§ 'Nothing in this Act shall prejudice the pensions of British Telecommunications employees past, present and future.'.—[Mr. Mark Fisher.]
§ Brought up, and read the First time.
§ Mr. Mark Fisher (Stoke-on-Trent, Central)I beg to move, That the clause be read a Second time.
My hon. Friend the Member for Newcastle-under-Lyme (Mr. Golding), my Staffordshire neighbour, was less than charitable in the festive season to the Minister of State, who has problems with his voice. Indeed, my hon. Friend was less than accurate because, although the Minister spoke a great deal in Committee, he told us very little. Conservative Back Benchers, too, have been noticeable for their trappisi-like silence in our deliberations in Committee. Now the Minister seeks to give us his impersonation of that well-known talk-singer, Miss Eartha Kitt, in a husky voice that would do her credit. Her famous song was "Love for sale". The Minister seeks to blandish Opposition Members with his song "British Telecom for sale". We were not impressed by that in Committee, nor are we impressed today.
New clause 2 refers to the problem of pensions, which will have great financial implications for British Telecom if it is privatised. The clause has even greater personal and immediate significance for the thousands of beneficiaries of the pension fund and for those paying into it. Moreover, unlike new clause 1, the matter has not been debated adequately in Committee. Indeed, it was the subject of only a few minutes passing debate and comment.
I hope that hon. Members on both sides of the House will agree that the Government have a clear responsibility to past and present BT employees. They must honour that responsibility. The Opposition will ensure, to the best of 1031 our ability, not only that those obligations are honoured but that future employees will receive pension arrangements that are at least as good as those currently available. New clause 2 seeks a fair deal for BT employees, and a fair pension for all those who have worked for the company.
The Minister of State gave assurances in Committee, which I shall quote. He said:
The Government have given a clear assurance that existing pension obligations will be honoured fully … In the improbable event that BT plc goes out of business, that liability will be transferred to the Secretary of State under clause 64 … The trust deed prohibits changes to its rules which would reduce the benefits of any person already entitled to a pension. So it would not be open to the successor company, even if it wished, to reduce this entitlement … All the trustees are required by law to act in the best interests of the trust's beneficiaries".On the question of the pension fund deficiency, the Minister said that BT was underwritten by the Government in clause 64If it could not meet its obligations". — [Official Report, Standing Committee A, 29 November 1983; c. 1013–15.]On the face of it, the Minister's assurances are substantive. So why are we worried? More pertinently, why is the Post Office Veterans and Pensioners Association worried at the lack of assurances in the Bill about pension arrangements? First, we are worried because of the qualification in one of the Minister of State's remarks that I read out —the word "existing". The Minister referred to "existing pension obligations". Nothing at all was said about the protection of future employees. Second, we are worried because of the difficulty for the Government to ensure watertight guarantees for the future conduct of the fund. Most significantly, we are worried because of the long and sorry history of pension problems which arise every time the Government seek to privatise a public asset.
§ Mr. Rob Hayward (Kingswood)The hon. Gentleman referred to the concern apparently expressed by the Post Office Veterans and Pensioners Association since the Minister's reply to the Committee. Will the hon. Gentleman identify where that concern is set out, because I am not aware of it?
§ Mr. FisherI am talking about the areas of concern. I shall answer the hon. Gentleman in referring to the problems about pensions.
Problems arose when the National Freight Corporation was privatised. On that occasion the Government received £53.5 million from the sale, but they had to pay back £47 million to make good the deficit in the pension fund. After the sorry saga and privatisation shambles of Amersham International, that company has to run different pension funds with different benefits for the beneficiaries—one fund for existing employees and one for new employees who come to work for the company after privatisation. That is not a recipe for good industrial relations. Every time, the position of the pension fund, as part of the capital structure of a company in the public sector that is to be privatised, presents problems for the potential purchasers of shares. Even if the pension fund is not prejudiced, it is crucial to the sale of those shares and the real, rather than the book, financial benefit to the Government and the taxpayer.
There is another problem. This week it was announced that British Airways was yet another target for the 1032 Government's obsession with privatisation. Some 20,000 employees in British Airways have been made redundant in the past four years which will have a significant effect on the pension obligations of the corporation. That pinpoints a major dilemma that BT is likely to face after it is privatised.
One of the prime motives of the Government's obsession with privatisation is, as they always say, to increase productivity and efficiency. To the Opposition, those expressions seem to be a polite way of saying that employees will be sacked, made redundant and given their cards, which has a desperate impact on people's lives and is traumatic. The impact on the pension fund can be dramatic.
It is widely rumoured that BT will lose 45,000 employees as a result of privatisation and new technology. That figure was mentioned several times in Committee, and the Government never denied it. What effect will that have on the pension fund? Why has not the Minister of State made a full statement? Has he done his sums? Does he have projected figures for the effect on contributions to the fund? Extra responsibility will be placed on BT because of the increasing number of beneficiaries. If the Minister has those figures, why has he not published them? If he does not have them, why on earth does he not have them? He should have them.
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It is difficult to piece together a coherent picture of what the fund will be like after BT is privatised. Until 31 March this year the pension fund was combined with that of the Post Office, in POSSFUND. The split is expected to be approximately 45 per cent. to the Post Office and 55 per cent. to BT. When we see the scale of the pension fund, we begin to realise the scale of the problem which the new clause addresses. The assets of the Consolidated Fund account are £4,574.8 million, of which BT's share will be approximately £2,400 million. The income to that fund in contributions and investment is £839.4 million. Those are enormous sums, and they sound very solid. However, when one sees the impact of 45,000 sudden new redundancies on the financial demands on the consolidated assets one begins to realise the scale of the problem.
The Minister may say that there will not be 45,000 redundancies. He may say that we are being unduly pessimistic. Let us say optimistically—optimistically? —that there will be only 30,000 redundancies.
Let us consider a technical officer aged 50 earning £10,000 a year. He would be a typical employee in British Telecom, which employs 33,000 similar people. That man, or woman, is particularly vulnerable to redundancy and is very likely to be made redundant. On the first day of his redundancy, he receives one and a half times his annual pay in a lump sum—approximately £15,000. He also has an enhanced pension that will last for an extra 10 years, and that, at 50 per cent. of his earnings or £5,000 a year, will constitute an extra demand on the assets of the pension fund of £50,000. To that £50,000 one must add the loss of interest on the £15,000 that he is receiving 10 years before he normally would have done. The total loss of an early redundancy to the pension fund will be apparently £60,000.
Let us assume that there are only 30,000 redundancies as a result of privatisation — I use the word "only" advisedly and with some irony—and that only half the redundant employees are on the somewhat elevated scale 1033 that I have just mentioned and the rest will only benefit by half that amount, if that is possible. Even if we minimise the figures in that way and run down the potential threat to the fund, as the Government may seek to do, 30,000 redundancies affecting such a range of employees will mean a total extra demand on the pension fund of £1,350 million, which is more than half the total fixed assets of the fund. To put it at its most polite, the Government do not seem to have faced the scale of the problem.
The deficit is in two halves. The pre-1969 deficit stands at about £1,700 million. The post-1969 deficit is running at about £800 million. As the Minister of State has said, the deficits are part of the capital structure of BT. He further said:
No decisions have yet been taken on the shape of that capital structure." — [Official Report, Standing Committee A; 29 November 1983, c. 1015.]The Minister of State has been considering the Bill for 18 months. He must have reached decisions on the capital structure of the company that he will offer to the public. It is hard for Opposition Members to believe that no decisions have been taken. It is true that no decisions have been announced, although they should have been, but I cannot believe that the Minister of State and the Under-Secretary have not seriously considered how to approach the capital structure. Why will the Minister of State not tell the House what that structure will be and what role the pension fund will play in it? What does he have to hide?Will the substantial potential liabilities against the total fixed assets of the pension fund be explained in the offer documents, or will they, by that stage, have been discounted, massaged away or paid off by the Government in advance? Perhaps, as in the case of the National Freight Corporation, some of the proceeds of the sale will be used after the event to pay off the deficit. None of those options will be acceptable to the taxpayer, who will be giving approximately £2,500 million to the purchasers of British Telecom, some of whom, as the Minister of State has recognised, are likely to he foreign corporations. That is no way to treat taxpayers' money. The House rightly expects a detailed answer about such problems.
If it is not massaged in the capital reconstruction, how will British Telecom PLC finance the enormous deficits? What about the reality of the commitment to sustain inflation-proof index-linking for pensions? The fund is fully financed—it is paid out of income and guaranteed by the Government. It is protected by the BT trustees and ultimately underwritten by the Government under clause 64, in the Minister's own words, if it cannot meet its liabilities.
We all accept that in what the Minister called the implausible scenario of BT going into liquidation the Government, under clause 64, will act as underwriters and guarantors. That is the fall-back position. But what will happen in an interim stage if, without going into liquidation, BT tells the trustees of the pension fund that its present financial condition does not allow it to meet the demands of the deficit that year and that it will have to lower its contributions, or ask employees to raise their contributions, in order to sustain the integrity of the fund? If BT could not or would not pay, what should the trustees do? Should they ask the employees to raise their contribution, thus reducing the value of their pensions, or in what way should they interpret the expression
The best interests of the … beneficiaries."— [Official Report, Standing Committee A; 29 November 1983, c. 1014.]1034 The trustees and the Government could be faced with that problem, and, in the interests of the employees, the Government should face it now. If they do not do so, they are saying, in effect, that they will honour their obligations only if BT goes bankrupt. That is unsatisfactory, because the creation of competition may mean that temporarily, or for a sustained period, BT's trading position cannot sustain its onerous and substantial pension fund. When the Minister of State refers to BT being unable to meet its liabilities, what does he mean? Could that mean that it will not meet them, or is not keen to do so? Can the Government force BT to meet its liabilities if it has not gone bankrupt, or will it accept BT's judgment, pay up and shut up, protecting the pension interests even though BT has not gone into liquidation? The Minister of State should set out in cold cash terms what the pension liabilities and obligations will be and exactly how the Government see their role as an underwriter in the stage before BT went into liquidation. I fear that he will not do so, because the facts are inconvenient for the Government. They might frighten potential purchasers of the shares.The Minister of State made some fine, generalised statements in Committee. Those statements testified to his good intentions; but good intentions are not sufficient. On behalf of the employees of BT, we need facts. Are there to be two schemes? If so, will the benefits differ, and in what way? How can any difference in pension schemes or benefits within one company be justified? That is a recipe for bad industrial relations and it is totally unfair to future employees who are not protected by the Minister of State's statement.
What capital reconstruction will take place, and how will it affect the pension fund? What impact will the rationalisation of staff—as it is called—have upon the income and expenditure of the fund? We are not merely juggling with figures in balance sheets. We are talking about men's lives and incomes. We are talking about the ability to look after their families and lead a dignified and decent life of men and women who have worked loyally. hard and long in the public service. Even though the company is now to be taken out of the public service and run for private profit, the men and women who are the potential beneficiaries of the pension fund have given much, during their working lives, to the benefit not only of BT but of the customers, the country and the Governments whom they have served. They did so confident that their futures were agreed and assured by BT trust fund. Past, present and future employees demand answers to those questions. They are right to do so. The Opposition join them in that demand. We expect clear, detailed answers.
§ Mr. HaywardI want to comment on the speech of the hon. Member for Stoke-on-Trent, Central (Mr. Fisher) because he has, like a number of hon. Gentlemen in Committee—no doubt they will do so this evening and tomorrow—persistently raised suspicions and rumours. They have attempted to induce unnecessary fears in people and have failed to consider the answers that have been given.
The hon. Gentleman said that the issue had been subject to limited debate. I suggest that was because of the extensive filibuster that occurred on clauses debated before the general election.
Mr. John Mc William (Blaydon)On a point of order, Mr. Deputy Speaker. Is it in order for an hon. Member to accuse a Chairman of a Committee of allowing a filibuster, which is a breach of the rules of the House?
§ Mr. Deputy Speaker (Mr. Ernest Armstrong)I do not think that it is a matter about which we need become excited.
§ Mr. HaywardThe hon. Member for Stoke-on-Trent, Central also used phrases such as "it is rumoured". Rumoured by whom? He was again attempting to make people suspicious. He cited massive figures in relation to redundancy, but he did not say where they had come from. He did not say that telecommunications is one of the fastest growing industries.
§ Mr. Patrick Thompson (Norwich, North)Does my hon. Friend agree that the Opposition's campaign has been based entirely upon rumour rather than fact?
§ Mr. HaywardI agree with my hon. Friend. The speech made by the hon. Member for Stoke-on-Trent, Central illustrated the suspicion and rumours upon which the Opposition have attempted to build their case. They have failed to consider the direct and specific answers given in Committee by my hon. Friend the Minister.
The hon. Gentleman mentioned the Post Office Veterans and Pensioners Association. As the hon. Gentleman is aware, the secretary of that association is a constituent of mine. I received a letter from him this morning about the debate in Committee. He did not ask one question about the answers given by the Minister in Committee. That may be because the association has not had a chance to discuss the matter fully, but the hon. Gentleman should not presume what such people might be worried about when he has had no correspondence with a representative of the association.
§ Mr. FisherIf the hon. Gentleman had attended meetings of the Post Office Engineering Union throughout the country as I have and had met BT's past and present employees, he would have found that they are worried about pensions. The fact that he has not attended, been invited to, or sought to attend those meetings disqualifies him from making such wild generalisations. Employees are deeply worried about their pensions.
§ Mr. HaywardI am not surprised that employees are deeply worried about their pensions in the light of the rumours and misinformation included in speeches such as those made by the hon. Gentleman. He said that he was citing the pensioners association, and he referred to the association, not to pensioners generally and to current employees. I and my hon. Friends met representatives of the association two days before the clause was debated in Committee. I had an interesting discussion, as did a number of my hon. Friends, about the issues that worried the association, which will be directly affected by the privatisation of BT. I sought to obtain the association's views and they have been put fairly and clearly to most of the hon. Members who are present this evening.
The hon. Gentleman also mentioned the problems of individual employees who will be under two different pension schemes. It is common in industry for people to have pensions covered by as many as four pension schemes. That is due to the way that companies develop. There may have been takeovers and reorganisations. It 1036 happens in large organisations, and British Telecom plc will be one of the largest companies. The hon. Gentleman has been attempting to raise doubts in people's minds. A current BT employee will not appreciate the problems that must be faced when transferring from one organisation to another, but they can be and are regularly overcome by private industry.
I have been a pension trustee in a company, and I have been responsible for employees who have been covered by five different funds. Problems can be easily overcome in the vast majority of cases if one seeks the advice of the trustees covering each of the different pension schemes, and the actuaries.
The hon. Gentleman asked for a full statement. He said that the Minister's reply in Committee had been less than specific. In Committee the hon. Member for Newcastle-under-Lyme (Mr. Golding) made great play of words such as "satisfactory," "reasonable" and "consider". If one studies the statement made by the Minister in columns 1013, 1014 and 1015 one will be hard put to find any of those words.
On the subject of pension obligations the Minister said:
The Government have given a clear assurance that existing pension obligations will be honoured fully. … In the improbable event that BT plc goes out of business, that liability will be transferred to the Secretary of State under clause 64.That statement is clear and precise. It is not vague, as the hon. Gentleman attempted to imply. The Minister continued:The trustees of the pension fund have the duty of providing pensions and holding in trust the contributions paid by BT and the Post Office to past and present employees.That is a clear statement of pension trust law and of the obligations of pension trustees. The Minister further said thatBT's pensioners are entitled to periodic increases in their pensions, in line with the increases enjoyed by most civil servants. The trust deed prohibits changes to its rules which would reduce the benefits of any person already entitled to a pension.The answer specifically says, "prohibits." The Minister continued:So it would not be open to the successor company, even if it wished, to reduce the entitlement.There could be no more clear response about the position of existing pensioners. I do not see what the hon. Gentleman is trying to do other than to put further rumours and anxieties in people's minds. The Minister spoke about current employees and said:Any change to the rules in relation to employees retiring in future would require the agreement of all trustees, including those representing BT's trade unions. All trustees are required by law to act in the best interests of the trust's beneficiaries."—[Official Report, Standing Committee A, 29 November 1983; c. 1013–14.]I suggest that the potential pensioners, the current employees of BT, have doubts in their minds, because it has not been made clear to them that all the pension trustees have to agree to changes. I have a feeling that in a number of cases misinformation has been given to individuals, and that that information naturally raised those doubts.
§ Mr. GoldingMay I put a question to the hon. Gentleman? Could there be no possibility of the ending of index-linked pensions for present employees — no possibility of the worsening of the pension in any way, whatever BT's future financial position is?
§ Mr. HaywardI was not saying that. I said that any changes had to be made with the agreement of all the 1037 trustees, including the trade union representatives. That is what I said, and I did not attempt to interpret it in any way. That is very clear.
§ Mr. GoldingDoes the hon. Gentleman appreciate that the staff want a categoric assurance that there will be no worsening of conditions, whoever is led to agree to them?
§ Mr. HaywardWe would all like categoric assurances for every term and condition of employment that we have, whether as employees of BT, as Members of Parliament, or as employees in any other part of British industry or service company. No management can reasonably be expected to give categoric assurances about the future. The law on pension trusts says that there has to be agreement by all the trustees, in the case of BT, including the trade union representatives.
§ Mr. FisherSo the hon. Gentleman is saying that although there are categoric assurances now, because BT is a public corporation and the Government underwrite the pensions, there will not be categoric assurances in the future, when it is a private company. That seems to be the burden of what the hon. Gentleman is saying.
§ Mr. HaywardThat is not what I said, and the hon. Gentleman knows it. I was referring to the pension trust deed, which remains unaltered. I was referring to pension law, which covers not only this pension fund, but many others that operate throughout British industry. I do not accept the deliberate misinterpretation, again, of what is being said.
§ Mr. HaywardI have given way many times, but I shall do so again.
§ Mr. StottI wish to intervene before the hon. Gentleman leaves that important point. My hon. Friend the Member for Stoke-on-Trent, Central (Mr. Fisher) said that at present the guarantees are given to the employees because BT is a public corporation. There are no ifs, buts or maybes. There is a cast-iron guarantee that the pension provisions will continue to prevail as long as BT remains in the public sector, but the Bill and the move to privatisation will alter that fundamental fact.
§ Mr. HaywardThe hon. Member for Wigan (Mr. Stott) is incorrect. One cannot set a pension scheme in tablets of stone. There may be a future change in the pension scheme, whether the employees remain in BT as a nationalised company or as a denationalised company. The responsibility to change the pension schemes rests with the trustees. There is no guarantee now. There is the current practice as outlined, but in future pension trustees may choose to change the pension fund. It is not in tablets of stone. No one—including hon. Gentlemen—who has been involved in negotiations on pension funds, pay and conditions, would expect a guarantee that a fund would remain in one form ad infinitum, because that would remove the opportunity to improve the terms and conditions.
I come now to the question of future employees. The answer that was given in Committee about future employees was, in my view, clear:
Neither I nor anybody else can bind the future pensions policy of BT when it is a public limited company. The pensions policy of BT plc in relation to new recruits after it becomes a public limited company must be a matter for it to determine in consultation with its work force".
§ Mr. GoldingWas not that a most surprising statement by the Minister, since BT is bound in every possible way in both the licence and the legislation? Every restriction is put on it—from the points of view of the customer, of purchasing, and of commercial operation and prices. The only thing that the Minister cannot find it in his heart to do is something for the staff and their pensions.
§ Mr. HaywardWe may debate some of those issues on a new clause that Labour Members have tabled later. However I want to draw attention to the Minister's words
to determine in consultation with its work force".—[Official Report, Standing Committee A, 29 November 1983; c. 1014.]In other words, yet again there is a responsibility to discuss the matter with the employees of BT plc.The hon. Member for Stoke-on-Trent, Central asked a lot of questions about the complex difficulties in connection with pension fund liabilities. I accept that the problems facing the pension fund both before and after 1969 are complicated. However, the answer given at the time was:
No decisions have yet been taken on the shape of that capital structure. In the discussions in progress—" from which the hon. Gentleman quoted—we are considering in particular the deed of covenant obligation. If there is any change of treatment of that liability, I shall report it to the House".There is a clear undertaking that when it has been resolved, and when the Minister is in a position to do so, he will bring the matter to the House. It was a clear undertaking by the Minister. He went on:However, I make it clear that in future that obligation will be met. I should not wish anyone to think that the trust fund will be short of that money. It will not." —[Official Report, Standing Committee A, 20 November 1983; c. 1015.]That is firm and clear, and should put aside to some extent the worries of pensioners, although I accept that the liabilities are a complex issue.
§ Mr. FisherThe Minister of State made it clear that the pension fund is part of the BT's capital structure. Therefore, it is ridiculous for us to have to make decisions on the pension fund in advance of knowing what that capital structure or capital reconstruction will be. Surely. anyone can see that we are approaching the problem in the wrong way. Only after we know what the capital structure is to be can we make an intelligent judgment about the position of the pension fund
§ Mr. HaywardI do not agree. The position, both before and after 1969, is extremely complex. It is made even more complex by hon. Members arousing suspicions and creating rumours.
The most surprising aspect of this debate is that the wording of the new clause was debated previously in Committee. Having given an answer, and considered at length—
§ Mr. Goldingrose—
§ Mr. HaywardI stand corrected if the wording is not identical.
§ Mr. GoldingHas the hon. Gentleman checked his facts? Was he present when the matter was last debated? Has the whole of his speech this afternoon been as erroneous as his last statement?
§ Mr. HaywardFor once, the hon. Gentleman's memory fails him. I quoted at length from columns 1013, 1014 and 1015. The hon. Member whose speech fills the 1039 rest of column 1013, and who spoke about pensions, was me. The hon. Gentleman cannot have been present if he fails to remember that. He has a very good memory.
§ Mr. GoldingWhat was the wording of the amendment? I have not missed a Division or a debate since last January.
§ Mr. HaywardI thank the hon. Gentleman for that correction. I have just checked the wording and he is right. The wording is substantially different.
§ Mr. GoldingWill the hon. Gentleman withdraw his devastating statement that I was once wrong, before my reputation is destroyed forever?
§ Mr. HaywardI will not withdraw my statement about the hon. Gentleman being inaccurate because he questioned whether I was present.
§ Mr. GoldingNo.
§ Mr. HaywardMy response was that I was present and that I had spoken. I have checked the wording and it is different so I withdraw that, but I still stick to my statement that I was present and spoke and that therefore the hon. Gentleman is inaccurate.
§ Mr. GoldingMay we take it that the hon. Gentleman has been learning from the Minister of State? He is now creating straw men and knocking them down. When he reads Hansard he will see that at no point did we challenge the fact that the hon. Gentleman was present. He was so inconspicuous, even when speaking in our debate, that none of us would remember whether he was present or not.
§ Mr. Deputy Speaker (Mr. Paul Dean)Order. I hope that we can return to the issue of pensions.
§ Mr. HaywardI thank you, Mr. Deputy Speaker, for bringing us back to the issue of pensions.
While I accept the point that the wording of the amendment is somewhat different from that of the previous amendment I find it surprising that the speeches and the points raised are similar to those made in Committee. Yet, at the time, having received the answer from my hon. Friend the Minister of State, the hon. Member for Newcastle-under-Lyme chose not to press the matter to a Division. Therefore, I find it somewhat surprising that this proposal and these issues should be raised again in this form.
§ Mr. Penhaligonrose—
§ Mr. McWilliamI am sorry if I appear to have upset the hon. Member for Truro (Mr. Penhaligon), who is leaving the Chamber.
I should like to begin by declaring an interest. I am sponsored by the Post Office Engineering Union. In fact, I am on leave from BT without pay. That will be cleared up on 2 May 1984, when I must resign.
This is an important subject for those who still work for BT, who could be in the position I was before I became a Member of the House in 1979. I became an established civil servant in the Post Office in 1959. Therefore, in the period between 1959 and 1969, I qualified for a Civil Service pension. In the normal course of events I would 1040 not retire from the Post Office—from BT—until the year 2001. That 10 years of service will still have to be reckoned for pension purposes.
I read the Minister's speech in Committee about pensions with care. I could not see that if I stayed with BT my pension expectations would necessarily be fully protected under the Bill as it now stands. If, however, our amendment is incorporated into the Bill, I can see that my pension would be so protected. As my hon. Friend the Member for Newcastle-under-Lyme (Mr. Golding) rightly pointed out, this Bill prescribes everything with regard to the future activities of BT except the well-being and the future of the staff.
I should like to address myself to the interesting speech of the hon. Member for Kingswood (Mr. Hayward). It seemed to depend much more on misinformation than anything we have said—in fact, the hon. Gentleman had to withdraw some misinformation at the end of his speech. He accused us of spreading rumour rather than fact. If we have to construe things from the evidence put before us instead of being told the facts, that is not our fault. This is not our Bill. We do not like it and we do not want it. The facts of the matter must come from the Minister and they have not so far been available.
The hon. Gentleman pooh-poohed the idea that the capital structure of BT was neutral with regard to the future pension scheme. He appeared to find it acceptable that, at the Report stage of an important Bill, we still do not know what the capital structure will be. It would not be so bad if we had not been here before, but we have been all the way through it before. If the Government did not know last time what the capital structure was going to be, surely they should have spent 10 minutes working it out before they deigned to reintroduce the Bill. I believe that the Minister knows very well what he thinks the capital structure should be. His right hon. and hon. Friends have probably been told what it should be but, because he wants to get the Bill through the House with the fewest possible problems, he has chosen not to bother to tell us until such time as the Bill has passed through the House, when he will announce it in a way that suits him. That is not good enough. The capital structure has a significant effect on the expectations of present employees of BT, in particular those like me, who were previously employed by the Post Office before they became employees of BT.
I am glad that the hon. Member for Kingswood met the pensioners. It is interesting that he managed to speak for some considerable time, having told us that he had received a letter just the other day from the secretary of the pensioners association, without actually telling us what fears the secretary had raised with him in the letter. The hon. Gentleman merely reiterated the points that the Minister had made. I found that most surprising. If the Secretary of the pensioners raised a specific point with him, I would have thought it his duty to stand up and raise that point with the Minister.
§ Mr. HaywardI thank the hon. Gentleman for giving way. I hope, Mr. Deputy Speaker, that you will correct me if I am in breach of procedure in quoting from a letter. The secretary of the pensioners association asked for copies of the Minister's speech in today's and tomorrow's debate.
§ Mr. McWilliamI am grateful to the hon. Gentleman for that information. I just hope that the secretary of the 1041 Post Office Veterans and Pensioners Association will be wiser when he receives those copies than he is at the moment. Frankly, I doubt it.
§ Mr. HaywardModesty and accuracy will not allow me to leave unmentioned the other section of the letter in which the secretary thanked the Ministers and me for our help and assistance in Committee.
§ Mr. McWilliamI am again grateful to the hon. Gentleman for that information. Courtesy was something with which we were imbued when we were civil servants and were employed by the Post Office. It went out of the window when we started to change our ways. I would expect such a courteous letter from anyone in that position.
The hon. Member for Kingswood talked about employees being covered by more than one pension scheme and said that it was not unusual. He is right. In the Post Office, we had employees covered by more than one pension scheme. There were the Cable and Wireless A-optants and there were the rest of us. There was continual warfare and scrapping between the two groups, one of which got more money and one of which got more pension, about who should be in what position at any particular time because of the next wage claim. That was a continual thorn in the flesh in pay negotiations and industrial relations in the telephone exchange and the planning office, where there were two people doing the same job with different conditions of service.
Hon. Members will not be surprised to learn that there was continual friction and that productivity and work suffered. The Minister should not be surprised, therefore, that we are opposed to having two classes of employees doing the same job in BT. That does not seem sensible, just or reasonable and it will not help in the future of BT, as it goes ahead into the next century, where it will be such an important part of the developing information technology infrastructure.
I take issue with the Minister because he attempted to imply that we had pretty well a categoric assurance, but then, when pressed on the matter, admitted that no categoric assurance had been given and none was possible. I do not take too much issue with him about that. Anybody who reads the Minister's words or who stays to listen to them tonight will eventually have to admit the same thing. There is no categoric assurance.
My hon. Friend the Member for Stoke-on-Trent, Central (Mr. Fisher) raised a fundamental point when he talked about the projected 45,000 redundancies when BT becomes a public limited company. That may be an underestimate. What is certain is that if the statements of the chairman of BT, Sir George Jefferson, together with some of the other statements and articles written in the gazettes and the technical press are to be believed, that 45,000 is a conservative estimate.
When we went into the pension scheme on a contributory basis, we contributed 6.383 per cent. of our salary. That 6.383 per cent. of the salary of 45,000 BT employees, particularly the workers likely to be at risk, is a considerable sum of money each year. The demands on the pension fund will not come down — they will increase because Post Office pensioners are beginning to live a little longer.
It used to be customary for BT and Post Office pensioners not to live for long after their retirement age of 60. My father retired from BT at 60 and died when he was 1042 64. On another occasion, I went into work in the morning on an early shift. The night shift man was due to retire the next day, and I found him dead at his test-desk console, so he did not get any pension at all. The widows and orphans benefits were available—although there were no orphans—but the pension fund did not have to pay out much.
The calls on the scheme were not as great as they are now. Despite having this Government in power, it will be reasonable to expect that, as time goes on, the improvements in health care and services and in medical science will accelerate the process of people living longer. There is another point. There are an increasing number of women BT employees, and women live longer and receive the same salary. The more women employees that we have, the greater the call will be on the scheme. BT has been employing a number of able young women graduates as engineers and when they come to retirement age, if they carry on as women do now, they will live to a ripe old age and take large chunks out of the pension scheme, and good luck to them. That means that the pension scheme must be adequately funded, and if we lost that 6.383 per cent. of the salaries of 45,000 employees, I doubt whether the scheme will be able to afford that if it goes ahead on the basis of the Bill as it stands. We seek to so amend the scheme so that it will be capable of supporting that additional load.
6.45 pm
There is yet another problem. The Minister told the Committee that he accepted that £1,250 million would be due to be paid under the trust by 1992—in other words, in eight years' time. What is to happen if the capital reconstruction means that that is ridiculous and the money should be got out of the sale of assets? What sort of arguments will the Minister have for his right and hon. Friends in the Treasury who will want to get their hands on that money? What guarantees can there be to make sure that that sum is adequate, because I am not sure that it is? It was materially right at the time that it was determined, but that was a long time ago. It could easily be wrong, and if it is, something will have to be done about it.
The Minister has fairly said that he will come and report this matter to the House, but what does that mean? The only guarantee is that he will make a statement to the House. That does not guarantee that there will be a debate or that there will be any amendable motion. It guarantees nothing other than the fact that he is an honourable man and will come to the House and report the matter. We never doubted that the Minister is an honourable man, although perhaps he is misguided. It would be in character for him to come to the House, but that is not the assurance that I would expect, or one that would answer the question.
I am still concerned. I am not yet convinced that in all possible circumstances the future, present and past pensioners of BT are adequately protected by the scheme. There is nothing illegal, wrong or immoral in incorporating the words of the amendment, which are:
Nothing in this Act shall prejudice the pensions of British Telecommunications employees past, present and future.Those are simple and straightforward words and if incorporated in the Act they can be legally enforced. If they are not, I suspect that we are laying up trouble for the future.It will not be long before the demands for profits by the shareholders of BT outstrip their social conscience towards 1043 pensioners who are not theirs, who never worked for them and for whom they feel no affinity. Without those words, the pensioners will not be adequately protected. It is up to the Minister to stand up and tell us that we are right and that he accepts the words, which represent a simple idea. If he does not, he is refusing to give the categoric guarantee for which we have been asking. Therefore, we shall be justified in telling the Post Office pensioners and existing BT employees that their pensions are not protected and are at risk because of the Bill.
§ Mr. PenhaligonThere is no point in denying that the Post Office employees are worried about this matter because manifestly they are. In even the most casual conversation with those affected by this legislation someone will raise this point. It is possible that that fear is not well founded.
The Government will do themselves a great deal of good if they accept the new clause. On the whole, I am against the Bill and will undoubtedly vote against it on Third Reading. It is important that the Bill should not cause great disruption in the Post Office when it is implemented. I assure the Minister that accepting new clause 2 would do a great deal to reassure a large number of worried people. The new clause simply says:
Nothing in this Act shall prejudice the pensions of British Telecommunications employees past, present and future.It does not say that the pensions are guaranteed, but only that the legislation will not legally change the position of pensioners. That is a reasonable minimal request. It is the type of request that any employee would make if his company were taken over in the normal transaction of business on the stock market. I suspect that hon. Members would make such a request if we were no longer to have control over our pensions. The Post Office employees' fear is not half so irrational as some Conservative Members have suggested.The pension fund operated by the Post Office in its various guises over the years has been an improvement on the national insurance pension scheme. I do not believe that anyone has argued for a long time that the pension fund is funded on an actuarial basis. People are aware that, at least in part, their pensions depend on a Treasury guarantee. I understand that the Government's thrust in this legislation is to remove the Treasury guarantee on a number of fronts. That is the only half-credible argument that I have heard in favour of the Bill. The Government must be looking forward to removing the Treasury guarantee of pensions. The ordinary Post Office employee is aware that the pension he enjoys, which he has earned and to which he looks forward, is partly dependent on a Treasury guarantee. He is aware also that this legislation —which I suspect is about to be passed—will remove that guarantee. If the Post Office employee queries or worries about the security of his pension, we can hardly describe him as foolish or irrational—indeed, we would have to use those words if he did not raise the point.
The new clause merely announces to all employees of BT throughout our great land that the Government are introducing this legislation but that nothing in it will affect the pensions of those employees. That seems to be a reasonable request. I hope that the Minister—unusually —will cut short the debate, beat the carol concert at 7.10 pm, and save a full 20 minutes of the time for 1044 discussing the next subject by recognising the validity of the arguments that have been presented and giving BT employees that guarantee. That is a simple matter and would do more than anything else to reassure scores of thousands of employees of the Government's genuine approach to them. Those employees are well aware of the rather unusual basis on which their pension has been based for so long. If the Treasury guarantee goes, undoubtedly there will be fear among BT pensioners. If the new clause is accepted, the Minister will find that a great deal of the opposition to the Bill will evaporate.
§ The Under-Secretary of State for Trade and Industry (Mr. John Butcher)A large number of questions have been asked, and that is understandable because we are talking of the safeguards for existing and future pensioners of BT. We have been careful throughout the passage of the Bill to make clear the safeguards that exist for BT pensioners and current BT employees. It is not the underlying intention or specific effect of the Bill to change their pension entitlements, and pension obligations are specifically safeguarded. Nevertheless, I am bound to oppose the new clause as being unnecessary for past and present categories of BT employees and misguided in respect of new recruits taken on after the transfer date.
It is worth repeating the safeguards that exist for BT pensioners and current BT employees. They are based in the pension fund trust deed which lays down the pension entitlements of employees retiring from BT' service. The Bill does not in any way diminish those safeguards. For existing BT pensioners, the trust deed prohibits any changes to its rules that would reduce their pension entitlements, so it would not be open to the successor company to reduce the benefit due to BT pensioners. Any changes to the rules of the trust deed in relation to current BT employees retiring in the future would require the agreement of all the trustees of the pension fund.
I shall refer later to pensions that are linked to Civil Service rates of pensions which were the subject of one of about five or six questions raised by the hon. Member for Stoke-upon-Trent, Central (Mr. Fisher). Four of the nine trustees represent the trade unions, and all trustees, including five from the successor company, would be required by law to act in the best interests of the trusts' beneficiaries. I believe that that provides a large measure of protection.
It is difficult to see how those safeguards could be enhanced by the new clause. The new clause may even create confusion by implying that there is something in the Bill to detract from the pension rights of existing pensioners and employees. If there were such a provision, the right course would be to amend it, and no one would be more ready than I to make the necessary amendment. There is no such provision, and the new clause as it relates to existing employees ansd pensioners may be unnecessary and, as has become evident in correspondence, it could also cause some confusion.
The new clause poses a particular difficulty for new recruits or employees taken on after the transfer date. I give the example of a young man recruited by the successor company 10 years after the company has been successfully privatised. The new clause might appear to require that the pension entitlement when he retires 40 years later be the same as or at least no worse than it would have been if BT had remained a nationalised industry.
1045 How are we to know what would have happened had BT remained a nationalised industry? The question is perhaps too hypothetical to form the basis of successful legislation. In any case, the new clause is technically in error—it is obviously, therefore, a probing amendment —in that respect, since new recruits will be employees of the successor company rather than BT. I recognise that the underlying intention of the new clause may be to require that new recruits receive the same treatment as current employees. BT as a nationalised industry is thus not legally bound in its policy towards new recruits, nor should the successor company be bound in that way. So to bind it would in any case be wholly inappropriate to the company's private sector status.
Specific questions have been raised, especially by the hon. Member for Stoke-on-Trent, Central and the hon. Member for Truro (Mr. Penhaligon), who homed in on some of the same points during an intervention in the excellent speech of my hon. Friend the Member for Kingswood (Mr. Hayward) — no doubt as an ex-personnel manager he is familiar with pension rights and pension obligations generally.
I repeat that the trustees of the pension fund have a duty to provide pensions and to hold in trust the contributions paid by British Telecom, the Post Office and past and present employees. The benefits paid to pensioners are therefore governed by the pension fund deed. Under rules established by the deed, pensioners are entitled to periodic increases in their pensions in line with those enjoyed by civil servants. I should state categorically that the trust deed prohibits changes to its rules which would reduce the benefits of any person already entitled to the receipt of a pension. Therefore, it will simply not be open to the successor company to reduce the entitlement, even if it wished to do so.
7 pm
We then entered a discussion in which a number of hypothetical questions were raised. That does not mean that those questions do not deserve an answer. The hon. Member for Stoke-on-Trent, Central asked what would happen to the pension fund and how the trustees could observe their obligations if the company were in difficulties—that is to say, on the way to liquidation but before the major safeguard in clause 64 came into operation. The answer is that British Telecom is bound to make sufficient contributions to fund the pension fund's liabilities after allowance is made for employee contributions. If it cannot make those contributions, it is bankrupt and the Government backing under clause 64 comes into play to guarantee existing pension obligations. If BT is not bankrupt, the trustees can hold BT to meet its due pensions obligations, so in the final analysis pension rights are safeguarded.
The hon. Gentleman also asked what would happen if workers were sacked. He suggested that an increase in redundancies might reduce the income of the fund and thus endanger its ability to make due payments. The health of the fund in terms of BT's and employees' contributions depends on the health and future of the telecommunications industry, so the possible impairment of BT's ability to make proper contributions is the real issue at stake. We believe that telecommunications is most definitely a growth sector. It would need a great deal of mismanagement for that not to be the case. There is 1046 scarcely a country in the western world in 'which telecommunications is not expanding, usually faster than the domestic economy as a whole.
Taking the hypothetical question a little further, the hon. Gentleman asked what would happen in the case of premature retirements, perhaps in conjunction with a redundancy programme. If people left BT early, the obligations of the pension fund would to some extent be reduced because the amount of pension entitlement increases with the length of service. That is the other side of the equation. There is therefore no overwhelming reason to believe that there would be a problem.
I hope that the debate has helped to allay anxieties. It has been a good and positive debate and I hope that in future we shall no longer hurl epithets across the Chamber suggesting that someone has somehow misled someone else. I put it on record today that existing BT pensioners should be entirely reassured and that existing employees' future pensions will be assured. I hope that the House 'will accept, however, that it would be quite out of order for us to bind the successor company in respect of employees who have yet to join that company.
§ Mr. FisherWith permission, I should like to reply to one or two of the points made by the Under-Secretary of State. We are grateful to him for stating clearly that the Government's understanding of the debate is that there is a sincere and genuine intention on both sides to protect pensioners and no intention on either side to cause anxiety. Far from it—I believe that both sides wish to clarify the position and to ensure that it is secure and sound. We certainly make no accusations of bad faith to pensioners on the part of any Minister. We accept that the Government's intentions are absolutely sincere, but we believe that they have not considered all the financial implications of privatisation and have therefore not fully grappled with the problems facing the pension fund and thus the extent of the insecurity facing BT employees.
The Under-Secretary of State asked what provision in the Bill created uncertainty. This is perhaps a case of the wood and the trees: the provision is so large that he may have missed it. The provision that creates uncertainty is the privatisation of BT. Thai is the heart of the matter. The hon. Member for Kingswood (Mr. Hayward), who is unfortunately no longer present, failed to appreciate the distinction in pension status between a public corporation and a private sector company. The Under-Secretary of State fully recognised that when he said that the successor company would find it "unusual" to have index-linked pensions in the private sector. Certainly, few private companies operate fully financed index-linked schemes. In that sense, the successor company would be at odds with its compeitors and would have an extremely onerous financial responsibility.
As the Under-Secretary of State recognised, there is a major distinction between private and public sector companies. Unless one can imagine this nation irrevocably going bankrupt—[Interruption.] I shall ignore my hon. Friend's suggestion that the Conservatives will achieve that, although they are certainly doing their best, so no one can say that they have failed for want of trying. Nevertheless, the pension fund of a public corporation always has the Government's ultimate guarantee to back it. The Minister for Information Technology, as an 1047 honourable man, will be the first to admit that that is not the case in the private sector, in which there is always the risk of the problems that we have described.
The argument is actuarially so complicated that neither the Under-Secretary of State nor I, nor I believe any hon. Member, has the necessary expertise fully to comprehend the problem, but the ratio between the increased demands on the pension fund and the minimised contributions is probably about 5:1—that is, for every £1 million saved due to there being fewer people in the fund there will be £5 million in increased demands on the fund due to the redundancies to which we have referred.
The Minister has not faced that issue in the Bill. The Under-Secretary of State failed to produce the figures. One must assume either that he does not have them or that he is reluctant to release them. We make the charitable assumption that he does not have the figures. At the very least, therefore, we suggest that in the interests of all pensioners and employees of BT the Minister has a responsibility to examine carefully the impact on the pension fund of the redundancies which both he and the Under-Secretary of State noticeably failed to deny.
On that basis, confident in the belief that only in this way can the House fully secure and give peace of mind to BT employees, I commend the new clause to the House.
§ Question put, That the clause be read a Second time:—
§ The House divided: Ayes 187, Noes 309.
1050| Division No. 99] | [7.21 pm |
| AYES | |
| Adams, Allen (Paisley N) | Dewar, Donald |
| Archer, Rt Hon Peter | Dixon, Donald |
| Atkinson, N. (Tottenham) | Dormand, Jack |
| Bagier, Gordon A. T. | Dubs, Alfred |
| Banks, Tony (Newham NW) | Duffy, A. E. P. |
| Barron, Kevin | Eadie, Alex |
| Beggs, Roy | Eastham, Ken |
| Beith, A. J. | Edwards, R. (W'hampt'n SE) |
| Bell, Stuart | Evans, loan (Cynon Valley) |
| Bennett, A. (Dent'n & Red'sh) | Evans, John (St. Helens N) |
| Bidwell, Sydney | Fatchett, Derek |
| Blair, Anthony | Faulds, Andrew |
| Bray, Dr Jeremy | Field, Frank (Birkenhead) |
| Brown, Hugh D. (Provan) | Fields, T. (L'pool Broad Gn) |
| Brown, N. (N'c'tle-u-Tyne E) | Fisher, Mark |
| Brown, R. (N'c'tle-u-Tyne N) | Flannery, Martin |
| Brown, Ron (E'burgh, Leith) | Foot, Rt Hon Michael |
| Callaghan, Jim (Heyw'd & M) | Forrester, John |
| Campbell, Ian | Forsythe, Clifford (S Antrim) |
| Campbell-Savours, Dale | Foster, Derek |
| Canavan, Dennis | Foulkes, George |
| Carter-Jones, Lewis | Fraser, J. (Norwood) |
| Clark, Dr David (S Shields) | Freeson, Rt Hon Reginald |
| Clarke, Thomas | Freud, Clement |
| Clay, Robert | Garrett, W. E. |
| Cocks, Rt Hon M. (Bristol S.) | George, Bruce |
| Cohen, Harry | Gilbert, Rt Hon Dr John |
| Coleman, Donald | Godman, Dr Norman |
| Concannon, Rt Hon J. D. | Golding, John |
| Conlan, Bernard | Gould, Bryan |
| Cook, Frank (Stockton North) | Hamilton, W. W. (Central Fife) |
| Cook, Robin F. (Livingston) | Hardy, Peter |
| Corbett, Robin | Harman, Ms Harriet |
| Cowans, Harry | Harrison, Rt Hon Walter |
| Cox, Thomas (Tooting) | Hart, Rt Hon Dame Judith |
| Crowther, Stan | Haynes, Frank |
| Cunningham, Dr John | Healey, Rt Hon Denis |
| Dalyell, Tam | Heffer, Eric S. |
| Davies, Rt Hon Denzil (L'lli) | Hogg, N. (C'nauld & Kilsyth) |
| Davies, Ronald (Caerphilly) | Home Robertson, John |
| Davis, Terry (B'ham, H'ge H'l) | Howell, Rt Hon D. (S'heath) |
| Deakins, Eric | Howells, Geraint |
| Hoyle, Douglas | Pendry, Tom |
| Hughes, Mark (Durham) | Pike, Peter |
| Hughes, Robert (Aberdeen N) | Powell, Raymond (Ogmore) |
| Hughes, Roy (Newport East) | Prescott, John |
| Hughes, Sean (Knowsley S) | Radice, Giles |
| Hughes, Simon (Southwark) | Randall, Stuart |
| Janner, Hon Greville | Redmond, M. |
| John, Brynmor | Rees, Rt Hon M. (Leeds S) |
| Johnston, Russell | Richardson, Ms Jo |
| Jones, Barry (Alyn & Deeside) | Roberts, Allan (Bootle) |
| Kaufman, Rt Hon Gerald | Roberts, Ernest (Hackney N) |
| Kennedy, Charles | Robertson, George |
| Kilroy-Silk, Robert | Robinson, G. (Coventry NW) |
| Kirkwood, Archibald | Rooker, J. W. |
| Lambie, David | Ross, Ernest (Dundee W) |
| Lamond, James | Ross, Stephen (Isle of Wight) |
| Leighton, Ronald | Rowlands, Ted |
| Lewis, Ron (Carlisle) | Ryman, John |
| Lewis, Terence (Worsley) | Sedgemore, Brian |
| Litherland, Robert | Sheerman, Barry |
| Lloyd, Tony (Stretford) | Sheldon, Rt Hon R. |
| Lofthouse, Geoffrey | Shore, Rt Hon Peter |
| Loyden, Edward | Short, Ms Clare (Ladywood) |
| McCartney, Hugh | Short, Mrs R.(W'hampt'n NE) |
| McCusker, Harold | Skinner, Dennis |
| McDonald, Dr Oonagh | Smith, C.(Isl'ton S & F'bury) |
| McGuire, Michael | Snape, Peter |
| McKay, Allen (Penistone) | Soley, Clive |
| McKelvey, William | Spearing, Nigel |
| Mackenzie, Rt Hon Gregor | Steel, Rt Hon David |
| McNamara, Kevin | Stott, Roger |
| McTaggart, Robert | Strang, Gavin |
| McWilliam, John | Thomas, Dafydd (Merioneth) |
| Madden, Max | Thomas, Dr R. (Carmarthen) |
| Marek, Dr John | Thompson, J. (Wansbeck) |
| Martin, Michael | Thorne, Stan (Preston) |
| Mason, Rt Hon Roy | Tinn, James |
| Maxton, John | Torney, Tom |
| Maynard, Miss Joan | Varley, Rt Hon Eric G. |
| Meacher, Michael | Wardell, Gareth (Gower) |
| Meadowcroft, Michael | Wareing, Robert |
| Millan, Rt Hon Bruce | Welsh, Michael |
| Miller, Dr M. S. (E Kilbride) | White, James |
| Mitchell, Austin (G't Grimsby) | Wigley, Dafydd |
| Morris, Rt Hon A. (W'shawe) | Williams, Rt Hon A. |
| Morris, Rt Hon J. (Aberavon) | Wilson, Gordon |
| Nellist, David | Winnick, David |
| O'Brien, William | Woodall, Alec |
| O'Neill, Martin | Young, David (Bolton SE) |
| Orme, Rt Hon Stanley | |
| Park, George | Tellers for the Ayes: |
| Parry, Robert | Mr. James Hamilton and Mr. Lawrence Cunliffe. |
| Patchett, Terry | |
| Pavitt, Laurie |
| NOES | |
| Adley, Robert | Blaker, Rt Hon Sir Peter |
| Aitken, Jonathan | Body, Richard |
| Alison, Rt Hon Michael | Bonsor, Sir Nicholas |
| Amess, David | Bottomley, Peter |
| Ancram, Michael | Bowden, A. (Brighton K'to'n) |
| Arnold, Tom | Boyson, Dr Rhodes |
| Ashby, David | Braine, Sir Bernard |
| Aspinwall, Jack | Brandon-Bravo, Martin |
| Atkins, Rt Hon Sir H. | Bright, Graham |
| Atkins, Robert (South Ribble) | Brinton, Tim |
| Atkinson, David (B'm'th E) | Brittan, Rt Hon Leon |
| Baker, Kenneth (Mole Valley) | Brooke, Hon Peter |
| Baker, Nicholas (N Dorset) | Brown, M. (Brigg & Cl'thpes) |
| Baldry, Anthony | Bryan, Sir Paul |
| Banks, Robert (Harrogate) | Buchanan-Smith, Rt Hon A. |
| Batiste, Spencer | Burt, Alistair |
| Beaumont-Dark, Anthony | Butcher, John |
| Bellingham, Henry | Butler, Hon Adam |
| Bendall, Vivian | Butterfill, John |
| Benyon, William | Carlisle, John (N Luton) |
| Berry, Sir Anthony | Carttiss, Michael |
| Best, Keith | Chalker, Mrs Lynda |
| Biffen, Rt Hon John | Chapman, Sydney |
| Biggs-Davison, Sir John | Chope, Christopher |
| Churchill, W. S. | Hooson, Tom |
| Clark, Hon A. (Plym'th S'n) | Howarth, Gerald (Cannock) |
| Clark, Dr Michael (Rochford) | Howell, Rt Hon D. (G'ldford) |
| Clark, Sir W. (Croydon S) | Howell, Ralph (N Norfolk) |
| Clarke Kenneth (Rushcliffe) | Hubbard-Miles, Peter |
| Clegg, Sir Walter | Hunt, David (Wirral) |
| Cockeram, Eric | Hunter, Andrew |
| Colvin, Michael | Hurd, Rt Hon Douglas |
| Conway, Derek | Irving, Charles |
| Coombs, Simon | Jenkin, Rt Hon Patrick |
| Cope, John | Jessel, Toby |
| Cormack, Patrick | Johnson-Smith, Sir Geoffrey |
| Corrie, John | Jones, Gwilym (Cardiff N) |
| Couchman, James | Jones, Robert (W Herts) |
| Crouch, David | Joseph, Rt Hon Sir Keith |
| Currie, Mrs Edwina | Kershaw, Sir Anthony |
| Dickens, Geoffrey | King, Roger (B'ham N'field) |
| Dorrell, Stephen | Knight, Gregory (Derby N) |
| Douglas-Hamilton, Lord J. | Knight, Mrs Jill (Edgbaston) |
| Dover, Denshore | Knowles, Michael |
| du Cann, Rt Hon Edward | Knox, David |
| Dunn, Robert | Lang, Ian |
| Durant, Tony | Latham, Michael |
| Dykes, Hugh | Lawler, Geoffrey |
| Edwards, Rt Hon N. (P'broke) | Lawrence, Ivan |
| Eggar, Tim | Lawson, Rt Hon Nigel |
| Emery, Sir Peter | Lee, John (Pendle) |
| Evennett, David | Leigh, Edward (Gainsbor'gh) |
| Eyre, Reginald | Lennox-Boyd, Hon Mark |
| Fallon, Michael | Lester, Jim |
| Farr, John | Lightbown, David |
| Favell, Anthony | Lilley, Peter |
| Finsberg, Geoffrey | Lloyd, Ian (Havant) |
| Fookes, Miss Janet | Lord, Michael |
| Forman, Nigel | Lyell, Nicholas |
| Forsyth, Michael (Stirling) | McCrindle, Robert |
| Fowler, Rt Hon Norman | McCurley, Mrs Anna |
| Fox, Marcus | Macfarlane, Neil |
| Fraser, Rt Hon Sir Hugh | MacKay, Andrew (Berkshire) |
| Fraser, Peter (Angus East) | MacKay, John (Argyll & Bute) |
| Freeman, Roger | Maclean, David John. |
| Fry, Peter | McNair-Wilson, M. (N'bury) |
| Gale, Roger | McNair-Wilson, P. (New F'st) |
| Galley, Roy | McQuarrie, Albert |
| Gardner, Sir Edward (Fylde) | Major, John |
| Garel-Jones, Tristan | Malins, Humfrey |
| Gilmour, Rt Hon Sir Ian | Malone, Gerald |
| Glyn, Dr Alan | Maples, John |
| Gorst, John | Marland, Paul |
| Gow, Ian | Marlow, Antony |
| Gower, Sir Raymond | Marshall, Michael (Arundel) |
| Grant, Sir Anthony | Mates, Michael |
| Greenway, Harry | Maude, Francis |
| Griffiths, E. (B'y St Edm'ds) | Mawhinney, Dr Brian |
| Griffiths, Peter (Portsm'th N) | Maxwell-Hyslop, Robin |
| Grist, Ian | Mayhew, Sir Patrick |
| Grylls, Michael | Mellor, David |
| Gummer, John Selwyn | Merchant, Piers |
| Hamilton, Hon A. (Epsom) | Meyer, Sir Anthony |
| Hamilton, Neil (Tatton) | Miller, Hal (B'grove) |
| Hampson, Dr Keith | Mills, Iain (Meriden) |
| Hanley, Jeremy | Mills, Sir Peter (West Devon) |
| Hannam, John | Mitchell, David (NW Hants) |
| Hargreaves, Kenneth | Moate, Roger |
| Harvey, Robert | Monro, Sir Hector |
| Haselhurst, Alan | Montgomery, Fergus |
| Hawkins, C. (High Peak) | Morris, M. (N'hampton, S) |
| Hawkins, Sir Paul (SW N'folk) | Moynihan, Hon C. |
| Hawksley, Warren | Mudd, David |
| Hayhoe, Barney | Neale, Gerrard |
| Hayward, Robert | Nelson, Anthony |
| Heathcoat-Amory, David | Neubert, Michael |
| Henderson, Barry | Nicholls, Patrick |
| Heseltine, Rt Hon Michael | Norris, Steven |
| Hickmet, Richard | Oppenheim, Philip |
| Hicks, Robert | Osborn, Sir John |
| Hill, James | Ottaway, Richard |
| Hirst, Michael | Page, Richard (Herts SW) |
| Hogg, Hon Douglas (Gr'th'm) | Parkinson, Rt Hon Cecil |
| Holland, Sir Philip (Gedling) | Parris, Matthew |
| Patten, John (Oxford) | Stradling Thomas, J. |
| Pawsey, James | Sumberg, David |
| Peacock, Mrs Elizabeth | Tapsell, Peter |
| Percival, Rt Hon Sir Ian | Taylor, Teddy (S'end E) |
| Pollock, Alexander | Tebbit, Rt Hon Norman |
| Porter, Barry | Temple-Morris, Peter |
| Powell, William (Corby) | Terlezki, Stefan |
| Powley, John | Thatcher, Rt Hon Mrs M. |
| Prentice, Rt Hon Reg | Thomas, Rt Hon Peter |
| Price, Sir David | Thompson, Patrick (N'ich N) |
| Proctor, K. Harvey | Thorne, Neil (llford S) |
| Raison, Rt Hon Timothy | Thornton, Malcolm |
| Rathbone, Tim | Thurnham, Peter |
| Renton, Tim | Townend, John (Bridlington) |
| Ridley, Rt Hon Nicholas | Townsend, Cyril D. (B'heath) |
| Ridsdale, Sir Julian | Tracey, Richard |
| Rifkind, Malcolm | Trippier, David |
| Roberts, Wyn (Conwy) | Twinn, Dr Ian |
| Robinson, Mark (N'port W) | van Straubenzee, Sir W. |
| Rossi, Sir Hugh | Vaughan, Dr Gerard |
| Rost, Peter | Waddington, David |
| Rowe, Andrew | Wakeham, Rt Hon John |
| Rumbold, Mrs Angela | Waldegrave, Hon William |
| Ryder, Richard | Walden, George |
| Sackville, Hon Thomas | Walker, Bill (T'side N) |
| Sainsbury, Hon Timothy | Walker, Rt Hon P. (W'cester) |
| St. John-Stevas, Rt Hon N. | Waller, Gary |
| Sayeed, Jonathan | Walters, Dennis |
| Scott, Nicholas | Ward, John |
| Shaw, Giles (Pudsey) | Wardle, C. (Bexhill) |
| Shaw, Sir Michael (Scarb') | Warren, Kenneth |
| Shelton, William (Streatham) | Watson, John |
| Shepherd, Colin (Hereford) | Watts, John |
| Shersby, Michael | Wells, Bowen (Hertford) |
| Sims, Roger | Wells, John (Maidstone) |
| Skeet, T. H. H. | Wheeler, John |
| Smith, Sir Dudley (Warwick) | Whitfield, John |
| Smith, Tim (Beaconsfield) | Whitney, Raymond |
| Soames, Hon Nicholas | Wiggin, Jerry |
| Speed, Keith | Wilkinson, John |
| Speller, Tony | Winterton, Mrs Ann |
| Spence, John | Winterton, Nicholas |
| Spencer, D. | Wolfson, Mark |
| Spicer, Michael (S Worcs) | Wood, Timothy |
| Stanbrook, Ivor | Woodcock, Michael |
| Stanley, John | Yeo, Tim |
| Steen, Anthony | Young, Sir George (Acton) |
| Stern, Michael | Younger, Rt Hon George |
| Stevens, Lewis (Nuneaton) | |
| Stevens, Martin (Fulham) | Tellers for the Noes: |
| Stewart, Allan (Eastwood) | Mr. Carol Mather and Mr. Robert Boscawen. |
| Stewart, Andrew (Sherwood) | |
| Stokes, John |
§ Question accordingly negatived.