HC Deb 18 October 1966 vol 734 cc20-1
23. Mr. Bruce-Gardyne

asked the Chancellor of the Exchequer if he will give redress to members of the public who purchased shares in Great Universal Stores Limited between 7th July and 10th October, 1966, on the basis of a 36¼ per cent. dividend, in view of the Treasury's action in forcing the company to reduce its dividend to 32½ per cent. retrospectively.

Mr. MacDermot

No, Sir.

Mr. Bruce-Gardyne

Can the hon. and learned Gentleman tell the House by what statutory authority the Treasury intervened in this matter? Was it not a rather ugly example of government by menace—menace to use powers which the Government did not have?

Mr. MacDermot

There was no question of statutory powers or statutory action. We invited the co-operation of the Great Universal Stores board in the matter of dividend restraint, and I am glad to say that it showed a great deal of responsibility—rather more than some hon. Members opposite have shown.

Mr. Dalyell

Is my hon. and learned Friend aware of the irritation that is widespread in the community at those companies which refuse to co-operate in dividend reductions?

Mr. MacDermot

My right hon. Friend is well aware of the feeling on this matter. It is only right to say that there has been a very high degree of co-operation. In the early stages there was some genuine confusion and misunderstanding, but the matter is now perfectly clear, and we are obtaining very good co-operation.

Mr. Boyd-Carpenter

Is not there a question of good faith here? In a situation which is largely a crisis of confidence have not the Government forced some great companies to break their word?

Mr. MacDermot

There is no question of forcing companies to do anything. I do not accept that there is any breach of faith. Many wage and salary earners were rightly expecting increases, which have been affected by the standstill, and there is no reason why shareholders should be in a privileged position.

Mr. Rankin

Does my hon. and learned Friend call it co-operation when a great building and construction company generously reduces its dividend from 20 per cent. to 19 per cent.? Is not that just a method of getting round the difficulty?

Mr. MacDermot

I am afraid that I do not follow my hon. Friend's point, or know the case to which he is referring.

Mr. Iain Macleod

Why does the hon. and learned Gentleman justify this breach of faith on the grounds that the Government are permitting so many others?

Mr. MacDermot

I am not justifying and I do not accept that it is a breach of faith. We are inviting people of all sections of the community to co-operate in a vitally important measure to obtain an improvement in our economic position. We are obtaining this co-operation—to the consternation of hon. Gentlemen opposite.