HC Deb 25 October 1982 vol 29 cc755-85


Lords amendment: No. 1, before clause 1, insert: A.—(1) Section 16 of the Companies Act 1967 (additional matters of general nature to be dealt with in directors' report) is amended as follows. (2) In subsection (1), the following paragraph is added at the end— (h) in the case of relevant companies, contain a statement describing the action that has been taken during the financial year to introduce, maintain or develop arrangements aimed at— (i)providing employees systematically with information on matters of concern to them as employees, (ii)consulting employees or their representatives on a regular basis so that the views of employees can be taken into account in making decisions which are likely to affect their interests, (iii)encouraging the involvement of employees in the company's performance through an employees' share scheme or by some other means, (iv)achieving a common awareness on the part of all employees of the financial and economic factors affecting the performance of the company. (3) After subsection (1) there is inserted the following subsection (1A) For the purposes of subsection (1)(h) above, a company is a "relevant company" if the average number of persons employed by it in each week during the financial year exceeds 250; and for the purposes of this subsection the number of persons employed shall be the quotient derived by dividing by the number of weeks in the financial year the number derived by ascertaining, in relation to each of those weeks, the number of persons who, under contracts of service, were employed in the week (whether throughout it or not) by the company and adding up the numbers ascertained. (4) After subsection (7) there is inserted the following subsection— (8) In subsection (1)(h) above "employee" does not include a person employed to work wholly or mainly outside the United Kingdom; and for the purposes of subsection (l A) above no regard shall be had to such a person."

Read a Second time.

4.51 pm
Mr. Speaker

I call the hon. Member for Chester-le-Street (Mr. Radice) to move the first sub-amendment to the proposed new clause, and I suggest that it will be in the interests of the House to discuss also the three remaining sub-amendments in the names of the hon. Member for Chester-le-Street and others:

In subsection (2)(h) leave out 'aimed at' and insert 'for'.

In subsection (2)(h) (i) leave out 'as employees' and insert 'including in particular, information about the arrangements by means of which the company carry out any statutory obligations to which the company may be subject regarding consultations with recognised independent trade unions,'. In subsection (2)(h) (i) at end insert 'and in particular, information about the extent of the company's compliance with the requirements of the Disabled Persons (Employment) Act 1944,'.

Mr. Giles Raclice (Chester-le-Street)

I beg to move, as an amendment to the proposed Lords amendment, in subsection (2)(h) .after 'statement', insert 'a copy of which shall be issued free of charge to every employee of the company'. The Lords amendment is an extremely modest measure. It is hardly worthy of the name "reform". It is not that employee participation, or employee involvement as, apparently, it is new called, or, as the Labour Party prefers to call it, industrial democracy, is not of the highest importance. It is.

In moral terms, the democratic case within industry has the same basis as he democratic argument everywhere—that every person should have a say in those decisions which affect his or her life. Every survey confirms the obvious point that the deeper the individual involvement, the greater the job satisfaction.

There is another argument that is especially relevant to our predicament today. It will not be possible to carry through the re-equipment and reinvestment in British industry that is so desperately needed unless employees a re fully involved. We may examine foreign examples. Those countries that are doing best—Japan, for example, about which we hear a great deal from the Prime Minister—are those in which employees are fully involved.

Unfortunately, the Lords amendment merely amounts to a small change in directors' reports to shareholders. Companies will be able to say what they have done to provide information for, to consult and to encourage involvement of employees through a shares scheme or some other means. If companies have done nothing, they need only say that they have nothing to report. As I understand it, there is nothing in the amendment to compel any company to do anything about information, consultation or representation. I do not believe that it will do any harm—although I regret that it is contained in this infamous anti-trade, union Bill—but it is unlikely to do much good.

The first amendment speaks for itself. Company reports that include a section on employee involvement should go to all employees, not just to shareholders. I am glad to see the hon. Member for Kidderminster (Mr. Bulmer) present. When he moved his Bill on directors' reports, he said: It is clearly desirable that the statement should be written not in the language beloved of accountants"— hear, hear— but in terms to which employees can respond and that they should each receive a copy."—[Official Report,7 April 1982; Vol. 21, c. 956.] That is precisely what the amendment would do.

The third amendment stresses the role of trade unions in employee participation. It also makes companies report on how they are carrying out their legal obligations to unions, such as in section 17 of the Employment Protection Act 1975, which provides information on collective bargaining, section 99 of the same Act, which notifies the procedure on redundancies and section 2 of the Health and Safety at Work etc. Act 1974 which deals with the appointment of safety representatives. That would be a useful amendment.

In reply, the Minister may speak as though Government support for the amendment is a great new Government initiative. It should be clear that the Government resisted an amendment on those lines both in Committee and on Report in the House of Lords. They were defeated on Report. That is why we are discussing the amendment today.

The Government's attitude towards industrial democracy has been uniformly negative. From time to time they say that, in principle, they are in favour of it, but they have strongly resisted any legislation. The Under-Secretary of State for Employment, the hon. and learned Member for Clitheroe (Mr. Waddington), told a personnel conference at Gatwick on 14 May that calls for legislation are misguided and that there is no system which will suit the needs of every company and any system imposed by Government would cut across and lead to the abandonment of schemes of partnership in some industries which are working well. That is an amazing statement.

We also know that the Government have expressed their consistent hostility both to the EEC fifth directive on worker representation on boards and to the Vredeling proposals on information and consultation. I understand that they have been threatening to use the veto. We know that Conservative MEPs watered down the fifth directive when it came before the European Parliament in May. We also know that, acting as the mouthpiece of the Government and the multinationals who orchestrated an unprecedented lobbying campaign, Conservative MEPs tore the guts out of the Vredeling plans only a fortnight ago. They voted to deny workers access to the head offices of multinationals, they voted to exclude firms with fewer than 1,000 employees and they voted to grant management the exclusive right to decide what information should be given to employees. No wonder the Conservative Group spokesman boasted with ill-concealed delight "Vredeling is dead."

it is against that background of unrelenting hostility that Ministers appear in the House today as friends of employee involvement or participation. That is rank hypocrisy. Having been defeated in the House of Lords, the Government suddenly realised that the amendment would be useful as a fig leaf to hide their utter distaste for industrial democracy. They will now tell the European Commissioners "We are making good progress on industrial democracy so we do not have to take any notice of your directives." In other words, the Government are using this flimsiest of window dressing as their alibi for inaction. That is the truth of the matter and I challenge the Government to deny it. Even the Conservative trade union group, at least one member of which is here today and which, in line with the Conservative Party's promise before the election, is asking for a code of practice, has been disappointed by the Government's lack of progress.

5 pm

Any objective assessment of the past three years is bound to show how little progress has been made. The recession and the Government's reactionary attitude have encouraged employers to resort far more to unilateral decision-making. The Government have quoted the CBI's survey. That survey shows that only a third of British companies have consultative arrangements of any kind. We also know from other studies that, although British employees would like a greater say, they have a remarkably low level of involvement in decisions that affect them. The level is lower than in most other European countries. What is required now is action, not window dressing on the lines of the Lords amendment.

I am deeply disappointed that the Social Democratic Party's leaders have learnt so little from their long membership of the Labour Party. They do not seem to realise that if any system of industrial democracy is to succeed it must have the support and active involvement of the trade unions which represent the majority of British workers. The Social Democrats' panacea is the introduction of works councils on the German model in all firms employing more than 1,000 workers. They have forgotten that, whereas all German companies have had works councils for 60 years or more—indeed, they formed part of the Weimar constitution—in Britain only a small minority of firms have such councils, and their experience has not been exactly encouraging. In this country, the characteristic shop floor organisation is through shop stewards' committees, and shop floor bargaining and any effective system of industrial democracy must build on that. Characteristically, the Social Democrats, in their search for electoral popularity, have chosen to ignore that fact. Characteristically, too, they have fudged the issue of how workers are to be represented at top level. Are they in favour of that or are they not? No one would know from reading their documents.

The Labour Party's proposals on employee involvement have had the support of both the TUC, about which we have heard so much today, and the Labour Party conference. They are firmly based on trade union organisation and the extension of collective bargaining and they go far beyond the amendment. An incoming Labour Government would not leave the matter to management, as the Lords amendment does, but would legislate to introduce new rights in three areas—information, consultation and representation.

We have three aims with regard to information. First, we wish to spread and to improve disclosure practice throughout industry. Secondly, we wish to expand the range of matters relevant to the running of companies—for example, investment plans, closures, takeovers, performance, output, orders, sales, and so on. Thirdly, we wish to assist the full understanding of companies' operations.

We go beyond the mere provision of information because we believe that disclosure without debate is meaningless. Therefore, we propose that management should be obliged to consult the unions on all impending decisions covered by information disclosure rules.

Finally, we propose a right of representation so that workers' representatives will have a right to parity on policy boards, but they will also be able to choose a lesser proportion of representation and different methods if they wish. This will not only assist the provision of information and consultation, but ensure that the voice of the employee representative is heard at the top level.

Mr. Tim Renton (Mid-Sussex)

On the matter of representation, is the hon. Gentleman saying that the Labour Party is now abandoning the Bullock proposals and no longer supports the suggestion that worker directors should be on every major board, but still believes that they should be nominated and chosen by the trade unions only?

Mr. Radice

The hon. Gentleman is slightly confused. Of course we go beyond the Bullock proposals. This is a more comprehensive approach to the problem. It covers information and consultation as well as representation. However, if trade unions support the idea of having workers' representatives on boards and believe that it would be useful, they would have the right to establish it.

Our proposals have three advantages. First, they would be established naturally through existing employee organisations. We are not setting up something entirely new.

Mr. David Penhaligon (Truro)

If the trade unions considered it a good idea to have worker directors, would those worker directors be selected by the unions or by a ballot of all the employees of the company?

Mr. Radice

We are not committed, but we have made it clear that any form of industrial democracy must be based on the trade unions. We would not set up a separate channel of organisation, as the Liberals and the Social Democrats propose. We believe that basically this should be done through the trade unions. We do not believe in elections through works councils, as I think the Social Democrats and the Liberals have proposed, because that would be foreign to our traditions. Our proposals are also flexible.

Mr. Renton

The Bullock proposals specified worker directors chosen by authorised trade unions only. Many of us found that point in the Bullock proposals thoroughly objectionable. Is the hon. Gentleman now saying from the Labour Opposition Front Bench that worker directors should be nominated and voted for by all members of the work force, whether or not they are in trade unions, or does he still hold that they should be chosen by the trade unions?

Mr. Radice

In each company where the trade unions believe that there should be worker representation on the board, a joint council of all the trade unions ought to be set up and the worker directors should be chosen through that representative body. If the hon. Gentleman is confused about this, I shall be delighted to send him a copy of "Economic Planning and Industrial Democracy" which contains our proposals.

Mr. John Grant (Islington, Central)

Is there to be a ballot in which all the employees take part? That is still not clear.

Mr. Radice

Some trade unions might believe that such a ballot ought to take place. It would be entirely up to them. We are not laying that down. Interestingly enough, it is not laid down in the Social Democratic Party's proposals either.

Mr. Grant

The hon. Gentleman is attacking us for that.

Mr. Radice

No, I am not. I am attacking the Social Democrats because they do not say what they favour. That is rather different.

We believe that our proposals are flexible, because it is left to workers' representatives to decide the pace and, through information and consultation, gradually to build up to representation. That is the way that it should be done.

Lastly, and importantly, we link our proposals on industrial democracy to industrial recovery. The Labour Party believes that considerable Government intervention will be required if British industry is to recover from the world recession and Government policies. That is why we propose industrial planning. However, it will be planning with a difference, because, through industrial democracy, for the first time, there will be proper input from below. Planning will not be imposed from above.

For those three reasons we think that our proposals are realistic and relevant. At the very least, unlike the other parties in the House, we are taking industrial democracy seriously. We are not proposing a Lords amendment at a late stage of an anti-union Bill and pretending that it is a great advance in industrial democracy. We are taking the issue seriously, as we did in the last Parliament with the Bullock report and the publication of the White Paper which—let the House remember—was prepared by a Cabinet Committee chaired by, I believe, the right hon. Member for Crosby (Mrs Williams).

We shall not oppose the Lords amendment, despite the fact that it is a flimsy bit of window dressing. We have moved an amendment to it, for which I hope we shall have the support of Conservative Members, particularly the hon. Members for Kidderminster and for Mid-Sussex (Mr. Renton)

The Lords amendment does not measure up to what is required in British industry. The next Labour Government will take relevant and realistic action to establish a framework of democratic rights in industry.

We believe that that will be good for employees, management and British industry.

The Under-Secretary of State for Employment(Mr. David Waddington)

Before I deal with the clause and the amendments, perhaps I shall be forgiven if I say a word or two about the speech of the hon. Member for Chesterle-Street (Mr Radice). He told us that industrial democracy was the Labour Party's aim. The trouble is that many hon. Members doubt whether the Labour Party any longer has the faintest idea of the meaning of the word "democracy".

It was obvious from some of the points made in the last debate that some people of considerable influence in the Labour Party and in the trades union movement did not know much about democracy when they threatened their members with disciplinary action if they did not come out on strike. That is why, as hon. Members know, we shall be consulting about internal democracy in trade unions, with a view to examining the possibility of legislation in that area.

It is clear that the hon. Member for Chester-le-Street was talking not of industrial democracy but of shop steward power. He is even turning his back on the concept of one man, one vote from the shop floor. His mind is still firmly rooted to the single channel, which has nothing whatever to do with industrial participation and employee involvement which we are discussing today. The defects of that system have been apparent for years and I should have thought that all intelligent people should now be looking away from it for other ways to get rid of the "them and us" attitude in industry and making the desired progress.

I am glad that my hon. Friend the Member for Kidderminster (Mr. Bulmer) is present. He has been a pioneer in employee involvement and speaks with unrivalled authority. I notice that some Labour Members laugh, but it is a fact that my hon. Friend is engaged in a business which has practised employee involvement for years and is a model which other companies would be well advised to follow. It is nice that now and again there are hon. Members in the House who are able to speak with authority rather than simply mouthing political slogans with little idea of what is involved. My hon. Friend's persuasive advocacy of legislation requiring companies to include in their annual reports a statement about their arrangements for employee involvement has done much to persuade the Government of the merits of the clause which we are now discussing.

5.15 pm

The House will remember that the Bill followed extensive consultations on the Green Paper on "Trade Union Immunities". During the Bill's passage we were, perhaps not surprisingly, reluctant to see added clauses covering matters which had not been canvassed in the Green Paper. Therefore, when a new clause on employee involvement was tabled in another place we made it clear that we had every sympathy with the proposal's objectives, but were, on balance, inclined to advise against its adoption. We were then, and remain now, conscious of the need to avoid imposing unjustifiable additional burdens and costs on industry. Everybody should approach a subject of this nature with the need for British industry to become competitive in the forefront of his mind. It is our duty to see that unnecessary additional costs are not imposed.

The matter was cogently argued by Lord Rochester. When his new clause was carried on Report, the Government immediately accepted the decision in principle. However, we felt that there might be some difficulty about the form of the clause. As it was industry which would have to operate the requirement, we felt that it was important that industry should have an opportunity to comment. We issued a consultative letter on 4 August and more than 80 detailed and constructive replies were received. I am grateful to those organisations that responded.

I am also grateful to Lord Rochester, who was kind enough to come and see me and with whom I had a very helpful discussion. The upshot was that the Government presented the revised version of the clause for debate on Third Reading in another place, and it was agreed after discussion.

Subsection (1) gives effect to the general wish expressed by industry that requirements relating to company reports should form part of company law. Subsection (1) amends section 16 of the Companies Act 1967, which deals with the contents of such reports.

Subsection (2) sets out the substantive reporting requirements, and the introduction to the subsection requires that a statement be included in the directors' report on action taken during the financial year to introduce, maintain or develop arrangements for employee involvement. Hon. Members will see that the word "maintain" is new. That was inserted as a result of our consultative exercise and is a good illustration of the value of consulting on such matters.

Many people who replied to us pointed out that companies which had long-established arrangements and had already made progress towards developing a high standard of employee involvement would not, without the word "maintain", have been required to report at all. That would clearly have been absurd, because one of the advantages of the clause is that matters such as employee involvement will have to be discussed at boardroom level and included in company reports. Company directors will be able to look at other companies' experiences to see what they are doing in that area and study whether they can emulate it to the advantage of themselves and their employees.

Paragraphs (i) to (iv) describe the particular employee involvement activities that companies will have to cover in their statements, and it is to that part of the clause that the Opposition have tabled amendments. If I had a suspicious mind, I might have thought that tabling amendments at this stage was an attempt to frustrate the Bill's progress, but I am sure that it would not be right to be so suspicious.

I have studied all the amendments carefully. The first amendment requires that a copy of the statement about employee involvement should be issued to each employee. We believe that the amendment is unnecessary. It may be desirable, and it may be good practice to issue such a statement to each employee, but any company that has developed arrangements will take steps to bring them to their employees' attention. More importantly, companies use a variety of means for communicating, such as special employee reports, notice boards and presentations by senior management, and it would be wrong to prescribe one means that would also, incidentally, be costly. Indeed, there should be no doubt about the cost. It may be a desirable step, but it is not the type of step that should be made compulsory.

Mr. Radice

Our amendment does not say that other means could not be taken. We are merely laying down one means. The Minister has brought up the issue of cost again, but how much would such a measure cost the average firm?

Mr. Waddington

Obviously the answer depends on the number of employees and the complexity of the operations being carried out. If the hon. Gentleman is saying that the amendment allows for other means to be used, why has this means alone been set out?

Mr. Harold Walker (Doncaster)

Doubtless the hon. and learned Gentleman will tell me if I am wrong, but I understand that every shareholder in a limited company is required by the Companies Act to be supplied with a copy of the company's report. I see nods from Conservative Members confirming that I am right. Why should that information be provided to the shareholders and not to the workers? Surely the giving of such information should be the fundamental starting point for any employee involvement. If it is possible to bear the cost for shareholders, why is it not possible to do so for workers, whose lives are integrally bound up with the company's well-being and fortunes?

Mr. Waddington

One obvious difference is that the shareholders may be spread across the globe, while employees are under one roof or at any rate at a location at which it would be easy to communicate with them by other means.

The second Opposition amendment states that arrangements should be "for", rather than "aimed at", providing employees with information and so on. I am a little baffled by that and I doubt whether the amendment would materially alter the meaning of the clause. Of those whom we consulted, no one suggested such a change. We consulted not only employers but trade unions and virtually all of those who responded to the Green Paper entitled "Trade Union Immunities".

Mr. Walker

I had not intended to inflict a speech on the House, but the amendment stands in my name. As a result of the amendment, the clause would refer to action that has been taken during the financial year to introduce, maintain or develop arrangements for—

  1. (i)providing employees…
  2. (ii)consulting employees".
In other words, it would get rid of the permissive "aimed at". That is the sort of waffle that is often used in election addresses to avoid the issue. It would make the provision mandatory. A company could not say that it aimed to do something; it would have to say that it had done it. That would remove the present permissiveness and make the clause more effective.

Mr. Waddington

The right hon. Gentleman is losing sight of the fact that, apart from the duty to put something in the company report, there is nothing mandatory about the clause. There is nothing in the clause to require the company to consult—[Interruption.] The right hon. Gentleman cannot understand what I am saying and I certainly cannot understand what he is saying. It would take a lawyer with a far more confused mind than mine to see the important distinction between "aimed at" and "for".

If the amendment is meant to require companies to report on what they have achieved rather than on what they have sought to achieve, it would have little effect, because arrangements that have been newly developed or introduced in the financial year are unlikely to have yielded any results by the time the report is made.

Mr. Walker

I am trying to avoid making a speech, but perhaps the hon. and learned Gentleman has misunderstood me because I have been too brief. My point is the very one that he has confirmed—that there is nothing mandatory in the clause. It is entirely permissive, and to that extent it is meaningless. Our amendment would take away the permissive element and turn the clause into a provision that imposed an obligation on companies.

I shall re-read the clause as it would stand if amended. It would read: in the case of relevant companies, contain a statement describing the action that has been taken during the financial year to introduce, maintain or develop arrangements for—

  1. (i)providing employees systematically with information…
  2. (ii)consulting employees…
  3. (iii)encouraging the involvement"
At present the clause merely requires a company to say what it has done to aim at those things. As amended, it would not only have to aim at something, but do it. It may well be that all the clever and sophisticated lawyers who advise the Minister have said that the language of our amendment is inappropriate for statutes. However, we all know that it is traditional for Ministers to consider the substance of the argument and, if persuaded by it and by the views of the House, to ask parliamentary counsel to find the right form of words to achieve the intended effect. I may have chosen the wrong words, but I hope that the hon. and learned Gentleman understands our aims and that he will address himself to them instead of to semantics.

Mr. Waddington

I am sorry. I do not wish to lecture the right hon. Gentleman, but if he reads the clause he will see that there would be nothing mandatory about it even if one were to substitute "for" for "aimed at". We are discussing merely a reporting requirement and not a clause that will make employers provide employees systematically with information on matters of concern to them as employees. It merely attempts to point out the type of issues that a board of directors should try to canvass in the annual report. The right hon. Gentleman is right to say that "aimed at" is not mandatory, but the substitution of "for" for "aimed at" would not make the provision mandatory. Therefore, the argument is boring and unnecessary.

The words "aimed at" seemed satisfactory to those who were consulted and it certainly did not seem to be an unsatisfactory formula to the trade unions that replied to the consultative exercise. In those circumstances, I cannot see any powerful argument for moving away from a clause that was found acceptable by the other place and, in particular, by Lord Rochester.

The Opposition's third amendment states that a statement should include arrangements for carrying out statutory obligations to consult recognised trade unions. It seems unnecessary, because there are adequate legal sanctions for failure to consult. Of course, if there is a failure to consult, those who are entitled to be consulted, such as the recognised trade unions, will be the first to complain and they will not have to look at a company annual report to discover whether they have been consulted.

It is strange to suggest that such verbiage should be included in an annual report. I stress that if there is a failure to consult about redundancies the trade unions concerned can go to industrial tribunals, which can impose sanctions and make protective awards. There is no need to use an annual report to draw the attention of unions to the fact that they might have a remedy before an industrial tribunal. Long before the publication of the annual report the trade union will have been to the tribunal and back.

The fourth Opposition amendment states that information about the extent of the company's compliance with the requirements of the Disabled Persons (Employment) Act 1944 should be included in the statement. There are recent more general requirements in regulations for the inclusion of information on policy towards the employment of disabled persons. It would be right, surely, to allow those new regulations, which require reporting on policy towards disabled persons, to settle down. This again was not a matter that was raised in consultation.

5.30 pm

I revert now to the new clause itself and to subsections (3) and (4), which deal with matters of scope. The only change of substance is that the clause will now apply to companies with 250 employees or more, instead of 200. That is a sensible threshold, because it is in line with the regulations imposing the obligation to report on policy regarding the employment of disabled people. There must be powerful arguments for uniformity.

In conclusion, I repeat that we are grateful to those who have inspired the new clause. It should help stimulate the continued growth and development of employee involvement arrangements in British industry. We believe in removing restrictions from industry rather than in imposing them. It is of the utmost importance to remove the "them and us" attitude in industry and to get home the message that companies which have implemented employee involvement policies have reaped tangible gains in terms of improved industrial relations and performance.

Progress on employee involvement has, unfortunately, been uneven, and more could be done. This provision will encourage progress by ensuring that attention is given in the boardroom to company policy on employee involvement. We also feel that shareholders, for whom the directors' report is designed, and the general public have a legitimate interest in companies' activities in this area.

The hon. Member for Chester-le-Street referred to something that I said not long ago in a speech about employee involvement. On that occasion, if my recollection is correct, I spoke of the danger of laying down by law fixed patterns of employee involvement and pointed to the danger of our cutting across existing policies for employee involvement which are working well. The hon. Gentleman seemed to think that there was something strange in that statement. It seems to me to be only common sense. There are great dangers in laying down a rigid framework when circumstances are so varied, particularly when companies in British industry are confronted with differing problems.

That is why we are more than sceptical about the proposals for legislation in the draft directives issued by the European Commission. We are not ashamed of saying that we are more than sceptical. We still believe that successful employee involvement depends, above all, on a spirit of co-operation and that any formal arrangements are best introduced voluntarily and tailored to meet the needs of individual enterprises. The clause is valuable in underlining the voluntary approach.

It is a modest but important change. It is now up to industry to decide whether to respond constructively to make a success of the voluntary approach to employee involvement. I have every confidence that it will.

Mr. Stan Thorne (Preston, South)

I am at a loss to some degree with regard to the discussion that has taken place this afternoon, because I was not a member of the Committee that discussed the Bill in detail. However, certain comments by the Minister suggest to me that, with regard to the new clause and to the amendments submitted by my hon. Friends, the subject under discussion is undustrial democracy—a point that he made on a number of occasions.

What baffles me about the Minister's remarks is that the words "aimed at", which are contained in new clause A, place no responsibility on the employer really to carry out the spirit of the clause, while the word "for", which is suggested by the Opposition amendment, does imply that the employer will do something of value. We will never change the "them and us" situation until employers have a responsibility to carry out the spirit of the clause.

There is another aspect that disturbs me. It may have been debated at length in Committee, but I see no reference to it in the Bill. I am referring to the areas in which employees will receive information and be able to participate in decision-making within the company about its future. Although it might be suggested that there is no need to mention specific items, there is no mention of profits, costs, pricing policies or investment plans. There is no mention of product prospects within the market and the possibility of diversification in order to make it a viable company in which the employees can respond in the way that is suggested in the new clause, which refers to encouraging the involvement of employees in the company's performance". We shall get involvement in the company's performance only when the employee feels that he can be involved in real terms in the decision-making within the company. Industrial democracy, if it means anything at all, means that the employee can participate in a discussion about the forward investment plans of the company, the product prospects, to which I have already referred, or, indeed, possible merger proposals in which a company may be involved. Is that not a matter of which the employee should be fully apprised?

While the annual report deals largely with what has happened in the past, it will nevertheless deal with the prospects for the future, or the shareholders will wish to know why it does not. If that is to be the case, prior to the writing of the report there should have been some dialogue—probably extensive discussions—between the management of the company and the employees at various levels within the firm.

If the employer, as is being suggested, is to be encouraged to maximise a relationship in the factory—the feeling of "we are all in this together"; an esprit de corps—it is vital that the employee should be able to make a contribution in real terms and to feel a sense of overall commitment to the decision-making. I am not referring to issues such as whether the curtains in the canteen are of the right colour, or to the relationships that exist between one canteen and another, or even about the siting of the stores, although often employers do not take sufficient notice of employees' points of view on such issues. Employees should certainly be consulted as of right about the future of their company and matters that directly affect their economic interests.

Mr. Esmond Bulmer (Kidderminster)

I support the Lords in their first amendment. My hon. Friends and I are delighted at the Minister's response to the initiative from their Lordships' House. The clause resembles closely the Companies (Directors' Reports) (Employee Involvement) Bill which I and my hon. Friends recently introduced but which failed through lack of time. The essential provisions are the same—information for employees on a systematic basis, regular consultation and the encouragement of active involvement through profit sharing and other means.

In converstations earlier in the year before introducing our Bill, I found the Minister extremely sympathetic. He had, however, to consider whether the annual report was the right place for such an initiative, whether a code of practice might be preferable, or whether, in the light of what was going on in the European Parliament, such provision as is contained in the clause might form part of a larger Bill. I am glad that after due consideration of the state of the debate in Europe, Lord Rochester's initiative and the views of industry, the Government have decided to table the new clause now.

The clause follows the provision in section 46 of the Companies Act 1980 under which directors are to take into account the interests of their employees. This reversed the judgment in Parkes v Daily News and was a necessary first step to developing a more positive approach to employee participation.

The next logical step was to require directors to spell out in the annual report how they did this. The clause does that. No two companies behave in exactly the same way and it would be wrong to believe that a rigid formula would be appropriate in all cases. The new clause accepts that. In essence, it calls for a statement on industrial relations in the company. That will be a record that the hon. Member for Chester-le-Street (Mr. Radice) rightly said should be available to all employees.

The hon. Member for Chester-le-Street should consider, however, whether a company with many plants which produces for employees in a particular plant a statement which is fuller and more relevant to them than the annual report needs to provide each employee with a copy. In such cases it might not be appropriate to provide a full annual report. Otherwise, I sympathise with what the hon. Gentleman said. Equally, I accept what the Minister said about avoiding unnecessary cost and placing a further burden on industry.

It is important to ensure that at least once a year boards of companies consider formally the state of industrial relations in their companies and what action might be taken to improve them.

During discussions I hope that a number of questions will be asked. For instance: What are we doing to meet the requirements of the law and our own objectives? Are these shared by our employees? If not, why not? What are they asking us to do? Are we sympathetic? If not, why not? What are other companies doing? Is this or that a good idea and should we investigate it? How does our record look? What have we done in the past 12 months and what do we intend to do in the next 12 months? By no means all companies employing more than 250 people go through that process—certainly not at board level.

It is important that the chairman of a company—not the managing director, not the personnel director or somebody senior in line management—is responsible for ensuring that this happens. In some cases he will be able to draw on the considerable experience of non-executive directors. Such a process will change the present position for the better. It should be a serious exercise so that the press and the trade unions believe that considered judgments have been made and that they have the right to challenge them. If they are not satisfied, they should be able to make that clear.

5.45 pm

At the time of the Bullock report it was clear that there was an absence of any record of what was going on in companies. The Bill will provide some record in due course. How good it will be, only time will tell. I accept that some companies will do no more than the minimum. Others—and we have some first-class companies—will provide a record of their experience which will be valuable to others. Much will depend upon the spirit of a company's approach. Some will be positive and some will not. I hope that those which are not will recognise that if further legislation which they do not like is passed, it might be because they did not respond to the opportunity to state their case positively.

The time is ripe in another way for such an approach. Many companies have established a new unity as a result of the hard times that they have experienced. The outlook for improved profitability is there in many cases and therefore the moment is right for the introduction of profit sharing.

Research in the United States has shown consistently that companies with profit sharing outperform those that do not have it. I have no doubt that similar research here will establish that companies that go out of their way to recruit the understanding and commitment of the work force perform much better than companies that do not.

The more that can be clone to develop a common interest and deeper understanding of how companies function, the better the prospects for those who work in British industry. I wonder how many people who worked in the motor and steel industries and who are out of work today might be in work if they had understood the financial state of the companies for which they worked when they went on strike.

I am sure that in due course the Minister will wish to address himself to a glaring omission in the Bill's approach—the exclusion of the public sector. There is a greater problem in the public sector in terms of "us and them" than in the majority of private companies.

Mr. Harold Walker

Does the hon. Gentleman suggest that people are now out of work because at some time they went on strike? Is the hon. Gentleman aware that throughout the land bankrupt companies which have never experienced a strike have closed as a result of the Government's policies?

Mr. Bulmer

If the right hon. Gentleman went to Longbridge and talked about what went on in the past, he would find that the point that I have just made is readily understood.

The proposed new clause is a modest first step. Today's debate has shown that it is as far as we can go while commanding support from all sides. I agreed with much of what the hon. Member for Preston, South (Mr. Thorne) said about taking part in decision making. I look for further improvements in that area. I also look forward eventually to establishing a body representative of all employees with which a board consults on the basis of "one man, one vote" taken in secret. The hon. Member for Chester-le-Street might think that is as provocative as some of us thought the Bullock proposals. The fact that we can go forward in such short steps is a legacy from what happened when the Bullock report made such biased and provocative proposals.

I believe that most people who work in industry would prefer to have changes in industrial relations introduced on the basis of consensus so that they may have some confidence that the rules will not change and change again.

The clause is consistent with a voluntary approach, but at the same time it requires companies to take action to produce information that should increase understanding and, therefore, improve the chances that when we come to further legislation—as I have no doubt we shall—that legislation will be based on tested and proven experience.

Mr. Penhaligon

I am delighted that the amendment has reached this stage, and I have no doubt that it will become part of the Bill. It was proposed by Lord Rochester, but during the eulogies paid to him everybody has chosen to forget that he is a Liberal peer. I expect that most people can work out why that was not mentioned. The amendment was passed only because it had broad support from the Social Democrats and the Labour Party. Without that support it would have never been passed in the other place. I am pleased that the Government accept the amendment and that it is to be part of the Bill.

I agree with the comment of the Opposition that it is not an enormous breakthrough in industrial democracy or participation, but it is a step in the right direction. The House should work towards a system of industrial relations in which most employees in Great Britain can see that the success of the companies for which they work is to their advantage. I was a fitter-turner apprentice when I was 17, and unfortunately that was not the attitude that existed among even a minority of the workers on the shop floor. I should confess that that was 20 years ago, but I do not believe that those attitudes have changed much. The clause makes a small but useful contribution towards the creation of that sort of attitude, and for that reason must be welcomed.

The attitude of employers was often that there was no point in telling employees anything because they were not interested. It was extremely frustrating for those who were interested—albeit perhaps a minority—not to be able to find out anything about the enterprise in which they were involved, and not to be able to interest their colleagues and friends and make them more aware of what was going on. There are people on the shop floor who are interested in their company. They are well informed and well read—not in a classical university way—and they have had the initiative to find out what is happening. They understand, and, used properly, they can be a great asset to the management. They can pass on information when they meet socially and at work. The House should be seen to be encouraging that, and I am pleased that the amendment is to be part of the Bill.

A large company in my constituency employs 5,500 people and produces large quantities of china clay. The company has worked hard over decades to build up the respect of its employees. If one dares to attack the English China Clay Company, the employees will be after one for having the audacity to do so. They feel that the well-being and prosperity of the company are to their benefit, and they are absolutely right. It is good to see that attitude and realise that a few companies in Great Britain can achieve that degree of co-operation and interest.

I shall probably ruin the political career of the hon. Member for Chester-le-Street (Mr. Radice) by saying that I rather like him, but he should re-read his speech. At the beginning he said that the Labour Party's idea on industrial democracy involves everybody who works in the company. If those really are their ideas, the Lib-Lab pact could have passed some useful legislation before the last election. Every attempt to reach an agreement between the Liberal and Labour Parties failed, because we insisted that all company employees should be involved, while the Labour Party insisted that it should be trade union nominees only. That is a fundamental principle. I am pleased that my party stood firm and did not allow such legislation to go through the House.

If the hon. Member for Chester-le-Street is right, that is a delightful breakthrough. If he is not right, he should be more careful about the precise words that he uses when talking about industrial democracy. I thank the Government for their co-operation, and Lord Rochester for taking the initiative in the first place.

Mr. Bill Walker (Perth and East Perthshire)

I am not going to get involved in arguments between the Liberal and Labour Parties about what should and should not have been done as a result of the Lib-Lab pact. I leave history to attend to that. The next Conservative Government will probably ensure that some of those wishes will be fulfilled and that all employees will become involved in what the Liberal Party calls industrial democracy.

I have always kept away from industrial democracy as I believe that it is a rather dangerous description when what is really wanted is individual participation at the work place. That is different from industrial democracy. Many of the problems in British industry have their origins in the secrecy of management, and, as the hon. Member for Truro (Mr. Penhaligon) mentioned, in union intransigence. The problems that we face are not the result of one group of people becoming involved in one set of ideas; it is a collective matter. Management has a responsibility as well. That is one of the reasons why I am happy to support the amendment. I believe that it is a good amendment and should have the support of the House.

The Bill deals quite properly with the intransigence of unions. Therefore, on the Government Benches we are happy to see an amendment that deals with management secrecy. I have never attempted to defend such secrecy, because I believe that it is mistaken.

The financial position of British firms has been unfortunately misrepresented to the employees, who have been misled into making wage demands that were unrealistic. The result was that jobs vanished because firms were no longer able to compete. If the firms had been more forthcoming and given their employees sufficient information early enough many different attitudes would have been developed. That has to be seen against a siege mentality that has existed in British industry because organised labour through trade unions and the creature that they spawned—the Labour Party in Parliament—produced legislation that was intended to improve matters, but which in fact made industrial relations progressively worse. The truth about productivity, net profits and capital investment was not known to the employees who otherwise would not have been motivated to take part in the political strikes which could and did bring about the end of many jobs. The steel industry is a prime example. It is nonsensical to ask for a wage increase that one's company cannot pay. When that leads to closures and loss of jobs it is no good wringing one's hands.

I believe that the amendment will stimulate and encourage employee participation and involvement in their companies. That is something which I have tried to encourage throughout my adult life, both in my trade union activities and in management. Human resources are the greatest asset of any company or corporation. It is how well those human resources are motivated that determines how the company will compete in the market place.

Too often British management has been hung up on the lack of what it thought was investment, when the real problem was lack of profitability. That is the great problem that we have faced since the end of the war in 1945, and as a result British firms have not been profitable enough. If directors are required to give employees information on matters of concern, it means that employees need to be told the facts of life. If the facts of life had been told to a firm in my constituency—Smedley's canning factory—early enough, I am sure that it would be in existence today, because when it closed the employees produced many workable plans whereby the company could still be a viable concern. I put it no higher than that. Sadly, however, it was too late. The closure was in part due to management not keeping the employees in the picture.

6 pm

It is right that management should consult employees and their representatives on a regular basis. I do not believe, and never have believed, in a doctrinal, laid-down, rigid format to make those people part of the decision-making process of the company—in other words, the board of management. If that formula were right, would not the Co-op be the dynamo of the High Street? Would it not be the dynamo of manufacturing? That is surely what it would be, if that formula worked.

It is essential to study aspects that have failed, whether they be lack of information from management, intransigence by unions, or management structures of the type which have existed in the Co-op for many years, but which have not generated the dynamic drive in manufacturing, marketing, or in the High Street, which would make that organisation comparable with Marks and Spencer, GUS or Boots.

Let us consider carefully the differences. One involves the structure of management and the decision making. I have never supported what I consider is the wooly thinking of industrial relations employee participation and involvement, all wrapped up in what is called industrial democracy. One cannot have that management structure and be effective in the market place. If I believed that, I should support it wholeheartedly, but my experience of looking carefully at the Co-op, the one organisation in the United Kingdom which has participated in this way on a large scale, has convinced me that it is not a road that we should travel—certainly not one that we should use legislation to enforce. That is the great weakness in many of the cases that are put forward in the name of so-called industrial democracy.

A legal framework would be wrong. We should not force industrial democracy in that way. The amendment will force boards of directors to insert in their annual reports a statement on what they have been doing. Anyone who has sat in a boardroom discussing what is to go into the annual report knows that certain things happen only when the annual report is about to be written. That is because the pressure is on whoever is accountable actually to do something. I am in favour of that, and I am in favour of much more involvement. The training machine in a company is one method of employee involvement. That is where two-way exchanges take place, and it needs more encouragement. Participation, not just in employee shares, but in bonus schemes and so on, is also vital.

We must consider how to motivate individuals in every company to operate effectively within that company. There is no textbook on human relations that tells us how to motivate different people in different companies in different parts of the country. Such a textbook does not exist. So we need something flexible, which will encourage those who are accountable—the boards of management and the chairmen—to make people more aware of what is happening in companies, how their companies are performing in the market place, what the future is, and what share they can expect in the future in terms of remuneration, holidays, and so on. If they take more out of a company than the company can stand in the market place, eventually jobs in that company will vanish. Sadly, that is what has happened in British companies for too long.

I welcome the amendment and I believe that it will be welcomed throughout industry.

Mr. Ian Mikardo (Bethnal Green and Bow)

I, too, welcome the amendment, but with a little less enthusiasm than some of those who have spoken. To a hungry man, it is not really true that half a loaf is better than no bread. One dried crust is better than no bread. That is about the weight of the concession in the amendment. I greet it, therefore, not with three cheers, not with two cheers, but with one muted cheer, which is about what it is worth.

The House will be grateful to the Under-Secretary of State for his clear exposition of the purposes and effect of the amendment and its limitations—its very severe limitations—which he explained most fairly. I was a little sorry—not for myself, but for him—that he felt it necessary, as a prelude to his excellent and enlightening speech, to follow his master's voice and engage in a little vituperation. He is much too good to try to go down in history as the poor man's Norman Tebbit. No doubt he observed that his right hon. Friend got a seat in the Cabinet by substituting abuse for argument and offensiveness for enlightenment. I beg the hon. and learned Gentleman, for his own sake, not to follow that bad example.

I agree with much of what has been said by Conservative Members, and also by the hon. Member for Truro (Mr. Penhaligon). The hon. Members for Kidderminster (Mr. Bulmer) and Perth and East Perthshire (Mr. Walker) said many things with which I agree and which I have said for a long time. They did drop one or two clangers, but we shall forgive them those for the positive things that they said.

In particular, I agree with the hon. Member for Perth and East Perthshire. who has had much experience—some of which may be similar to the experience that I had in my years in industry—when he said how self-defeating is the secrecy of management. I 'wish that managers would realise that. I know that the hon. Member for Kidderminster understands that and that he tries to persuade others to understand it, too. Managers should realise that industrial management—the personal involvement of workers in decision making, or whatever one likes to call it—is not merely an instrument of social justice or an extension of political democracy into economics, but is a valuable tool of management. If they realised that, there would be an enormous improvement in the average performance of British industry. I spend half my life as a management consultant trying to get people to understand what a useful tool of management it is and getting managers to understand that the real barrier to increased productivity is the lack of confidence which most workers have in their management. It derives from the fact that they see the disadvantages of management decisions. Often they do not see the advantages, because no one has ever told them.

Therefore, all management decisions are a choice between evils. There is never a clear-cut choice. There are always options and one has to choose the best or the least bad option. No one ever explains to the workers the pros and cons of each option. Therefore, whatever option is chosen by management, the workers condemn it. The workers say "Here is this so-and-so adjectival management. I would not pay it in washers. Why should I bust my guts working harder when it dissipates all the effects of my work doing the wrong things?" The management may not be doing tie wrong things. The workers might agree that it was not if they were told about the considerations that led to the managerial decisions, but they never are.

That is why the companies that resist any invasion of the secrecy of management, to use the words of the hon. Member for Perth and East Perthshire, or the companies, to use the words of the hon. Member for Kidderminster, which do the minimum—that is to say, no more than they are statutorily compelled to do—are being not merely reactionary but stupid. They are committing not a crime, but something worse than a crime, which is a mistake. If this—if the Under-Secretary and Lord Rochester will forgive me—piddling little amendment makes a small contribution to the enlightenment of our more backward managers, it will have done some good.

Hon. Members confuse two questions. The first is whether one should seek to lay down a standard pattern of industrial democracy or worker involvement which every firm must follow. The second is whether the whole system should be voluntary or whether there should be some statutory compulsions. The hon. Member for Perth and East Perthshire spoke as if the two were the same. They are not. I can dispose of the first easily. I wrote a pamphlet for my union in 1944 saying that we should not write a blueprint for industrial democracy and expect every firm to follow that precisely, because that is grossly impracticable. One has to ensure that every organisation does things along certain lines of principle and let it work out the details for itself.

There are certain lines of principle. It is no good saying that one will rely for ever on the voluntary arrangement. We have had that arrangement for a long time. The overwhelming majority of firms have done nothing in the direction so well advocated by the hon. Members for Perth and East Perthshire and Kidderminster. Therefore, the voluntary arrangement does not work. One always has the problem of those who, as the hon. Member for Kidderminster said, will do only the minimum. They will not do anything that they are not forced to do. Therefore, one must lay down a statutory framework and then, as the hon. Member for Perth and East Perthshire said, within that framework let the bosses and blokes in every workplace work out for themselves what is the best way to implement it in the light of what they are making, how they are making it, and so on.

6.15 pm

What should be the framework and the degree of statutory compulsion? First, the provision of information ought to be a compulsory requirement. Otherwise, there will be too many secrecymongers among managers. Secondly, the acceptance of the principle—here I go along strongly with what was said by my hon. Friend the Member for Preston, South (Mr. Thorne)—that any decision within a workplace that affects the welfare of any worker should be negotiable. No unilateral management decision on any matter can affect the welfare of the worker. If his welfare, his wages, his environmental conditions, his prospect of future employment and his esteem in the community—which counts for a lot among workers—will be affected, any decision must be negotiable. If one accepts that principle and the principle that the chap on the other side of the table is entitled to all the information that the other person has on his side of the table to carry out the negotiations, there is no problem about working out the best system within the framework and circumstances of each organisation.

Therefore, without being too rigid, we must face the fact that the voluntary system has not worked. If there is to be a statutory framework, it has to have flexibility. The decisions on details must be left to those concerned.

There have been many references to the argument whether whatever machinery one has in an organisation to fit that organisation should be chosen through the mechanism of the trade unions or by everyone in the factory. On the face of it, there seems to be an overwhelming case for everyone having an equal say. However, one must deal with life as it is and with practicalities.

I worked in a factory as a consultant 40 years ago. There was a works council elected by all the workers in the factory. That was fair enough. However, there were also agreements with a number of trade unions that specified that on wages and working conditions—later health and safety were added—the management had to negotiate with a joint shop stewards' committee. It entered into firm commitments so to do. It was a contractual obligation. The management could discuss with its works council anything that it liked about the factory as long as it did not affect the workers' wages and conditions. Everything that happens in a factory affects workers' wages and conditions. In that factory there was an awful conflict. Anything that the works council agreed to, the shop stewards committee vetoed. There was an impossible situation.

That example is being mirrored everywhere else. One cannot separate the normal contractual arrangements for negotiating with trade unions on wages, working conditions, health and safety and welfare from industrial democracy about everything that does not affect wages, conditions, health and safety and welfare, because everything that does not affect wages, working conditions, welfare and health and safety is nil. That is silly.

Mr. Ron Leighton (Newham, North-East)

Is my hon. Friend aware of the striking confirmation of his view by Lord Rochester when he replied to the debate in the House of Lords on 28 July at column 254 in the Lords Hansard? He said that in his old factory all the employee representatives were, and still are, shop stewards and that they would be engaged as the employee representatives in the consultation exercise.

Mr. Mikardo

That is a man speaking from practical experience, as I have been trying to do. One of the greatest joys of my life was being a management representative on such a joint committee. I disagreed with some of the committee members and resigned in a friendly fashion. I was replaced by another member of management, but three weeks later I was elected as works representative on the same committee. I had a very good time in the following few months.

People, such as Lord Rochester, who have had firsthand experience of industrial problems understand the problem that we are discussing. It is no use being theoretical and using large-sounding phrases. In order to reconcile the conflicting interests, much thought must be given to the problem. To say glibly that democracy demands that everyone should be involved, irrespective of the consequences, will result in a beautifully democractic framework that produces an impotent instrument. Such a result will not help either side of industry.

I end as I began by giving a muted cheer to the clause.

Mr. Mark Wolfson (Sevenoaks)

I am pleased that the amendment has given the House an opportunity to discuss industrial democracy. I am especially grateful to the hon. Members for Chester-le-Steet (Mr. Radice) and Bethnal Green and Bow (Mr. Mikardo) for spelling out their support for industrial democracy, using the term in the same way that some of us use the words "participation" or "involvement".

The terms "democracy" and "industrial democracy" are different and should have different meanings. "Industrial democracy" should mean power sharing in all its aspects. That is how the Opposition believe that the term should apply in industry. . Democracy was introduced to Government over many years and is now accepted at all levels to be the ultimate constraint against dictatorship. It is right that we should have such democracy in Government, but to extend that democracy to all companies, which have a different role to play from that of Government, is unsatisfactory. Decisions about a firm's products, future, marketing and finance may have to be taken rapidly and cannot be subjected to such protracted debates as those with which we are all familiar and which we all know, perhaps to our cost, are part of the work of the House and local government. Therefore, I welcome the amendment for its encouragement of greater involvement by employees in industry. That involvement will increase their commitment.

My hon. Friend the Member for Kidderminster (Mr. Bulmer) gave us a clear picture of how the amendment could affect the attitude and, more important, the action of company boards and managements to achieve increased involvement and commitment by the work force.

I welcome the amendment, but I must make the point to Ministers that there is still considerable anxiety among many British managers, especially articulated by the CBI, about the amendment being tacked on to the Bill and requiring such information to be shown in the company report. There is anxiety that the company report is not the right vehicle. We must accept that the provision is tacked on to a Bill which was not designed to achieve greater involvement. That is not to say that I or members of the Conservative Party do not wish to achieve greater involvement, but it requires voluntary commitment by companies. During the next year and beyond, I hope that my party will bend all its energies towards developing policies that will increase participation, but not along industrial democracy lines. We must consider the position as companies respond to the proposals.

Although the amendment is valuable, we must be aware of the likely EEC legislation on the horizon. We must assure British companies that we are keeping a close eye on that legislation so that we do not run the risk of imposing statutory EEC requirements on our present voluntary system of industrial relations and participation. I am glad that my hon. and learned Friend the Minister spelt out the Government's anxiety and awareness about the fifth directive and the Vredeling proposals. From the exposure given by the hon. Member for Chester-le-Street to the activities of Conservatives in the European Parliament, we are aware of those dangers and prepared to be robust in ensuring that our concerns are considered properly in the EEC as they will be here in due course.

We must be careful not to build up a Christmas tree of requirements in the annual report. If we do that, the report will lose the impact of its original intention, which is a crucial and important document to shareholders.

6.30 pm
Mr. John Grant

The new clause should be welcomed as a modest, but worthwhile, step in a Bill which, for the most part, will do little, if anything, to improve industrial relations, and may well turn out to be largely counterproductive. Contrary to the impression that the Minister seeks to give, it will do nothing to reduce the shameful figure of 3½ million unemployed, which should be the Government's preoccupation.

It was a bit much for the hon. Member for Chester-le-Street (Mr. Radice) to complain about the shortcomings of the clause. The official Opposition did nothing to secure more discussion on industrial democracy at an earlier stage of the Bill, when they had the opportunity to do so. The new clause resulted from an initiative in the House of Lords, particularly that of Lord Rochester and Liberal peers, supported by SDP peers and, to be fair, with substantial Labour support. We should congratulate the Government on supporting that initiative, however belatedly and reluctantly.

Mr. Bulmer

Does the hon. Gentleman accept that the new clause received the support of Conservative peers as well?

Mr. Grant

Yes, that is true. I do not know what happened when the Government were defeated. Presumably, the Secretary of State, in that lovable manner that we know so well, patted his Minister on the shoulder, said "Hard luck," swallowed hard and made the best of the problem.

Mr. Waddington

There is no mystery about this. Our spokesman in the House of Lords made it plain that we accepted the verdict of the House and the purpose of the new clause in principle. The hon. Gentleman will agree with the force of the argument that I advanced that, as there was a consultative process on the basis of a Green Paper on trade union immunities, we were rather reluctant to add to the Bill matters that were not canvassed in that consultative process.

Mr. Grant

I take the Minister's point. However, if British industry across the board paid more attention to its most valuable asset—the work force—a clause of this type would not be necessary. Unfortunately, sensible and progressive employers, and I count the hon. Member for Kidderminster (Mr. Bulmer) among them, are not necessarily the majority. There are too many laggards when it comes to taking employees into their confidence and encouraging them to share in decision taking.

The clause does not go far enough. The SDP green paper makes positive proposals for far-reaching changes in providing employees with a share in decision taking in British industry, through right and not favour. However, the document is just a green paper for consultation, and when the consultation is over the SDP will vote on the proposals on the basis on one person, one vote. We shall reach our conclusions, and we shall make our commitment at that stage.

Let us hope that, with the Government's acceptance of the clause, we have at least the seeds of recognition that there has to be accountability and greater openness in British industry. Recognition may come soon. We may have to move because of the EEC and its requirements. The Minister referred to scepticism of the Vredeling proposals and the fifth directive, but I have the strong impression, which he confirmed today, that the Government are opposed to the proposals at Council of Ministers level. That would be regrettable.

I do not know whether the hon. Member for Chester-le-Street mentioned what was in our green paper, and I wonder whether he has read it carefully. He should reread it. I will not read from it to the House, because that would not be welcome. However, it envisages the full involvement of the trade unions. Perhaps we can get somewhere with those proposals instead of running into the sort of deadlock that we saw after the Bullock report.

The direction in which the clause points us is relevant to finding lasting solutions to the class-ridden "them and us" attitude that bedevils so much of British industry. In that respect, it is perhaps more relevant than the rest of the Bill put together. It should have been part of a separate, much more substantial Bill about industrial democracy, and we shall certainly want that.

Despite what the Minister says about consultation, I can understand the Government's initial reluctance to support a proposal of this sort, because it conflicts with the general confrontational attitude of the Secretary of State, which he is never tired of showing. It also conflicts with the attitude of the increasingly dominant part of the Labour and trade union movement. I hope that that attitude does not spread to the Opposition Front Bench tonight.

It is an attitude that is growing, and is best personified when one listens to or sees Mr. Arthur "Wedgwood" Scargill preaching his class war claptrap on every second television programme. He is interested not in industrial democracy, but in industrial demagogy. Every time he needs another boost for his earnings, his ego or his votes, Auntie Beeb is always obliging.

Mr. Scargill, and others like him, are the perfect excuse for those on the other side of the industrial argument who are determined to resist all moves towards greater participation and industrial democracy and are too blinkered to see the potentially greater, all-round prosperity that such changes can help to achieve. We have to move away from the depressing and damaging confrontational atmosphere and try to build a genuine industrial partnership.

Legislative proposals by the SDP aim to do that. They recognise the need for flexibility and diversity, and do not impose a blueprint, to use the phrase of the hon. Member for Bethnal Green and Bow (Mr. Mikardo). That is the right approach, and it is better than passing a rigid law that will be flouted in spirit if not in letter. However, we must have a legislative framework, because voluntarism has not provided the impetus or the answer, and the Government have done little, if anything, to promote changes.

The SDP has put preliminary proposals on the table. We are ready to discuss them with anyone, as they are in green paper form. Meanwhile, the clause should be received with all-round approval and, if it is, that will be an achievement.

Mr. Michael Martin (Glasgow, Springburn)

I was interested to hear the Under-Secretary say that a good way of commenting on a company's statement would be to put a notice on the factory notice board. It is obvious from that that the hon. and learned Gentleman has never seen a factory notice board, because if he had he would know that when a notice is pinned on the board in a factory, somebody comes along with another notice and covers it. Then someone else comes along with another notice and covers the second until the information on the board is no good to the work force.

I was also interested to hear what the hon. Member for Kidderminster (Mr. Bulmer) had to say about profit sharing. I hope that the Government will encourage more companies to give shares in their companies.

I know that one large employer in my constituency, involved in the tobacco industry, has been able, over the years and with consultation with the shop stewards and the work force, to introduce new technology which the work force knew would ultimately mean that people lost their jobs. However, they were courageous enough to allow that machinery to be introduced. It is only right that if people make decisions which improve the prospects of the company but which also mean, at the end of the day, that they or their colleagues could lose their jobs, they should be entitled to a share in that company. Even if they are involved in redundancies, they should have the benefit of security for the courageous decision that they made.

Several hon. Members, including the Under-Secretary, have mentioned the trade union movement in the context of a "them and us" situation. That is far from a true picture. It has been my experience in the West of Scotland that the vast majority of trade unions and those involved as shop stewards get on well with management. There is a first-class relationship. One is always reading in the newspapers about disputes, redundances or something else that puts industrial relations in a bad light. Those experienced in industrial relations know that managements and the trade union movement have gone far in recent years to improve those relations.

I wish that more hon. Members in these debates would try to emphasise the positive developments that are taking place in industry and the trade union movement. If the Under-Secretary is worried about a "them and us" situation, he should perhaps encourage some employers to eliminate problems that create such a situation. There are hourly paid workers who, no matter how long they have been working for a company, are not paid if, due to sickness or some other reason, they have to leave their place of work. They receive no sick pay from the employer.

However, a person in the same company employed under staff conditions can be paid full wages if taken ill or even if possessing a legitimate excuse for leaving the place of work. Six years ago, when I was employed in a large engineering factory, an hourly paid, or what we called a direct, worker who had been employed by the company for 30 years was taken ill with influenza at about three o'clock in the afternoon. His shift ended at 4.30 pm. The employer took from him one and a half hours' wages because he had had to leave his place of work.

That man's own daughter, an 18-year-old typist, who had spent only about a year with the company, was given time off with pay the following week to go with her boyfriend to see a house that they wanted to buy. They were about to be married. That happened because she enjoyed staff conditions. It creates a "them and us" situation which should be removed from industry. In some factories, even today, there is an apartheid situation where a man wearing a boiler suit is not allowed into the staff canteen. That is ridiculous.

The Lords amendment refers to a company with more than 250 workers. We should not deceive ourselves. If a company with 50 workers told me that it was setting up business in my constituency, I would welcome it with open arms. Every hon. Member, I am sure, would adopt the same attitude. Nowadays, a company with 50 employees can be regarded as large. We should not merely be considering industrial democracy for those fortunate enough to have a job in a company with 250 or more employees. In this day and age, a company with 50, or even 25 employees, is considered to be a large employer. It is a sad feature of the industrial society in which we live.

6.45 pm

The hon. Member for Kidderminster referred to industrial democracy in the public services. This area worries me. The nature of the company or the service means that it is obviously non profit-making. I believe, for instance, that the National Health Service, which is run by the people for the people, should have better industrial relations and that the work force should be involved to a greater extent in the running of its affairs. This is not the case. A great deal of pettiness exists in industrial relations within the National Health Service.

I am not referring to the present dispute. In normal times, within the Health Service, there are many petty problems that could be ironed out if more training were given to those who work in the personnel sections. One has only to examine Health Service cases that go to industrial tribunals to see that many petty problems could be resolved if more expertise existed within the personnel departments. Once the existing problems of the National Health Service are resolved—I hope that this happens quickly—attention should be given to the personnel sections. They have been treated as poor relations. I do not feel that the right type of person has been attracted into personnel which controls the destiny of many employees.

Mr. Renton

I apologise to the House for being absent for half an hour following the speech of my hon. Friend the Member for Kidderminster (Mr. Bulmer). I was attending a committee meeting. I congratulate my hon. Friend on initiating the work that Lord Rochester carried a step further in the other place and which we see culminating today with the support, I am sure, of both sides of the House. The hon. Member for Glasgow, Springburn (Mr. Martin) has emphasised the need to diminish the "them and us" characteristics of British industry. I agree wholeheartedly. One of the many things from which British industry suffers is the civil war that has continued for too long between management, particularly in the larger companies, and the work force. This small amendment is a step towards diminishing that civil war by establishing better understanding and consultations between management and work force on a permanent basis. That is of prime importance.

I was pleased when my hon. Friend the Member for Kidderminster asked me to be one of those supporting his Ten-Minute Bill some months ago. I am pleased to see it reach its culmination. It must be clear to all hon. Members, certainly to those who have spoken, that it is the company which consults which prospers. One cannot help thinking, looking back to what happened at British Leyland at Longbridge and at Speke, that if there had been much greater consultation much earlier in those factories, many more jobs would have survived than is now the case in our depleted major industries.

The very message that the company which consults is the one which prospers is emphasised when we consider shining examples such as United Biscuits, Sainsburys and, I have no doubt, that eponymous company, H. P. Bulmer. I hope that when the requirement to state in the annual report what a company has been doing about employee involvement in the last 12 months is enacted, those who attend the annual general meeting will ask questions about it. I hope that if there is merely a paragraph or two in. the statement, the small shareholder with 100 shares and the institutional fund manager will both rise and ask the chairman why more has not been done about employee involvement. It is very important that the matter should be raised and discussed at the annual general meeting.

The hon. Member for Chester-le-Street (Mr. Radice), who is somewhat endearing in the way that he works himself into a lather about a Lords amendment and then says that he intends to support it, has urged in his amendment that a copy of the statement should be circulated as of right to every employee. Annual reports from large companies are full of glossy photographs and many pages of elaborate financial data. I do not think that that is the document—often running to 100 pages—which should be circulated to every employee. I take the point that the statement about what is being done concerning employee involvement should go to every employee, but it would be better to put that information in a separate statement specially produced for the employees of a particular unit within the group,.

I have in mind the report that Wiggins Teape produces as part of BAT Industries, a company that I had the privilege of studying under the aegis of the Industry and Parliamentary Trust. As part of a very large group, it was proud of the report that it produced annually, specifically and only for employees of Wiggins Teape.

Mr. Harold Walker

On a point of order, Mr. Speaker. The hon. Gentleman said that he thought it right that a copy of the statement referred to in their Lordships' amendment should go to every employee. That is entirely consistent with the Bill presented earlier this year by the hon. Member for Kidderminster (Mr. Bulmer). The Opposition amendment is entirely in line with what the hon. Member—

Mr. Speaker

Order. I have been very generous to the right hon. Member for Doncaster (Mr. Walker).

Mr. Renton

Many of us would like to ask the Minister when the provision is likely to come into operation, and whether employers will be given any guidance in meeting the new legislative requirement.

Mr. Waddington

I think that Lord Rochester's clause was intended to apply to any financial year beginning after 1 January 1983. Our present intention is to use the same date, but there is no need for the date to be in the clause, because the Bill provides for the commencement of various clauses on various dates, as decided by the Secretary of State.

Mr. Renton

I thank the Minister for that helpful reply.

The hon. Member for Chester-le-Street, in speaking for the Opposition, said that I was one of the Conservative trade unionists present. I am privileged to be president of the large and growing organisation of Conservative trade unionists, and I agree with him that we have published a pamphlet on the question of participation, the conclusion of which was that we needed a code of participative practice.

It is difficult to draw the balance between legislation, code of practice and purely voluntary proposals, particularly when not only the size of company is so enormously different but when the stage that companies have reached along the line of employee involvement is so different. We took the view that a code of practice on the subject would be helpful. I hope that the Government—perhaps when they have been re-elected in 12 or 18 months' time—will consider it to be a suitable subject for the next Parliament.

I fully agree with the hon. Member for Springburn on the importance of employees, whenever possible, holding shares in the business in which they work. I am delighted that under a Conservative Government the number of employee share schemes has grown from a mere handful when we came into office to many hundreds. But there is a gap to which attention should be drawn. When an employee shareholder obtains shares—for example, when his company goes public, as in the case of the recent British Aerospace issue—how can we ensure that he keeps those shares? Often employees apply for shares, they get an offer, and within a year or two many of the shares end up in the hands of an institution. That aspect ought to be studied. It is not just a matter of encouraging employees to obtain shares, but of trying to ensure that they keep them. I am interested to know that, according to the newspapers, that may be one of the features of the Britoil flotation in two or three weeks' time, to which hon. Members on each side of the House are looking forward so keenly. It is one matter which I shall study with interest in the prospectus. I hope that a means will be found not only of helping employees to get shares, but of ensuring that they keep them for a few years. I congratulate my hon. Friend the Member for Kidderminister on his initiative in the matter.

Mr. Don Dixon (Jarrow)

The new clause is the wrong clause in the wrong Bill, and in my view it is a con. How on earth can people talk about industrial democracy and put a new clause into a Bill which is primarily designed to destroy organised trade unionism in industry? It is an absolute farce.

The Minister was truthful when, in answer to my hon. Friend the Member for Chester-le-Street (Mr. Radice), he said that the new clause had no powers whatever and was purely consultative. He admitted that there was nothing mandatory about it. Subsection (2)(h)(i) aims at providing employees systematically with information on matters of concern to them as employees. Who is to determine which matters are of concern to employees? I well recall, when working in industry, being asked "What is a fair day's work for a fair day's pay?". My answer was "It all depends whether you are giving it or receiving it". That has been the position in industry for a considerable time.

The Minister said that the reason why the clause was accepted in the House of Lords was that there had been time for some consultation. I think he said that 90 letters were sent out. It is rather ironic that of the 19 clauses and the four schedules, the only one to come into operation when the Bill receives Royal Assent will be schedule 1, paragraph 1, which has no provision whatever for consultation. That is the paragraph in the schedule which gives the Secretary of State for Industry the right to pay out £2 million of taxpayers' money to those who were "free riders" between 1974 and 1980.

I repeat that the amendment is a con and should be rejected, because the whole Bill is anti-trade unionist. The clause is simply a bit of icing that the Government are seeking to put on it.

Question put, That the proposed amendment to the Lords amendment be made:—

The House divided: Ayes 227, Noes 292.

Division No. 320] [7 pm
Abse, Leo Evans, John (Newton)
Adams, Allen Ewing, Harry
Allaun, Frank Faulds, Andrew
Anderson, Donald Fitch, Alan
Archer, Rt Hon Peter Foot, Rt Hon Michael
Ashley, Rt Hon Jack Ford, Ben
Ashton, Joe Forrester, John
Atkinson, N.(H'gey,) Foster, Derek
Bagier, Gordon A.T. Foulkes, George
Barnett, Guy (Greenwich) Fraser, J. (Lamb'th, N'w'd)
Barnett, Rt Hon Joel (H'wd) Freeson, Rt Hon Reginald
Benn, Rt Hon Tony Garrett, John (Norwich S)
Bennett, Andrew(St'kp't N) George, Bruce
Bidwell, Sydney Gilbert, Rt Hon Dr John
Booth, Rt Hon Albert Golding, John
Boothroyd, Miss Betty Gourlay, Harry
Bottomley, Rt Hon A.(M'b'ro) Graham, Ted
Bray, Dr Jeremy Grant, George (Morpeth)
Brown, Hugh D. (Provan) Hamilton, James (Bothwell)
Brown, R. C. (N'castle W) Hamilton, W. W. (C'tral Fife)
Brown, Ron (E'burgh, Leith) Hardy, Peter
Buchan, Norman Harrison, Rt Hon Walter
Callaghan, Jim (Midd't'n & P) Hart, Rt Hon Dame Judith
Campbell, Ian Hattersley, Rt Hon Roy
Campbell-Savours, Dale Haynes, Frank
Canavan, Dennis Healey, Rt Hon Denis
Cant, R. B. Heffer, Eric S.
Carmichael, Neil Hogg, N. (E Dunb't'nshire)
Carter-Jones, Lewis Holland, S. (L'b'th, Vauxh'll)
Clark, Dr David (S Shields) Home Robertson, John
Clarke,Thomas(C'b'dge, A'rie) Homewood, William
Cocks, Rt Hon M. (B'stol S), Hooley, Frank
Cohen, Stanley Howell, Rt Hon D.
Coleman, Donald Hoyle, Douglas
Concannon, Rt Hon J. D. Huckfield, Les
Conlan, Bernard Hughes, Mark (Durham)
Cook, Robin F. Hughes, Robert (Aberdeen N)
Cowans, Harry Hughes, Roy (Newport)
Cox, T. (W'dsw'th, Toot'g) Janner, Hon Greville
Craigen, J. M. (G'gow, M'hill) Jay, Rt Hon Douglas
Crowther, Stan John, Brynmor
Cryer, Bob Johnson, James (Hull West)
Cunningham, Dr J. (W'h'n) Johnson, Walter (Derby S)
Dalyell, Tam Jones, Rt Hon Alec (Rh'dda)
Davidson, Arthur Jones, Barry (East Flint)
Davies, Rt Hon Denzil (L'lli) Jones, Dan (Burnley)
Davis, Clinton (Hackney C) Kaufman, Rt Hon Gerald
Davis, Terry (B'ham, Stechf'd) Kilroy-Silk, Robert
Deakins, Eric Lambie, David
Dean, Joseph (Leeds West) Lamond, James
Dewar, Donald Leighton, Ronald
Dixon, Donald Lestor, Miss Joan
Dobson, Frank Lewis, Arthur (N'ham NW)
Dormand, Jack Lewis, Ron (Carlisle)
Douglas, Dick Litherland, Robert
Dubs, Alfred Lofthouse, Geoffrey
Duffy, A. E. P. Lyon, Alexander (York)
Dunnett, Jack McCartney, Hugh
Dunwoody, Hon Mrs G. McDonald, Dr Oonagh
Eadie, Alex McGuire, Michael (Ince)
Eastham, Ken McKelvey, William
Edwards, R. (W'hampt'n S E) MacKenzie, Rt Hon Gregor
Ellis, R. (NE D'bysh're) McMahon, Andrew
English, Michael McNamara, Kevin
Evans, loan (Aberdare) McTaggart, Robert
Marks, Kenneth Short, Mrs Renée
Marshall, D(G'gow S'ton) Silkin, Rt Hon J. (Deptford)
Marshall, Dr Edmund (Goole) Silkin, Rt Hon S. C. (Dulwich)
Marshall, Jim (Leicester S) Skinner, Dennis
Martin, M(G'gow S'burn) Smith, Rt Hon J. (N Lanark)
Mason, Rt Hon Roy Snape, Peter
Maxton, John Soley, Clive
Maynard, Miss Joan Spearing, Nigel
Meacher, Michael Spriggs, Leslie
Mikardo, Ian Stallard, A. W.
Millan, Rt Hon Bruce Stewart, Rt Hon D. (W Isles)
Miller, Dr M. S. (E Kilbride) Stoddart, David
Mitchell, Austin (Grimsby) Stott, Roger
Mitchell, R. C. (Soton Itchen) Strang, Gavin
Morris, Rt Hon A. (W'shawe) Straw, Jack
Morris, Rt Hon C. (O'shaw) Summerskill, Hon Dr Shirley
Morris, Rt Hon J. (Aberavon) Taylor, Mrs Ann (Bolton W)
Morton, George Thomas, Dafydd (Merioneth)
Moyle, Rt Hon Roland Thomas, Dr R.(Carmarthen)
Mulley, Rt Hon Frederick Thorne, Stan (Preston South)
Newens, Stanley Tilley, John
Oakes, Rt Hon Gordon Tinn, James
O'Neill, Martin Torney, Tom
Orme, Rt Hon Stanley Urwin, Rt Hon Tom
Palmer, Arthur Varley, Rt Hon Eric G.
Park, George Wardell, Gareth
Parker, John Wainwright, E.(Dearne V)
Parry, Robert Walker, Rt Hon H.(D'caster)
Pavitt, Laurie Watkins, David
Pendry, Tom Weetch, Ken
Penhaligon, David Welsh, Michael
Powell, Raymond (Ogmore) White, Frank R.
Prescott, John White, J. (G'gow Pollok)
Race, Reg Whitehead, Phillip
Radice, Giles Whitlock, William
Rees, Rt Hon M (Leeds S) Wigley, Dafydd
Richardson, Jo Willey, Rt Hon Frederick
Roberts, Allan (Bootle) Williams, Rt Hon A.(S'sea W)
Roberts, Ernest (Hackney N) Wilson, Gordon (Dundee E)
Roberts, Gwilym (Cannock) Wilson, Rt Hon Sir H.(H'ton)
Robertson, George Wilson, William (C'try SE)
Robinson, G. (Coventry NW) Winnick, David
Rooker, J. W. Woodall, Alec
Ross, Ernest (Dundee West) Woolmer, Kenneth
Rowlands, Ted Wright, Sheila
Ryman, John Young, David (Bolton E)
Sever, John
Sheerman, Barry Tellers for the Ayes:
Sheldon, Rt Hon R. Mr. Allen McKay and
Shore, Rt Hon Peter Mr. Lawrence Cunliffe.
Adley, Robert Boyson, Dr Rhodes
Alexander, Richard Braine, Sir Bernard
Alison, Rt Hon Michael Brinton, Tim
Amery, Rt Hon Julian Brittan, Rt. Hon. Leon
Ancram, Michael Brooke, Hon Peter
Aspinwall, Jack Brotherton, Michael
Atkins, Rt Hon H.(S'thorne) Brown, Michael(Brigg & Sc'n)
Atkins, Robert(Preston N) Browne, John (Winchester)
Atkinson, David (B'm'th,E) Bruce-Gardyne, John
Baker, Kenneth(St.M'bone) Bryan, Sir Paul
Baker, Nicholas (N Dorset) Buck, Antony
Banks, Robert Budgen, Nick
Beaumont-Dark, Anthony Bulmer, Esmond
Bendall, Vivian Burden, Sir Frederick
Bennett, Sir Frederic (T'bay) Butcher, John
Benyon, Thomas (A'don) Carlisle, John (Luton West)
Benyon, W. (Buckingham) Carlisle, Kenneth (Lincoln)
Best, Keith Carlisle, Rt Hon M. (R'c'n )
Bevan, David Gilroy Chalker, Mrs. Lynda
Biffen, Rt Hon John Channon, Rt. Hon. Paul
Biggs-Davison, Sir John Chapman, Sydney
Blackburn, John Churchill, W. S.
Blaker, Peter Clark, Hon A. (Plym'th, S'n)
Body, Richard Clark, Sir W. (Croydon S)
Bonsor, Sir Nicholas Clarke, Kenneth (Rushcliffe)
Boscawen, Hon Robert Clegg, Sir Walter
Bottomley, Peter (W'wich W) Cockeram, Eric
Bowden, Andrew Colvin, Michael
Cope, John Johnson Smith, Sir Geoffrey
Corrie, John Jopling, Rt Hon Michael
Costain, Sir Albert Joseph, Rt Hon Sir Keith
Cranborne, Viscount Kaberry, Sir Donald
Crouch, David Kershaw, Sir Anthony
Dickens, Geoffrey Kimball, Sir Marcus
Dorrell, Stephen King, Rt Hon Tom
Douglas-Hamilton, Lord J. Kitson, Sir Timothy
Dover, Denshore Knight, Mrs Jill
du Cann, Rt Hon Edward Knox, David
Dunn, Robert (Dartford) Lamont, Norman
Durant, Tony Lang, Ian
Dykes, Hugh Latham, Michael
Eden, Rt Hon Sir John Lawrence, Ivan
Edwards, Rt Hon N. (P'broke) Lawson, Rt Hon Nigel
Eggar, Tim Lee, John
Elliott, Sir William Lennox-Boyd, Hon Mark
Emery, Sir Peter Lester, Jim (Beeston)
Eyre, Reginald Lewis, Kenneth (Rutland)
Fairbairn, Nicholas Lloyd, Ian (Havant & W'loo)
Fairgrieve, Sir Russell Lloyd, Peter (Fareham)
Faith, Mrs Sheila Loveridge, John
Farr, John Luce, Richard
Fell, Sir Anthony Lyell, Nicholas
Fenner, Mrs Peggy McCrindle, Robert
Finsberg, Geoffrey Macfarlane, Neil
Fisher, Sir Nigel MacGregor, John
Fletcher, A. (Ed'nb'gh N) MacKay, John (Argyll)
Fletcher-Cooke, Sir Charles Macmillan, Rt Hon M.
Forman, Nigel McNair-Wilson, M. (N'bury)
Fowler, Rt Hon Norman McNair-Wilson, P. (New F'st)
Fox, Marcus McQuarrie, Albert
Fraser, Rt Hon Sir Hugh Major, John
Fry, Peter Marland, Paul
Gardiner, George (Reigate) Marlow, Antony
Gardner, Edward (S Fylde) Marshall, Michael (Arundel)
Garel-Jones, Tristan Mates, Michael
Gilmour, Rt Hon Sir Ian Maude, Rt Hon Sir Angus
Glyn, Dr Alan Mawby, Ray
Goodhart, Sir Philip Mawhinney, Dr Brian
Goodhew, Sir Victor Maxwell-Hyslop, Robin
Goodlad, Alastair Mayhew, Patrick
Gorst, John Mellor, David
Gow, Ian Meyer, Sir Anthony
Gower, Sir Raymond Mills, lain (Meriden)
Grant, Anthony (Harrow C) Mills, Sir Peter (West Devon)
Gray, Hamish Miscampbell, Norman
Grieve, Percy Moate, Roger
Griffiths, E.(B'y St. Edm'ds) Montgomery, Fergus
Griffiths, Peter Portsm'th N) Moore, John
Grist, Ian Morgan, Geraint
Grylls, Michael Morris, M. (N'hampton S)
Gummer, John Selwyn Morrison, Hon C. (Devizes)
Hamilton, Hon A. Morrison, Hon P. (Chester)
Hamilton, Michael (Salisbury) Mudd, David
Hannam, John Murphy, Christopher
Haselhurst, Alan Myles, David
Hastings, Stephen Neale, Gerrard
Havers, Rt Hon Sir Michael Needham, Richard
Hawkins, Sir Paul Nelson, Anthony
Hawksley, Warren Neubert, Michael
Hayhoe, Barney Newton, Tony
Henderson, Barry Onslow, Cranley
Heseltine, Rt Hon Michael Oppenheim, Rt Hon Mrs S.
Hicks, Robert Page, John (Harrow, West)
Higgins, Rt Hon Terence L. Page, Richard (SW Herts)
Hill, James Parris, Matthew
Hogg, Hon Douglas (Gr'th'm) Patten, Christopher (Bath)
Holland, Philip (Carlton) Patten, John (Oxford)
Hooson, Tom Pattie, Geoffrey
Hordern, Peter Pawsey, James
Howe, Rt Hon Sir Geoffrey Percival, Sir Ian
Howell, Rt Hon D. (G'Idf'd) Peyton, Rt Hon John
Howell, Ralph (N Norfolk) Pink, R. Bonner
Hunt, David (Wirral) Pollock, Alexander
Hunt, John (Ravensbourne) Porter, Barry
Irvine, Bryant Godman Price, Sir David (Eastleigh)
Irving, Charles (Cheltenham) Prior, Rt Hon James
Jenkin, Rt Hon Patrick Proctor, K. Harvey
Jessel, Toby Raison, Rt Hon Timothy
Rathbone, Tim Stradling Thomas, J.
Rees-Davies, W. R. Tapsell, Peter
Renton, Tim Taylor, Teddy (S'end E)
Rhodes James, Robert Tebbit, Rt Hon Norman
Rhys Williams, Sir Brandon Temple-Morris, Peter
Ridley, Hon Nicholas Thomas, Rt Hon Peter
Ridsdale, Sir Julian Thompson, Donald
Rifkind, Malcolm Thorne, Neil (Ilford South)
Rippon, Rt Hon Geoffrey Thornton, Malcolm
Roberts, M. (Cardiff NW) Townend, John (Bridlington)
Roberts, Wyn (Conway) Townsend, Cyril D, (B'heath)
Rossi, Hugh Trippier, David
Rost, Peter van Straubenzee, Sir W.
Royle, Sir Anthony Vaughan, Dr Gerard
Rumbold, Mrs A. C. R. Viggers, Peter
Sainsbury, Hon Timothy Wardell, Gareth
St. John-Stevas, Rt Hon N. Wakeham, John
Shaw, Giles (Pudsey) Waldegrave, Hon William
Shaw, Sir Michael (Scarb') Walker, B. (Perth )
Shelton, William (Streatham) Walker-Smith, Rt Hon Sir D.
Shepherd, Colin (Hereford) Waller, Gary
Shepherd, Richard Walters, Dennis
Shersby, Michael Ward, John
Silvester, Fred Warren, Kenneth
Sims, Roger Watson, John
Skeet, T. H. H. Wells, Bowen
Smith, Dudley Wells, John (Maidstone)
Smith, Tim (Beaconsfield) Wheeler, John
Speed, Keith Whitelaw, Rt Hon William
Speller, Tony Whitney, Raymond
Spence, John Wiggin, Jerry
Spicer, Jim (West Dorset) Wilkinson, John
Spicer, Michael (S Worcs) Williams, D.(Montgomery)
Squire, Robin Winterton, Nicholas
Stainton, Keith Wolfson, Mark
Stanbrook, Ivor Young, Sir George (Acton)
Stanley, John
Stewart, A.(E Renfrewshire) Tellers for the Noes:
Stewart, Ian (Hitchin) Mr. Anthony Berry and
Stokes, John Mr. Carol Mather.

Question accordingly negatived.

It being after Seven o'clock, MR. SPEAKER proceeded, pursuant to the Order this day, to put forthwith the Question necessary for the disposal of the business to be concluded at that hour.

Lords amendment No. 1 agreed to.

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