Dividends (Hansard, 10 April 1962)

§ 12. Sir C. Osborne
asked the Chancellor of the Exchequer how many companies have increased, reduced, or paid the same dividend since his pay pause policy was announced; and how much money was involved in each of the three classifications.

§ Sir E. Boyle
Out of 1,247 dividend declarations by public companies since 25th July last year listed in the Financial Times, 357 represented increased dividends and 890 the same or reduced dividends. I regret that the rest of the information requested could not be extracted without disproportionate work.

§ Sir C. Osborne
On balance, is it not fair to say that the directors of companies have acceded to the Chancellor's request for a dividend pause?

§ Sir E. Boyle
Yes. I agree with my hon. Friend. I think that the figures I have announced show that that is so.

§ Mr. Jay
Is it the Chancellor's policy that dividends paid in 1962 should not increase by more than 2½ per cent. over the previous year?

§ Sir E. Boyle
My right hon. and learned Friend has made it perfectly plain that we are now moving to a new phase of the incomes policy. Neither in the case of incomes nor of dividends could it be right to say that we should go right back to where we were before 25th July last. The proportion of companies announcing increased dividends, as listed in the Financial Times, has been diminishing steadily each month from an average of 56.4 per cent. over the first three months after 25th July to 22.6 per cent. in the last three months. This is not a matter on which right hon. and hon. Gentlemen opposite have any political points they could usefully make.

§ Sir C. Osborne
Surely it would be unfair—to follow up the question asked by the right hon. Member for Batter-sea, North (Mr. Jay)—to limit dividends increase to 2½ per cent. to those companies which have had to reduce dividends because of reduced profits in the last year?

§ Sir E. Boyle
Again, this is too big a question to debate now, but the point I made was that neither with regard to incomes nor to dividends, nor to incomes of any kind, do the Government believe that we could go back to the position as it was before 25th July. But there can be no doubt that to an increasing extent the trend of dividend has been in full accord with my right hon. and learned Friend's policy. That should be fully recognised by the House and the country.

§ Mr. Jay
Will the hon. Gentleman answer my question? Will the Government allow only a 2½ per cent. increase in dividends in 1962?

§ Sir E. Boyle
It would be very unreasonable to answer that question in isolation. The right hon. Gentleman should look at the White Paper and take note of the answers I have given. I think that that is a completely satisfactory reply on this matter.

§ Mr. Warbey
As dividends increased by 25 per cent. last year, is the hon. Gentleman prepared to maintain that increase during the present year? As a large number of companies—including Courtaulds, banks and insurance companies—have increased dividends, when will the Treasury take action in this matter?

§ Sir E. Boyle
The hon. Gentleman must try to get Courtaulds off his brain. His figures are inaccurate. He has taken no notice of the trend, which is fully in accord with the Chancellor's policy.