Amendment made: No. 6, in page 15, line 33 at end insert
'4A. For the purposes of the Act of 1979, gains arising on the disposal by the Central Board of any shares, or rights to shares, in the new holding company shall not be chargeable gains.'.— [Mr. Ian Stewart.]
§ Motion made, and Question proposed, That the Bill be now read the Third time.1146 12.19 am
§ Dr. McDonald
I do not intend to detain the House on the Third Reading; I want to make only one or two remarks. As has been clear from the debate on the new clauses, the Opposition have sought to alter the Bill in such a way as to lead to the reorganisation of the TSB so that it might the better represent its traditions. We regret that the alterations were not made.
We know that the chairman of the TSB has given assurances that he intends to maintain the tradition of the TSB as personal banks which will continue to serve the local communities in which they were established. The Opposition will be watching the progress of the TSBs after flotation to see whether they fulfil the commitments which the chairman gave in his letter which accompanied the White Paper. We wish them well.
§ Mr. Ashdown
I must express a degree of amazement—the hon. Member for Crawley (Mr. Soames) is doing his usual business of sitting in his seat and making some kind of intervention— [HoN. MEMBERS: "Withdraw."] No doubt he has once again dined too well— [HoN. MEMBERS: "Withdraw."] I make the assumption—
§ Mr. Ashdown
I make the assumption, Mr. Deputy Speaker, that since you do not take interventions from a sedentary position, the hon. Member for Crawley wants to intervene. To satisfy my curiosity as to whether he is as good when speaking on his feet as he is when sitting on his backside, I shall give way to him. It seems that he does not wish to intervene.
As I was saying, I must express a degree of amazement after listening to the hon. Member for Thurrock (Dr. McDonald), who has indicated that the official Opposition will not vote against the Bill. The safeguards for which they asked in Committee and on Second Reading have not been provided by the Government. We are surprised that they have decided not to oppose the Third Reading, because the Government are seeking to change fundamentally an institution which has its roots in the working-class areas of Britain and which has been famous in the past for serving those areas in a way which, as the Minister said, was unique. Now that the Government intend to change the nature of that institution, the Labour party does not intend to vote against them.
The Government have claimed during the passage of the Bill that this is a great advance towards wider share ownership and towards property owning. In reality it is revealed as a move in the opposite direction. The TSB sat uncomfortably in the banking sector and provided competition which the clearing banks could not meet. The London clearing banks obligingly said just that in their evidence to Page. The committee of the London clearing banks put forward to Page the argument that trustee savings banks represented unfair competition. The Page committee rejected that outright.
What the London clearing banks meant when they said that was that the TSBs were reaching parts of the nation which they could not reach, that the TSBs were providing a service which they could not provide and that they were getting at a market which the clearing banks could not get into because of the low operating costs. In the Bill a new 1147 principle is being established. It is not the well-known principle, "If you can't beat them, join them," but rather, "If you can't beat them, get the Government to make them join you." In the absence of the safeguards which we have sought from ther Government and which they have consistently refused to give, the Bill is revealed finally as no more than a mechanism for the Government to do the bidding of the clearing banks, and of the management of the trustee savings banks as well, to the cost of many of their depositors and some of their employees.
The Page committee said that there was a requirement in the banking sector for a third arm. It said that the TSBs could have become that third arm and fulfilled the need that it identified.
All right hon. and hon. Members who have followed the issue closely recognise that some of that pass —perhaps all of it—was sold in the 1976 Act. My hon. Friend the Member for Stockton, South (Mr. Wrigglesworth), who had some dealings with the Act, generously admitted as much in his Second Reading speech. He said:The Bill would not have been before us … had we clarified ownership of the banks in the 1976 Act … it might have been better had we gone down the road of mutuality in 1976."—[Official Report, 14 January 1985; Vol. 71, c. 50.] That is true. That is how we see it.The Bill could have reversed what happened after the 1976 Act. It could have gone a long way towards restoring that mutuality which Page thought so important and which it wished to see encouraged. It could have maintained what the Minister described as the unique character of the TSBs. It could have fulfilled the urgent need that Page identified for a third arm in the British banking sector. Instead, it has taken a noble and in some senses unique institution, founded in the community with the capacity to offer banking to some of our poorest and most deprived areas, and made it into yet another faceless financial conglomerate in the City of London.
My hon. Friend the Member for Stockton, South said on Second Reading that at that stage he would not vote against the Bill, but he called for a number of safeguards. He asked for stronger guarantees about ownership. Those have not been provided. He asked for details of the amount of shares to workers and depositors. We again asked for those in new clause 1. Those, too, have not been provided. He asked for further details on the flotation. Those, too, have not been provided.
The Page committee called for the TSBs to be made into mutual organisations. That has not been done. The committee called for the development of a third force in banking. The Bill will not do that, either. The committee believed that the customer first, profits later ethic that gave cheap banking facilities to the less well off should be preserved. The Bill will almost certainly destroy that unique quality of the TSBs.
The Government had a unique opportunity with the Bill to give a new dimension to an old and proud tradition. They have not taken it, and it is an opportunity that has, sadly, been missed.
There is a need for new types of institutions to stand between the great corporate financial structures so loved by the Tory party and the great corporate state structures beloved by the Labour party. We need community-based 1148 institutions serving individuals rather than either profit or the state. That is what the TSBs could have become. The Bill destroys that opportunity, and the alliance will vote against it.
§ Mr. Pike
I intend to vote against the Third Reading because I believe the Bill to be wrong. I have opposed all its stages, and the only way now to express opposition to it is by voting against the Third Reading.
If the amendments had been carried, they would have provided safeguards for the future of the Trustee Savings Bank, and I regret that they have been rejected. But, even if they had been carried, they would still have provided a bad solution, the Bill would not have been a good one, and I would still have voted against it.
My hon. Friend the Member for St. Helens, South (Mr. Bermingham) raised an important point of order at the start of Report stage. I respect the view of Mr. Speaker, and accept that his ruling was correct. He ruled that it was not for him to determine whether the Bill was legal. However, he did not say that the Bill was legal. He gave no interpretation of that point. I believe that my hon. Friend's point may well have been important. How can one privatise something that, at present, is owned by no one? The Bill is suspect and questionable. Those who vote for it tonight may be voting for a Bill that will be found to be illegal. What will their position be then?
I said, when speaking on one of the amendments, that the trustee savings banks have a long tradition of service, providing a personal banking service for the ordinary working people. I started work in the Midland bank in 1954. The Midland bank then owned the Clydesdale and North of Scotland bank, now the Clydesdale bank. At that time the TSB was playing its traditional role. Since then it has developed rapidly with the introduction of cheque book accounts and Trustcards, and many other developments. I am not opposed to the TSB developing to meet the 1990s and the years to come. No doubt certain changes need to be made to give the TSB the powers and freedom to develop and meet the demands both of present and future customers. But I do not believe that the Bill is the right way forward. It is regrettable that the Government have brought it in.
Once again, the Government express their belief that the employees in an industry should have the right to buy shares, but they are not prepared to make any concession to ensure that there will be worker directors within the organisation. We have not debated that point tonight, but it was debated in Committee. The same thing happened in the case of the royal ordnance factories and in other cases. The Government talk of giving greater participation to the employees of the organisations that they privatise, but they are not prepared to give them any special position on the board of directors. That is something that could have been done.
The Bill is a bad Bill and this is a sad day for the TSB. I hope that it will continue to prosper, but I feel that it will not be many years before it is taken over. Whatever assurances are given by the chairman now, he may soon be replaced. His assurances are not worth the paper on which they are written.
Some years ago there was a local brewery in Burnley, Massey's brewery, which had been there for more than 100 years. It brewed a very good pint of beer. It was taken over by Bass Charrington. An assurance was given that 1149 there would be no closure of the brewery in Burnley. Surprise, surprise—the chairman of Massey's brewery suddenly became chairman of Bass North-West. He was also at that time the hon. Member for Morecambe and Lonsdale. As soon as he became chairman of Bass North-West, the Burnley brewery was closed down.
§ Mr. Michael Meadowcroft (Leeds, West)
Is it not true that many of his right hon. and hon. Friends are not prepared to join the hon. Member for Burnley (Mr. Pike) in the Lobby because one of the unions involved has done a deal? It is sad that, on so important an issue, hon. Members should be inhibited from supporting the hon. Gentleman by such a factor.
§ Mr. Pike
I am not aware of any such undertaking and am certainly not party to it. I am also sure that my hon. Friends on the Front Bench are not party to any such agreement or undertaking.
The brewery I was talking about closed, despite all the undertakings. The identity of and the service provided by the TSB will not survive for long as it will soon be merged and its employees will find themselves out of work. Technology and the existence of too many banks and building societies on the high street mean branch closures in the future. If the TSB is taken over, its employees will find themselves out of work. I hope that the House will think seriously about the Bill and vote against it receiving a Third Reading.
§ Mr. Ian Stewart
I do not want to rehearse the issues in the Bill, as they have already been dealt with. Before the Bill leaves the House, I should like to thank all those who have been responsible for arranging a complex and technical Bill that will provide an important basis for the future of the TSBs. I should also like to thank the hon. Member for Thurrock (Dr. McDonald) and her team for their generally constructive approach to the Bill.
On Second Reading, I spoke of the TSBs' long history and distinguished past. I also said that we were confident that they had an important future. The Bill releases the TSBs from the restrictions of direct parliamentary accountability and opens the way for their further development as they have chosen. On behalf of the Government and, I hope, most if not all hon. Members, I should like to wish them every success in the future. Question put, That the Bill be now read the Third time:—
§ The House divided: Ayes 130, Noes 25.1150
|Division No. 122]||[12.36 am|
|Beaumont-Dark, Anthony||Douglas-Hamilton, Lord J.|
|Boscawen, Hon Robert||Dunn, Robert|
|Bottomley, Mrs Virginia||Durant, Tony|
|Brown, M. (Brigg & Cl'thpes)||Fairbairn, Nicholas|
|Bruinvels, Peter||Favell, Anthony|
|Budgen, Nick||Forsyth, Michael (Stirling)|
|Burt, Alistair||Forth, Eric|
|Butcher, John||Freeman, Roger|
|Chope, Christopher||Gale, Roger|
|Cockeram, Eric||Galley, Roy|
|Conway, Derek||Garel-Jones, Tristan|
|Cranborne, Viscount||Gregory, Conal|
|Dorrell, Stephen||Griffiths, Peter (Portsm'th N)|
|Ground, Patrick||Neale, Gerrard|
|Hamilton, Hon A. (Epsom)||Newton, Tony|
|Hamilton, Neil (Tatton)||Norris, Steven|
|Hanley, Jeremy||Onslow, Cranley|
|Hargreaves, Kenneth||Oppenheim, Phillip|
|Hayes, J.||Page, Richard (Herts SW)|
|Hayward, Robert||Portillo, Michael|
|Henderson, Barry||Powley, John|
|Hickmet, Richard||Proctor, K. Harvey|
|Hind, Kenneth||Raffan, Keith|
|Holt, Richard||Rhodes James, Robert|
|Howarth, Alan (Stratf'd-on-A)||Rhys Williams, Sir Brandon|
|Howarth, Gerald (Cannock)||Roberts, Wyn (Conwy)|
|Howell, Rt Hon D. (G'ldford)||Robinson, Mark (N'port W)|
|Hubbard-Miles, Peter||Rowe, Andrew|
|Hunt, David (Wirral)||Sainsbury, Hon Timothy|
|Hunter, Andrew||Shaw, Sir Michael (Scarb')|
|Jones, Robert (W Herts)||Shepherd, Colin (Hereford)|
|Jopling, Rt Hon Michael||Smith, Tim (Beaconsfield)|
|Kellett-Bowman, Mrs Elaine||Soames, Hon Nicholas|
|Key, Robert||Spencer, Derek|
|King, Roger (B'ham N'field)||Stevens, Lewis (Nuneaton)|
|Knight, Gregory (Derby N)||Stevens, Martin (Fulham)|
|Knight, Mrs Jill (Edgbaston)||Stewart, Allan (Eastwood)|
|Knowles, Michael||Stewart, Andrew (Sherwood)|
|Leigh, Edward (Gainsbor'gh)||Stewart, Ian (N Hertf'dshire)|
|Lennox-Boyd, Hon Mark||Stradling Thomas, J.|
|Lester, Jim||Sumberg, David|
|Lightbown, David||Taylor, John (Solihull)|
|Lilley, Peter||Taylor, Teddy (S'end E)|
|Lloyd, Peter, (Fareham)||Terlezki, Stefan|
|Lord, Michael||Thomas, Rt Hon Peter|
|Luce, Richard||Thompson, Donald (Calder V)|
|McCurley, Mrs Anna||Thompson, Patrick (N'ich N)|
|Macfarlane, Neil||Thurnham, Peter|
|MacGregor, John||Tracey, Richard|
|Maclean, David John||Twinn, Dr Ian|
|Malins, Humfrey||Walden, George|
|Maples, John||Waller, Gary|
|Marland, Paul||Wardle, C. (Bexhill)|
|Mather, Carol||Watson, John|
|Maxwell-Hyslop, Robin||Wheeler, John|
|Mayhew, Sir Patrick||Whitfield, John|
|Mellor, David||Whitney, Raymond|
|Merchant, Piers||Wilkinson, John|
|Meyer, Sir Anthony||Winterton, Mrs Ann|
|Miller, Hal (B'grove)||Winterton, Nicholas|
|Mills, Iain (Meriden)||Wolfson, Mark|
|Mills, Sir Peter (West Devon)||Wood, Timothy|
|Mitchell, David (NW Hants)||Yeo, Tim|
|Montgomery, Sir Fergus||Tellers for the Ayes:|
|Moynihan, Hon C.||Mr. Ian Lang and|
|Murphy, Christopher||Mr. John Major.|
|Alton, David||Loyden, Edward|
|Ashdown, Paddy||Nellist, David|
|Beith, A. J.||Parry, Robert|
|Bruce, Malcolm||Penhaligon, David|
|Carlile, Alexander (Montg'y)||Pike, Peter|
|Clay, Robert||Skinner, Dennis|
|Craigen, J. M.||Snape, Peter|
|Cunliffe, Lawrence||Stewart, Rt Hon D. (W Isles)|
|Davies, Ronald (Caerphilly)||Welsh, Michael|
|Evans, John (St. Helens N)||Wilson, Gordon|
|Home Robertson, John|
|Hughes, Simon (Southwark)||Tellers for the Noes:|
|Kennedy, Charles||Mr. Michael Meadowcroft and|
|Lewis, Terence (Worsley)||Mr. Archy Kirkwood.|
|Lloyd, Tony (Stretford)|
§ Question accordingly agreed to.
§ Bill read the Third time, and passed.