§ 2. Mr. MacGregor
asked the Chancellor of the Exchequer whether he will now abolish dividend restraint.
§ The Paymaster-General (Mr. Edmund Dell)
No, Sir; there has been no change in the position since my right hon. Friend informed the House on 2nd July 1974 that he intended to carry out a comprehensive review of the controls later this year. The Royal Commission on the Distribution of Income and Wealth has been asked to assemble some of the factual information for the review, and to report by the early summer.
§ Mr. MacGregor
Does not the Paymaster-General recognise that the continuation of the policy of dividend restraint is having increasingly damaging effects, including distortions in the capital market; penalties, and therefore disincentives, to savers whose returns are not keeping pace with inflation; and, above all, perhaps, disadvantages for pension funds in terms of their revenue flow and, hence, potentially for many millions of pension fund holders? In the light of all these facts and of the fact that we cannot wait for the report of the Royal Commission, will not the right hon. Gentleman reconsider this policy?
§ Mr. Healey
I think that we can wait for the report of the Royal Commission, and the arguments the hon. Gentleman adduced will no doubt be seen in better perspective against the facts presented by the commission.
§ Mr. Norman Lamont
Will the right hon. Gentleman acknowledge that if it is the Government's aim to penalise the rich for the purpose of the social contract, that purpose is better achieved through the taxation system? Does he not agree that dividend control is a blunt instrument, which penalises alike the poor, the investor, the pension fund and the charity? Is it not a fact that the increases now allowed are well below the going rate of inflation, and that that is the unfairness of the system?