§ 39. Mr. Albuasked the Chancellor of the Exchequer the figures of net industrial investment in fixed capital at constant prices for each year since 1948; and the amount distributed in dividends in each of those years.
§ Mr. R. A. ButlerNo official estimates of net industrial investment are available. Figures for dividends and interest payments for 1948–53 are given in "National Income and Expenditure 1946 to 1953,"and figures for 1954 will be provided in the forthcoming White Paper on National Income and Expenditure.
§ Mr. AlbuWould the Chancellor agree that net industrial investment rose to an all-time peak in 1950 and fell by 1953 to the inadequate pre-war level, and that while investment was falling, dividends were rising?
§ Mr. ButlerI would like to examine the hon. Gentleman's very clipped remarks on this subject to see whether I can support them, but I undertake to examine them.
§ Mr. WoodburnIs the right hon. Gentleman aware that all expert opinion is convinced that there is not nearly enough of this capital investment if this country is to keep its place at the head of the industrial nations?
§ Mr. ButlerThat is precisely why the major measure of the last Budget was devoted to increasing investment, and I am glad to say that it has been successful, as far as we can judge.
§ 40. Mr. Albuasked the Chancellor of the Exchequer by what means he intends to ensure that the recent apparent revival of industrial investment, from the low levels of the last three years, is not reversed as a result of the rise in the Bank Rate.
§ Mr. R. A. ButlerI see no reason to suppose that a flexible use of interest rates will have any permanently adverse effect on long-term industrial investment.
§ Mr. AlbuCan the Chancellor say whether it is his view that a very high Bank Rate, and consequently long-term interest rates, does or does not have a restrictive effect on investment in the months immediately following?
§ Mr. ButlerThe fundamental point is that long-term industrial investment depends very much on the confidence of industry in the future strength and stability of the economy, and as I think that that will have been increased by our recent action, I see no reason to be too pessimistic about investment.
§ Captain PilkingtonIn view of the fact that when my right hon. Friend raised the Bank Rate, the "Daily Herald," in large black letters, said that there was a financial crisis and "The Times" on the same day said there was no hint of one, will my right hon. Friend say which was right?
§ Mr. ButlerIt is not my practice to adjudicate between our principal organs of public opinion.
§ 43. Mr. Jayasked the Chancellor of the Exchequer whether he will now introduce legislation to limit excessive dividends.
§ Mr. R. A. ButlerNo, Sir.
§ Mr. JayCan the Chancellor say why he proposes to restrict hire purchase, and, for instance, the purchase of furniture by newly married couples, by compulsory legislative methods but merely leaves dividend restraint to pious exhortations which have always been disregarded?
§ Mr. ButlerI do not think that the attempts made by right hon. and hon. Gentlemen opposite to find an artificial method of limiting dividends were successful. I think we had better leave the matter where it is, with the general statements already made by the Government.
§ Mr. JayHow can the Chancellor say that our method was not successful when it was never tried? Will he tell us why he makes distinction between hire purchase and dividend restraint?
§ Mr. ButlerI had good reason to act in the case of hire purchase, and I think I was able to act effectively. I believe that the situation With regard to dividends allows a proportion to be put back into reploughing and investment, which is an important feature.
§ Mr. StokesDoes the Chancellor recognise an excessive dividend When he sees one?
§ Mr. ButlerThe answer is "Yes, Sir."