I've worked for this company for 12 years.. it was bought out 7 years ago.. I remain on the original contract and anyone starting since the 7 years have different contracts being paid lower wages.
I wish to drop my working hours down by 10 hours and I've been told because I want to change my hours I must sign this new contract and be paid £20 a night less!
Can they do this? If I refuse to sign can they dismiss me?

Seems to me (and I am in no way a labor lawyer) that your decision is do you want to terminate the conditions of your existing contract to get less hours.

In my humble opinion the company's position is correct.

If you terminate your original contract, then you would have to decide whether to accept the new contract or seek employment elsewhere.

Sorry for the bad opinion.