§ 31. Mr. Ridleyasked the Chancellor of the Exchequer, in view of the fact that share prices quoted on the Stock Exchange have reached an all-time peak, if he will seek to amend the Corporation Tax by ceasing to tax equity dividends twice, thus encouraging the issue of more equity stock.
§ Mr. DiamondI do not think that the treatment of dividends under the Corporation Tax system calls for amendment. Share prices are affected by a great many factors.
§ Mr. RidleyWhy is it part of Socialist philosophy to discriminate more against equity shareholders than against fixed-interest shareholders? Second, did the right hon. Gentleman foresee that the result of his policy would be to achieve an all-time record high in the Stock 1127 Exchange, and is that in accordance with Socialist philosophy?
§ Mr. DiamondThe distinction which the hon. Gentleman makes has nothing to do with Socialist philosophy; it has to do with plain accountancy. Interest is different from a dividend.
§ Mr. Hall-DavisDoes not the Chief Secretary recognise that not the least disadvantage of this tax is that an increase in the rate of Corporation Tax is, in effect, a levy on retained profits available for industrial modernisation?
§ Mr. DiamondThe hon. Gentleman is helping me very considerably by making it clear that those who plough back the whole of their profits have minimum tax to pay.