HC Deb 23 February 1983 vol 37 cc957-79

'(1) It shall be the duty of British Shipbuilders, after consulting any relevant trade union to formulate from time to time when it considers appropriate, or the Secretary of State so requires, corporate policies and plans regarding the carrying out of its activities in the most efficient manner.

(2) In making their formulation, British Shipbuilders will have full regard to improving productivity, decentralising management and operational centres, industrial relations and such other matters as the Secretary of State may specify in writing.

(3) The Secretary of State shall lay before each House of Parliament—

  1. (a) a copy of any corporate policy or plan made under subsection (1) above, or
  2. (b) where the Secretary of State is of the opinion that the disclosure of any part of the policy or plan is against the national interest, a copy of the policy or plan excluding that part.
(4) Section 7 of the 1977 Act (Formulation of the Corporation's policies and plans and conduct of the operations) shall cease to have effect.'.—[Mr. Willey]

Brought up, and read the First time.

4.45 pm
Mr. Frederick Willey (Sunderland, North)

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

Mr. Deputy Speaker (Mr. Ernest Armstrong)

It will be for the convenience of the House to take at the same time amendment No. 4, in schedule, page 6, line 5, column 3 at end insert 'Section 7.'

Mr. Willey

This is partly an enabling Bill and partly grease to help privatisation. In that regard it is generally unacceptable, but an amendment was accepted in Committee that is both important and relevant to this debate. It provided some guidelines to the national interest. The Government withdrew their proposals and accepted section 4 of the 1977 Act, as it stood, which provides that full regard will be paid to certain important matters. The first, was co-operation with shipping and having a maritime policy. The second was accession to international organisations, which is important in relation to the European Community and the OECD. Then there is fair international competition on equal terms. The section also provides that full regard should be paid to regional policy, particularly on unemployment. The fact that we are retaining these provisions, not removing them, as the Government originally intended, is relevant to this debate.

Incidentally, in my view it would be better, in dealing with amendments of this nature, to deal with all the sections in part I of the Act comprehensively, so that the new provisions are clear and easy to follow.

Section 7 of the 1977 Act provides for the formulation each year of a corporate plan for the corporation's operations, covering, in particular, capital investment, research and development, the profit and loss, and employment of persons. Employment of persons was not in the original provision, but was added, and of course the Secretary of State can add other matters. These matters are dealt with in the new clause.

We had a long discussion about these provisions in Committee, when the Conservative Members and the Liberal Member voted against section 7. The new clause provides for the repeal of section 7, so there should be broad agreement with what we seek to do.

I am not against corporate plans and policies. They have established themselves in one form or another in the nationalised industries, and generally they have been a good thing. However, we are against the definitions in section 7. First, section 7 provides for an annual corporate plan. That is quite unreal. It was unreal in the circumstances in which section 7 was accepted. Major investment programmes in the coal and steel industries had been agreed with the Government. However, those were not annual but long-term assessments. If we are dealing with corporate plans the first thing that we must recognise is that we are inevitably dealing with corporate and long-term issues that cannot be adequately dealt with on an annual basis. It has been quite impossible to have annual plans as envisaged by the Act in view of world economic conditions and the world shipbuilding market. Such plans have been unreal, have not given any effective guidance and have largely been useless.

I am not saying that a good deal has not been done, because it has. There have been capital investment programmes and if one reads the annual reports of British Shipbuilders it can be seen that there has been a good deal of effective corporate planning, but I am concerned about the annual corporate plans that have not been effective. That is proved, above all, by the Select Committee's report. The argument used to be that every now and again a Select Committee will look at a nationalised industry, and we had a Select Committee for that purpose. However, that has gone in the tidying-up of the departmental Select Committees. The remarkable thing is that although there is a casual reference to corporate planning, practically nothing at all is said about corporate plans in the Select Committee's report and inquiries. One would have thought that it would have been primarily concerned with the corporate plans, the changes made and why they have not turned out to be annual plans. I should have thought that the Select Committee would have been expected to deal with such things, but it has not. That is a reflection on the present provisions for the corporate plan.

How many people are there in the Department engaged upon the corporate plan and how many are there in British Shipbuilders? That activity has not been profitably used. The new clause proposes corporate plans from time to time when British Shipbuilders feels that they are appropriate or when the Secretary of State requires them. That seems sensible. In view of the way in which such plans have exhaustively engaged the Department and the corporation, I should have thought it was now time to provide such flexibility. There is a safeguard, because the Secretary of State can intervene if he feels that the corporation is not providing a corporate plan sufficiently early.

The purpose of the new clause is not only to get away from the concept of annual corporate plans but to provide more realistic guidelines. I have suggested that we should pay attention to efficiency, improving productivity and decentralising management and operational centres. Decentralisation is necessary today because some of the yards are in peril. I was worried that among the matters that the Government have removed from the Bill is the provision for decentralisation—a matter that British Shipbuilders has tried to deal with effectively.

Shipbuilding is an assembly industry and the corporation recognises that industrial relations are of great importance. In addition, section 4 provides guidelines for the Secretary of State as to what is in the national interest. We must pay attention to shipping, the EC and the intervention fund. I was much encouraged by what the Minister said about the intervention fund. At any rate, we are all right until July and after that we shall have to hope for the best. At least the Minister is trying hard.

There must be competition on equal terms. We may have to deal with that unilaterally if necessary. In Committee we discussed the loss of the order for the cable-laying ship to Korea. Korea and the far east reduced their prices by 30 per cent. That results in unfair competition, which we are against. Those are the sort of points that should be reviewed, but not necessarily every year.

We should probaly now be reviewing diesels. British Shipbuilders should be considering that matter in the light of the report which the Government have. I am not being dogmatic about this because it is for the Government to act in the light of their experience in the past few years; I am suggesting that we should do something topical, realistic and effective. We must take effective steps now and not at the speed at which the corporate plans are considered at the moment. If the Government do not like the proposals it is up to them to suggest others. It was the Conservative party which voted against section 7—the matters which determine the corporate plan. In the light of that I should have thought that they are bound to say what their experience has taught them.

There is a case both for making the timing more flexible and for making the guidelines more realistic. Having said that, my last recommendation is that the corporate plan should be made public. I accept that there is a case for the exclusion of some matters and I do not want to argue about it. It is a difficult problem, about which I am not being dogmatic. Commercial confidentiality is important and there are other confidential matters in the world market. However, those problems could be met by sensible disclosure. In the present circumstances it is necessary that the plan that British Shipbuilders produces in consultation with the Government should be made public. We should know what its views are and they should be placed before Parliament. I have stressed throughout our debates on public corporations that relations with Parliament are important and I hope that these proposals will, in principle, be accepted. The Government should take the opportunity which they are now afforded to improve the provisions with regard to the formulation of the corporate plans.

5 pm

Mr. James Hill (Southhampton, Test)

New clause 1 is good in parts. We dealt with this matter in depth in Committee. I see that the hon. Member for Southampton, Itchen (Mr. Mitchell) has an amendment down further to expand clause 1.

The opening statement in a research note issued by the Library puts the matter in perspective. It states: The whole of this Bill relates to the powers and duties of British Shipbuilders. It is not therefore directly a privatisation measure like, for example, the British Aerospace Act 1980. A closer analogy would be the Iron and Steel Act 1981 which amended the legislation governing the British Steel Corporation. This Bill is simply to provide a means for the chairman of British Shipbuilders to form small companies and then, within the wisdom of his management, to privatise those small companies. In other words, it seeks to allow the assets of those companies either to be purchased back by the former owners or, indeed, to allow new shareholders to be brought in. So, it is not an all-embracing Bill. It does not have the same scope as the Transport Act 1981 which set up Associated British Ports. It does not have the same impact. In fact, there were doubts in Committee that certain of the companies could ever be put on to the private market for the obvious reason, which was quoted time and again, mainly by the right hon. Member for Sunderland, North (Mr. Willey), that so many of these yards were almost at death's door. They had no orders, their labour forces were demoralised and they had to compete in world markets where the only policy was to submit the lowest tender, regardless of profitability. It was mentioned many times that Japan, Taiwan and Korea were our natural enemies in shipbuilding and that many British yards could not compete.

Many solutions were suggested. It was argued that we should have a scrap and build policy, that fiscal taxation measures could be introduced to help the British shipowner or that there could be slightly higher subsidies for British Shipbuilders, mainly for the merchant yards. The Bill, if it receives Royal Assent, would enable Vosper Thorneycroft, a yard in which I and the hon. Member for Itchen are interested, to be privatised.

There is a certain logic to new clause 1 which the Government did not accept in Committee. It gives the chairman of British Shipbuilders every possible avenue to formulate the assets of the company in any way he wishes—the design, development, production, sale, repair, and maintenance of ships and so on. The hon. Member for Itchen wishes to broaden this out into any sphere, including ship repairs, to obtain profitability.

There are good points in new clause 1. Nevertheless, I know that the right hon. Member for Sunderland, North would not like to see the assets of British Shipbuilders sold off. The Opposition made it clear in Committee that warship building is the profitable side of the industry and helps to keep the merchant shipbuilding side afloat. It was made only too clear in Committee that the profits of the warship side of the industry were almost a complete balance for the losses in the merchant shipbuilding side.

If this was a straightforward Bill not to privatise in any way, new clause 1 would probably be acceptable. But the right hon. Gentleman is missing the point. This is a partial privatisation Bill. New clause 1 certainly involves corporate policies and plans regarding the carrying out of its activities in the most efficient manner but his idea of "the most efficient manner" would not necessarily be mine.

Mr. Don Dixon (Jarrow)

I wish to confine my remarks to subsection (2) of the new clause, which deals with industrial relations. I do so because, if new clause 1 is not accepted, there will be no provision in the Bill to deal with industrial relations in the shipbuilding industry.

I agree with the hon. Member for Southampton, Test (Mr. Hill) that, at present, the workers in the shipbuilding industry are demoralised. The Bill revokes section 5(2) of the Aircraft and Shipbuilding Industries Act 1977, which gives British Shipbuilders powers to promote industrial democracy. I do not know whether the Government are interested in industrial relations, but having heard the statement of the Secretary of State for the Environment about the water dispute and having witnessed the mess he made by interfering in that industry, I should have thought he would have some concern for industrial relations and an interest in working with the people in the industry.

To give some idea of the improvements in industrial relations since vesting day in 1977, when the British Shipbuilding industry was nationalised, one must go back to when the industry was in private hands. When the chairman of British Shipbuilders was first appointed, he said: We are breaking down old-fashioned and deep-rooted attitudes and substituting informed, active and hard-headed involvement with participation. That is an important statement. The chairman of British Shipbuilders recognised the poor state of industrial relations that prevailed when the industry was in private hands.

I have worked in the industry all my life as, indeed, have some of my colleagues in the Chamber. When one considers the conditions that prevailed before nationalisation one can understand the concern of the workers in the shipbuilding industry if a provision about industrial relations is not included in the Bill. The Aircraft and Shipbuilding Industries Act led workers in the industry to believe that they had industrial democracy, for which they accepted the loss of 25,000 jobs, the closure of nine shipyards, the closure of ship repair yards and engine works. They did so because they thought they had some say in what was happening in the industry.

The Bill, which we are told is an enabling Bill, means that the workers have been conned since 1975. Had they not had so-called industrial democracy, they would have put up a fight against losing 25,000 jobs, with not one compulsory redundancy to date.

I worked in the shipbuilding industry before nationalisation. In one of the shipyards that I worked in we put lugs on plates so that the welders could weld the plates together. A lug was a small piece of metal. The welders' rods were inches from the shipyard workers' fingers. The employers refused to supply gloves for the workers. Every day we finished up with sceptic burns on our hands because of the attitude of the owners of the industry.

Before nationalisation the whole industry was fraught with demarcation disputes. I recall the famous one in Liverpool, when a six-month strike took place because the joiners claimed that they should be boring the holes on small pieces of plate instead of the drillers. One should consider such things when one talks about the British shipbuilding industry.

Before nationalisation there were virtually no industrial relations. The management was the worst in the country. There was no consultation on any innovations in the yards. That was one of the reasons for the hostile reaction from the workers. In 1977 we thought that Utopia had come and that the British shipyard workers at last would have some say in the industry in which they were investing their lives.

I recall the strike at Hawthorn Leslie, when the management stopped the greasing allowance that the shipwrights got for going underneath the ship and greasing the ways so that the ship could be launched. We got the princely sum of 7s. 6d., which would be 37½p today, for going under the ship and greasing it. We put our hands in big barrels of grease and slapped it on the ways before the launch of the ship. At the same time as it stopped that allowance the management had a champagne party for the guests who were invited for the launching of the ship. Such conditions used to prevail in the industry.

There was no pension scheme. Nothing happened if someone was killed or died at work. The widow or any other dependants had to rely on the workmen having a whip round. Those were the conditions before nationalisation.

The hon. Member for Southampton, Test said that the morale of the British shipyard workers was low. Something about industrial relations should be written into the Bill. Section 5(2) of the 1977 Act, in which industrial democracy was supposed to be promoted, has been revoked. Therefore, there will be no co-operation by people who work in the industry.

Before 1977 there were 168 bargaining units in the shipbuilding industry. These have been reduced to two—one for the manual workers and one for staff. That gives one an idea of what happens when one gets the co-operation of the workers. If the Government want confrontation, the best way to do so is to ignore industrial relations. As I said in Committee, if one took all the directors and put them on a luxury yacht, filled it with caviar and red and white wine and sent it to the Mediterranean, ships would still be built because they are built by the workers and not by the directors. It is about time the Government realised that.

One of our first major achievements was to get the 168 bargaining units down to two. Demarcation disputes are vitually eliminated now. There is an amalgamation of trades. At one time there were various separate trades, such as the burners, the caulkers, the shipwrights, the platers, the joiners, the painters and the French polishers. Most of them have been amalgamated and there is no demarcation. The industry wants some assistance, not the Bill.

5.15 pm

I shall not take long, because my right hon. Friend the Member for Sunderland, North (Mr. Willey) has explained the reasons for the corporate plan. I want to emphasise my point about industrial relations. If the Government ignore industrial relations, there will be a confrontation with the industry at the worst possible time. I hope that the Minister will accept the new clause. Without it there is nothing in the Bill about industrial relations. That has been completely eliminated by the revocation of section 5(2) of the 1977 Act. I hope that the Minister will accept the new clause.

Dr. J. Dickson Mabon (Greenock and Port Glasgow)

I support the new clause, which the right hon. Member for Sunderland, North (Mr. Willey) moved with considerable force.

The 1977 Act has not worked out as its authors intended. New clause 1(4) refers to the withdrawal of section 7 of that Act, which was about having an annual corporate planning policy. That is sensible. It has proved impossible, in view of the immense problems facing the industry, to have an annual corporate policy. It is difficult to have a corporate policy at all. However, that does not mean that there should not be an effort by British Shipbuilders to have a corporate policy, which, as the hon. Member for Yarrow—

Mr. Dixon


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

A Freudian slip.

Dr. Mabon

I agree that there is a considerable difference.

Mr. Dixon

The right hon. Gentleman will be saying "Harrow" next.

Dr. Mabon

I apologise to the hon. Gentleman. I have the 'flu and cannot speak very clearly. I never went to Harrow, but to a state school.

Section 7, in its attempt to get an annual corporate policy, was a mistake because such a policy has been difficult to secure. I have been associated with the industry all my life. My father was also associated with it. The workers wanted industrial democracy in its real and old-fashioned sense as a result of nationalisation. It is one of the few industries in which it has been resented and resisted by even the most progressive employers for many years. There were a few exceptions, but on the whole the industry was riddled with prejudice against industrial participation by the workers.

The 1977 Act was important. It is therefore sensible that, if we are amending the original Act with such substantial amendments, we should mention industrial relations and democracy, as the hon. Member for Jarrow (Mr. Dixon) said.

I do not see the objection to the clause. No doubt the Minister will try to make a case. I hoped that he would speak immediately after the amendment had been moved so that we could hear an acceptance by the Front Bench, in principle if not in text, of the new clause. The argument of the hon. Member for Southampton, Test (Mr. Hill) was awfully doubtful, even downright silly, when he said that the new clause could not be incorporated because elements of privatisation could come into it. I do not agree with elements of privatisation but the Bill does not say that there will be any. It is simply an enabling measure. The meaning of new clause 1 would not be affected by privatisation. Privatisation would not upset the balance. I doubt whether the Minister will claim that the Bill will denationalise the larger part of British Shipbuilders. A fraction of the industry may be privatised. If the Government intend to denationalise the industry, they have not said so in the House.

Dr. John Cunningham (Whitehaven)

I am grateful to the right hon. Gentleman for giving way. Perhaps he will reflect on what he has just said. Surely the warship building yards, the profitable part, is the largest part of what is likely to be left of the industry because of its decline, and that is exactly the bit that the Government want to privatise.

Dr. Mabon

I hope that that is not so. The Government do not confess to it. Nevertheless, I am willing to accept the hon. Gentleman's postulation that it might be so. The fact remains, however, that a large part of the industry will continue to produce ships of peace rather than ships of defence or war. In those circumstances, new clause 1 still stands. I am simply rebutting the argument of the hon. Member for Southampton, Test who said that new clause 1 cannot be incorporated because it prevents privatisation. It does nothing of the kind. The new clause can stand, even within the Government's compass and within the view of the hon. Member for Whitehaven (Dr. Cunningham), who argues that the bulk of the warship building side will be denationalised.

Mr. Hill

When the chairman of British Shipbuilders gave evidence to the Select Committee he said that a corporate plan was largely out of date and that he was now mainly interested in cash limits and the intervention fund. He said that they were crucial to British Shipbuilders. In any form of selling the assets, the corporate plan that is suggested in new clause 1 would have to be incorporated in an agreement to sell those assets. There is no chance of a private firm that buys up an asset wanting to be tied to an annual corporate plan.

Dr. Mabon

I am not advocating an annual corporate plan. Events have proved it to be nonsense. Nevertheless, I should be extremely surprised if a man such as Robert Atkinson opposes the idea of a corporate plan. I am not asking Ministers to say whether the chairman agrees with the new clause 1. That would be quite improper. Nevertheless, I should be surprised if he disagrees with it. It is sensible for any chairman of any corporation, whether private or public, to have a corporate plan, albeit not annually. Moreover, it is important for such a chairman to have a corporate plan that involves consultation with unions and, more directly, with employees.

We are debating the submission of such a plan to Parliament, not an annual submission. This admirable new clause would provide for a submission being made at some time when it has been agreed within the industry. I should be surprised if the Minister took refuge in the argument that was loyally but mistakenly advanced by the hon. Member for Southampton, Test. That is a bad argument. There is a good argument for having a corporate plan. Clause 2 deals with improving productivity. Is that not the theme of many of the chairman's speeches to many groups of shipbuilders? That is certainly true of the lower Clyde. The chairman wants improved productivity, but he must work out how to achieve it. To do that he must have the co-operation not merely of the unions formally, but of the men who are directly involved. No one opposes improved productivity. The argument is about how one achieves it. The hon. Member for Jarrow rightly mentioned industrial relations. The Minister might want to suggest to the chairman that other matters might be included in the corporate plan.

Decentralising management is another issue. I remember earlier discussions on the Bill when some of us felt that decentralising British Shipbuilders could be on a estuarial or riparian basis rather than the present functional division between offshore, commercial and warship sections. It is not true to argue that British Shipbuilders is a decentralised nationalised industry. It has become, alas, highly centralised. I strongly regret that. That is why I welcome new clause 1. It would help towards decentralising management. Nowhere is that more true than on the lower Clyde. It is to our regret that we do not have the element of decentralisation that we used to have in the early days of nationalisation.

New clause 1 is not cosmetic or merely a genuflection to industrial relations and the rest. It is sensible and tries to build on the earlier legislation. Not all Governments get things right and not all Acts are perfect. The annual corporate plan was a mistake. I confess that readily. Nevertheless, that does not mean that we should now throw out the baby with the bathwater. Moreover, I do not believe that the extract of the evidence of the chairman of British Shipbuilders to the Select Committee, to which the hon. Member for Southampton, Test referred, is representative of all of the chairman's evidence. I do not accept that he is against a corporate plan. If he is, what does it matter? We shall have to overrule him. We shall have to say "We are sorry, chairman. We insist on having a corporate plan."

I cannot see the objections to new clause 1. I hope that Ministers will address themselves to that. Where are the objections? I would have preferred to make my speech later to see what arguments Ministers deploy. My right hon. and hon. Friends and I wholeheartedly agree with the right hon. Member for Sunderland, North. I hope that the Government will not regard the issue in a partisan way. A large part of British Shipbuilders will remain in public hands. It deserves to have a corporate plan and to have this type of description of it in statute so that Parliament will be consulted. I earnestly beg the Government to incorporate this new clause.

Mr. Anthony Nelson (Chichester)

I greatly welcome the principal objective of the bill, which is to privatise British Shipbuilders in part or its subsidiaries. However, I share the views of those hon. Members who have already spoken in that neither the long title of the Bill nor its provisions exclude some aspects of new clause 1.

The long title of the Bill which is to Make further provision with respect to the functions and activities of British Shipbuilders should encompass exactly the objectives to which new clause 1 refers. Moreover, the Bill changes the law and refers to several prohibitions that relate to British Shipbuilders which are not solely concerned with privatisation. Clause 2(1) confers on British Shipbuilders the duty to exercise its powers in the most efficient manner. That is a proper responsibility and, in itself, has nothing to do with privatisation. The new section 4A(1) is a prime example of the way in which lawyers and draftsmen have a field day in tautology when they draft Bills. It says: It shall be the duty of British Shipbuilders so to exercise its powers as to secure that the carrying on of the activities that have fallen to be carried on under its ultimate control is organised, so far as regards the direction thereof, in the most efficient manner. Why does it not simply say "It shall be the duty of British Shipbuilders to act efficiently" because that is what the subsection proposes?

5.30 pm

In sympathy with the right hon. Member for Sunderland, North (Mr. Willey) and with my hon. Friend the Member for Southampton, Test (Mr. Hill), may I say that we should review critically the provision of section 7 of the Aircraft and Shipbuilding Industries Act 1977 which imposes a statutory duty on British Shipbuilders to produce an annual corporate plan. With the benefit of hindsight, that has been not only an onerous responsibility but of dubious benefit to British Shipbuilders, its employees and Parliament. I suggest to my hon. Friends the Under-Secretary of State and the Minister of State, who have enormous personal experience of industry and companies, that few major companies or corporations must produce both an annual report and a complete new annual corporate plan, which requires extensive negotiation, agreement in committees and consultation, rightly, with trade unions and other interested parties. That is an onerous and expensive duty that could reasonably be removed.

I have not scoured the Official Report of the Standing Committee to ascertain whether an amendment to that end was moved. When my hon. Friend replies, I hope that he will direct his attention sympathetically to those points and to the need that many people accept for more discretion to be given to British Shipbuilders to decide when it is appropriate for it to come forward with a new corporate plan. Even in the absence of that legislative requirement under section 7 of the 1977 Act, British Shipbuilders must act efficiently and achieve commercial targets. If it decides that that is its overriding objective and that a new corporate plan is necessary, it is responsible and commercial enough to produce such a plan.

The new clause is deficient and is in the interests of neither British Shipbuilders nor the House. However, some parts of the new clause are fairly responsible. Few hon. Members would contend that improvements in productivity, proper consideration of the decentralisation of management and better industrial relations were undesirable. However, the new clause also seeks to repeal section 7 of the previous Act. Therefore, we must consider the provisions of section 7 that worked well but that are not included in the new clause. There are many such provisions, and section 7 places a responsibility on the corporation to include in its corporate plan specific considerations relating to matters such as capital investment, research and development, employment of workers, forecasts of income and expenditure and profit and loss and a variety of other matters.

The right hon. Member of Sunderland, North may argue that such provisions would be included in the subsection of his new clause that states and such other matters as the Secretary of State may specify in writing. That is not good enough. I should be reassured if the commercial criteria that British Shipbuilders must include in its corporate plan were laid down in law and referred to the financial objectives contained in section 7 but omitted in the new clause.

Mr. Willey

I do not disagree with the hon. Gentleman. My point was that his colleagues criticised those provisions in Committee. The Government must advise us about this matter. They have had experience during the past few years of running annual corporate plans—not very successfully—and they should decide about any revisions. That is why I made no revisions.

Mr. Nelson

I am grateful to the right hon. Gentleman. Perhaps there is little difference between us.

I hope that my hon. Friend's reply will be satisfactory and that the House need not divide on the new clause. If we were to accept the new clause, well-intentioned though it is, it would be deficient because it would exclude from the duties laid on British Shipbuilders several important financial and commercial criteria that must be included in its corporate plan. A corporate plan that does not, above all, uphold the objectives of making a return on capital and making a profit will not be in the interests of either the Government or the employees of British Shipbuilders.

British Shipbuilders is currently faced with a major pay claim, and the Amalgamated Union of Engineering Workers is insisting that it will be both militant and intransigent in pressing its claim. During a period of keen world competitiveness, we must remind British Shipbuilders statutorily and in public that we look to it and its employees to respond to the considerable sums of public subvention that have been made available and to fulfil some of the worthy objectives of section 7 of the previous Act.

Dr. John Cunningham

That is all very well, but does not the hon. Gentleman recognise that each year for the past four years the unions in the shipbuilding industry have accepted a wage settlement below the rate of inflation? They have agreed to yard closures, job losses and redundancies because they were promised that the industry would become leaner and fitter and would survive. But the result, after four years, is that the unions have been told that they must accept more closures and redundancies and less Government support. Does the hon. Gentleman believe that they will accept that?

Mr. Nelson

The unions may have to accept it, deeply regrettable though it may be. I share with the hon. Gentleman any tribute paid to British Shipbuilders' workers, who have made sacrifices in recent years. The changes in that industry, as in other major industries such as steel, have been traumatic on both a coporate and a personal scale. But, as the hon. Gentleman rightly says, the purpose is to enable British Shipbuilders to survive and to create a more competitive national corporation so that orders, such as the CEGB order that we discussed last week, are not lost as readily as they are. It is not enough to say that we, as trustees of the public purse, should pay ever-increasing sums of public money in financial support and should increase the borrowing powers of such national corporations without reminding those concerned in the industry that they must play their part. By and large, they accept that responsibility, but, if some recent union statements are to be believed, the pay claim—if settled in full—would greatly damage the corporation. Everyone would regret that, most of all those in the industry, and if the claim is settled in full a difficult world position would become even more difficult.

It would be unwise for the House to accept the new clause, because it would be a prescription for unprofitable coporate plans. The criteria in the new clause, worthy though they are, exclude some important criteria contained in the previous legislation. Section 7 may be deficient in its requirement for annual corporate reports. It is especially deficient because section 18 of the 1977 Act states that British Shipbuilders should provide the Secretary of State with an annual report. Therefore, the corporation must produce not only an annual report but a corporate plan. I believe that a corporate plan is superfluous.

I am sure that the Minister will respond sympathetically to what has been said. With those cautionary words, I urge my hon. Friends to view with some scepticism whether the provisions of the new clause would be to the benefit of British Shipbuilders and whether in fact they exclude a number of other important criteria.

Mr. R. McTaggart (Glasgow, Central)

I should like to believe that debates on this new clause and on other new clauses and amendments during the Bill's passage had made everyone aware of the need for a strong shipbuilding capacity to provide for the future needs of this country. Shipbuilding is of vital importance to Great Britain as an island. Its success or failure will have a tremendous impact on the United Kingdom economy. That impact will be felt whether shipbuilding is in private or public hands. It is, therefore, imperative, in the nation's interest, that the Bill should contain provisions to ensure that British Shipbuilders operates as efficiently as possible and strives to lead the field in industrial relations.

Subsection (1) of the new clause provides: It shall be the duty of British Shipbuilders, after consulting any relevant trade union, to formulate from time to time when it considers appropriate, or the Secretary of State so requires, corporate policies and plans regarding the carrying out of its activities in the most efficient manner. Several advances have been made since the formation of British Shipbuilders in 1977. The work force now has specific agreements on flexibility. I remember, from working in the industry, the old demarcation rules which my hon. Friend the Member for Jarrow (Mr. Dixon) mentioned. I remember the strikes that those demarcation rules caused and the trouble that then ensued. We did not just have different wage rates among different trades; we had different wage rates within trades. It caused a great deal of jealousy and back-biting and brought out the worst in the workers.

Since vesting day, British Shipbuilders has had a national procedure for settling disputes. We have trimmed 170 different wage agreements negotiated annually to two wage agreements which now have a common pay anniversary in the industry throughout the country. There have also been casualties.

I should like to pay tribute to the management of British Shipbuilders and to the trade union negotiators who have taken part in the talks throughout that period. The loss of 25,000 jobs in relative calm since vesting day is no mean feat, especially when unemployment rages at about 4 million. About 12 shipyards have closed since vesting day. They were previously building the merchant ships which carried abroad the cargoes needed to help this country's balance of payments.

We cannot underestimate the agreements reached by those negotiators during that period. However, the work force still has deep-rooted suspicions, because all too often in the past it has seen management techniques which resulted in agreements going to the wall once the work force was seen to have conceded something. I hope that every Member of the Committee and the House will make it his duty to allay the workers' fears and prove that the House has a genuine desire for a strong and thriving shipbuilding industry.

Subsection (2) of the new clause states: In making their formulation, British Shipbuilders will have full regard to improving productivity, decentralising management and operational centres, industrial relations and such other matters as the Secretary of Sate may specify in writing. I believe that that provision should be welcomed. It is a positive and just step. Surely no one can be under any illusion that the loss of 25,000 jobs, the closure of 12 yards—to ensure the industry's survival and the maintenance of a shipbuilding capacity in this country—and the putting forward of legislation which does not just split the corporation, but takes away the need for British Shipbuilders to promote industrial democracy, will not cause bitterness. The old suspicions and distrust will be felt.

5.45 pm

I may well be naive. The hon. Member for Southampton, Test (Mr. Hill) stated that some people have said that the Bill is about the introduction of private capital and others have said that it is about the hiving-off of the warship building division into private hands. If the industry is to be successful, presumably the new owners will require greater efficiency from the work force. They will want even more productivity agreements, and they will be wanting ships delivered more quickly in order to become more competitive. I do not see how that can be achieved if we take away from the work force the safety net of the need to promote industrial democracy and say to the workers and trade union officials, who may be thought to have been stabbed in the back, "We want your co-operation for further job losses so that the private sector can be made more profitable." I do not believe that the trade unions would agree to that. It is a recipe for confrontation.

I feel that if the Bill is to succeed in allowing privatisation, it should contain that part of the new clause relating to industrial relations. I strongly urge every hon. Member, particularly Conservative Members, to support the new clause.

Mr. W. E. Garrett (Wallsend)

The hon. Member for Chichester (Mr. Nelson) was probably right in his criticism of the new clause when he said that it did not match up to what was needed. However, it is not beyond the wit of the Government, even at this stage in the Bill's progress, to formulate words that would incorporate the principles so ably enumerated by my right hon. Friend the Member for Sunderland, North (Mr. Willey) when he moved the new clause. Those of us who have sat in on the rather lengthy Committee proceedings are well aware that we never discussed industrial relations because there was no clause covering them. We were well aware that the principal object of the Bill was to allow the Government, when they wish, to privatise certain sections of British Shipbuilders.

If the new clause is accepted it would allow at some time, a corporate strategy for the industry, whether private or public. The House should heed the warnings given by my hon. Friend the Member for Jarrow (Mr. Dixon), who has an intimate knowledge of the industry in which he worked for so many years. Those of us on the Committee were aware of his expertise on shipbuilding and the industries associated with it.

I have lived most of my life on Tyneside, and I represent a constituency where most of British Shipbuilders' employees work. It is true that morale is at a low ebb, for a variety of reasons. If it was felt that privatisation would mean a lessening of the structure of industrial relations, morale would sink further still. Many in the House will remember the appalling industrial relations that used to exist in the industry. Many of us have sat back and read media criticisms of trade unionists, whom they called Luddites. Had they known the industry at all, they would have realised that the real Luddites were the management. But two wrongs do not make a right. We have passed that stage, and it is an unpleasant factor in the industrial history of Britain.

Since the shipbuilding corporation was created, it has been an undeniable fact that industrial relations have improved beyond belief, and beyond anything that I dreamt of when I was an active member of the Amalgamated Union of Engineering Workers on Tyneside. I fear that if the Government do not make a statement about future industrial relations as they will be affected by their policy on privatisation we could heap up more trouble for ourselves. Neither the public nor the private sector will gain any benefit from that. Certainly the workers will not.

The Under-Secretary of State should take note of some of the sincere advice that has been offered in the debate. I support the new clause, but am prepared to consider carefully any similar Government initiative. It is not beyond the power of the Government to insert something into this short Bill to meet the deep concern that has been expressed in the House today.

Mr. R. C. Mitchell

Both the hon. Member for Southampton, Test (Mr. Hill) and the hon. Member for Chichester (Mr. Nelson) welcomed the new clause in principle, but ingeniously found reasons why they could not vote in favour of it. It is a good clause, and I shall invite my hon. Friends to vote for it.

As I said on Second Reading, the Bill is basically an enabling measure. It gives a tremendous amount of power to the Minister, whoever he may be. Hon. Members wo served on the Committee will remember that we tried to reduce that power, which enables the Minister to instruct British Shipbuilders to do many things, such as to sell the warship yards and so on. We did not succeed. The new clause provides that British Shipbuilders should produce a corporate policy, which should be laid before each House of Parliament. That is one more opportunity for Parliament to exert some control over the Executive's actions at any given time.

We cannot have a corporate plan for shipbuilding in isolation. We must recognise that shipbuilding, shipping and defence are interlinked. If there is no demand for ships, there will be no demand for shipbuilding. As we realised during the Falklands crisis, the merchant navy is important as part of our defence forces. We must press the Government for a maritime policy covering all the aspects to which I referred.

Everyone will agree that productivity has improved in the shipbuilding industry, especially during the years since nationalisation. But there is still some way to go, and we have not yet reached the ultimate in productivity in the shipyards. There is a need for further, continuous discussion between management and unions.

My right hon. Friend the Member for Greenock and Port Glasgow (Dr. Mabon) said that one of his disappointments since nationalisation has been the centralised control of British Shipbuilders. When the nationalisation Bill passed through the House, under the auspices of the right hon. Member for Manchester, Ardwick (Mr. Kaufman) I said that we did not want a centralised body that made decisions and then transmitted them to the various yards. I fear that British Shipbuilders has become too centralised. It does not allow enough initiative to local yard managers for local decision making. I hope that that will be reversed during the next few years.

Industrial relations have also improved tremendously—since nationalisation. Before that, they were in an appalling state. But again, we still have a long way to go. There are still too many trade unions negotiating in that area. There are about 16 now, whereas previously they numbered 27, so we have made some progress. We must take the next step and move away from direct confrontation to a system where those who work in the shipyards play a part in the decision-making process. Most people believe that to be a part of industrial democracy. It is not simply collective bargaining—the men working in the yard have a part to play in decision-making. That is not a new concept in the shipbuilding industry. It was successfully tried at Fairfields many years ago. We must get away from the "we-they" attitude and recognise that we are all "us", and that both sides have the same object in mind, which is to maintain a profitable shipbuilding industry.

If the Government follow their present economic policies, and if the world recession continues, there will be a danger—especially in civilian shipbuilding—that we shall have no shipbuilding industry at all. So there is some urgency in the matter. I hope that, as a first step, the Government will accept the new clause. I have not heard any legitimate reason for opposing it. If the Government cannot accept its wording, I hope that they will introduce something similar.

The Under-Secretary of State for Scotland (Mr. Alexander Fletcher)

I have a great deal of sympathy with the general intentions expressed this afternoon by the right hon. Member for Sunderland, North (Mr. Willey) and represented in the new clause. The Bill, as amended in Committee, reflects the Government's positive response to many of the arguments put before the House this afternoon, including the plea in the last few words spoken by the hon. Member for Southampton, Itchen (Mr. Mitchell).

The issues were discussed in Committee when we dealt with the part of the Bill that repeals section 5 of the 1977 Act. The new clause covers much the same ground as section 5, and, for the same reason as I supported the repeal of section 5, I believe that we should not accept the new clause.

6 pm

I was surprised by the right hon. Gentleman's suggestion that it was better for a corporate plan, or something of that nature, to be produced from time to time rather than annually. I agree that the corporate plan must be relevant, alive and up to date, but it must also be timely, and it needs the discipline provided by an annual framework. We entirely accept the principle of the annual corporate plan and the information that it presents to the Government.

I am not opposed to regular management reviews, the promotion of industrial democracy, the decentralisation of operations, the improvement of productivity, and so on. Those matters are all very important and should be kept constantly under review by British Shipbuilders, and the corporate plan is the right and appropriate vehicle for that purpose. Our objection to the new clause is simply that the matters described in it either should be the natural concern of the management of a commercial organisation, to which statutory exhortation adds nothing, or covered elsewhere in the legislation.

In effect, with some differences more of detail than of substance, the right hon. Gentleman's new clause reconstitutes section 5 which we took out of the legislation and disposes of section 7 which is essentially the one providing the corporate plan. As we said in Committee, section 5 has not been used by British Shipbuilders since 1978. The power of British Shipbuilders to submit an occasional report was used in 1978 for the first and only time. The practice of the management of that nationalised industry therefore suggests that management itself prefers the vehicle of the corporate plan and finds it sufficient for its purposes, rather than the occasional submission of a plan as is envisaged in the new clause.

Mr. R. C. Mitchell

Will the hon. Gentleman tell me where else in the legislation provision is made for the corporate plan to be laid before Parliament?

Mr. Fletcher

I shall take up that point in due course.

It is important to note that section 7 of the 1977 Act is not repealed by the Bill. Section 7 requires British Shipbuilders to produce art annual corporate plan and to consult the trade unions before doing so. I emphasise that fact for the benefit of the hon. Member for Jarrow (Mr. Dixon), who has suggested today, as he did in Committee, that the corporate plan does not make sufficient allowance for the trade union interest to be taken into account. He prefers the section 5 solution which, as I have said, was used only once to the regular annual corporate plan as under section 7. I remind the hon. Gentleman that section 7 provides: It shall be the duty of each Corporation, after consulting any relevant trade union, to formulate in each year and so on.

I should point out to my hon. Friend the Member for Chichester (Mr. Nelson), with whom I disagree about the way in which the private sector might deal with this, that section 7 lays down the kind of basic information expected from a nationalised industry. I suggest that most private companies, however they may describe the process, perhaps on a five-year rolling basis or in some other form, will consider the matters set out in section 7—

  1. "(a) capital investment,
  2. (b) research and development,
  3. (c) employment of persons,
  4. (d) forecasts of income and expenditure on profit and loss account"
and other essential matters.

Mr. Nelson

There is no disagreement between us about the contents of a corporate plan, but only about the timing and whether it would be every year.

Mr. Fletcher

I suggest that most businesses do this every year, however they describe the operation. Indeed, I believe that, if anything, they would probably do it more frequently. There is nothing to prevent BS from making more frequent use of the corporate plan, or amending it during the year as circumstances change and as management considers necessary.

Mr. Dixon

The Minister said that section 5 had not been invoked since 1978. Subsection (2) of that section instructs BS to promote industrial democracy in its undertakings". If that has not been invoked, the men in the industry have been conned since 1977. It was because they believed that they had industrial democracy that they accepted the 25,000 redundancies, the loss of the shipyards and the drop from third to 19th in the wages league. They accepted all that because they believed that BS was bound by section 5. The Minister is therefore saying that the workers have been conned.

Mr. Fletcher

I do not think that there is any question of that. All the hon. Gentleman's references to industrial relations in BS have not stemmed from section 5. My point was that if section 5 was so important it would have been used more frequently since the nationalised industry was established and not just in 1978.

The first sentence of section 7 requires that the trade unions be consulted not just about industrial relations but about a whole series of matters which lie at the heart of the industry's planning and of consideration by the board of BS. I believe that it is far more important for the workers to be consulted about the corporate plan, with all the consequences that might flow from decisions surrounding that plan, than to have some attractively worded provision with the phrase "industrial democracy" painted all over it which may ultimately be far less meaningful than the presentation of the corporate plan and consultation with the trade unions about it.

Mr. Hill

The Bill will naturally enable BS to set up subsidiary companies, which may or may not then be sold to the private sector. Will it be a condition of sale that the arrangement in section 7 be carried through in the conveyancing of the contract of sale?

Mr. Fletcher

I think that that would depend entirely on the situation surrounding the sale. A prospective purchaser might wish to carry forward the best practices of BS in industrial relations. I doubt whether that would be laid down in a contract of sale, but I suppose that it is not impossible. The important thing is that this part of the legislation would not apply to a part of BS which was privatised and in effect changed ownership so that it was no longer a nationalised industry and thus no longer subject to the terms of the legislation.

The new clause suggests that the corporate policy or plan shold be concerned with the efficient manner in which the activities of the corporation should be carried out. British Shipbuilders will have a duty under the new section 4A(1), to be organised in the most efficient manner". Any commercial organisation that is concerned about its financial results must keep that under frequent review.

The new clause is also concerned with the decentralisation of management and of operational centres. I am also in favour of decentralisation to profit centres. British Shipbuilders is organised in a decentralised fashion. [Interruption.] I hear the groans. I have sympathy with them in the sense that the problem arises about order intake and the allocation of orders. That is a prime test of decentralisation in shipbuilding, steel or any other nationalised industry. That is a hurdle that nationalised industries are unable to get over, partly because of political interference across the spectrum of politics in the House. As long as an industry is nationalised, Members of Parliament and others—I say nothing of Ministers or former Ministers—will feel that they have the right to exercise or to try to exercise some influence over where orders are placed. That is a serious criticism of nationalisation and not of the structure of British Shipbuilders. Given its obvious inhibitions, I entirely agree that British Shipbuilders does everything possible to operate in a decentralised manner. There are ways in which that can be measured.

The head office and central services of British Shipbuilders employ only a few hundred people compared with the 64,000 employed in the separate and publicly accountable subsidiaries. That degree of decentralisation may be preserved. Under the new section 4A(2), the Secretary of State's consent will be required before British Shipbuilders can make any substantial change in its organisation.

I say to the right hon. Member for Greenock and Port Glasgow (Dr. Mabon) that, if necessary, the Secretary of State could also use his powers under section 7 to specify decentralisation as a matter to be considered in the annual corporate plan.

Dr. Mabon

The Minister has pressed hon. Members on the argument of quantitative decentralisation, hence his quoting of figures at this centre and that. However, there is also qualitative decentralisation, which involves the question of where decisions are made. That is the criticism.

6.15 pm
Mr. Fletcher

That is more a criticism of nationalisation than of the organisation and structure. [Interruption.] It is; because Ministers are inevitably deeply involved in nationalised industries. That is also relevant to the point that I made earlier about the allocation of orders.

Sir David Price (Eastleigh)

Does my hon. Friend agree that the real test of decentralisation, whether in a privately or publicly run organisation, is how much of the profit made by a profit centre within the group can remain within that profit centre and how much of that profit has to go to head office?

The dilemma facing the House is that it wants the profitable yards to subsidise the unprofitable yards, yet at the same time it is talking about decentralisation. If there is real decentralisation in terms of profit centres, I do not understand how there can be both.

Mr. Fletcher

I agree entirely with my hon. Friend. Several tests can be applied. That is one which is extremely important.

An aspect of the new clause with which I am less sympathetic is that any plan produced under the new clause would have to be laid before Parliament. That is fine, sounds great and is, perhaps, as it should be. However, there must be a safeguard to protect not just the national interest, which could be prejudiced by the publication of sensitive information, but the commercial interests of the corporation. From what he said this evening and from the comments he made when the matter was discussed in Committee I have no doubt that the right hon. Member for Sunderland, North recognises that. It is not in the best interest of British Shipbuilders, leaving aside the national interest, that such an important document, full of sensitive information, and of great interest to competitors, should be laid before the House and so become a public document.

Mr. R. C. Mitchell

Bearing in mind the leaks that have recently occurred from Ministries, should the corporate plan be laid before the Minister?

Mr. Fletcher

Fortunately, the privatisation of British Shipbuilders will at least remove that source of information for our competitors. However, one final reason for rejecting the new clause that cannot be ignored by the House is that the Government, as part of their public expenditure planning, set all the nationalised industries a financial framework. It would clearly be inappropriate to do that without first considering the plans and the cost of those plans in respect of each nationalised industry. It is necessary to have annually a fully considered plan from British Shipbuilders and from other nationalised industries to enable the Government to put together their total public expenditure considerations for the year ahead.

In an industry that is subjected to the frequent changes in market prospects with which British Shipbuilders has to cope, regular reviews of its corporate plan are absolutely essential. Given those points and the other considerations I have mentioned, the Government cannot accept the new clause.

Dr. John Cunningham

I congratulate my right hon. Friend the Member for Sunderland, North (Mr. Willey) on the effective and persuasive way in which he moved the new clause. It is a serious attempt to improve a pretty awful Bill. Even the hon. Members for Chichester (Mr. Nelson) and for Southampton, Test (Mr. Hill), who spoke from the Government Back Benches see some merit in what has been proposed. The new clause has received unanimous support from the opposition Benches, not only from my hon. Friends the Members for Jarrow (Mr. Dixon) and Wallsend (Mr. Garrett) but from the spokesman for the Social Democratic party, the right hon. Member for Greenock and Port Glasgow (Dr. Mabon).

The proposals have had a good reception. That is not surprising since they involve matters that are of considerable importance to the future of our shipbuilding industry as well as to productivity, decentralisation, industrial relations and the corporate plan. There is nothing ideological about what is proposed in the new clause. It is regrettable that the Minister devoted so few of his remarks to the importance of industrial relations in the shipbuilding industry, especially in view of the dramatic improvement that has taken place in that aspect of the industry's affairs since British Shipbuilders was established. That is one of the reasons why the corporation has survived to date, although it has faced serious difficulties.

One of the slight differences of opinion that arose between myself and the right hon. Member for Greenock and Port Glasgow involved the Government's real reasons for not wanting these provisions in the Act. I suspect there is some truth in what the hon. Member for Southampton, Test said, that the Government do not want any impediment to their intentions and proposals to break up, privatise, sell off and close down different aspects of the shipbuilding industry.

We all agree that—as the Minister said—that we should not need to legislate for good management practices. In an ideal world we would accept his assertion, but the real world is rather different, and it has been necessary to legislate for several matters and not least, improvements in industrial relations as well as the development of industrial democracy.

Almost the whole of the private sector of British industry has been running round terrified about proposals from the EC on worker participation and involvement. Far from giving the proposals a wide welcome, all sorts of reasons are being advanced both publicly and behind the scenes as to why they should be rejected. Therefore, we do not accept the Minister's argument in respect of industrial democracy or any other aspect of the new clause.

Mr. Michael Colvin (Bristol, North-West)


Dr. Cunningham

I shall not give way. I want to be brief because there are other amendments to debate, as well as Third Reading.

The fact that the Government do not want these measures to be reintroduced—having taken some of them out of the 1977 Act—reflects a change in attitude about how our industries should be run and managed. As we often said in Committee, no one in British Shipbuilders has asked for such a thing to be done. The Government are on their own in making the changes.

The Minister's speech was in the form: "Oppose gently. Be nice, but say there are good practical reasons why these proposals cannot be incorporated into the Bill." It is a speech that we have all heard many times in the House. It was singularly unconvincing in this instance. In Committee, we tried to improve the Bill by incorporating some of these provisions. We wanted to discuss them again on Report and we shall certainly invite the House to join us in voting for them.

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

The House divided: Ayes 223, Noes 284.

Division No. 77] [6.22 pm
Abse, Leo Dewar, Donald
Adams, Allen Dixon, Donald
Allaun, Frank Dormand, Jack
Alton, David Douglas, Dick
Anderson, Donald Dubs, Alfred
Archer, Rt Hon Peter Duffy, A. E. P.
Ashley, Rt Hon Jack Dunwoody, Hon Mrs G.
Ashton, Joe Eadie, Alex
Atkinson, N. (H'gey,) Eastham, Ken
Barnett, Guy (Greenwich) Edwards, R. (W'hampt'n S E)
Barnett, Rt Hon Joel (H'wd) Ellis, R. (NE D'bysh're)
Beith, A. J. Ellis, Tom (Wrexham)
Benn, Rt Hon Tony English, Michael
Bennett, Andrew (St'kp't N) Ennals, Rt Hon David
Bidwell, Sydney Evans, Ioan (Aberdare)
Booth, Rt Hon Albert Ewing, Harry
Boothroyd, Miss Betty Faulds, Andrew
Bray, Dr Jeremy Fitch, Alan
Brocklebank-Fowler, C. Ford, Ben
Brown, Hugh D. (Provan) Forrester, John
Brown, R. C. (N'castle W) Foster, Derek
Brown, Ronald W. (H'ckn'y S) Foulkes, George
Brown, Ron (E'burgh, Leith) Fraser, J. (Lamb'th, N'w'd)
Campbell, Ian Freeson, Rt Hon Reginald
Campbell-Savours, Dale Freud, Clement
Canavan, Dennis Garrett, John (Norwich S)
Cant, R. B. Garrett, W. E. (Wallsend)
Carmichael, Neil George, Bruce
Carter-Jones, Lewis Gilbert, Rt Hon Dr John
Cartwright, John Golding, John
Clark, Dr David (S Shields) Gourlay, Harry
Clarke.Thomas (C'b'dge, A'rie) Graham, Ted
Cocks, Rt Hon M. (B'stol S) Grimond, Rt Hon J.
Cohen, Stanley Hamilton, James (Bothwell)
Coleman, Donald Hamilton, W. W. (C'tral Fife)
Concannon, Rt Hon J. D. Hardy, Peter
Conlan, Bernard Harrison, Rt Hon Walter
Cook, Robin F. Hart, Rt Hon Dame Judith
Cox, T. (W'dsw'th, Toot'g) Hattersley, Rt Hon Roy
Craigen, J. M. (G'gow, M'hill) Haynes, Frank
Crowther, Stan Healey, Rt Hon Denis
Cryer, Bob Heffer, Eric S.
Cunliffe, Lawrence Hogg, N. (E Dunb't'nshire)
Cunningham, G. (Islington S) Holland, S. (L'b'th, Vauxh'll)
Cunningham, Dr J. (W'h'n) Homewood, William
Dalyell, Tam Hooley, Frank
Davidson, Arthur Horam, John
Davies, Rt Hon Denzil (L'lli) Howell, Rt Hon D.
Davis, Clinton (Hackney C) Hoyle, Douglas
Davis, Terry (B'ham, Stechf'd) Hughes, Mark (Durham)
Deakins, Eric Janner, Hon Greville
Dean, Joseph (Leeds West) Jay, Rt Hon Douglas
Jenkins, Rt Hon Roy (Hillh'd) Robinson, P. (Belfast E)
John, Brynmor Rodgers, Rt Hon William
Johnson, James (Hull West) Rooker, J. W.
Jones, Barry (East Flint) Roper, John
Jones, Dan (Burnley) Ross, Ernest (Dundee West)
Kaufman, Rt Hon Gerald Ross, Stephen (Isle of Wight)
Lambie, David Sandelson, Neville
Leadbitter, Ted Sever, John
Leighton, Ronald Sheerman, Barry
Lestor, Miss Joan Sheldon, Rt Hon R.
Lewis, Arthur (N'ham NW) Shore, Rt Hon Peter
Lewis, Ron (Carlisle) Short, Mrs Renée
Litherland, Robert Silkin, Rt Hon J. (Deptford)
Lofthouse, Geoffrey Silkin, Rt Hon S. C. (Dulwich)
Lyon, Alexander (York) Silverman, Julius
Lyons, Edward (Bradf'd W) Skinner, Dennis
Mabon, Rt Hon Dr J. Dickson Smith, Cyril (Rochdale)
McCartney, Hugh Smith, Rt Hon J. (N Lanark)
McDonald, Dr Oonagh Soley, Clive
McElhone, Mrs Helen Spearing, Nigel
McGuire, Michael (Ince) Spellar, John Francis (B'ham)
McKay, Allen (Penistone) Spriggs, Leslie
McKelvey, William Stallard, A. W.
MacKenzie, Rt Hon Gregor Steel, Rt Hon David
McNamara, Kevin Stewart, Rt Hon D. (W Isles)
McTaggart, Robert Stoddart, David
Marks, Kenneth Stott, Roger
Marshall, D(G'gow S'ton) Strang, Gavin
Marshall, Dr Edmund (Goole) Straw, Jack
Marshall, Jim (Leicester S) Summerskill, Hon Dr Shirley
Martin, M(G'gow S'burn) Taylor, Mrs Ann (Bolton W)
Mason, Rt Hon Roy Thomas, Mike (Newcastle E)
Meacher, Michael Thomas, Dr R. (Carmarthen)
Millan, Rt Hon Bruce Thorne, Stan (Preston South)
Miller, Dr M. S. (E Kilbride) Tinn, James
Mitchell, Austin (Grimsby) Torney, Tom
Mitchell, R. C. (Soton Itchen) Varley, Rt Hon Eric G.
Morris, Rt Hon A. (W'shawe) Wainwright, E.(Dearne V)
Morris, Rt Hon C. (O'shaw) Wainwright, H. (Colne V)
Mulley, Rt Hon Frederick Walker, Rt Hon H. (D'caster)
Newens, Stanley Warden, Gareth
Oakes, Rt Hon Gordon Watkins, David
O'Halloran, Michael Wellbeloved, James
O'Neill, Martin Welsh, Michael
Orme, Rt Hon Stanley White, Frank R.
Palmer, Arthur Whitlock, William
Park, George Wigley, Dafydd
Parker, John Willey, Rt Hon Frederick
Parry, Robert Williams, Rt Hon A.(S'sea W)
Pavitt, Laurie Wilson, Gordon (Dundee E)
Pitt, William Henry Wilson, Rt Hon Sir H.(H'ton)
Powell, Raymond (Ogmore) Wilson, William (C'try SE)
Race, Reg Winnick, David
Radice, Giles Woodall, Alec
Rees, Rt Hon M (Leeds S) Woolmer, Kenneth
Richardson, Jo Wrigglesworth, Ian
Roberts, Albert (Normanton) Wright, Sheila
Roberts, Allan (Bootle)
Roberts, Ernest (Hackney N) Tellers for the Ayes:
Roberts, Gwilym (Cannock) Mr. George Morton and
Robertson, George Mr. Harry Cowans.
Robinson, G. (Coventry NW)
Aitken, Jonathan Benyon, Thomas (A'don)
Alexander, Richard Benyon, W. (Buckingham)
Alison, Rt Hon Michael Berry, Hon Anthony
Amery, Rt Hon Julian Best, Keith
Ancram, Michael Bevan, David Gilroy
Arnold, Tom Biffen, Rt Hon John
Aspinwall, Jack Biggs-Davison, Sir John
Atkins, Rt Hon H.(S'thorne) Blackburn, John
Atkins, Robert(Preston N) Blaker, Peter
Atkinson, David (B'm'th,E) Body, Richard
Baker, Kenneth(St.M'bone) Bonsor, Sir Nicholas
Baker, Nicholas (N Dorset) Bottomley, Peter (W'wich W)
Banks, Robert Bowden, Andrew
Beaumont-Dark, Anthony Boyson, Dr Rhodes
Bendall, Vivian Braine, Sir Bernard
Bennett, Sir Frederic (T'bay) Bright, Graham
Brinton, Tim Hawkins, Sir Paul
Brittan, Rt. Hon. Leon Hawksley, Warren
Brooke, Hon Peter Hayhoe, Barney
Brotherton, Michael Heddle, John
Brown, Michael(Brigg & Sc'n) Henderson, Barry
Browne, John (Winchester) Hicks, Robert
Bruce-Gardyne, John Higgins, Rt Hon Terence L.
Bryan, Sir Paul Hill, James
Buchanan-Smith, Rt. Hon. A. Hogg, Hon Douglas (Gr'th'm)
Buck, Antony Holland, Philip (Carlton)
Budgen, Nick Hooson, Tom
Burden, Sir Frederick Hordern, Peter
Butcher, John Howe, Rt Hon Sir Geoffrey
Carlisle, John (Luton West) Howell, Ralph (N Norfolk)
Carlisle, Kenneth (Lincoln) Hunt, David (Wirral)
Carlisle, Rt Hon M. (R'c'n) Hunt, John (Ravensbourne)
Chalker, Mrs. Lynda Hurd, Rt Hon Douglas
Channon, Rt. Hon. Paul Irvine, Rt Hon Bryant Godman
Chapman, Sydney Irving, Charles (Cheltenham)
Churchill, W. S. Jenkin, Rt Hon Patrick
Clark, Sir W. (Croydon S) Jessel, Toby
Clarke, Kenneth (Rushcliffe) Johnson Smith, Sir Geoffrey
Cockeram, Eric Jopling, Rt Hon Michael
Colvin, Michael Joseph, Rt Hon Sir Keith
Cope, John Kaberry, Sir Donald
Corrie, John Kershaw, Sir Anthony
Costain, Sir Albert Kitson, Sir Timothy
Cranborne, Viscount Knight, Mrs Jill
Critchley, Julian Knox, David
Crouch, David Lamont, Norman
Dickens, Geoffrey Lang, Ian
Dorrell, Stephen Langford-Holt, Sir John
Douglas-Hamilton, Lord J. Latham, Michael
Dover, Denshore Lawrence, Ivan
du Cann, Rt Hon Edward Lawson, Rt Hon Nigel
Dunn, Robert (Dartford) Lee, John
Durant, Tony Le Marchant, Spencer
Eden, Rt Hon Sir John Lennox-Boyd, Hon Mark
Edwards, Rt Hon N. (P'broke) Lester, Jim (Beeston)
Eggar, Tim Lewis, Sir Kenneth (Rutland)
Elliott, Sir William Lloyd, Ian (Havant & W'loo)
Emery, Sir Peter Lloyd, Peter (Fareham)
Eyre, Reginald Loveridge, John
Fairbairn, Nicholas Lyell, Nicholas
Fairgrieve, Sir Russell McCrindle, Robert
Faith, Mrs Sheila MacKay, John (Argyll)
Farr, John Macmillan, Rt Hon M.
Fell, Sir Anthony McNair-Wilson, M. (N'bury)
Finsberg, Geoffrey McNair-Wilson, P. (New F'st)
Fisher, Sir Nigel McQuarrie, Albert
Fletcher, A. (Ed'nb'gh N) Major, John
Fletcher-Cooke, Sir Charles Marland, Paul
Fookes, Miss Janet Marlow, Antony
Forman, Nigel Marshall, Michael (Arundel)
Fowler, Rt Hon Norman Marten, Rt Hon Neil
Fox, Marcus Mates, Michael
Fraser, Rt Hon Sir Hugh Maude, Rt Hon Sir Angus
Fraser, Peter (South Angus) Mawby, Ray
Fry, Peter Mawhinney, Dr Brian
Gardiner, George (Reigate) Maxwell-Hyslop, Robin
Gardner, Sir Edward Mayhew, Patrick
Garel-Jones, Tristan Mellor, David
Gilmour, Rt Hon Sir Ian Meyer, Sir Anthony
Goodhart, Sir Philip Miller, Hal (B'grove)
Goodlad, Alastair Mills, Iain (Meriden)
Gorst, John Mills, Sir Peter (West Devon)
Gow, Ian Miscampbell, Norman
Gower, Sir Raymond Mitchell, David (Basingstoke)
Grant, Sir Anthony Moate, Roger
Gray, Rt Hon Hamish Monro, Sir Hector
Greenway, Harry Montgomery, Fergus
Griffiths, B.(B'y St. Edm'ds) Moore, John
Griffiths, Peter (Portsm'th N) Morris, M. (N'hampton S)
Grist, Ian Morrison, Hon C. (Devizes)
Grylls, Michael Mudd, David
Gummer, John Selwyn Murphy, Christopher
Hamilton, Hon A. Myles, David
Hamilton, Michael (Salisbury) Neale, Gerrard
Hannam, John Needham, Richard
Haselhurst, Alan Nelson, Anthony
Neubert, Michael Stainton, Keith
Nott, Rt Hon Sir John Stanbrook, Ivor
Onslow, Cranley Stanley, John
Oppenheim, Rt Hon Mrs S. Steen, Anthony
Osborn, John Stevens, Martin
Page, Richard (SW Herts) Stewart, A.(E Renfrewshire)
Parkinson, Rt Hon Cecil Stewart, Ian (Hitchin)
Parris, Matthew Stokes, John
Patten, Christopher (Bath) Stradling Thomas, J.
Pawsey, James Taylor, Teddy (S'end E)
Percival, Sir Ian Tebbit, Rt Hon Norman
Peyton, Rt Hon John Temple-Morris, Peter
Pink, R. Bonner Thompson, Donald
Pollock, Alexander Thorne, Neil (Word South)
Porter, Barry Thornton, Malcolm
Prentice, Rt Hon Reg Townend, John (Bridlington)
Price, Sir David (Eastleigh) Townsend, Cyril D, (B'heath)
Proctor, K. Harvey Trippier, David
Pym, Rt Hon Francis van Straubenzee, Sir W.
Rathbone, Tim Vaughan, Dr Gerard
Rees, Peter (Dover and Deal) Viggers, Peter
Rees-Davies, W. R. Waddington, David
Renton, Tim Wakeham, John
Rhodes James, Robert Waldegrave, Hon William
Ridley, Hon Nicholas Walker, B. (Perth)
Ridsdale, Sir Julian Walker-Smith, Rt Hon Sir D.
Rifkind, Malcolm Wall, Sir Patrick
Rippon, Rt Hon Geoffrey Waller, Gary
Roberts, Wyn (Conway) Walters, Dennis
Rossi, Hugh Ward, John
Rost, Peter Warren, Kenneth
Royle, Sir Anthony Watson, John
Sainsbury, Hon Timothy Wells, Bowen
St. John-Stevas, Rt Hon N. Wells, John (Maidstone)
Shaw, Giles (Pudsey) Wheeler, John
Shaw, Sir Michael (Scarb') Whitelaw, Rt Hon William
Shelton, William (Streatham) Whitney, Raymond
Shepherd, Colin (Hereford) Wickenden, Keith
Shepherd, Richard Wiggin, Jerry
Silvester, Fred Wilkinson, John
Sims, Roger Williams, D.(Montgomery)
Skeet, T. H. H. Winterton, Nicholas
Smith, Tim (Beaconsfield) Wolfson, Mark
Speed, Keith Younger, Rt Hon George
Speller, Tony
Spence, John Tellers for the Noes:
Spicer, Jim (West Dorset) Mr. Carol Mather and
Sproat, Iain Mr. Robert Boscawen.

Question accordingly negatived.

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