unemployment.
This foolish notion applies equally to pay. The equal pay legislation has been the cause of much unemployment. Equal pay for equal work is a gigantic fraud. Pay can be quantified, but not the value of work. One cannot equate the value of a woman teacher, for example, of a class of boys with that of a male colleague. Boys should be trained by men. One cannot equate the value of a woman
1232
police officer with that of her male colleague. The idea of a woman coping with violence is ridiculous and offensive. Her colleagues and senior officers are bound to be concerned about her safety, to the detriment of their own efficiency.
Chief constables claim credit for higher recruiting figures, but the recruits are mostly women and they are mostly employed at the blunt end of the police effort. Mr. Anderton, the chief constable of Manchester, admitted as much recently. In fact, the police are an example of discrimination against men on the ground of sex. No man can be recruited whose height is less than 5ft. 8in., yet women may be recruited so long as they are over 5ft. 4in. How can such discrimination be defended?
To his credit, the hon. Member for Cannock (Mr. Roberts) recently pointed out this anomaly and the Minister of State, Home Office, did not defend it. He contented himself with saying that overall police recruitment figures were rising. Of course they are—by the recruitment of women, whose value as police officers is worth less than that of men over the whole range of police duties.
The Labour Government of 1974 succumbed to the demands of the women's rights lobby when they allowed women to bring in foreign husbands as of right. The plea of the equality of the sexes was made—yet in immigration and nationality matters there is and can be no equality. A child may derive his nationality from one parent. Few countries provide that both parents can determine it, because to do so is to create dual citizenship with many consequent problems.
Almost every country determines nationality by the place of birth, or by the place of birth of the father. It could be that of the mother—it does not matter which—but it is usually that of the father because the father's home and place of employment usually determine the home of the family. No man should owe allegiance to two sovereigns, as no man can serve two masters.
The same applies to immigration into this country for settlement. The Government are criticised for their immigration rule that there should be no absolute right of entry for settlement for foreign husbands. A husband in this country is expected by law to provide the home in

1233
a way backed up by legal duties. That is the rule in almost every other country as well.
The surprising thing in Britain is that no one—not in the equal rights lobby anyway—suggests that this rule of law should be changed and that women should have a duty to maintain their husbands as husbands have a legal duty to maintain their wives. If a wife is deserted and her husband fails to provide herwith a home she can go to the magistrates and sue him for wilful neglect to maintain. The deserted husband cannot sue his wife. She has no legal duty to provide him with a home which is enforceable at law. I think that that is right. The husband should provide the home. But wives should not expect to exempt their foreign husbands from our immigration laws so long as our law is so one-sided.
To be fair to the Government, they inherited most of this nonsense. When we were in opposition we did not enthusiastically support equality legislation. The dottier parts of the sex discrimination legislation were opposed by the Conservative Party. The Act should be repealed and the ridiculous Equal Opportunities Commission should be abolished. That would save another £2 million a year of taxpayers' money.
I know that the legislative congestion of the parliamentary timetable may not allow this to be done at once, but I hope that my right hon. Friend the Home Secretary will not give the impression that he has any faith in the future of this legislation.
The nub of my argument is that there are more important things in politics than the achievement of some theoretical equality of human rights between men and women. The pursuit of that theoretical equality deflects us in our efforts to solve our greater economic and social problems. It is counter-productive, and stimulates resistance even in areas where change is desirable. By confusing consequences that arise from natural differences between men and women with genuineequality, we are comparing the incomparable. By trying to enforce in practical terms what is impossible we are all made to look foolish.
12.16 am
Mr. John Stokes: I am happy to support
1234
my hon. Friend the Member for Orpington (Mr. Stanbrook) on the absurd subject of sex equality by legislation. I declare an interest in that for the past 20 years I have been director of a staff employment agency. Not once during the period has any lady applicant complained of having been discriminated against by myself or any of my colleagues.
Sensible, confident and competent women—such as my wife and two daughters, all of whom are graduates and are cleverer than I—have never depended on legal sanctions to make their way in the world. They have sensibly relied on their own characters and abilities.
I am all in favour of women. Women should compete for all jobs, including top jobs, provided that they do not have young children. Women have a great deal to offer in all walks of lifeas well as in the home. I am amazed that our splendid new Tory Government—whom we were so pleased to see gain office, who are doing so much good and will do much more good in future—have not yet had the sense and the courage to abolish the Equal Opportunities Commission.
Discrimination is a part of life. We discriminate with our friends, with our jobs and in choosing a partner for life. These are personal matters which would be better left to the kindness and tolerance of individuals, especially in this old nation of England, rather than be regulated by Government diktat.
12.19 am
Mr. Nicholas Winterton: I rise briefly to endorse fully the comments made by my hon. Friends the Members for Orpington (Mr. Stanbrook) and Halesowen and Stourbridge (Mr. Stokes). A great deal of sense has been spoken in the Chamber at this late hour.
I remind the Minister that this Government came to power with the objective of removing nonsense from the statute book and establishing sanity in this country. One of the nonsenses on the statute book is the Equal Opportunities Commission.
I do not want to hear what I read on the tape today in answer to a question I tabled concerning the abolition of the Equal Opportunities Commission. I should like my hon. Friend to tell us that

1235
he intends at an early date to bring forward legislation to abolish the Equal Opportunities Commission, which has created far more problems for women than any solutions that it may have provided.
In conclusion, I refer briefly to the absolute nonsense of the Equal Opportunities Commission wasting public money inquiring into the alleged sexism of Harold Hare in the children's comic "Jack and Jill". The British people must think that this Parliament is nonsense if it gives power to a public body to inquire into the comics that are read by children. This is a comic which has brought great pleasure to many youngsters over many years.
I urge my hon. Friend to give some formal commitment tonight that this ridiculous body, staffed by do-good busybodies, will be removed from the face of this land at a very early date.
12.21 am
The Minister of State, Home Office (Mr. Timothy Raison): This debate has had a certain value as well as a certain amount of spirit to it. We have not had many opportunities, if any, to debate this subject in the life of the present Parliament, and I congratulate my hon. Friend the Member for Orpington (Mr. Stanbrook) on bringing it forward. As I say, it has been a spirited debate. My hon. Friend gave it a very spirited beginning. I think that it would be fair to say that when he now goes home, he will be fully justified in quoting the now rather well known words of Harold Hare "You can bring my slippers and a hot drink now". I think that he will have deserved them.
What we have just heard from my hon. Friend the Member for Macclesfield (Mr. Winterton)—and I think that he was speaking in very much the same sense as my hon. Friend the Member for Orpington—was a firm demand for the repeal of the Sex Discrimination Act, which came into operation in December 1975. I am afraid that here I shall be disappointing my hon. Friends. [HON. MEMBERS: "Shame."] As the House knows, the Act makes discrimination on grounds of sex unlawful in many circumstances, notably in employment, in education and in supplying goods and services. It set up machinery for enforc-
1236
ing those provisions. It set up the Equal Opportunities Commission, to which reference has been made, to work towards the elimination of discrimination and to promote equality of opportunity between men and women generally.
I must say that, in spite of the mood of the House this evening, I believe that this legislation was widely seen as an important step forward in achieving equal opportunities. I am sure that I can at least remind the House of the support that it received during its passage both here and in another place. I know that a number of my hon. Friends, including my hon. Friend the Member for Orpington, by no means supported the passage of that piece of legislation, but I must say that it was supported by the generality of the Conservative side of the House.
Those who supported the measure realise that legislation by itself cannot achieve the objective of equal opportunity. It cannot by itself createnew attitudes or a new atmosphere which will enable men and women to be treated equally. But it was, I think, a declaration by Parliament of public policy that people should not be denied opportunities or be treated differently solely on the ground of their sex. It provided redress for individual victims of discrimination and machinery for securing changes in practices which resulted in discrimination.
Discrimination leads to injustice to individuals. It can, for example—and I think that this is the nub of the matter—prevent both men and women from doing work which best suits their abilities. I believe that as a country we cannot afford to waste talent in this way. Therefore, the Government remain committed to the advancement of equal opportunities.
There are, of course, those who believe very firmly that a woman's place is in the home. We have heard echoes of that sentiment this evening. For many women that is their choice for at least a part of their lives. Others, whether from personal preference or from need, wish to work. I do not think that this choice should be denied or that women should be restricted to a limited range of work, either because wider avenues are closed to them or because their education has not given them a reasonable chance to acquire the necessary qualifications.

1237
Greater equality of opportunity in effect means greater freedom of chice.
Mr. Nicholas Winterton: What about the Prime Minister?
Mr. Raison: The prime Minister has shown—
Mr. Winterton: She did it on her own merit. It had nothing to do with that ridiculous legislation.
Mr. Raison: I accept that the Prime Minister has achieved her position without the aid of legislation. However, that does not mean that the legislation has nothing to offer other women.
I realise that some of my hon. Friends regard the Equal Opportunities Commission with something less than total enthusiasm. However, as a Government we believe that it has a useful part to play in the advancement of equal opportunities. We are all aware that some of the commission's activities in recent years have been the subject of jocular press comment. Frankly, it sometimes asks for it. It is inevitable that a few of the cases brought before the courts have attracted disproportionate attention. However, other cases have received less widespread publicity and have led to useful progress being made towards achieving equal opportunities for women. The EOC does a good deal of its work quietly, and without ostentation. It achieves practical results without the need to bring cases to industrial tribunals or to the county court.
I recently visited the headquarters of the Equal Opportunities Commission in Manchester. I was rather impressed by the good work that it is doing, for example, in response to complaintsor queries that it receives from individuals concerning employment inequalities, as regards tackling legal questions in education, and in other ways. Criticisms of the EOC can be heard. I know that there are those who consider that the commission has not made the best of choices in its selection of priorities, and that it seems to spend a disproportionate amount of energy on relatively minor issues. Of course, the commission is independent as regards the day-to-day conduct of its business. My right hon. Friend the Secretary of State would not wish to intervene. I have no doubt, however, that the hard-working chairman
1238
of the commission and her colleagues will consider carefully the comments made by my hon. Friends on its work.
My right hon. Friend is responsible for the level of the commission's expenditure, but it is for the commission to decide the detailed allocation of its budget. This year, the commission has been asked to make savings on staff and other costs. Its expenditure is likely to be some £2¼million. The budget for next year has not yet been determined.
The provision of greater equality of opportunity is not just a matter for the EOC, or indeed for my right hon. Friend the Home Secretary. Other Government Departments have major responsibilities. I am thinking in particular of the Department of Employment, with its responsibility for the Equal Pay Act and for better employment opportunities. I am thinking also of the Department of Education and Science. The Chancellor of the Exchequer is involved in the important area of taxation, to which my hon. Friend has referred. In addition, the Secretary of State for Social Services is responsible, of course, for our pension system.
I shall devote a few minutes to one particular aspect that has been raised, namely, that of the police. The Government's position is clear. The Sex Discrimination Act applies to the police service, subject to certain specified exemptions relating to height limits, uniforms and other special matters. The Act also provides certain general exemptions, including provisions relating to decency that apply to such matters as the searching of women and the provision of training accommodation.
Subject to those exceptions, there should be no discrimination on the ground of sex. The opportunities for joining the police service are the same for men and women. Women police officers receive the same pay and allowances. They have the same opportunities for promotion, and are subject to the same code of discipline. They are alsoliable to undertake the whole range of duties. These should be allocated according to ability, without regard to sex. In cases where physical strength is needed—for example, in public order situations—senior officers should take account of that requirement when deploying officers. In general, women police officers undertake

1239
the full range of police duties, including those that involve physical risks.
It has to be acknowledged that all the police representative bodies were opposed to the decision to make the police service subject to the Act. That had nothing to do with male chauvinism. There were no objections to women police officers receiving equal pay and allowances, having the same promotion opportunities and being subject, in general, to the same conditions of service. There was simply a very genuine belief that women were not physically equipped to deal with situations in which there was a demand for sheer strength. That belief cannot be lightly dismissed. We understand the reluctance of supervising officers to detail women police officers to patrol alone at night or to send them to duties in which they are likely to become involved in violent confrontation. Nevertheless, senior officers fully recognise that the Act applies to the police service.
The present proportion of women in the police service is 8 per cent. in England and Wales. That proportion does not, of itself, give rise to any great concern. The overall figure does, however, mask certain problems. First, the proportion varies from one force to another, and forces where the figure is significantly higher may have problems of deployment.
Secondly, the increased intake of women officers coupled with the decline in the rate of recruitment of men during the two years preceding the police pay award in September 1978, led to an imbalance in the proportion of women to men among constables with fewer than three years' service. Since officers in their early years of service lack the experience for specialist duties, such as CID or traffic, the proportion of women officers on uniformed beat patrol duties was often much higher than that indicated by the overall strength. For example, in one force in which the overall strength of women police officers was 7 per cent., the proportion of women on beat patrol duties was sometimes as high as 25 per cent. In such circumstances the chief officer clearly has serious difficulties in deploy-
1240
ment. The significant improvement in recruiting since the implementation of the Edmund-Davies pay award is serving to correct that imbalance, but, because the rate of wastage among women police officers is high, a high proportion will inevitably continue to be employed on beat patrol duties.
I accept that the application of the Act to the police service does pose certain problems. The Edmund-Davies committee considered these, but concluded that it was too earlyto make any reliable assessment of the effect of the Act on the police service, and recommended that the position should be kept under review. We think that that is right. The increased rates of pay have not affected the number of women comingin to the police service—just over 2,000 in each year since 1976. What has happened is that the proportion of men coming in has increased. That should, in time, ensure that the proportion of uniformed police officers with the strength required to deal with violent incidents will increase, while enabling the police service to use to full advantage the abilities of the high quality women police officers who have joined in recent years.
May I now conclude. In my view, the movement towards providing greater equality of opportunity does not mean forcing men and women into adopting life styles that they do not want to pursue, or pretending that many women may not prefer to devote themselves to looking after their families, at least for some years. I believe that each family must work out for itself how it wants to distribute its labour and employ its abilities. Sometimes traditional roles may be reversed. Overall, I do not believe that the traditions and images of the masculine and the feminine, which are so deeply ingrained in our civilisation and in human psychology, should or could be lightly swept away. What matters is that scope for opportunity, talent and self-expression should be available to each sex. That is something which, in my view, public policy can help to bring about.
Question put and agreed to.
Adjourned accordingly at twenty-seven minutes to One o'clock