(1) Before the appointed day the Minister shall lay before both Houses of Parliament an order containing the memorandum and articles of association of the successor company to the National Freight Corporation.
(2) The memorandum and articles of association shall contain provisions to ensure that the Minister shall retain a majority of the securities of the company and that the assets of the successor company shall not be sold without the consent of the Minister.—[Mr. Prescott.]
I beg to move, That the clause be read a Second time.
The clause is concerned with an essential feature of the Bill, namely, the denationalisation of the National Freight Corporation. It is designed to achieve certain safeguards in the transition from being a public company, or perhaps a nationalised industry or corporation, to being a public-private company. It seeks to protect the public interests of the employees as expressed in the objectives and purposes of the new company.
It is no secret that the Opposition will oppose the principle of denationalisation both in this piece of legislation and in others going through Committees. In the clause we are concerned with the doubts and uncertainties that have arisen as a result of the conversion of the National Freight Corporation into a private company. We must recognise that there is a phase 1 and a phase 2 in this transition. In phase 1 the company is transferred, on the appointed day, from the National Freight Corporation to a wholly-owned Government private company, and from there, eventually, with the selling of shares, to a private-public company or a public-private company.
We are therefore particularly concerned in this new clause about the objectives of the company and with details and information about the operation of the successor company, which normally can be ascertained from the memoranda and articles of association of a company. The clause is designed to give an opportunity to the House to debate and see the purpose and policy of the new company that is to be brought into being by this denationalisation measure.
During the passage of the Bill through Committee we expected and were not surprised to be told that the private company that will come into existence will be more favourably treated than the corporation. For example, it will not have to carry the heavy interest payments that are such a burden under the financial obligations of nationalised industries. Nor will it be required to accept the public duties that we have spelt out and the requirements under the 1968 Act that led to the creation of the National Freight Corporation. Indeed, it would appear that the sole objective is to maximise profits for private rather than the public good.
This new company is to be financed by a form of equity financing, which will clearly make it much easier for it to earn profits and compete with its private competitors. That is exactly the same area of competition in which nationalised industries have been forced to exist without equity financing. Admittedly this is a criticism of nationalised industry financing, that it had to operate under the penalties of heavy interest payments and borrowing from the Government for investment, as distinct from the more advantageous procedures that are adopted by private companies.
During the course of the debate in Committee we repeatedly requested copies of the memorandum and articles of association of this new company, but with no success, although we have noted that other Committees dealing with denationalisation measures have been fortunate enough to be provided by the Departments concerned with articles of association and memoranda. This applies to the denationalisation of British Aerospace and British Airways, where the same process is being pursued and nationalised companies are being converted to private companies.
We have not been given a great deal of substantial information on why it was not possible for us to be provided with articles of association and the memorandum relating to the denationalisation of the National Freight Corporation. That has meant that we have been less clear about the objectives and policies of the new company. We have had to rely upon our probing in Committee, and it has become increasingly clear that the position is somewhat fluid. A great deal of reflection is going on, and if we compare the answers that have been given on different occasions it is possible to see a considerable change in the thinking and attitude in two specific areas.
The first is in the proportion of Government shareholding. Members of the TUC and the trade unions have come away from meetings with the Minister under the impression that the Government will hold 51 per cent. of the shares, but the Minister has made it clear that that is not his view, and he has put it in writing that it is not his intention that the Government should have a majority holding. We have seen that what was to have been a substantial shareholding, as debated in Committee, has come down to a statement by the Minister that it is likely to be only a small Government shareholding. As yet we have not reached nothing, but according to the estimates of a number of people it is down to its lowest point. As I understand it, the Government still intend to have a certain number of shares in this company.
The second area in which there has been some questioning is that of the Government's intention, clearly stated on a number of occasions, both in the House and outside, that there will be no hiving off; that the intention is to pass the Corporation over as one entity to this private company. This matter was debated in the Committee, and the Minister said:
I believe that State ownership has, up to now, denied the NFC the commercial freedom that is open to private sector firms and has shielded it from some of the rigours of commercial discipline." [Official Report, Standing Committee H, 19 February 1980; c. 1736.]
That is the thinking that led the Minister to justify denationalisation—that the present corporation does not enjoy sufficient flexibility or commercial freedom. If that is the case, I think that it is useful for the House to bear in mind, as did the Committee, the record of the National Freight Corporation. There seems to be general agreement that the corporation
was a unique company and was given the task of attempting to achieve integration, particularly between road and rail. I shall not today enter into the argument about integration. We put that argument in Committee, and there is a clear record of my thinking on what integration means. The corporation had the specific duty of integrating, conducting research and maintaining good industrial relations. Those aims were all written in as its statutory duties.
I do not want to delay the House, but the Minister is probably referring to the more controversial issue of whether traffic should be directed. I said in that speech that in the 1968 Act there were powers, which the Bill is now repealing, which make it possible to direct traffic. I think that there is an argument, particularly in regard to energy use, for determining the priorities of certain areas of traffic. This is done on the Continent and in certain other countries, and I think that there will be an increasing demand for that kind of action in an energy-conscious country such as we are likely to be in the next decade. I have put the arguments on record and people can see them, and I hope that we shall have another opportunity to debate this matter. We have lost one hour of the debate, and it is difficult to be brief if I get dragged off into arguments about integration.
I put forward the Opposition's attitude to the process of integration between road and rail as was embodied in the 1968 Act. We are in opposition, and we are thinking through the policies again. Clearly that is a matter for consideration. We have heard it over South Yorkshire, and we have heard it over freight, and that debate will continue. I am sure that others may not agree with that view. There was a Labour Government who were not necessarily convinced of that view and did not implement the direction of traffic.
Things are changing rather rapidly in transport priorities, as the Minister must know, with the Channel tunnel, the Armitage inquiry into the effects of lorries, and all sorts of things. These changes are occurring not only in Britain but everywhere because of energy priorities. I have always believed, and opinion seems to be moving towards this, in the importance of having some form of direction of traffic based on certain criteria. At the moment it is directed only by price, but I think that other criteria should come in. That is the most that I can say about this matter. I have put my view. I think that it is shared by many people. Certainly it is shared by the trade unions and is Labour Party policy, as determined by conference decisions.
The basic point is that the corporation was given a specific duty to integrate, and was given the tools with which to do it. Because of those policies, it would seem that the nationalised industry had a specific responsibility to the community, and that was set out. We want to know whether such obligations are likely to apply to a private company. We presume that the overall objective will be to maximise profit and to ensure the greatest private gain, and that the public good, as determined in the duties imposed on the National Freight Corporation, will be given a lower priority.
Despite those major problems, and despite the fact that the National Freight Corporation existed in a highly competitive industry, in a depressed economy, which had a considerable effect on bankruptcies in the transport industry, it is generally recognised that the corporation did remarkably well.
The Minister congratulated the corporation on the way it tackled the difficulties that it faced over the past few years. The Select Committee on nationalised industries has also made favourable remarks about it. According to the reports on nationalised industries, the corporation's record on industrial relations is as good as that of any other company, and better than most. The general secretaries did not want to give evidence in any way to criticise industrial relations. That is a remarkable tribute to the corporation.
The productivity of the corporation increased considerably, although there was a 50 per cent. reduction in the labour force. That is a remarkable record, whatever the judgment about the loss of job potential. The corporation has been an innovator of certain types of traffic; so much so that Marks and Spencer has become a customer. It developed road rescue units, which can be seen on our motorways. It was successful in integraing the freightliner service—which was later transferred—and in the development of a computer to enable empty lorries to be used more efficiently. It has also played an important part in solving urban traffic problems and in energy conservation. Major training on heavy goods vehicles was done by the National Freight Corporation, which promptly lost its drivers to the commercial sector, which was not doing such training.
That is a considerable record of success by a corporation which controlled only 10 per cent of the market. Congratulations should be given to workers and management, particularly to Dan Pettit, who used to be the chairman of NFC. We all pay our respects to him, especially in respect of the lectures on intermodal systems for which the NFC was responsible.
Nevertheless, the Government gave a considerable amount of money to the corporation, as became clear in Committee. In 1978 the Labour Government wrote off £53 million of capital debt. That reduced the commencing capital debt to approximately £100 million. The reason why the original debt had increased to £53 million was the penal interest rate which the National Freight Corporation had to carry. That again is a reflection on the principles that we have imposed for the financing of nationalised industries.
Grants were also given by the Government to assist with the additional difficulties associated with taking on National Carriers Ltd. The corporation was asked to take on National Carriers Ltd, and was given more than £40 million in grants. The corporation certainly turned the corner, but a considerable amount of taxpayers' money was involved. To that extent, when we are considering what is to be done in selling off these assets, we should bear in mind that the corporation had turned the corner sufficiently to be a candidate for selling to the private sector. A lot of money was put in by the taxpayer, and this is an opportunity to get some return for the future.
The final accolade for the company is that the Government want to sell it off. They do not propose to sell off British Rail or other nationalised industries which are not able to make a profit. They are selling off only the profitable areas. A number of sweeteners have been thrown in to make it attractive to the market. For example, there is the writing off of high interest debt problems associated with the corporation. The burden of pension obligations has been made easier for the private company. There is the £40 million that will be available if the company becomes profitable for the setting off of profits against tax allowances. No doubt a good price will be set to enable as many shares as possible to be sold. The balancing act which the Minister will have to do is to decide how many shares he can sell and what price he will get for them. Substantial sweeteners are offered in selling off a concern that has considerable potential.
There is considerable concern about the new company that will take the corporation's place, whether it is the mark I or the mark II version. The clause is designed to give the House an opportunity to debate the policy and objectives of the company that will he embodied in the articles of association and memorandum. The Committee was denied the opportunity to make that assessment. Yet other Committees dealing with aerospace and aviation in which holding companies are being established in a similar way have been able to see such documents. Why did the Government not give them to our Committee?
In Committee the Parliamentary Secretary said:
We do not have any draft articles of association at the moment. They are being drafted by those who give legal advice to the Government. I understand that another Committee was given draft articles of association, but the arrangements for sale in that case were much more advanced than ours.
I have taken advice from my colleagues, and I am told that the sale of British Aerospace and British Airways may be delayed because they will be facing the same problem, namely, when is the best time to float shares? There is not a great deal of difference in the delay time, although the Minister may indicate that he believes that the time perspective may be different. We believe, from our proceedings in Committee and discussions, that the Minister envisages a delay which depends on when is the best time to sell the shares. That is why there are these differing transition periods.
When we pressed the Parliamentary Secretary in Committee, he said:
I shall inquire of our advisers about the present stage of the drafting of the memorandum and of the company's objectives."—[Official Report, Standing Committee H; 14 February 1980, c. 1574–75.]
Six weeks have elapsed and the documents have still not been produced. Are we to be denied what has been given to other Committees of the House?
It is essential that hon. Members acting on behalf of the taxpayer should be able to make a proper judgment about two important matters. What will be the Government's share? Perhaps the Minister will say that it is only a small share. Will he tell us the size of the share ownership? Is it a requirement by the brokers that the Government should have a guaranteed portion of the shares? The logic of the argument is that the Government should sell all the shares and get all the money. Why are we told that the Government intend to hold a certain percentage of the shares? If that is true, it will be seen from the articles of association or the memorandum.
Secondly, if the Government's policy is to keep the NFC as a single holding and not to sell off the assets, they should make that commitment clear, as it was made clear in the articles of association in connection with aviation and aerospace. It was made clear that foreign domination of the company would not be allowed. Government policy was made clear in those documents, to which we have not had access.
When we asked the Minister in Committee how he could guarantee that once the company becomes a private company it will not sell off the profitable assets
and allow the unprofitable parts to go to the wall, he said:
Clearly, at some point, this must be a matter for the commercial decision of the new national freight company. I do not run away from that. I can give no guarantee about the future of the NFC over the next 10 or 20 years. That would be to limit its freedom.
If it has the commercial freedom—as I believe it should have—to develop in the ways that are best for it, and if control should, as I believe, go to the private sector, clearly the control has to be exercised and decisions taken. I do not pretend that there is any way in which I can control the activities of the NFC after it has become a company and gone out of the public domain."—[Official Report, Standing Committee H; 19 February 1980, c. 1737.]
That will hold only until the appointed day. The Minister was not guaranteeing anything. The legislation was doing that. The Minister was promising nothing. The corporation will remain as one unit. He meant that he was selling it as one unit. The industry wishes to maintain it as a successful integrated unit, as it is at present. Apparently the Minister is not concerned about that priority. He simply wants it to be sold as a commercial going asset, and what happens after that does not matter.
The employees are concerned about conditions in the industry, which they feel are associated with the cross-subsidisation that has been practised in the industry. They are concerned whether the new company will maintain the benefits that they have derived from the industry. Whether those fears are realisable and whether they have substance are matters of judgment. The importance for this debate is that the employees and unions feel that they have substance.
It is the Government's view that there must be maximum flexibility for continuing rethinking in the matter, but issues of policy must be decided. Some indication of policy is given in the articles of association and memorandums of British Aerospace and British Airways. I do not accept that it is a strategic matter. Questions need to be answered, and an indication of policy should be given in the articles of association and memorandum of the new company.
What will be the principle of policy control? What will be the role of the nominees and their influence in stage 1 of the company? What will be the capital construction? What will be the nominal value of the shares and the proportion of equity and security, which are of concern to the existing company? What period of time is envisaged by the Government between the appointed day and the selling of shares? What payments and obligations will be required from the existing company to pay the Government if there is a considerable period between the appointed day and the selling of shares? Under the interest payments, the Government were guaranteed £8 million. What will be the payments under the new security role? What will the taxpayer receive? Will the Government not ask for money back from the company, in order to make it an attractive selling proposition and to influence the price? It is fair to ask what proportion of shares the Government will hold. They say that they will hold the majority of shares in British Aerospace. How do they interpret a small share? A prospective shareholder needs that sort of information. Some indication on those matters is given in the articles of association and memorandums of other companies. It should be given in the articles of association and memorandum of this company.
I understand from the Minister that the Government have no intention of influencing commercial decisions. What will be the role of the Government if they hold only 10 or 15 per cent. of the shares? Is the taxpayer to be denied any right to participate in the commercial decisions of the company? If the Minister feels that there is some benefit in keeping the present corporation companies together, and if the new company proposes to break up the old company, will the Government use their shares to prevent such a policy?
Some indication of Government policy should have been given to the Committee, and it should be included in the articles of association and memorandum of the company. We feel that the new clause gives the House an opportunity to debate policy matters that should be included in the articles of association before the appointed day. The Government should make clear the political purpose of the Bill. Without doubt, we feel that it aims to denationalise and transfer to the private sector the National Freight Corporation. The Bill plunders the taxpayers' assets. It makes the Government an asset-stripper. The Government aim to acquire ready cash. The Minister desires to feed the Treasury with some money, whether from pensions or the sale of assets. That is also the Government's aim in selling and hiving off British Rail hotels and in their actions over British Airways and British Aerospace. Flexibility means a quick and ready access to cash.
The Bill is ideological because it rolls back the frontiers of the public sector. It also aims to please political and commercial friends—people who will gain from the transaction. It will reduce the public sector borrowing requirement. That is one of the fundamental reasons for this process—to fulfil the monetary madness policy of the Government, which even Professor Friedman found difficult to justify.
We believe that the Bill is more ideological in character than in commercial sense. We ask the House to support our clause because it makes sense and because it will provide hon. Members with a further opportunity to assert the matters of policy that they have been unable to assert in previous debates.
It may be for the convenience of the House for me to intervene briefly at this stage to set out the Government's general policy on the National Freight Corporation.
The hon. Member for Kingston upon Hull, East (Mr. Prescott) said that the articles and memorandum of association should be laid before the House, and that they should contain provisions to ensure that the Minister retains a majority of the securities of the company, and that the assets of the successor company shall not be sold without the consent of the Minister. That is a fundamental attack on our policy.
First, I wish to set out Government policy on the National Freight Corporation. The corporation is a public corporation operating in road haulage, and in a number of other related areas —cold storage, removals, and personal travel. The corporation takes the form of a holding company, controlling about 50 subsidiary companies, many of which are familiar. They include British Road Services, National Carriers and Pickfords. The Government do not feel that the State should be involved in the running of a road haulage business, and even less in the running of cold storage or household removal services, a travel agency or any of the other business in which the National Freight Corporation is at present engaged. The corporation is not the sole provider of an essential public utility. It comprises about 10 per cent. of the road haulage industry. In every type of business it is necessarily competing with the private sector in areas where the level of service and price must be determined by the free market. It is our view that the corporation should be subject to the disciplines of the private sector and enjoy some of the opportunities of undertakings within that sector. The restraints upon it should be lifted. It should be able to operate with a commercial freedom that it does not have at present. That which we propose has the full support of the board of the corporation.
The Government contend that the denationalisation of the corporation as proposed in the Bill is the best possible way to serve the interests of the corporation, those who work in it, its customers and the taxpayer.
The Government intend to dispose of the controlling interest in the corporation. That will be achieved by changing the legal form of the corporation so that it becomes a normal Companies Act company with an appropriate capital structure, including shares which can be sold to investors.
All the assets of the corporation will be transferred to a company formed specifically for that purpose. All shares in the company will be held initially by the Minister or his nominee on behalf of the public. It is impossible now to make a firm commitment on timing. I have already said that that will depend on a range of factors such as general Stock Market conditions and the company's track record.
Our overall objective is clear—namely, to sell as quickly as possible a controlling interest in the company to private investors. I have made it clear—the hon. Member for Kingston upon Hull, East did less than justice to my case—that we have decided not to sell off individual corporation subsidiaries to the highest bidder. I recognise that I can give no guarantee on the future of the corporation after it goes into the private sector. I can give no guarantee on the corporation and the development of its business. However, the House should recognise that we have taken a strategic decision not to break up the corporation and to sell it part by part. We have decided to keep it together.
We want the corporation to go into private ownership as a single entity without any major changes in its size or in the range of its interests. Its prosperity and future—I do not run away from this —must depend to a large extent upon its success after vesting day. We believe that we shall ensure the best possible future for the corporation.
The corporation, as a nationalised industry, is subject to Government intervention at every stage of its operations. It is important that the House understands what nationalisation means in practice. Government control affects the appointment of the board of the corporation and the corporation's borrowing powers. It means that Government approval must be given for the corporation's investment programme. It means that there must be consultation on the corporation's general financial and business progress. There has to be consultation on issues that may have political implications. Government intervention also involves broader economic and social policies—for example, prices and incomes policy and employment policy. The corporation as a nationalised industry faces those constraints.
The Bill will make no changes to the position of employees or to their existing rights.
The Minister has said that the board supports the idea of selling shares in the corporation. He made no reference to the attitudes of the trade unions and those of the staff. As someone who knows something about the problem, I assure him that the vast majority of the corporation's staff want nothing to do with the Bill. All the indications are that they are concerned about their future prospects. They are especially concerned about resettlement and redundancy arrangements that might occur as a result of hiving off any part of the corporation. The Minister did not deal adequately with those issues in Committee, and he has not done so in the House.
I was about to deal with the employees' conditions of employment. If the hon. Gentleman is saying that many of those within the trade union movement, of which he is a much respected figure, do not agree with the Government's policy, I accept that that is so. I have never been left in any doubt about that. However, he has conceded that the board, which has responsibility for the direction of the corporation, is in favour of taking the course that the Government propose. We are taking this course because we believe that it will provide extra opportunities for those working in the corporation. There is no question but that nationalisation has held back the nationalised transport industries.
British Transport Hotels is a prime example. I do not mind taking the House into a general debate on nationalisation, but I have a feeling that the Chair would rule me out of order if I were to embark upon that.
Notwithstanding the initial views that have been expressed by those who work for the corporation—I understand them —I hope that it will be understood that our proposals have been introduced with the intention of developing business. After all, the future for those working for the corporation can be assured only by developed and better business.
There seems to be a feeling on the Opposition Benches that, because an organisation is in the public sector, job security is created for ever more. That is not so. That would not be so even if the corporation were to remain nationalised.
The right hon. Gentleman does not have to lecture the corporation about that. It lost 50 per cent. of its employees over 10 years. Nationalised industries, including the corporation, have been dissatisfied with the financial obligations of nationalised industries. They have argued for equity financing. That is what the corporation was interested in, and that is what the National Bus Company wanted. It was wanted, too, by British Rail. If the right hon. Gentleman addressed himself to that problem, he would be a greater friend of the nationalised industries.
I accept that Labour Members might want to go along the policy line that enables the public sector to expand further. The hon. Gentleman will be less surprised to hear that that is not the Government's policy. We believe that if undertakings such as the corporation want the opportunities of the private sector they should observe the disciplines of that sector. The board of the corporation is content with the arrangements that we are making. It is content because it believes that the Bill will lead to a developing business and not a receding business.
I emphasise that the Bill will make no changes to the position of employees or to their existing rights. It was said in Committee that the Bill provided for the new company to assume all the existing obligations of the corporation. That includes its obligations to the staff. There will be no interference with the pension rights of individual employees or with their contracts of employment. Similarly, the proposals will not affect the travel concessions available to employees who were transferred from British Rail to the corporation on its establishment.
I have set out why I believe that this is in the interests of the NFC and also in the interests of the taxpayer. It is certainly true that the position of the NFC has improved over the past few years. Opposition Members will remember that under the previous Administration there were times when the NFC was in a rather worse shape than it is now, and it was supported to the tune of £82 million. That position has improved. The real question is what is in the best interest of the NFC. How do we secure its future? We shall secure its future more effectively by following the course that I propose rather than by retaining it in the public sector and making it subject to restraints.
The proposals embodied in the Bill will give everyone a better deal. The corporation will lose its unwanted and anomalous position as a nationalised industry, with no clearly defined role or objective. The employees will benefit through working for an organisation whose prospects for growth are greatly enhanced by a new freedom to compete in the market place on equal terms with private sector companies. The taxpayer will benefit also in an obvious way.
The memorandum and articles of association are being drafted by those who advise the Government. The articles will contain no surprises. They will follow the form described in Table A of the Companies Act 1948. The final shape of the memorandum will depend on the capital structure of the new company. This need not be comprised entirely of shares. As the Bill stands, it could be part shares and part loan stock. The capital structure will therefore be decided by the Government on the appointed day.
The second part of the new clause seeks to ensure that the Minister retains a majority of the securities. We covered that ground in Committee. I made it absolutely clear that that is not the Government's position. In the policy document that I sent out in August 1979, I said that ultimately the Government intend to dispose of the majority shareholding. I made the position equally clear in my Second Reading speech.
There is absolutely no question of the Government retaining a majority shareholding in the successor company. We intend to ensure that a controlling interest passes to the private sector. That is fundamental to the aims of the Bill.
The second section of this part of the new clause is another attempt by the Opposition to revive the weary topic of asset stripping. We have tried to explain that point before. All the major subsidiaries of NFC are trading profitably, and those engaged in transport operations could not be closed without higher costs in redundancy than could be realised from the sale of assets. At the same time it is essential to its business strategy, and to future employment prospects, that the corporation should continue the modernisation and rationalisation of its networks. Inevitably, that would mean the closure of some depots, and their sale to provide much needed cash for reinvestment in the business.
It is ludicrous to propose that the Minister should be required to give permission in such cases. In 1979 the NFC raised more than £4 million in that way, without the need for any Ministerial consent. I certainly do not intend to impose any such restrictions on the new company.
We intend to take the NFC out of the public sector, for a number of reasons. First, we do not believe that it should have been in the public sector in the first place. There is no justification for so-called public ownership of a company that depends for its future on its success in competing in the private sector and with private companies.
Secondly, the NFC should not be subject to the restraints that public ownership provides, or the interference of Government and civil servants. That has never been a recipe for success in any commercial undertaking.
Thirdly, there is a successful and developing business available, and that is in the interests of the NFC. It is also in the interests of those who work for the NFC. It should have the freedom to develop. It has a good and a prosperous future. I ask the House to reject the new clause.
We have heard a speech from the Minister about the denationalisation of the NFC. We did not hear one transport argument. We heard a series of unsupported assertions based on political dogma and nothing else. It is odd that no transport arguments should be advanced in a transport debate when the Minister is speaking from the Front Bench.
I rise to speak in support of new clause 12. In doing so, I wish to endorse and support the remarks of my hon. Friend the Member for Kingston upon Hull, East (Mr. Prescott). New clause 12 touches upon matters relating to part II of the Bill. It is true to say that that is the most politically controversial area in the Bill. The arguments that we shall hear relate especially to clause 36, which contains the root principles of the matter.
The twin aims of the new clause are, first, that there should be laid before the House the articles of association of the successor company, so that they could be properly scrutinised in the public interest. Secondly, we wish to ensure that enough power is left in the hands of the Minister for him to determine the size and financial structure of the new successor company.
The new clause is related to crucially important political and economic principles, which are matters of substantial political controversy.
In essence, the Government are proposing that the NFC—which is a State-controlled transport concern in the shape of a public corporation—should be convened into a private company under the Companies Acts. It is essential to argue the matter now, because we shall see it happening again. The Minister has already flown a kite on the privatisation of the railway assets. It is necessary for us to meet the argument head-on because we shall hear it again before, politically, hon. Members are much older.
The mechanism is simple. The present fixed interest capital formation will be changed to equity shareholding, which immediately will be held by the Minister, guided by the Treasury, and then sold off.
I have sifted the vast bulk of the Government's arguments. A number of reasons have been put forward for this major economic and political change. The clearest statement came from the hon. Member for Faversham (Mr. Moate), who has not spoken in the debate today. He said that the policy aims at:
a free-standing, highly competitive concern". —[Official Report, Standing Committee H, 14 February 1980; c. 1636.]
In other words, the Government are putting forward this policy as a matter of principle and in relation to competitive principles which they wish to bring to bear upon the argument.
Secondly, as I understand it, they are putting the policy forward for financial reasons. The NFC is under "investment constraints", whatever that may mean There are rigidities in the NFC's financial structure. It must be admitted that it is highly geared to fixed-interest loan capital, which in its wake brings financial disadvantages.
Thirdly, the arguments are concerned with the Government's precept and practice of economic policy as it relates to the public sector borrowing requirement and control of the money supply. Any loss which the Government might have to meet would increase the PSBR which, as we all now live in the world of Samuel Smiles, we must avoid at any cost. The argument, although spurious, is put forward under the banner of financial responsibility.
Therefore, the argument ultimately rests on all those assumptions. The purpose of the new clause is to counter the whole series of arguments that the Government have put forward. The Opposition are countering with new clause 12, in particular its second proposition, which seeks to present alternative and opposite assumptions through ministerial control, and ultimately, through control by this House. In order to argue the case for new clause 12, it is necessary to dispute all the assumptions which the Government have made about transport policy in general.
In passing, I must say that none of the arguments that have been put forward from the Government Front Bench have anything to do with transport. They have been concerned not with transport economics, but rather with doubtful, general political propositions.
The first argument put forward by the Minister related to competition. That differs from the arguments put forward by other Government Departments, which are attacking the present situation on grounds of monopoly. The NFC has no monopoly position at all in transport. It has 10 per cent. of the haulage business. It is true to say that the NFC is in a competitive position at almost every turn.
The hon. Member for Faversham (Mr. Moate) said that we want an enterprise which responds to the needs of the market. Yet on various occasions the Minister's own words have suggested that it does so. For example, he said:
The National Freight Corporation is not run as some vast over-centralised nationalised industry".
He also said:
It seems genuinely in no way to avoid commercial realities".
If what is being looked for is a fresh commercial approach, what we have, on the Minister's own admission, is a commercial attitude which is already present in the NFC. I should again like to quote the hon. Member for Faversham, who has a detailed knowledge about these matters. He said:
current management is first class and its relationship with the work force has been superb".
In fact, the real clue as to the Government's purpose was clearly brought out by the Parliamentary Secretary, who said that the NFC
is by no means out of the wood"—
here he was talking about its past difficulties—
But it is in a very strong recovery position. We believe that we can time the sale in such a way that it will be an attractive proposition for investors".—Official Report, Standing Committee H, 14 February 1980; c. 1635–44.]
Although the Parliamentary Secretary mixes with some doubtful political company, his integrity shines through in these matters. What he is saying is that although Government money has been used to see the NFC through difficult times, now that it is improving a little, and its future prospects are brighter, it will be sold off to the private sector. In brief terms, that is a precis of the argument which brings us to the truth at last.
I hate to rise critically when the hon. Gentleman has put his remarks in such a generous context. However, I am quite sure that the quotation which he used was not used in the context of giving my reasons for denationalisation. He has picked two sentences out of a debate about the way in which we would organise the sale. I hope that he is not suggesting that that was the only comment I made in Committee which was at all directed to the purposes of denationalisation. The reasons that I have given for denationalisation are strikingly similar to those given in the remarks which the hon. Gentleman has already quoted of my right hon. Friend and my hon. Friend the Member for Faversham (Mr. Moate).
The last thing that I would do is to quote things out of con- text or to accuse the Parliamentary Secretary of any sort of sharp practice. He said a good many other things, but I leave it to the judgment of the House. One would need acres of context if one were to misconstrue remarks such as those.
However, such is the strength of the competitive principle which the Government have put forward that they are to give a public subsidy of £100 million to go with the sale. The Government will wipe off £58·7 million of commencing capital debt and £41·3 million of outstanding loans in order to dress up the shop window so that they can make a sale. There is not much of the competitive principle in that. That reeks of a subsidy principle, only it is a subsidy for wrong purposes.
In transport terms, will the NFC be better under private enterprise? No arguments have been advanced to say whether that will be so. All that we have had has been a series of assertions. In fact, the argument boils down to financial and political sharp practice for very narrow ends.
Let me take the argument about financial structure. Let us admit that the financial structure of the NFC is such that it is too rigid. I think that over the years the NFC itself has argued that there should be an injection of equity capital, and that there should be some sort of public dividend capital, because when so much of one's financial structure is geared to fixed interest payments, instability is introduced into the structure.
The point that I am seeking, to make is that one does not have to go through the transfer into a successor private company in order to put that right. The Minister can put that right now with the present structure of the NFC.
The third argument relates to the PSBR. Will the £100 million which the Government will give to the sale with their blessing, be put on the PSBR account? I suggest that it will not. The straight issue here is a political one. The kernel of the political argument from start to finish is that the Government intend to put the whole of the road haulage transport business into free enterprise.
My quarrel with that argument is that I am a strong believer in the mixed economy. I believe that there should be a State sector in road haulage, which, according to the Minister's own admission, has made striking progress, in difficult conditions, over the years. I listened carefully to the Minister. He made a number of arguments in support of his case. He said that the Government have the support of the National Freight Corporation. That argument is not worth a light. People's jobs are at stake. I do not blame them for keeping their heads below the parapet. I might do the same in that situation. It adds no strength to what the Minister says.
The Minister also did his best—it is a doubtful argument—by saying that the Government would keep the corporation together in the initial stages. That conflicts with the commercial responsibility of the successor company. If the board is to be commercially free to make business decisions, there is nothing to stop it from breaking up the corporation into lots and selling it off piece by piece. Commercial freedom means exactly that. If the Minister says that he intends to try to keep it together and retain some of the structure, his argument will not hold water. It conflicts precisely with the principle of commercial freedom that he is trying to establish. That is the centrepiece of the argument for moving into the private sector.
I am certain that the corporation will be broken up. Those who seek to enter this market and 'who will buy their way into what is now the National Freight Corporation have their eyes on separate parts of it. They have no intention of running the framework of the unit as at present constituted. The purpose of the new clause is to try to maintain the structure by giving the Minister certain powers concerning the assets and the sale of such assets of the corporation with its improving record.
The new clause seeks to keep the Government in a majority shareholding position and to enable them to keep the present NFC structure intact. Under the clause it would be necessary to have ministerial consent for the sale of assets in the successor company so that the predators can be kept at bay and so that the non-transport political dogma thrown up by this Bill can be minimised.
We talked yesterday about a fundamental divide that exists over several clauses. This is obviously another fundamental divide between our ideologies and attitudes. My greatest difficulty is in accepting or grasping the status quo. If one could guarantee that any organisation, nationalised or private, would be allowed, magically, for ever, to continue its business without change, some arguments proposed by the Opposition might be attractive. How can we live with the status quo? Do nationalised industries guarantee a status quo? We have seen in many nationalised industries the diminution of their asset.
This precious asset—its value in financial terms and in employment—has diminished extraordinarily quickly in most nationalised industries over the last decade. How can hon. Members propose, as justification for the maintenance of the present status of the National Freight Corporation, that by being nationalised and being a Government concern, it will stay the same and guarantee the same levels of employment, retain the same asset value and still give guarantees to its customers, who, after all, play some part in this complex, and to its staff and work force, who play an enormous part?
The answer is that life moves on. Industry is competitive. If hon. Members argue that nationalisation is an answer to meeting competitive changes and competitive forces, I ask them to quote any examples of success among present nationalised industries from steel to British Leyland and the rest. The answer is simple. I shall give way if any hon. Member has an example.
I thank the right hon. Gentleman for his interesting intervention. How does one compete in an international competitive situation? How can one guarantee that any one factor will remain the same? I give a hostage to fortune to the House and say that distribution arrangements of freight will change in this country. That is no hostage. How can the organisation adapt to that change and best guarantee that the asset value of the concern will remain the same or increase and that there will be growth and adaptation to new processes and to new technology? By direction? By integration? By nationalisation? The answer is "No".
The answer is that it must be a keen competitive organisation. In defining a keen competitive organisation, one must, in essence, be able to compete. How can the National Freight Corporation compete in financial terms with private enterprise companies which have access to borrowing which is not available to the corporation? How can the corporation compete with private enterprise corn-panics that are not subject to political direction from the Government? The answer is self-evident.
What is an asset? I became most frustrated in Committee when Opposition Members talked about assets and assets being stripped. An asset is really an asset only if it has a positive value through being able to exist in the same form or in some growth form. If it diminishes, it rapidly loses its asset value.
Many companies, especially those in the private sector, have shown that they can adapt to modern conditions and changes in employment and industrial practice. I refer to a company near my constituency for which I used to work. A big multinational concern has started off a series of small industrial estates on its own grounds. That is private enterprise adapting. If the National Freight Corporation is to be allowed to change and to attract sufficient credibility in the City and among the financial institutions, in order to attract future capital to give its employees and customers better services and stability, it must be able to compete without political direction.
The political and ideological divide is clear. If a majority shareholding is held by a Government, whichever party is in power, there is no doubt that the customers and finances necessary to fuel the competitive urge and to allow the National Freight Corporation to adapt to innovative changes and to innovate itself will be necessary. It is not enough to claim that past success is enough. This has been the claim, over decades of British indus- trial history, for industry after industry that has subsequently found itself, due to changed events and the emergence of new countries and new concerns, without that keen cutting drive. If we wish to allow the National Freight Corporation to continue to be an asset and to allow those who work for it and its board the freedom necessary to drive it against keen and cutting competition, we should reject this new clause. We should certainly not allow the majority of the shareholding to be held by the State through the Minister.
I have been amazed by the speeches of the hon. Member for Meriden (Mr. Mills) and the Minister. Both have portrayed the National Freight Corporation as some stultified, dying outfit with no clearly defined role or objectives, which is clearly not doing its job and will be so inflexible to be incapable of adapting to change.
I refer the House to what the Minister said of this stultified nationalised industry when he was Opposition spokesman on 12 May 1978:
the NFC is not run as some vast over-centralised nationalised industry. The corporation is broken down into a federated structure, and maximum independence is given to the separate companies … the management in the NFC seems genuinely in no way to wish to avoid commercial realities. The opposite is the case. The approach of the corporation is … to achieve a commercially viable company, to invest in success and to disinvest in failure."— [Official Report, 12 May 1976; Vol 911, c. 587.]
That would be a reasonable, flexible approach to the problems of a company that represents about 10 per cent. of the freight transport industry.
There is a division of view even among Conservative Front Bench spokesmen. On the one hand they say that they want to get rid of nationalised industries because they are monopolies and on the other the Minister tells us today that he wants to get rid of the NFC because it is not a monopoly.
The object of the new clause is to keep the National Freight Corporation together as an entity, and to prevent it from being sold off in bits. Above all, we wish to keep the corporations assets—material and human—as part of the freight transport industry because we have no faith that the prospects of the denationalised company would be very good once it was in the private sector, unless some form of protection to the existing entity were provided. We want the Minister to keep control of it so that he can veto the sale of assets.
The Minister may say that he wants to keep this unit together. He said on Second Reading:
we are not going to be selling off individual NFC subsidiaries to the highest bidder. The whole purpose of this Bill is to enable us to sell shares in the enterprise as a whole. We want it to go into private ownership as a single entity, without any major change in size or range of interests."—[Official Report, 27 November, 1979; Vol. 974, c. 1129.]
We agree that that is a laudable objective, but once the corporation is sold into private ownership there is no way of maintaining that objective, because of the likelihood that it would be broken up and sold off. Without the powers that we seek in the amendment the Minister would have no power to achieve his objective of keeping the National Freight Corporation as a single entity. There is no chance whatever of his attaining his own demonstrated objective. The reason for that is that he is not really interested. He is not actually committed to keeping the corporation as an entity. What he really wants—as with the other denationalisation measures going through the House, concerning BP, British Airways and British Aerospace—is a rip-off for his Tory friends in the City.
During the Committee stage I referred to this as being a three-part rip-off. As it turned out, information provided in Committee revealed a four-part rip-off. The Minister, not content with three parts, announced a further part later in the day.
The first part of this series of rip-offs is the write-off of £100 million of debts. The NFC currently owes the Government £100 million, or £8 million of income each year. Before this company is sold to the private sector the taxpayer will write off that £100 million so that the debt is not carried forward to the private company and so that the private company can flourish because it will not have to pay the NFC's debt to the Government.
The next stage in this rip-off is the sell-off. Having written off the £100 million, the Government will sell off the remaining assets of the NFC. Hon. Members who heard me discourse on this aspect in Committee will know that the third stage in the rip-off is the strip-off. At that point the assets of the company will be stripped off separately. The fourth part of the rip-off that we discovered in Committee was the tax write-off. I shall come to that later.
Referring to the debt write-off, I should draw the attention of the House to the fact that on Second Reading the Parliamentary Secretary said:
One of the immediate effects of our proposals is that the company's capital structure will be very much more attractive "—[Official Report, 27 November 1979; Vol. 974, c. 1242.]
He can say that again. If a company has a debt of £100 million and that debt is written off there is no doubt that its capital structure becomes very much more attractive to those who want to buy it.
We come now to the sell-off. During a debate on the Consolidated Fund Bill two weeks ago I discovered an aspect that had not occurred to me before about the selling off of nationalised assets. There is a great lining of pockets and greasing of palms in the City direct to those who handle the transaction—not just those who buy the public assets, but to those who help the Government sell those assets.
When the last tranche of shares in BP was sold no less than £4·5 million was paid out in fees to the merchant banks and other City institutions for helping the Government to sell those shares in BP. I reckon that two or three hon. Members could have joined together and sold those shares in Leather Lane or Petticoat Lane market and still have received as good a price, even after the Government had paid out £4·5 million for financial advice. They may need a little more advice in selling shares in the NFC and therefore we can expect the level of fees paid to the merchant banks and others assisting the Government to be higher. We were told that the £4·5 million paid in fees for the BP shares was "an especially lean fee". Therefore, we can expect a rather fatter fee for helping the Government sell off the National Freight Corporation, because it will be harder to sell and harder to judge the value of the shares.
It is worth pointing out to the House, when considering the strip-off rip-off, that the total assets of the NFC amount to about £100 million. Of that sum, about £60 million is in land and buildings. If hon. Members have visited the National Carriers depot they will know that the bulk of that value must be in the land, because it is certainly not in the buildings. We have £60 million worth of assets in the land of the NFC. It is worth knowing—I am sure that the asset-stripping property companies who contribute to Tory funds have observed this—that if one reads very carefully the last annual accounts of the NFC one will see that the £60 million valuation of the land was carried out as long ago as 1968. There has been a great deal of inflation since they, as well as a dramatic, catastrophic inflation in the value of land. The asset stripper always concentrates on identifying assets that are presently undervalued, so that he can sell them off at current values and make a killing
A fourth point, the tax write-off, was something that came to light only as a result of the intervention of the hon. Member for Faversham (Mr. Moate), who has already been mentioned today. In Committee he said—
I will break off to explain, Mr. Deputy Speaker, that the object of the clause is to try to keep the NFC together as a single entity within the freight industry in future. I am outlining what the state of the company will be when it is transferred into the private sector if the clause does not go through, and trying to exemplify the dangers that will result and the threat to the NFC as an entity in the freight industry.
The hon. Member for Faversham said:
The company has immense accumulated losses … If carried forward those tax losses would mean that the new company would not have to pay corporation tax for some years. That would be a helpful factor for the new company.
He went on:
If it is to begin life as a free enterprise company, let us give it a good start. The tax losses could be an immense asset to it." —[Official Report, Standing Committee H, 14 February 1980; c. 1633–4.]
That rather took aback the Parliamentary Secretary, who, quite reasonably, had to consult his officials about Government policy in relation to the tax losses. However, he confirmed to the Committee that it was the intention of the Government that tax losses on the scale envisaged would be allowed to be carried forward from the nationalised sector into the new company so that they would be a substantial asset for the company.
The losses were incurred some time ago. One of the questions that need to be resolved and that the Ministers have not resolved to date is whether these tax losses from 1968 to 1980 will include the actual losses themselves and not just the tax losses that were written off at various stages during different times when the capital structure of the NFC was being sorted out. I do not think that that is a sound argument for denationalisation. It is certainly not a sound argument for denationalisation and carrying forward the tax losses so that, in effect, the taxpayer does without twice. That seems quite absurd.
In Committee, in an effort to establish an NFC that would be retained as a single entity, which is the purpose of the amendment, and to ensure that it continued to operate in the national freight sphere, we put forward—the Minister has already referred to the terms and conditions of the existing staff—amendments that sought to carry forward the existing structure of industrial relations, so that the present machinery for negotiation of pay and consultation about other terms and conditions would be carried forward with the new company. We believed that that was an asset that any company would want if it was to operate in the private sector.
Needless to say, our amendments were turned down by the Government, as was our desire to carry forward certain of the existing rights of employees. The Government did not accept that suggestion. They said that people could rely on the Employment Protection Act and various other measures to which, ironically, the Government had earlier objected. I believe that there was a cavalier objection by the Government to our efforts to include in the structure of the new company proposals that would make it work as an organisation operating in the transport freight sector.
Following that, the Minister, at a meeting with the TUC—groans, no doubt, from Government Members—said that it was his impression that employees of the NFC were looking forward to the challenge of the private sector. In the immortal words of the Duke of Wellington
If you believe that you will believe anything".
I do not know whether Government Members have consulted people who work for the NFC, but I represent a substantial number of them in my constituency, and as a sponsored NUR Member of Parliament I have a great deal of contact with their official representatives. I have seen no sign whatever that they welcome this transference to the private sector, even though the hon. Member for Meriden (Mr. Mills) would have me hold out to them the glorious prospect of burgeoning wealth if they all battle together flexibly, responding to the call of the market and everything else that the right hon. Member for Leeds, North-East (Sir K. Joseph) continually talks about.
The second part of our clause says:
The memorandum and articles of association shall contain provisions to ensure that the Minister shall retain a majority of the securities of the company and that the assets of the successor company shall not be sold without the consent of the Minister.
I think that the people working in the NFC at present might be willing to bite on the bullet about the prospect of transfer to the private sector if they had a guarantee on those lines and were assured that they would not be put through the City's bacon slicer to the advantage of people working in the City and to their substantial disadvantage.
Alternatively, I believe that if the Minister, by accepting this amendment, could give worthwhile assurances that the NFC, even when in the private sector, would remain an entity and continue roughly as it is at present, and operate in the freight transport sphere as it does at present, the employees of the NFC might be a trifle less reluctant than they are at present. However, I know that he will ask the House to vote against this amendment, and consequently he will not give the guarantee for which I am asking. Therefore, I can only conclude—as we have concluded from everything that has been said by the Government in the House and in Committee—that the object of the sell-off of the NFC has nothing to do with freight transport and everything to do with property and financial speculation.
I have listened to the debate with great interest and I still am not very worried about whether the NFC is sold or not. I am certain that if my party were in power we would not have gone through the process of putting this Bill together. Although we are basically against nationalisation, most of our objections do not apply to the NFC. It is not a monopoly. It has to compete in the market, and if it does not do so it will not survive. If the company competes successfully it will grow. Most of the historic objections that I have to nationalisation, therefore, do not apply.
I wish that there were two separate votes on new clause 12, because I would vote enthusiastically for the first subsection. It is important, at least to me, to know precisely what the memorandum and articles of association say. If they included wide regulations, which greatly encouraged the owning of shares by employees, I could vote for the proposal with some enthusiasm.
We must work towards a society in which those who work in large corporations have a direct financial interest. I look forward to a system in which those who work throughout their lifetimes for a company will share in its assets growth. When they retire I hope that they will have something worth while to invest.
As the new clause stands, we are buying a pig in a poke. The Minister said that they will be the normal memorandum and articles of association. However, we have no idea of their content. It is incredible that the House has been asked to vote for the denationalisation of a company when it does not know the rules and regulations by which the new company is to be run.
I would like to see the new rules and regulations put in a form that would allow us to debate them, and amend them if necessary. We should greatly increase an employee's ability to buy shares. I had understood that the Government were keen on that. Why will they not give a total commitment to that type of company?
Turning to the second part of the new clause, one must make up one's mind whether to sell. The half-sale arrangement proposed in the new clause is unsatisfactory. British Petroleum has often been quoted. However, I suspect that that unique arrangement arose as a result of circumstances that existed many years ago. As that company is in the profitable energy sector, the arrangement has worked well. That does not apply to most industries. I am therefore against the second part of the new clause, but I am tempted to vote in favour of it as a whole.
I hope that a privately owned company will not have to ask the Minister whether it can sell a motor-bike. The company should make that decision. I am tempted to vote in favour of the new clause because the memorandum and articles of association are unsatisfactory. The House should be given clear details before voting. We need the document. It should be presented in a form that can be amended. We could thereby reflect on the type of company that we should like to see restructured.
The employees should be given a direct and personal interest in the success of the new company. That was the argument behind nationalisation 40 or 50 years ago. If I had been around at that time, those arguments might have appealed to me. It was envisaged that society and employees would benefit from nationalisation. However, it has not worked. There is an alternative. Employees could be given massive investment in the company and an opportunity to build up assets during their working lives. I should like to see that included in the memorandum and articles of association. The Liberal Party will probably vote in favour of the clause. However, we are against one part of it.
The hon. Member for Ipswich (Mr. Weetch) chided us for failing to produce transport arguments against the new clause. I waited for him to produce his transport arguments in favour of it. However, I waited in vain. The nearest that Opposition Members came to offering a transport argument was when the hon. Member for Kingston upon Hull, East (Mr. Prescott) strayed into his favourite theme of integration and direction of freight traffic. He made a long speech on that subject in Committee. New clause 12 provided the hon. Gentleman with an ideal opportunity to express his enthusiasm.
The basis of the 1968 Act, and of the Labour Party's belief in the National Freight Corporation, was that it would integrate freight transport. That belief accompanied quantity licensing and the direction of traffic from road to rail. The hon. Member for Kingston upon Hull, East is beaming with pleasure. He nods his head as he remembers those far-off days. His preferences are clear. However, it might have been useful if, in stating those preferences, he had made clear whether he was speaking for the Labour Party. Many of those involved in the road haulage and transport business would like to know where they stand. I understand that the right hon. Member for Barrow-in-Furness (Mr. Booth) will shortly speak in the debate. He speaks with the authority of a member of the Shadow Cabinet. I hope that he will make clear whether there has been a fundamental shift in the Opposition's transport policy. At one stage it was suggested that the Opposition would reconsider all their policies. However, if the Labour Party has no policy, perhaps the right hon. Member for Barrow-in-Furness could indicate when debate within the Labour Party will end.
Those who operate in the transport business need to plan. They need to know the Opposition's transport policy. They want to know whether the Labour Party wishes to return to the so-called golden days of Barbara Castle; the days of integration, direction of traffic, quantity licensing and the rest of the rigmarole that the previous Labour Government found impracticable throughout their six years of office.
That point relates to the National Freight Corporation and the reasons why the Labour Party might resist the method of denationalisation that we propose. We see no reason for subsidising or directing any part of freight transport. Freight transport exists primarily to serve its customers, including British industry. The National Freight Corporation can make its best contribution—as it has a 10 per cent. share of road haulage—by becoming a private enterprise road haulage company. It will be free of the constraints of the public sector and be able to operate in the market to the best of its competitive abilities. There is no reason to restrain that.
As my right hon. Friend said, we cannot understand why the Government should continue to have a stake in operations such as cold storage, furniture removals, travel agents, and so on. We propose to sell the company for the best price available. The proceeds of that sale will go into public funds, for their benefit. Sale is also in the interests of those in the National Freight Corporation. We have the support of the board. It supports us not because individuals on that board fear for their positions, but because they see this as a desirable option. We have been opposed by the trade unions. Such opposition to denationalisation is predictable. Many of the corporation's employees should appreciate that their position wil be best ensured if the company is given the maximum commercial freedom to thrive—if it can—in a highly competitive market.
The company does not have that commercial freedom now. The hon. Member for Ipswich made a disparaging reference to "investment constraints"—whatever they may be. If a trading company, such as the National Freight Corporation, operates in a commercially competitive market, it will find no advantage in nationalisation. The company has to operate under investment constraints. It needs Government approval for its investment programmes and for borrowing. The Government appoint the board.
Previous Governments intervened heavily in the decisions of the board, for political reasons. Sometimes those reasons were wise, sometimes they were the result of expediency. The corporation might have wished to pursue a policy that would prove embarrassing and inconvenient to the Government. These problems are in- escapable, yet they face public sector corporations. If a corporation is given commercial freedom, it will be to the advantage of all those within it.
Commercial freedom may be resisted because it is thought that nationalisation is a guarantee of job security and of high pay, thus avoiding the rigours of the market. That view is completely fallacious, yet it was implied by the hon. Member for Derby, South (Mr. Johnson) in the course of several interventions. The hon. Member for Kingston upon Hull, East knows that that is not true. The National Freight Corporation has lost 50 per cent. of its employees in the past 10 years. There is no guarantee except that it should have commercial freedom.
The board has commercial freedom, subject to the necessary restraints of investment and borrowing imposed on any public company to enable the Government to retain control over public sector finances. It is also free from political interference. The logical next step is to turn it into a private sector company.
As the proposers of the new clause know, its acceptance would put impossible inhibitions on the process by which lye seek to make the corporation a private sector company. What is the objection to the mechanics by which we propose to change the public corporation into a Companies Act company, privately owned and operating in the market? As so often throughout our proceedings, the hon. Member for Holborn and St. Pancras, South (Mr. Dobson) phrased the attack in the most dramatic language, with elaborate descriptions of rip-offs, strip-offs and every other undesirable but exhausting sounding word. I wish to refute in the plainest terms the allegation behind those colourful words.
There is no question of giving away public assets to anybody. We are maximising the amount that we shall get for the shares and making it an attractive and saleable company. In that way we shall increase the price that we get, and the public will benefit. My right hon. Friend and I do not have back pockets into which to slip even the merest percentage of the proceeds. We wish to transform the company's structure and organisation so that it will realise a sensible price upon quotation, which will benefit the public and the public purse.
The Opposition cannot have it both ways. They accuse us of giving away a priceless asset. In Committee when I talked of making the corporation more saleable to attract a reasonable price and get a good return for the public, we were accused of helping our friends in the City.
We are accused of writing off over £100 million of fixed interest capital debts that the company owes to the Government. We are being falsely accused of doing what the previous Government did. They wrote off £50 million as one of the many stages of propping up the company during its bad old days. That amount was wiped off with no return, together with the £82 million grant given to the corporation over the past five years. The previous Government waved goodbye to those sums.
We are changing the capital structure of the company. It cannot be sold with the fixed interest capital debt. We are converting it into a proper capital structure. It will have a mixture of share capital and fixed interest stock in order to make it saleable on the market. We are not waving goodbye to £100 million. We are exchanging our marketable equity and stock for that debt, and we shall thereby produce a return. We are simply changing the nature of the Government's interest from an unrealisable £100 million of fixed interest debts into what we trust will be a realisable quantity of equity.
We are accused of giving something away, because a first charge on the proceeds of sale will be to top up the pension fund. We have to put the pension fund into a soundly financed position as we dispose of this company. The company must have a proper actuarial-based fund to finance its pension obligations. It is currently a liability on the corporation's assets. We are merely discharging that liability, as we must, out of the first proceeds of sale. We are not giving anybody anything. If we did not do that, the liability would rest on the new company, just as it does on the old corporation.
The tax losses have been referred to. They are there now for the benefit of the corporation. If we change the cor- poration into a company, they will remain there for the benefit of the company in the future. The hon. Member for Holborn and St. Pancras, South claims to want to see the company thrive. It is therefore entitled to the benefit of the tax losses. As the hon. Gentleman knows, there is no question of another business acquiring in a devious manner the advantage of those tax losses. The successor company will have the entitlement to those tax losses. We are not giving away any Government liability.
Does the hon. Gentleman agree that, once the National Freight Corporation is wholly privately owned, he will have no control over its capital structure? He can give no guarantee, particularly as the legislation for carrying forward these tax losses is not yet before the House, that a company will not move in and amalgamate its existing assets with the National Freight Corporation and use those tax losses to offset its unfavourable tax position.
The legislation is not yet before us. My hon. Friend the Financial Secretary, in reply to a question, made it clear that the Government intend to make early legislative provision for the circumstances in which the tax losses of these public corporations will, on denationalisation be carried forward to their private sector successors. There is no give-away in what I have described.
I ask Labour Members to keep their eyes on the essential point in regard to the public's position—and perhaps this is the last time that I shall make that plea. At present the public have something of value—the National Freight Corporation. Its value cannot be measured by merely looking at what the public have put into the corporation in the past. The public do not have the sum total of loans, grants, capital debt, and so on. Most of that has been written off. It has been long since lost. The money came from the Exchequer, was poured away and was wasted. We simply have the corporation as a trading corporation.
It has a value based mainly on its trading record and expectations in the competitive road haulage market. We shall realise the full value of what the public have now. We are not giving anything away. There is no way in which we can magic up something from the past to try to claim public credit for grants and leans that have long since gone into the sand.
It is said that even if we get a good price we should prevent asset stripping by requiring Government control over all future disposals of property by the new private sector company. I have listened for weeks to these arguments about asset stripping. It is an elastic phrase, used particularly by those on the Left of politics to describe a wide variety of operations.
I believe that I know what the phrase means. The hon. Member for Holborn and St. Pancras, South and his hon. Friends do not have a great future as asset strippers, because they do not appreciate the circumstances in which that happens. The idea is that a company with long undervalued land and other assets is bought at a knock-down price. Those assets are rapidly realised for a quick windfall profit, the business is closed down and the assets disposed of. We have tried to lead the Opposition through the position of the National Freight Corporation to explain that it is in no such position. We are glad to have their assistance in warding off any incompetent asset stripper who might blunder into the operation, believing that he might make a profit.
The hon. Member for Holborn and St. Pancras, South mentioned National Carriers Ltd. depots. I agree that at the moment they are not all the most attractive property, but they stand on land that has a value. The National Freight Corporation is in the same position, but, as one has tried to explain, the possible value of these lands and assets on the market will be outweighed by the considerable redundancy payments required to get rid of the large number of people employed in that business. It would be a loss-making exercise as an asset stripping proposition. That is no basis upon which we can sell it, and it is not the basis upon which it will be sold.
After it is sold, we cannot guarantee that the corporation will stay in its present shape. As a private sector company it will have to change and react successfully and well to the market. We could not guarantee the existing shape of the corporation against market pressures, any more than previous Governments have been able to ward off market pressures on the corporation. Despite all the money thrown at the corporation in its bad and unsuccessful old days, the last Government could not stop necessary change.
We hope that the company will maximise its most successful features once it is in the market and go for growth where it can be achieved. In those sectors where the company is less successful it will have to retract, and it must be free to do so, as is any other private sector company. We believe there will be plenty of opportunities for the new company to benefit once it enters the market.
However, the company could not trade under the conditions suggested by the second part of the new clause, where it would need Government approval to dispose of any asset. That is not even a requirement on the present corporation. The corporation raised £4 million last year by disposing of redundant land. The idea that any company, nationalised or private, can somehow trade in a competitive market while having to come to the Minister every time it wants to dispose of a redundant, derelict warehouse is ludicrous. We do not believe that the new company should be put under any such constraint.
The other way in which the Opposition expressed their concern about the successor company and how it will behave was to ask for the articles of association and memorandum of the new company. We have explained exactly what we shall do on the appointed day to change the corporation into a Companies Act company, 100 per cent. owned by the Government. At that stage it will be a private company, but on flotation it will become a public company when we sell whatever proportion of our shareholding seems to us right at the time.
The only commitment of my right hon. Friend in this context will be to dispose of at least a majority shareholding. We must be left free to make the eventual judgment whether, and if so to what extent, the Government need to retain any shareholding at all. So far as the articles of association and the memorandum are concerned—
The size of the Government shareholding, if any, will have to be decided when we come to flotation. We are not in a position, as the hon. Gentleman claims, analogous to the sale of British Aerospace and British Airways. If we were selling off shares in a company manufacturing military aircraft, or selling shares in a company that was the national flag flyer in the international airlines market, different considerations would apply.
We wish to make the best decision commercially, and in the public interest, about the extent to which the Government should retain a shareholding in the corporation. The company to which we shall transfer the corporation—that is, the company whose shares we shall sell—will be an ordinary Companies Act company with no unusual quirks or sinister content in its articles of association or memorandum. The reason why we did not produce the articles in Committee was that we simply did not have them. They had not been drafted then, and they have not been drafted yet. But we have indicated that the articles of association will follow table A of the Companies Act and that the memorandum will contain nothing unexpected.
The hon. Member for Truro (Mr. Penhaligon) is concerned that those details are not before the House at the moment. I must tell him we would resist that aspect of the new clause—even if we had articles of association ready—if it was sought to make them some kind of statutory instrument or to make them debatable or amendable in the House. Heaven knows what shape of company we would end up with if we were not careful, or what shape of company might be forced upon us.
We see no need for that, but I can give this undertaking to the hon. Member.
When the articles of association are available and we are approaching the appointed day, we shall make copies available. They will be placed in the Library or wherever is the most appropriate place for those hon. Members who are interested. The articles will contain no surprises and nothing sinister. They will contain nothing that will make this new company unusual.
The hon. Member for Truro can make representations to my right hon. Friend the Minister. We shall have a statutory instrument which might have to return constantly to the House for amendment. It is not unusual for the memorandum of a company to be amended from time to time, and it may even be necessary between the appointed day—when the corporation becomes a Companies Act company—and the day of flotation to make some amendments. It is not unusual if a private company—I use the words "private company" in the Companies Act sense of the word—is floated and made into a public company for there to be some necessary changes to the memorandum. But we do not wish to proceed on the affirmative resolution procedure before we are able to do that. We will produce these documents, and I assure the hon. Member for Truro that they will contain nothing startling or sinister.
Though we do not intend to respond to the request of the hon. Member for Truro that the articles of association should be tabled before the House now and that they should show a commitment, in terms, to employee participation, we share his interest and enthusiasm for employee shareholding. It is the desire of the Government when they sell off their shares to offer them to employees of the company, and we are considering ways in which we can encourage the take-up of the shares. We hope that there will be a reasonable sale of our shares to the people who work in the National Freight Corporation so that there will be no conflict of interest between the owners and management of the company and those who work for the company, in its new private sector role.
There is no conflict between ourselves and the hon. Member for Truro. The conflict of policy between the Government and the official Opposition on the new clause is predictably ideological. However, there is not much substance in the advocacy of the new clause on any other point.
I hope that I have dealt in detail with particular points. It remains obvious that the fundamental motive of the Opposition in moving this new clause is a kind of Pavlovian reaction to any reduction of our public sector holdings or any privatisation or introduction of private capital. I thought that the Labour Party normally went in for this kind of thing in relation to the commanding heights of the economy. When last I heard a clear statement of official Labour Party policy, that was the theory. It may be that they are now coming down the slopes a little and that the glaciers are descending. It may be that a different definition of the commanding heights is coming into play.
The National Freight Corporation is 10 per cent. of the road haulage business. It is a public sector company by sheer historical accident, and the attitude of the Opposition does no good to its employees, its customers or anyone else. It is startling that the Labour Party is determined to try to stop the escape of even a small company such as this from the public sector.
For the Labour Party nationalisation remains just as much a shibboleth as ever it was, but the Opposition are extending the concept into some strange corners by moving this new clause and trying to keep Pickfords, BRS, the travel agents and the coal haulage business inside the public net.
The new clause has three clear aims. One is to secure for the House copies of the memorandum and articles of association of the company that is to be sold under the Bill. The company is a public asset of some consequence. I shall not go down the path that the Parliamentary Secretary invited me to walk when he suggested that Members of the Labour Party were concerned principally with the commanding heights of the economy. Such an argument is not worthy of him because he knows that in Government and in Opposition we have demonstrated a concern for aspects of the economy that we believe to be important in the public interest, whether they are described as minor industrial and service aspects or major public aspects. We believe that a combination of industries and services alone can secure the social and economic objectives that we in the Labour Party pursue.
The Parliamentary Secretary invited me to state the Labour Party's policy on the National Freight Corporation. We have never tried to hide our policy. The Labour Party is not averse to holding considerable policy debates about a number of subjects, and transport is not excluded. The Labour Party believes that there should be a public holding in the freight industry. The industry should be efficient, innovative and well-managed. It should have good industrial relations and maximum employee participation. The Government should be able to intervene with sensitivity on social and economic issues that arise from the operation of the freight industry. There has never been any secret about our policy.
We have been given no explanation why we should not see the memorandum and articles of association connected with the transfer of an important public asset. The hon. Member for Horsham and Crawley (Mr. Hordern) made an embarrassing statement in an intervention. He said that the tax losses were evidence of the need for public ownership to secure profits and efficient working. Before the hon. Gentleman came into the Chamber the Minister said that each subsidiary of the National Freight Corporation was profitable.
Whatever way the NFC capital is constructed, and no matter how it is to be transferred to a Companies Act company, that is to be hidden from us. After all, we are only the elected representatives of the British people. We are not to be told. The reality is that the company is paying £8 million a year to the British people on that capital holding. That is the return which the British people receive from that group of public assets. It does not matter whether the previous money paid by the taxpayer is written off to the point where the capital value is £100 million or £15 million. The requirement is that NFC pays £8 million to the British taxpayer.
The right hon. Member for Barrow-in Furness (Mr. Booth) proves my point. Having written off £80 million, it is impossible to state that the profit is £8 million. If £80 million is written off the company must have been running at a loss.
The hon. Member for Horsham and Crawley proves nothing of the kind. He misunderstands the argument. If the public possess an asset on which there is a return of £8 million a year the valuation put on the asset does not matter. The return is predetermined. Its percentage of the capital value, of course, depends on how the assets are valued, but one cannot deny that the possession of one-tenth of the road transport industry, on which there is a return of £8 million, is a valuable asset.
Because the corporation is a valuable asset it cannot win under a Conservative Government. No nationalised industry can win under the Conservatives. When a nationalised industry is successful the Conservative Government try to sell it off to the private sector. When an industry is unsuccessful the Conservative Government try to cripple it with cash limits. When a nationalised industry occupies the whole of an industrial sector it is accused by the Conservatives of abusing its monopoly position. If it occupies only 10 per cent. of the market the Conservatives say that there is no reason why it should remain in public hands. The Conservatives cannot even understand why Labour Members wish the NFC to remain in public hands. Whatever the position of a nationalised industry, it is condemned by the present Government.
Considerable restrictions are placed upon the operation of nationalised industries by those who manage them. I have some sympathy with the Minister's argument. To be forced to pay fixed interest of £8 million a year on an operation that covers one-tenth of the road freight industry is a considerable restraint.
We explained in Committee how we believe that the Government should respond. They should explore ways in which greater flexibility and freedom might be exercised by those who manage the nationalised industries. A degree of flexibility that allows industries to pay less to the public in times of expansion and more at other times may be desirable. We do not reject the argument that nationalised industries work under restrictions that might not make sense, particularly when they compete vigorously in the public sector. However, we reject the idea that because of the restrictions an industry should be denationalised.
One cannot argue that the NFC has not competed successfully. Perhaps its crime in the eyes of the Conservative Government is that it has competed too successfully—that it has been the innovator and the leader in many aspects of road freight. It has served a valuable public function. It enabled British road freight to move with the times in a way that many privately owned sectors of road freight would not consider. It has a value in that sense.
Therefore, the public ownership limitations, to which I attach importance, along with the Minister, have not prevented its operating as a successful element in the road freight industry. Therefore the Opposition can state their side simply. The House needs much more information before this major and important public asset—because of its special position in road freight transport—is turned over to a private company.
There may have been an unfortunate choice of words by the Parliamentary Secretary. He said that Ministers must have the right to decide these matters. It is a constitutional affront for any Minister to say that, be he the Prime Minister or the Parliamentary Secretary. It is for the House to decide whether Ministers should be free to construct the sale of public assets in the way they want, or whether it should have a sight of the proposition under which those public assets are to be disposed of. We favour the latter course.
There is an onus upon those who argue, as the Opposition do, that part of the National Freight Corporation should be in public hands, to say how far the Government should intervene in that area. That fair challenge was thrown out by the Parliamentary Secretary. I want to respond to it briefly.
The Opposition believe that nationalisation in road freight, as in a number of other areas, means that the Government have a responsibility to intervene on certain major policy issues, especially in the area in which they have a public holding. We also accept that the Government should have an employment policy regard for the area. The Government should be prepared to intervene, where they judge it right in the public interest, in the investment policy of the industry. In doing that, the Government must be sensitive to, and intelligently apprised of, the social and economic needs of all those who are affected by the way in which road freight is operated.
The Government are completely blind to that as a result of their own mone-
|Division No. 243]||AYES||[6.44 pm|
|Abse, Leo||Fitch, Alan||Meacher, Michael|
|Adams, Allen||Flannery, Martin||Mellish, Rt Hon Robert|
|Allaun, Frank||Fletcher, L. R. (Ilkeston)||Mikardo, Ian|
|Alton, David||Fletcher, Ted (Darlington)||Miller, Dr M. S. (East Kilbride)|
|Anderson, Donald||Foot, Rt Hon Michael||Mitchell, Austin (Grimsby)|
|Archer, Rt Hon Peter||Ford, Ben||Mitchell, R. C. (Soton, lichen)|
|Armstrong, Rt Hon Ernest||Foulkes, George||Morris, Rt Hon Alfred (Wythenshawe)|
|Ashley, Rt Hon Jack||Fraser, John (Lambeth, Norwood)||Morris, Rt Hon Charles (Openshaw)|
|Ashton, Joe||Freud, Clement||Morton, George|
|Barnett, Guy (Greenwich)||Garrett, John (Norwich S)||Moyle, Rt Hon Roland|
|Barnett, Rt Hon Joel (Heywood)||Garrett, W. E. (Wallsend)||Newens, Stanley|
|Beith, A. J.||George, Bruce||Oakes, Rt Hon Gordon|
|Benn, Rt Hon Anthony Wedgwood||Gilbert, Rt Hon Dr John||O'Neill, Martin|
|Bennett, Andrew (Stockport N)||Ginsburg, David||Orme, Rt Hon Stanley|
|Bidwell, Sydney||Gourlay, Harry||Owen, Rt Hon Dr David|
|Booth, Rt Hon Albert||Graham, Ted||Palmer, Arthur|
|Boothroyd, Miss Betty||Grant, George (Morpeth)||Park, George|
|Bottomley, Rt Hon Arthur (M'brough)||Grant, John (Islington C)||Parker, John|
|Bradley, Tom||Hamilton, W. W. (Central Fife)||Pavitt, Laurie|
|Bray, Dr Jeremy||Harrison, Rt Hon Walter||Pendry, Tom|
|Brown, Hugh D. (Provan)||Haynes, Frank||Penhaligon, David|
|Brown, Ronald W. (Hackney S)||Hogg, Norman (E Dunbartonshire)||Powell, Raymond (Ogmore)|
|Brown, Ron (Edinburgh, Leith)||Holland, Stuart (L'beth, Vauxhall)||Prescott, John|
|Buchan, Norman||Home Robertson, John||Race, Reg|
|Callaghan, Jim (Middleton & P)||Homewood, William||Radice, Giles|
|Campbell, Ian||Hooley, Frank||Rees, Rt Hon Merlyn (Leeds South)|
|Campbell-Savours, Dale||Horam, John||Richardson, Jo|
|Carmichael, Neil||Howells, Geraint||Roberts, Albert (Normanton)|
|Cartwright, John||Huckfield, Les||Roberts, Allan (Bootie)|
|Clark, Dr David (South Shields)||Hudson Davies, Gwilym Ednyfed||Roberts, Ernest (Hackney North)|
|Cocks, Rt Hon Michael (Bristol S)||Hughes, Mark (Durham)||Roberts, Gwilym (Cannock)|
|Cohen, Stanley||Hughes, Robert (Aberdeen North)||Robertson, George|
|Coleman, Donald||Jay, Rt Hon Douglas||Robinson, Geoffrey (Coventry NW)|
|Concannon, Rt Hon J. D.||John, Brynmor||Rodgers, Rt Hon William|
|Conlan, Bernard||Johnson, James (Hull West)||Rooker, J. W.|
|Cowans, Harry||Johnson, Walter (Derby South)||Ross, Ernest (Dundee West)|
|Crowther, J. S.||Johnston, Russell (Inverness)||Rowlands, Ted|
|Cryer, Bob||Jones, Rt Hon Alec (Rhondda)||Ryman, John|
|Cunliffe, Lawrence||Jones, Dan (Burnley)||Sever, John|
|Cunningham, George (Islington S)||Kaufman, Rt Hon Gerald||Sheerman, Barry|
|Cunningham, Dr John (Whitehaven)||Kerr, Russell||Shore, Rt Hon Peter (Step and Pop)|
|Dalyell, Tam||Kilroy-Silk, Robert||Silkin, Rt Hon John (Deptford)|
|Davidson, Arthur||Lambie, David||Silkin, Rt Hon S. C. (Dulwich)|
|Davies. Ifor (Gower)||Lamborn, Harry||Silverman, Julius|
|Davis, Clinton (Hackney Central)||Lamond, James||Smith, Rt Hon J. (North Lanarkshire)|
|Davis, Terry (B'rm'ham, Stechford)||Leadbitter, Ted||Snape, Peter|
|Dean, Joseph (Leeds West)||Leighton, Ronald||Soley, Clive|
|Dempsey, James||Lestor, Miss Joan (Eton & Slough)||Spearing, Nigel|
|Dewar, Donald||Lewis, Arthur (Newham North West)||Spriggs, Leslie|
|Dixon, Donald||Litherland, Robert||Stallard, A. W.|
|Dobson, Frank||Lofthouse, Geoffrey||Steel, Rt Hon David|
|Douglas, Dick||Lyon, Alexander (York)||Stewart, Rt Hon Donald (W Isles)|
|Douglas-Mann, Bruce||McDonald, Dr Oonagh||Stoddart, David|
|Dubs, Alfred||McGuire, Michael (Ince)||Strang, Gavin|
|Dunnett, Jack||Mckay, Allen (Penistone)||Straw, Jack|
|Dunwoody, Mrs Gwyneth||McKelvey, William||Summerskill, Hon Dr Shirley|
|Eadie, Alex||MacKenzie, Rt Hon Gregor||Taylor, Mrs Ann (Bolton West)|
|Eastham, Ken||Maclennan, Robert||Thomas, Dafydd (Merioneth)|
|Edwards, Robert (Wolv SE)||McMillan, Tom (Glasgow, Central)||Thomas, Jeffrey (Abertillery)|
|Ellis, Raymond (NE Derbyshire)||McNally, Thomas||Thomas, Mike (Newcastle East)|
|Ellis, Tom (Wrexham)||Marks, Kenneth||Thomas, Dr Roger (Carmarthen)|
|Ennals, Rt Hon David||Marshall, David (Gl'sgow, Shetties'n)||Thorne, Stan (Preston South)|
|Evans, loan (Aberdare)||marshall, Dr Edmund (Goole)||Tilley, John|
|Evans, John (Newton)||Martin, Michael (Gl'gow, Springb'rn)||Tinn, James|
|Ewing, Harry||Maxton, John||Torney, Tom|
|Field, Frank||Maynard, Miss Joan||Varley, Rt Hon Eric G.|
|Wainwright, Edwin (Dearne Valley)||Whitehead, Phillip||Woolmer, Kenneth|
|Wainwright, Richard (Colne Valley)||Whitlock, William||Wright, Sheila|
|Walker, Rt Hon Harold (Doncaster)||Wigley, Dafydd||Young, David (Bolton East)|
|Watkins, David||Willey, Rt Hon Frederick|
|Weetch, Ken||Williams, Rt Hon Alan (Swansea W)||TELLERS FOR THE AYES:|
|Welsh, Michael||Williams, Sir Thomas (Warrington)||Mr. James Hamilton and|
|White, Frank R. (Bury & Radcliffe)||Wilson, William (Coventry SE)||Mr. Hugh McCartney|
|White, James (Glasgow, Pollok)||Winnick, David|
|Adley, Robert||Fell, Anthony||Macfarlane, Neil|
|Aitken, Jonathan||Fenner, Mrs Peggy||MacGregor, John|
|Alexander, Richard||Finsberg, Geoffrey||MacKay, John (Argyll)|
|Ancram, Michael||Fisher, Sir Nigel||McNair-Wilson, Michael (Newbury)|
|Arnold, Tom||Fletcher, Alexander (Edinburgh N)||McNair-Wilson, Patrick (New Forest)|
|Aspinwall, Jack||Fletcher-Cooke, Charles||McQuarrie, Albert|
|Atkins, Robert (Preston North)||Fookes, Miss Janet||Madel, David|
|Atkinson, David (B'mouth, East)||Forman, Nigel||Major, John|
|Baker, Kenneth (St. Marylebone)||Fowler, Rt Hon Norman||Marlow, Tony|
|Baker, Nicholas (North Dorset)||Fox, Marcus||Marshall, Michael (Arundel)|
|Beaumont-Dark, Anthony||Fraser, Rt Hon H. (Stafford & St)||Mather, Carol|
|Bell, Sir Ronald||Fraser, Peter (South Angus)||Maude, Rt Hon Angus|
|Bendall, Vivian||Fry, Peter||Mawby, Ray|
|Benyon, Thomas (Abingdon)||Gardiner, George (Reigate)||Mawhinney, Dr Brian|
|Benyon, W. (Buckingham)||Gardner, Edward (South Fylde)||Maxwell-Hyslop, Robin|
|Best, Keith||Garel-Jones, Tristan||Mellor, David|
|Biffen, Rt Hon John||Gorst, John||Meyer, Sir Anthony|
|Biggs-Davison, John||Gow, Ian||Miller, Hal (Bromsgrove & Redditch)|
|Blackburn, John||Gower, Sir Raymond||Mills, Iain (Meriden)|
|Blaker, Peter||Grant, Anthony (Harrow C)||Mills, Peter (West Devon)|
|Body, Richard||Gray, Hamish||Molyneaux, James|
|Bonsor, Sir Nicholas||Greenway, Harry||Monro, Hector|
|Boscawen, Hon Robert||Grieve, Percy||Montgomery, Fergus|
|Bottomley, Peter (Woolwich West)||Griffiths, Eldon (Bury St Edmunds)||Morgan, Geraint|
|Bowden, Andrew||Griffiths, Peter (Portsmouth N)||Morris, Michael (Northampton, Sth)|
|Boyson, Dr Rhodes||Grist, Ian||Morrison, Hon Charles (Devizes)|
|Braine, Sir Bernard||Grylls, Michael||Morrison, Hon Peter (City of Chester)|
|Bright, Graham||Gummer, John Selwyn||Mudd, David|
|Brinton, Tim||Hamilton, Hon Archie (Eps'm&Ew'll)||Murphy, Christopher|
|Brittan, Leon||Hamilton, Michael (Salisbury)||Myles, David|
|Brocklebank-Fowler, Christopher||Hampson, Dr Keith||Neale, Gerrard|
|Brooke, Hon Peter||Hannam, John||Needham, Richard|
|Brown, Michael (Brigg & Sc'thorpe)||Haselhurst, Alan||Nelson, Anthony|
|Browne, John (Winchester)||Hastings, Stephen||Neubert, Michael|
|Bryan, Sir Paul||Havers, Rt Hon Sir Michael||Newton, Tony|
|Buchanan-Smith, Hon Alick||Hawkins, Paul||Oppenheim, Rt Hon Mrs Sally|
|Buck, Antony||Hawksley, Warren||Osborn, John|
|Budgen, Nick||Hayhoe, Barney||Page, John (Harrow, West)|
|Bulmor, Esmond||Henderson, Barry||Page, Rt Hon Sir R. Graham|
|Burden, F. A.||Hicks, Robert||Page, Richard (SW Hertfordshire)|
|Butcher, John||Higgins, Rt Hon Terence L.||Parkinson, Cecil|
|Butler, Kon Adam||Hogg, Hon Douglas (Grantham)||Parris, Matthew|
|Cadbury, Jocelyn||Hooson, Tom||Patten, Christopher (Bath)|
|Carlisle, John (Luton West)||Kordern, Peter||Patten, John (Oxford)|
|Carlisle, Kenneth (Lincoln)||Howell, Ralph (North Norfolk)||Pattie, Geoffrey|
|Chalker, Mrs Lynda||Hunt, David (Wirral)||Pawsey, James|
|Channnon, Paul||Hunt, John (Ravensbourne)||Percival, Sir lan|
|Chapman, Sydney||Irving, Charles (Cheltenham)||Pollock, Alexander|
|Churchill, W. S.||Johnson Smith, Geoffrey||Porter, George|
|Clark, Hon Alan (Plymouth, Sutton)||Jopling, Rt Hon Michael||Powell, Rt Hon J. Enoch(S Down)|
|Clarke, Kenneth (Rushcliffe)||Joseph, Rt Hon Sir Keith||Prentice, Rt Hon Reg|
|Clegg, Sir Walter||Kaberry, Sir Donald||Price, David (Eastleigh)|
|Colvin, Michael||Kershaw, Anthony||Prior, Rt Hon James|
|Cope, John||Kimball, Marcus||Proctor, K. Harvey|
|Cormack, Patrick||King, Rt Hon Tom||Rathbone, Tim|
|Corrie, John||Kitson, Sir Timothy||Renton, Tim|
|Costain, A.P.||Knight, Mrs Jill||Rhodes James, Robert|
|Critchley, Jullan||Knox, David||Rhys Williams, Sir Brandon|
|Dickens, Geoffrey||Lamont, Norman||Ridley, Hon Nicholas|
|Dorrell Stephen||Lang, Ian||Ridsdale, Juliian|
|Douglas-Hamilton, Lord James||Langford-Holt, Sir John||Rifkind, Malcolm|
|Dover, Denshore||Latham, Michael||Roberts, Wyn (Conway)|
|du Cann, Rt Hon Edward||Lawrence, lvan||Ross, Wm. (Londonderry)|
|Dunn, Robert (Dartford)||Lawson, Nigel||Rost, Peter|
|Dykes, Hugh||Lee, John||Royle, Sir Anthony|
|Eden, Rt Hon Sir John||Lennox-Boyd, Hon Mark||Sainsbury, Hon Timothy|
|Edwards, Rt Hon N. (Pembroke)||Lester, Jim (Beeston)||St. John-Stevas, Rt Hon Norman|
|Eggar, Timothy||Lewis, Kenneth (Rutland)||Scott, Nicholas|
|Elliott, Sir William||Lloyd, Ian (Havant & Waterloo)||Shaw, Michael (Scarborough)|
|Emery, Peter||Lloyd, Peter (Fareham)||Shelton, William (Streatham)|
|Fairbairn, Nicholas||Loveridge, John||Shepherd, Colin (Hereford)|
|Fairgrieve, Russell||Luce, Richard||Shepherd, Richard(Aldridge-Br'hills)|
|Faith, Mrs Shella||Lyell, Nicholas||Shersby, Michael|
|Farr, John||McCrindle, Robert||Silvester, Fred|
|Skeet, T. H. H.||Thomas, Rt Hon Peter (Hendon S)||Walters, Dennis|
|Speller, Tony||Thompson, Donald||Ward, John|
|Spence, John||Thorne, Neil (Ilford South)||Watson, John|
|Spicer, Michael (S Worcestershire)||Thornton, Malcolm||Wells, Bowen (Hert'rd & Stev'nage)|
|Sproat, Iain||Townend, John (Bridlington)||Wheeler, John|
|Squire, Robin||Townsend, Cyril D. (Bexleyheath)||Whitney, Raymond|
|Stainton, Keith||Trippier, David||Wickenden, Keith|
|Stanbrook, Ivor||Trotter, Neville||Wiggin, Jerry|
|Stanley, John||Taylor, Teddy (Southend East)||Wilkinson, John|
|Steen, Anthony||Vaughan, Dr Gerard||Williams, Delwyn (Montgomery)|
|Stevens, Martin||Viggers, Peter||Winterton, Nicholas|
|Stewart, Ian (Hitchin)||Waddington, David||Wolfson, Mark|
|Stewart, John (East Renfrewshire)||Wakeham, John||Young, Sir George (Acton)|
|Stokes, John||Waldegrave, Hon William|
|Stradling Thomas, J.||Walker, Bill (Perth & E Perthshire)||TELLERS FOR THE NOES:|
|Tapsell, Peter||Walker-Smith, Rt Hon Sir Derek||Mr. Spencer Le Marchant and|
|Tebbit, Norman||Waller, Garry||Mr. Anthony|