§ '(1) The Secretary of State shall supervise the functions of the Takeover Panel in formulating publishing and applying the rules of the Takeover Code, and shall himself have power to make, modify and enforce the rules of the Takeover Code, either directly or through the agency of the Takeover Panel.
§ (2) The rules of the Takeover Code shall take effect as if they were made by the Secretary of State under this Act.
§ (3) The Secretary of State may exercise any of the functions described in this section notwithstanding that any or all of the persons affected by the exercise of such functions are not authorised persons for the purposes of this Act.
§ (4) An authorised person who contravenes rules made or described under this section shall be treated as having contravened rules made under Chapter V of Part I of this Act or, in the case of a person who is an authorised person by virtue of his membership of a recognised self-regulating organisation or recognised professional body, as having contravened the rules of that organisation or body.
§ (5) A person other than an authorised person who contravenes rules made or described under this section shall be guilty of an offence and liable—
- (a) on conviction on indictment, to imprisonment for a term not exceeding two years or to a fine or both;
- (b) on summary conviction, to imprisonment for a term not exceeding six months or to a fine not exceeding the statutory maximum or both.'.—[Mr. Gould.]
§ Brought up, and read the First time.
§ Mr. GouldI beg to move, That the clause be read a Second time.
The Bill regulates the very wide area of virtually all the investment business conducted in the City. But it is, to say the least, odd and unfortunate that we are not dealing with one of the matters that has put the City into the headlines in recent weeks. I refer to the merger mania that has broken out in the City, which now involves billions of pounds and virtually all our major firms.
The Bill is basically concerned with setting up a Securities and Investments Board to provide a structure of authorisation for investment business. But partly as a result of amendments in Committee, the SIB now deals with issues well beyond the scope of authorisation. For example, it deals with unauthorised persons and the investigation of insider dealing. It is, after all, entitled the Securities and Investment Board, and is not just concerned with investments. Its role as a securities authority should 541 incline the Minister and the House towards believing that it should accept some responsibility in the sphere of takeover bids.
That view is advanced and supported by Professor Gower in his seminal report on the whole question of City regulation and administration. It is not as though the need for such rules is unrecognised. The need for rules to regulate procedures in takeover bids was recognised by the City itself as long ago as 1968, when it felt that it was very much under pressure, and it introduced for the first time the takeover code.
It is appropriate to pay tribute to the work of the takeover code and of the panel that administers it. The question is not essentially the content of the rules but increasingly, and more pressingly, whether the voluntary arrangements underpinning those rules suffice. We face a new situation, and that is why we have this Bill. The City will now be dominated by huge, powerful new players, by new techniques in financing, and by grand takeover bids which this year already total, I believe, about £20 billion. Thus, the sums involved are massive. Yet apparently, judging from the Bill, we are not yet prepared to subject that one aspect of the City to statutory rules.
The Takeover Panel and the rules of the takeover code will no longer be sufficient to keep control of the increasingly difficult situation. The crucial question is what will happen if the clear rules of the takeover code are breached. What sanctions will follow? What will happen to those in breach? We have a recent example. Only yesterday it was reported that in the context of Dixons' bid for Woolworth, the merchant bank Rothschild was severely rapped over the knuckles by the Takeover Panel for what was described as permitting a materially deficient profit forecast in the exchange of information relevant to that takeover battle. But having rapped the bank over the knuckles, what does the Takeover Panel do?
One assumes that Rothschild is jealous of its reputation and that it will respond. One assumes that it did not welcome being rapped over the knuckles and that it will make an excuse, or will not repeat the mistake. However, what happens if those involved do not care so much about their reputation, are prepared to take such reprimands and to toss them aside, accepting them as the price for obtaining a lot of money? What would happen if Rothschild and other prominent and reputable City institutions were rapped over the knuckles so frequently because their practices were so endemic that standards fell so low that nobody took any notice of being rapped over the knuckles? We have seen that happen,in the City before under a regime of voluntary and self-regulation. In a rapidly changing period when huge sums of money are involved, new techniques are being introduced and huge new players are getting in on the act, how can a voluntary code keep control?
Further evidence for that concern can be found in an article published in The Sunday Times by the financial journalist Ivan Fallon. He says:
In bid after hid these days there is evidence that a merchant bank shamelessly uses its fund management side to support its side in the battle, sometimes getting it to add to its holding, more often persuading it to vote its shares the right way. There are so many instances of odd purchases made by a merchant bank, on behalf of clients who 542 presumably never know how their money is being used, at key times in takeover bids that it seems to me the rules are being breached almost weekly."I do not say that that paints an accurate picture in every respect, but it is sufficiently accurate to worry many Opposition Members, and it should worry the Minister too.Recently, the Takeover Panel issued its own rules on Chinese walls to ensure that the practice described by that journalist does not occur during takeover bids. It is excellent that they should be published, but unlike the rules published by the SIB under the Bill the rules on Chinese walls have no effect. There is no sanction attached to them and no statutory back-up. The SIB issues its rules on Chinese walls, and, side by side, the Takeover Panel issues its rules for a similar purpose. It could hardly be argued that the rules issued by the Takeover Panel are less important than those of the SIB, as they deal with an extremely important aspect of City operations. Yet the Takeover Panel's rules lack that sanction or statutory authority.
6 pm
I believe that the clear and sensible solution to the problem is to do as Professor Gower originally recommended — to bring the Takeover Panel and therefore the rules of the takeover code within the framework created by the Bill. I believe that there is considerable support in the City for this view, and the Government have indicated their willingness to contemplate the solution. I am disappointed, to say the least, that apparently the Government have thought about it and decided to do nothing. I hope that, even at this late stage, they will take the opportunity to do something about an area that is going to be increasingly difficult to control. If they do not do something, I believe that we shall he storing up a disaster for the future.
§ Mr. FletcherI am grateful to the hon. Member for Dagenham (Mr. Gould) for bringing this point before the House even, as he himself said in his closing remarks, at this late stage. It is unlikely that there will be any other new clauses or amendments as important as this proposal, but it would be quite wrong for the Bill to go further without the House at least expressing some views on the role of the Takeover Panel.
I should like to take this opportunity to express my appreciation—if it will not damage him too much—of the masterful way in which the hon. Member for Dagenham has handled his brief on the Bill and, indeed, on a previous occasion on the Insolvency Bill on which I had the pleasure of working with him. Having said that, I do not go all the way with the proposal that he has placed before the House, for reasons that I shall describe briefly.
It is hard to imagine that the panel can stand still while everything else in the City moves. Indeed, everything else moves with great speed. Yet it appears to be the considered view of the panel, to the best of my knowledge, that it can go on as it has done for some years, while everything else toughens up in terms of the regulation and overall practices of the City.
I agree with the hon. Member for Dagenham that the panel has worked well over the years, but it cannot continue to work with club rules while all around there is a much higher degree of professionalism and, of course, a much higher degree of competition requiring tougher 543 and more professional regulations. These are, indeed, the criteria on which Government policy and the Bill are based.
The panel has made no case of which I am aware as to why its activities should be an exception to the general rule and policy underlying the Government's approach to the City. Although the panel may not have changed its view about its role in the new City regime, I think that important parts of the City and industry would disagree with the panel in that respect. Even in the past few months, I believe that there has been some change in the operation of many practitioners in the City. I know that the SIB has enough on its plate to keep it going for some time, as has my hon. and learned Friend the Minister.
While I am making what are probably the last remarks that I shall make on the Bill perhaps I may say that my hon. and learned Friend has done an excellent job in piloting the Bill through the House. He is not to blame for all its inadequacies. He has done a fine job. While he has been doing that, I have gone back to working for a living. I have been at the receiving end of regulatory decision-making of one kind or another, and it has been rather tough at times. I will spare the House my experiences of the last few months in this respect.
I ask my hon. and learned Friend not to leave this final stone unturned, even if I did when I was in the Department. I do not wish to see the panel in a regulatory straitjacket. I think that if the proposal of the hon. Member for Dagenham were accepted, that would be the case. I should like to see a more professional and representative body than exists in the City at present. I believe that the executive should be stronger and have more authority. The executive and the panel should be comprised not simply of City practitioners sitting in judgment on themselves—indeed, that is a remark that I have heard frequently from City practitioners— but of the users of financial services — the victims of their decisions. The users, of course, are industrial and commercial businesses and the managers of those businesses, to whom the club rules of the panel are often something of a mystery. I know how anguished and frustrated they feel about some of the decisions that are made and the time that it can take to get any action following a decision.
Again, I agree with the hon. Member for Dagenham in wondering what will happen if, as the competitive climate in the City grows, merchant banks and others—perhaps not the old guard or the sort of firms that we are used to in the City, but newcomers and big international players —are less likely to accept the club rules or the sort of ticking off that the panel gives in the hot situations that exist, particularly over mergers.
My hon. and learned Friend will be delighted to hear that I have no proposal for legislation. In fact, I have no idea how the problem might be tackled at this late stage, except to suggest—this is nothing new or original, but it is worth while—a short, sharp, independent review of the panel's role and, most important, its authority.
The panel plays a critical role in the City. I believe that it will be well worth while to re-examine this, particularly if its credibility is to be maintained as we move into this highly competitive situation in financial markets and services.
My hon. and learned Friend will recall that, at the beginning of this legislative process, he was under some pressure to include Lloyd's in the Bill. I think that he 544 handled that extremely well and responsibly by appointing someone to examine Lloyd's in relation to legislation and the changes that the Government propose. That is naturally a bigger and more complicated task than examination of the panel. However, I believe that it would be better for the Department to hold an independent reexamination of the panel rather than to wait for a year or so, when things may have started to crumble. This is an area where a little foresight now might save a lot of trouble in a few months' time.
§ Mr. Ian Wrigglesworth (Stockton, South)I agree very much with what the hon. Member for Edinburgh, Central (Mr. Fletcher) has said about the panel and the need for it not to carry on as it is and has been doing, although, like him, I believe that it has done a very good job. Times are changing. Indeed, they have already changed in recent months, and, as everybody knows, they will change ever more later this year and next year.
I do not think that the proposal in the new clause would put the Takeover Panel in a straitjacket. I am sure that the members of the SIB would not regard it as a straitjacket into which all the SROs must fit, conform and be restricted. Indeed, the system will not work if it operated in a rigid and inflexible manner. Therefore, the hon. Gentleman's conclusion is wrong. A review would only cause confusion in a situation that is already confused, and create great uncertainty. It is quite unnecessary when a solution is available such as that contained in the new clause.
I support the proposal embodied in the new clause because the future responsibilities of the panel will be considerably greater and more important than at present. With the number of takeover bids now occuring and the changed behaviour to which the panel and the Director General of Fair Trading have already referred, we have had a taste of what is likely to happen after the big bang takes place. Life will become rougher and tougher in the City, so the Takeover Panel needs to be within the net of the regulatory framework, not out on a limb, if it is to perform its critical, central function.
It is because the role of the panel is so critical that it should be contained within the new regulatory framework. In a sense, it is almost a vote of no confidence in the new framework if the panel is not contained within it. It is such an important part of the regulation of the City that to be outside the new framework would reflect badly and also confuse many people about the ability of the new regime to operate effectively. For the credibility of the new system and for the effectiveness of the future work of the panel, it must be included within the SIB's remit. It would be an anomaly were it to float free. There is great danger that there will be not only overlap and confusion but conflict between the bodies responsible for that area. Putting the panel within the ambit of the SIB would help to avoid such confusion and potential conflict.
I hope that the Minister will not close the door completely on the proposal. I hope that, even at this late stage, it is possible for him to give some hope that this very important body will be seen to be part of the new framework, that it will come under the SIB and will form part of what everyone in this House — despite our various views—hopes will be a successful system of City regulation when the big bang comes.
§ Mr. D. N. Campbell-Savours (Workington)I intend to be very brief. I had experience last year of abuse by one 545 company representing Scottish and Newcastle Breweries during the battle for the takeover of Matthew Brown Breweries— a major brewer in my constituency and in Blackburn. I hope that the Minister will take on board the comments of hon. Members about the great need for some form of regulatory control, especially to cover the operations of merchant banks involved in takeover decisions in advising their clients and securing shares on their behalf.
6.15 pm
I wish to draw attention to the Scottish and Newcastle takeover of Matthew Brown. When the abuse took place in the stock exchange on the afternoon of 11 December, I immediately came to the House to table an early-day motion to protect the interests of my constituents. In the new environment envisaged in the new clause, I believe that the early-day motion would have led to action against the companies concerned. The motion tells the story. It states:
That this House condemns the highly irregular activity and questionable practice of Scottish and Newcastle Breweries on the London Stock Exchange who at 3.30 p.m. on Wednesday 11th December extended their deadline for acceptances of the Scottish and Newcastle's offer for Matthew Brown's shares; recognises that by 3.30 p.m., the original deadline set by Scottish and Newcastle in their own offer document, the attempt to take over Matthew Brown had failed, with the acquisition of only 47 per cent. of Matthew Brown's shares; expresses profound concern over the fact that by subterfuge and with the use of irregularity Scottish and Newcastle secured a further 3 per cent. of Matthew Brown shares by 5 o'clock at which time they claimed control; welcomes the decision to convene the full City takeover panel on Thursday 12th December to carry out an inquiry into Scottish and Newcastle's activities; and believes that Scottish and Newcastle's predatory acquisition of Matthew Brown is to be condemned by all those who believe in fair dealing and fair play."I returned to the House to table the motion because I was advised by certain persons that it was important to make as much noise as possible to ensure that no decisions were ducked. I secured a number of interviews in the national media, including breakfast television, to provide publicity for the case prior to the Takeover Panel examining the matter in the City at 10 o'clock the following morning.I stayed up until 3 am. Indeed, I remember telephoning my hon. Friend the Member for Hackney, South and Shoreditch (Mr. Sedgemore) at 2 am on a matter relating to Lloyd's—and he was in bed. I was advised that it was important to make as much noise as possible to ensure that the panel dealt with the matter in a reasonable way and that no one could secure the takeover by what I described in my motion as "irregularity."
What would have happened if the new clause had, in fact, been in legislation? I understand that the merchant banks advising Scottish and Newcastle would have found themselves in difficulty. They might have been in contravention of rules, which might have led to proceedings. If that had happened, I am sure they would have advised Scottish and Newcastle, prior to the 3.30 pm deadline, not to enter into such questionable activity. That would have avoided all the difficulty and hassle that I, a number of my hon. Friends and others experienced during the night of 11 December.
I hope that the Minister will take on board my comments about that incident, and also those of my hon. 546 Friend the Member for Dagenham (Mr. Gould) about other incidents. There is a great deal of public concern. People want to feel sure that the rules are being complied with in every way. The Minister, by accepting the new clause, will have the opportunity to achieve precisely that.
§ Mr. HowardFirst, I thank my hon. Friend the Member for Edinburgh, Central (Mr. Fletcher) for his kind remarks during his contribution. I have paid tribute to him for his responsibility for the Bill and I am happy to join in the tribute which he paid to the hon. Member for Dagenham (Mr. Gould).
The hon. Member for Dagenham referred to the Government's original attitude to the issue that is taken up by the new clause. I remind the House that the White Paper on financial services stated that the panel had been
a good example of self-regulation working in an important area of the securities market in the United Kingdom. The Government wish it to continue to do so. If practitioners and users of the securities market felt that statutory backing would be helpful, the Government would be willing to consider it.Following the publication of the White paper, we received representations from various bodies on this issue. Some favoured a degree of statutory backing, but many were opposed to it. The panel itself, on which many City organisations are represented, argued against statutory backing, as did the Governor of the Bank of England. In the light of the advice that we received, having approached the matter with an entirely open mind, as stated in the White Paper, the Government decided not to include provisions in the Bill on the regulation of takeovers. We believed, and continue to believe—our belief appears to be shared by most hon. Members who have contributed to this short debate—that the panel is doing a good job in regulating takeovers on a non-statutory basis and that it enjoys the support of the City. We announced our decision when the Bill was published in December and we have received no representations that the decision should he reversed.Experience indicates that the conduct of takeovers is an area which is best left, as far as possible, to self-regulation rather than statutory provision. The City code on takeovers and mergers, and its administration by the panel, compares favourably with the more legalistic approach that is adopted in the United States. There are few in the City, or in industry and commerce, who would wish to move towards the American model if we can possibly avoid it.
I would argue that all the examples which have been cited by Opposition Members during the course of their observations strengthen the Government's case rather than detract from it. They have not been able to point to any example of anyone flouting the takeover panel. There may have been instances where, in the view of the panel, the code has been breached, but in those instances the panel has so ruled and the panel's decision has been accepted. As for the example cited by the hon. Member for Workington (Mr. Campbell-Savours), I would not care to speculate on the extent to which his experience on breakfast television may have influenced the decision of the panel. The fact is that the panel came to a decision which even the hon. Gentleman recognises was the right one to make.
§ Mr. Campbell-SavoursWhat about the financial advisers? What happened to them?
§ Mr. HowardThe point is that no attempt has been made to flout any decision of the panel. The panel's decisions have been respected.
The hon. Member for Dagenham posed a hypothetical question and asked what might happen if a decision of the panel were to be flouted. I face that question and address it. The Bill already contains powers which could be used to support the takeover code. There are wide-ranging powers to make conduct of business rules for authorised businesses in part 1, chapter V and it would be possible to require authorised businesses acting for participants in the hid to conduct themselves in ways which would support the code. Under part IV, obligations could be placed on listed companies. Clause 138 in part V enables the conduct of offers to be regulated. There would also be an indirect impact even on unauthorised offerers or offerees because clause 52 severely limits the circumstances in which investment advertisements can be issued by someone who is not authorised.
I suggest that the Takeover Panel is doing a good job and that there is every reason to suppose that it will continue to do so. I listened carefully to what was said by my hon. Friend the Member for Edinburgh, Central but I cannot go along with his argument that there is a need for a review of the sort for which he asked. I believe that there are powers in the Bill which could be used to support the code if necessary. It is on that basis that I invite the House to reject the new clause.
§ Mr. GouldI am grateful to the hon. Member for Edinburgh, Central (Mr. Fletcher) for his kind personal remarks and for his support in principle of the new clause. I understand his reluctance to commit himself to the detail of it. I am grateful also to my hon. Friend the Member for Workington (Mr. Campbell-Savours) and to the hon. Member for Stockton, South (Mr. Wrigglesworth) for their support for the new clause.
I cannot welcome the Minister's response in the same terms. By relying upon the views expressed to him by practitioners and users of the takeover code, he was applying the wrong test. His obligation was to apply the test which he has adopted in other instances, that of the public interest and the proper regulation of the City. The Minister should not confine himself to those who in one respect or another have a vested interest in the situation as it exists.
I think that the Minister missed the point of the example stated by my hon. Friend the Member for Workington. We believe that one of the beneficial consequences of effective regulation is that it has a prophylactic effect and deters the breaking of rules. That is not the same as coming along ex post facto, assuming that one is lucky enough to detect what has gone wrong and who was responsible, to issue a stern warning and no more. We want a proper system of rules, proper sanctions and proper penalties so that people are deterred from breach. What worries so many of us is the vast volume of breach that is taking place, which is largely undetected and unpunished.
For all these reasons I fear that I cannot be satisfied——
§ Mr. Campbell-SavoursIs this not an area to which the next Labour Government will have to return with new legislation? There are clear deficiencies, and it seems that the Government have no desire to deal with them.
§ Mr. GouldMy hon. Friend is right. Irrespective of the colour of the next Government — I have a firm view about that which, I am glad to say, is shared by all commentators and opinion polls, which is that there will be a Labour Government—that Administration will be obliged to legislate in this area. The developments that will take place will demand nothing less. For all these reasons feel that we must press the matter to a Division.
§ Question put, That the clause be read a Second time:—
§ The House divided: Ayes 113, Noes 215.
550| Division No. 221] | [6.26pm |
| AYES | |
| Adams, Allen (Paisley N) | Kirkwood, Archy |
| Alton, David | Leadbitter, Ted |
| Archer, Rt Hon Peter | Leighton, Ronald |
| Ashdown, Paddy | Lewis, Terence (Worsley) |
| Atkinson, N. (Tottenham) | McCartney, Hugh |
| Banks, Tony (Newham NW) | McDonald, Dr Oonagh |
| Barron, Kevin | McKay, Allen (Penistone) |
| Bell, Stuart | McNamara, Kevin |
| Bennett, A. (Dent'n & Red'sh) | Madden, Max |
| Blair, Anthony | Meadowcroft, Michael |
| Boyes, Roland | Mikardo, Ian |
| Bruce, Malcolm | Millan, Rt Hon Bruce |
| Caborn, Richard | Mitchell, Austin (G't Grimsby) |
| Callaghan, Rt Hon J. | Nellist, David |
| Callaghan, Jim (Heyw'd & M) | Orme, Rt Hon Stanley |
| Campbell-Savours, Dale | Owen, Rt Hon Dr David |
| Canavan, Dennis | Park, George |
| Carter-Jones, Lewis | Parry, Robert |
| Clarke, Thomas | Pendry, Tom |
| Clay, Robert | Pike, Peter |
| Clelland, David Gordon | Powell, Raymond (Ogmore) |
| Cocks, Rt Hon M. (Bristol S) | Prescott, John |
| Cohen, Harry | Radice, Giles |
| Coleman, Donald | Randall, Stuart |
| Cook, Frank (Stockton North) | Redmond, Martin |
| Cook, Robin F. (Livingston) | Rees, Rt Hon M. (Leeds S) |
| Corbyn, Jeremy | Roberts, Allan (Bootle) |
| Crowther, Stan | Roberts, Ernest (Hackney N) |
| Cunningham, Dr John | Robertson, George |
| Davies, Ronald (Caerphilly) | Robinson, G. (Coventry NW) |
| Davis, Terry (B'ham, H'ge H'l) | Rogers, Allan |
| Deakins, Eric | Rowlands, Ted |
| Dewar, Donald | Sedgemore, Brian |
| Dormand, Jack | Sheerman, Barry |
| Dubs, Alfred | Sheldon, Rt Hon R. |
| Eastham, Ken | Shore, Rt Hon Peter |
| Edwards, Bob (W'h'mpt'n SE) | Short, Ms Clare (Ladywood) |
| Fatchett, Derek | Silkin, Rt Hon J. |
| Faulds, Andrew | Smith, C.(Isl'ton S & F'bury) |
| Fields, T. (L'pool Broad Gn) | Smith, Rt Hon J. (M'ds E) |
| Fisher, Mark | Snape, Peter |
| Foot, Rt Hon Michael | Soley, Clive |
| Foulkes, George | Spearing, Nigel |
| Freeson, Rt Hon Reginald | Steel, Rt Hon David |
| Freud, Clement | Stewart, Rt Hon D. (W Isles) |
| Garrett, W. E. | Straw, Jack |
| George, Bruce | Thomas, Dr R. (Carmarthen) |
| Godman, Dr Norman | Tinn, James |
| Gould, Bryan | Wareing, Robert |
| Hamilton, James (M'well N) | Williams, Rt Hon A. |
| Hamilton, W. W. (Fife Central) | Wilson, Gordon |
| Hancock, Michael | Winnick, David |
| Haynes, Frank | Woodall, Alec |
| Hogg, N. (C'nauld & Kilsyth) | Wrigglesworth, Ian |
| Holland, Stuart (Vauxhall) | |
| Hoyle, Douglas | Tellers for the Ayes: |
| Janner, Hon Greville | Mr. John McWilliam and Mr. Don Dixon. |
| Kaufman, Rt Hon Gerald | |
| Kennedy, Charles |
| NOES | |
| Alexander, Richard | Ancram, Michael |
| Alison, Rt Hon Michael | Ashby, David |
| Amess, David | Aspinwall, Jack |
| Atkinson, David (B'm'th E) | Griffiths, Peter (Portsm'th N) |
| Baker, Nicholas (Dorset N) | Ground, Patrick |
| Baldry, Tony | Grylls, Michael |
| Banks, Robert (Harrogate) | Gummer, Rt Hon John S |
| Bellingham, Henry | Hamilton, Hon A. (Epsom) |
| Benyon, William | Hamilton, Neil (Tatton) |
| Best, Keith | Hampson, Dr Keith |
| Bevan, David Gilroy | Hannam, John |
| Biffen, Rt Hon John | Hargreaves, Kenneth |
| Biggs-Davison, Sir John | Harris, David |
| Blackburn, John | Harvey, Robert |
| Blaker, Rt Hon Sir Peter | Haselhurst, Alan |
| Body, Sir Richard | Hawkins, C. (High Peak) |
| Boscawen, Hon Robert | Hawkins, Sir Paul (N'folk SW) |
| Bottomley, Mrs Virginia | Hayward, Robert |
| Bowden, A. (Brighton K'to'n) | Heathcoat-Amory, David |
| Bowden, Gerald (Dulwich) | Henderson, Barry |
| Braine, Rt Hon Sir Bernard | Heseltine, Rt Hon Michael |
| Brandon-Bravo, Martin | Hickmet, Richard |
| Bright, Graham | Hicks, Robert |
| Brinton, Tim | Higgins, Rt Hon Terence L. |
| Brooke, Hon Peter | Hill, James |
| Brown, M. (Brigg & Cl'thpes) | Hind, Kenneth |
| Browne, John | Hirst, Michael |
| Bruinvels, Peter | Hogg, Hon Douglas (Gr'th'm) |
| Bryan, Sir Paul | Holland, Sir Philip (Gedling) |
| Budgen, Nick | Holt, Richard |
| Burt, Alistair | Hordern, Sir Peter |
| Butcher, John | Howard, Michael |
| Butler, Rt Hon Sir Adam | Howell, Rt Hon D. (G'ldford) |
| Butterfill, John | Hunter, Andrew |
| Carlisle, John (Luton N) | Jenkin, Rt Hon Patrick |
| Carlisle, Kenneth (Lincoln) | Jessel, Toby |
| Carlisle, Rt Hon M. (W'ton S) | Johnson Smith, Sir Geoffrey |
| Carttiss, Michael | Jones, Robert (Herts W) |
| Chapman, Sydney | Kershaw, Sir Anthony |
| Chope, Christopher | Key, Robert |
| Churchill, W. S. | Knight, Greg (Derby N) |
| Clark, Dr Michael (Rochford) | Knowles, Michael |
| Clark, Sir W. (Croydon S) | Lamont, Norman |
| Clarke, Rt Hon K. (Rushcliffe) | Lang, Ian |
| Clegg, Sir Walter | Latham, Michael |
| Colvin, Michael | Lawler, Geoffrey |
| Conway, Derek | Lawrence, Ivan |
| Coombs, Simon | Lawson, Rt Hon Nigel |
| Cope, John | Lennox-Boyd, Hon Mark |
| Couchman, James | Lester, Jim |
| Cranborne, Viscount | Lightbown, David |
| Crouch, David | Lilley, Peter |
| Currie, Mrs Edwina | Lord, Michael |
| Dickens, Geoffrey | McCrindle, Robert |
| Dicks, Terry | McCurley, Mrs Anna |
| Douglas-Hamilton, Lord J. | MacGregor, Rt Hon John |
| Dunn, Robert | MacKay, John (Argyll & Bute) |
| Durant, Tony | Maclean, David John |
| Edwards, Rt Hon N. (P'broke) | McNair-Wilson, M. (N'bury) |
| Emery, Sir Peter | Major, John |
| Evennett, David | Marlow, Antony |
| Fairbairn, Nicholas | Mates, Michael |
| Fallon, Michael | Mather, Carol |
| Farr, Sir John | Maude, Hon Francis |
| Finsberg, Sir Geoffrey | Maxwell-Hyslop, Robin |
| Fletcher, Alexander | Meyer, Sir Anthony |
| Forman, Nigel | Miller, Hal (B'grove) |
| Forsyth, Michael (Stirling) | Moate, Roger |
| Forth, Eric | Moynihan, Hon C. |
| Fowler, Rt Hon Norman | Nelson, Anthony |
| Fox, Marcus | Newton, Tony |
| Franks, Cecil | Norris, Steven |
| Fraser, Peter (Angus East) | Onslow, Cranley |
| Freeman, Roger | Osborn, Sir John |
| Galley, Roy | Ottaway, Richard |
| Gardner, Sir Edward (Fylde) | Page, Sir John (Harrow W) |
| Garel-Jones, Tristan | Patten, J. (Oxf W & Abgdn) |
| Goodhart, Sir Philip | Pawsey, James |
| Gorst, John | Percival, Rt Hon Sir Ian |
| Gow, Ian | Powell, William (Corby) |
| Grant, Sir Anthony | Proctor, K. Harvey |
| Greenway, Harry | Rhodes James, Robert |
| Griffiths, Sir Eldon | Rhys Williams, Sir Brandon |
| Ridsdale, Sir Julian | Twinn, Dr Ian |
| Rossi, Sir Hugh | van Straubenzee, Sir W. |
| Rowe, Andrew | Viggers, Peter |
| Sainsbury, Hon Timothy | Waddington, David |
| Sayeed, Jonathan | Wakeham, Rt Hon John |
| Shelton, William (Streatham) | Walden, George |
| Sims, Roger | Walker, Bill (T'side N) |
| Skeet, Sir Trevor | Waller, Gary |
| Smith, Tim (Beaconsfield) | Ward, John |
| Soames, Hon Nicholas | Wardle, C. (Bexhill) |
| Spencer, Derek | Watts, John |
| Spicer, Jim (Dorset W) | Wells, Bowen (Hertford) |
| Squire, Robin | Wells, Sir John (Maidstone) |
| Stanbrook, Ivor | Whitfield, John |
| Steen, Anthony | Whitney, Raymond |
| Stern, Michael | Wiggin, Jerry |
| Stevens, Lewis (Nuneaton) | Wilkinson, John |
| Stewart, Allan (Eastwood) | Winterton, Mrs Ann |
| Stewart, Andrew (Sherwood) | Wolfson, Mark |
| Taylor, John (Solihull) | Wood, Timothy |
| Taylor, Teddy (S'end E) | Yeo, Tim |
| Temple-Morris, Peter | Younger, Rt Hon George |
| Thomas, Rt Hon Peter | |
| Thompson, Donald (Calder V) | Tellers for the Noes: |
| Thompson, Patrick (N'ich N) | Mr. Peter Lloyd and Mr. Gerald Malone. |
| Thorne, Neil (Ilford S) | |
| Thornton, Malcolm |
§ Question accordingly negatived.