HC Deb 27 July 1978 vol 954 cc1993-2010

Question proposed, That the clause stand part of the Bill.

1.0 a.m.

Mr. Tim Renton

I am pleased to have caught your eye, Sir Myer. There have been long periods when I wondered whether I should ever have that privilege. I am also fortunate because this important debate is taking place in the presence of the Prime Minister, the Chancellor of the Exchequer and a number of other Ministers.

One point that is often stressed in the House, notably by my right hon. and learned Friend the Member for Huntingdonshire (Sir D. Renton), is the need for clarity in our legislation. [Hon. Members: "Where is he?"] I have no doubt that my right hon and learned Friend is wait-to take part in the debate shortly. If there is to be clarity in legislation, it must obviously start with the nomenclature of Bills. There is little point in having clarity within a Bill unless the outsider is able to see clearly to what a Bill refers. Otherwise, he will be misled from the start.

I am surprised, therefore, to see that the Title contains no reference to the Long Title and that it is proposed to call the Bill the Dividends Act 1978. It must be clear from our debates that that is not the right Title for the Bill. Whatever it is, it is not a Dividends Act. It may be a Restraint or Restriction of Dividends Act, it may even be a Non-Dividends or Lack of Dividends Act, but it is not a dividends Act. A Minister should justify the Bill's Title.

I am glad that the Chamber is fuller than it was between 10.15 p.m. and 12 o'clock. The hon. Member for Birmingham, Perry Barr (Mr. Rooker) waves his arm at me, but I can assure him that since 10.15 p.m. there have been many more of my hon. Friends in the Chamber than Labour Members.

Mr. Aitken

Is my hon. Friend aware that the tendency to produce a misleading Title is not confined to the Bill? The Police Act 1976 should have been entitled the Complaints against the Police Bill. It dealt exclusively and extravagantly with an unnecessary measure and it should not have been titled the Police Act.

The First Deputy Chairman

Order. The hon. Member for Thanet, East (Mr. Aitken) must confine his remarks to the Bill.

Mr. Renton

Thank you, Sir Myer, for your protection. I think that my hon. Friend the Member for Thanet, East (Mr. Aitken) was drawing us a little wide. Bearing in mind your strictures earlier, Sir Myer, it is important that we stick to the issues before us.

Mr. Hodgson

Will my hon. Friend bear in mind that we might consider calling it the Manipulation of Dividends Bill? The Minister has suggested that there will be no way in which the Treasury will be able to work out precisely what is required. It seems that there will have to be horse trading with the Treasury.

Mr. Renton

That is another logical consideration. I thank my hon. Friend for that suggestion.

You will recall, Sir Myer, that in the earlier debate, which you brought to a slightly quick end—I say that without criticising your judgment in any way—the Minister of State said that one reason for it being so important that the period of dividend restraint should run on to the end of July was that he did not want another period of pay control—I think that those were his words—interfered with by dividend controls coming to an end when the Government of the day might be in negotiation with, for example, the National Union of Mineworkers, about the next wage claim.

The First Deputy Chairman

Order. I think that the hon. Member for Mid-Sussex (Mr. Renton) will be grateful to me if I remind him that we are now discussing the Title of the Bill. We are not discussing the principle of the Bill. We are discussing the Title. I hope that he will stick to that.

Mr. Renton

I thank you, Sir Myer. I was advancing a reason to the Minister of State for accepting that the Bill has been given the wrong Title. If the present Title stands, the impression could well be given that the Bill aids dividends. If it is called the Dividends Bill, the implication must be that it liberates dividends from the restraints that they have been under for the past five years.

Mr. Michael Stewart (Fulham)

Would the hon. Gentleman say similarly that if a measure is called the Rent Act it means that it decontrols rents?

Mr. Renton

I am extremely glad that the right hon. Gentleman has raised that point. I have a Ten-Minute Rule Bill next Wednesday on the subject of the Rent Acts. I hope that he will be in the Chamber to listen to my arguments.

I am arguing that the Title of the Bill is a misnomer and that the Bill will have an effect contrary to the aims of Labour Members—with some of which I do not agree—that dividend restraint should run simultaneously and contemporaneously with wage control. If it is called the Dividends Bill, the wrong impression will be given.

Therefore, I respectfully submit that the Government should think again even at this late stage. I should be prepared to accept a handwritten amendment to the effect that the Bill should be entitled the Restraint on Dividends Bill or the Restriction on Dividends Bill. After all, that is precisely what it is. Let the Bill be known as such.

Mr. Viggers

In an exchange a short time ago you said, Sir Myer, that the clause was about the Title of the Bill. With respect, Sir Myer, on my reading of the clause that is not strictly so. It seems that it is concerned with whether the measure shall apply to Northern Ireland. That is an extremely important point of principle that we should not let pass without some careful consideration. Northern Ireland is a separate part of the United Kingdom where special considerations can apply.

There have been special wishes and desires to attract investment to Northern Ireland. Foreign investment will be curtailed in areas where the Bill applies. My hon. Friend the Member for Eastbourne (Mr. Gow) may wish to disagree with me—if so, I should be happy to hear his comments—but it is arguable that areas where unemployment is high should have special protection. I speak as a privileged Member for a south-east constituency which has high unemployment, but not as high as in some other parts of the United Kingdom, including Northern Ireland. It is arguable that the restriction of dividends restricts external investment in those areas.

Not much investment is by way of retained profits, although that is one area from which investment comes. Most investment is by way of new money, which will be discouraged if dividends are restricted. New money is encouraged into new issues and rights issues by showing that the dividend record of a company is successful and increasingly profitable.

If the clause stands part of the Bill, the Bill will apply to Northern Ireland. Therefore, it will restrict companies' dividend records and prevent investment from going to that part of the United Kingdom. Generally speaking, I take the view that the United Kingdom is composed of four parts which are indivisible, but in this instance I believe that we should think carefully before we allow the Bill to extend to Northern Ireland. I urge my right hon. and hon. Friends to ponder that point. Indeed, I wonder whether we should allow the clause to stand part of the Bill. Perhaps we should consider voting against it.

Mr. Gow

My hon. Friend the Member for Mid-Sussex (Mr. Renton) put forward a cogent argument for renaming the Bill. It would certainly be very much clearer, if it should reach the statute book after amendments have been made to it in another place, if it were called the Dividends (Restriction) Act. No Member of this place and no Member of another place would assent to the proposition that this measure was more accurately described as the Dividends Act than if it were amended to the Dividends (Restriction) Act. Indeed, there was an amendment to that effect—not selected by the Chairman of Ways and Means—which would have made the change suggested by my hon. Friend the Member for Mid-Sussex.

I hope that the Minister of State will address himself to subsection (2). It is notable that the Counter-Inflation Act 1973, whose child in a sense the Bill is, did not contain the words in subsection (2). Section 10 of the 1973 Act extends to companies which are incorporated in any part of the United Kingdom". The exact wording of section 10(4) of the 1973 Act is: This section shall apply to every company incorporated under the law of any part of the United Kingdom; but nothing in this section shall apply to companies not so incorporated. If the 1973 Act—notably section 10—is still in force, as we know that it is and that it will be extended after 31st July should the Bill reach the statute book, then, with the benefit of the advice of the Attorney-General, whom we are particularly glad to see in his place, perhaps we shall be told why it is necessary to include clause 2 (2) when the parent Act applies to companies—[HON. MEMBERS: "Oh! He has gone".] Anyway, perhaps the Lord Advocate—an intermittent attender at the proceedings on the Scotland Bill—can be sent for to explain this point to us.

1.15 a.m.

It is astonishing that we should put into a Bill something which I believe I have shown to be wholly superfluous. There is seated on the Back Bench opposite a Minister from the Northern Ireland Office. Perhaps he could be prevailed upon to come to the Front Bench to explain to the Committee whether the submission that I have made is right, that subsection (2) is superfluous. I say that it is unnecessary. It may be that if the Chief Secretary could persuade his right hon. Friend the Minister of State, Northern Ireland Office, to come down from Mount Olympus on to the Front Bench we could avoid a Division on whether clause 2 should stand part of the Bill. That could be of great assistance to the Committee and enable us to make that progress on the Bill which we on this side have so clearly demonstrated to be our desire.

Mr. Aitken

I wish to support the valid points put forward by my hon. Friend the Member for Eastbourne (Mr. Gow), and in supporting them—[Interruption]—I agree wholeheartedly that the title should be the Restriction of Dividends Bill or the Restraint on Dividends Bill. [Interruption.] Above all, the reason—

Mr. Gow

On a point of order, Sir Myer. My hon. Friend is in the course of delivering a cogent speech. [Interruption.] It is precisely about those sedentary interjections that I am protesting. I am finding it very difficult to hear my hon. Friend because of the noise that is coming from below the Gangway. Would you kindly restrain those who are making the noise?

The First Deputy Chairman

I am obliged to the hon. Gentleman. He can rest assured that I shall do what I can to maintain order in the Committee.

Mr. Aitken

I am most grateful to you, Sir Myer. I understand the irritation of Labour Members, because I am coming to the central point, which is that this is a misleading title as it stands and they do not like to be reminded of that. Labour Members are very quick to criticise such things as advertisements and newspaper headlines for being misleading. Indeed, they have set up, with all the paraphernalia and bureaucracy of Socialism, bodies to make sure that advertisements and newspapers are not misleading. We have the Press Council and the Advertising Standards Association, the purpose of which is to make sure that titles are not misleading. [Interruption.]

The First Deputy Chairman

Order. Interventions, particularly from a sedentary position, unnecessarily lengthen the proceedings.

Mr. Aitken

As I was saying, this is a misleading title as it stands. One realises that by considering the plight of a future Gibbon or Macaulay referring back in a hundred or so years' time to the deliberations of this House during 1978, thumbing through the already far too numerous pages of the statute book and wondering what the Dividends Act could possibly refer to. The man of the future will surely believe that it must have referred to the need to increase national prosperity, to increase productivity in industry and to increase employment prospects, whereas this mean, miserable little measure is doing absolutely the reverse, and it should say so in the Title, clearly and unequivocally.

Also, the Title should make clear that the Bill refers only to investment dividends. Labour Members have many constituents who shop at the Co-op. Dividends from the Co-op are not being restricted by the Bill. Perhaps, also, the social historian of the future will be baffled to find that a very narrow definition was applied.

In one way or another this is an unhappy and misleading title. It needs clarification. It needs complete alteration. I fully support the point made by my hon. Friend the Member for Mid-Sussex (Mr. Renton) that this should be called the Restriction of Dividends Bill.

Mr. Richard Wainwright

The hon. Members for Eastbourne (Mr. Gow) and Thanet, East (Mr. Aitken) have been competing with each other in staking their claims to be Ministers for the elderly in any Administration which their party might form in the future. I admire their attention to the needs of the elderly, but their attitude to the Title of the Bill is misconceived. It is better that Bills should have their Titles confined to the subject matter of the measure. We should give Bills such titles as "Dividends Bill", "Rents Bill" and "Housing Bill". We should not import into a Title a quality which the Government of the day allege that the Bill has but which it does not possess.

It would be wrong to call this the Dividend Restriction Bill, because the last thing the Bill does is to restrict an enormous number of dividends. That is what makes it such a mockery. The Bill will do nothing to restrict the dividends of companies with shareholders who are wealthy enough to make rights issues. It will do nothing to restrict the dividends of companies with some overseas interests such as Inchcape, Ocean Wilson and Nigerian Electricity, which have already driven a coach and four through the dividend control of successive Governments. It will do nothing to restrict the dividends of companies such as Marchwiel, which has restructured to escape the elementary and rambling controls. If there had to be a description from this side of the Committee it would be Dividend (Arbitrary Interference) Bill.

Since all sides of the House have conflicting ideas about what the Bill is supposed to do, I believe that, for once, the Government have it right and that Dividends Bill is a fair description and the best that can be put on this rather miserable measure.

Question put and agreed to.

Clause 2 ordered to stand part of the Bill.

Bill reported, without amendment.

Motion made, and Question proposed, That the Bill be now read the Third time.

1.22 a.m.

Mr. Higgins

Is this motion debatable, Mr. Deputy Speaker?

Mr. Deputy Speaker (Sir Myer Galpern)

The motion is debatable.

Mr. Higgins

I am delighted to learn that the motion is debatable, because after the proceedings this evening I was beginning to wonder whether anything was debatable.

Mr. Deputy Speaker

Order. I ask the hon. Member for Worthing (Mr. Higgins) to withdraw that accusation against the Chair. I told the House that the matter was debatable because the hon. Member did not seem to be aware of that.

Mr. Higgins

I withdraw any remark which appears to be a criticism of the Chair. I was about to say that it seems that the Government have adopted an unbelievably restrictive attitude to the debate today. I was referring not to you, Mr. Deputy Speaker, but to the Government. The closure was moved after only two hours' debate when a number of hon. Members were still waiting to take part. There was no further opportunity to pursue a number of arguments. This motion is debatable and we wish to discuss what remains in the Bill. I was criticising not you, Mr. Deputy Speaker, but the way in which the Government have proceeded. We had a debate on whether the Bill should extend to Northern Ireland, and the Government made no reply. That is intolerable. That was why I said that I wondered whether we should have any debate.

A number of issues need clarification. A number of issues are still unanswered from the Minister of State's earlier replies. We have not had a satisfactory reply on them, and it would be in order for him to repair that omission on Third Reading. We are concerned in particular about the way in which the Bill will be operated by the Government. To our surprise, we discovered that the Minister of State was apparently unaware by precisely which criteria the Government will decide whether relaxation will apply on dividends when the cover of the dividends in a particular company has risen above the previous level. The Minister of State did not feel competent at the earlier stage to give a specific answer, but this is surely a point of considerable importance if industry and those who will have to operate under the Act are to know whether it is fair.

It is not satisfactory to refer to the new accounting principles adopted by the Institute of Chartered Accountants in ED19 if we do not know whether their application to previous periods when they did not apply would be relevant in deciding whether the dividend cover had increased.

This is a matter on which the Minister should know the answer. It determines whether the change that is now proposed will have a sensible effect. I therefore hope that, in a spirit of a sensible debate on the matter, we can have a satisfactory answer from the Minister on a highly important technical point of deep concern to a number of firms.

Another point to which we have not had a satisfactory answer is whether the Bill is necessary. Much debate so far has centred upon whether dividends are being treated fairly compared with wage claims. We are entitled to have figures to show what has happened as between the two since dividend control was first introduced. Only on that basis can we decide whether the Government are, as they claim, being equitable. I do not believe that they are, but the House is entitled to know the figures so that we may judge the Government's claims on the matter.

1.28 a.m.

Mr. Aitken

I believe that the Bill should not have a Third Reading, because I come from a constituency in which there is considerable poverty among those who are struggling to live off small fixed incomes which are seriously affected by dividend control.

Mr. Ted Leadbitter (Hartlepool)

That is not the case with the hon. Member.

Mr. Aitken

Labour Members may scoff, but they are clearly not concerned about the way in which the balance of power has shifted in this country in the last four years. In my kind of constituency one is very well aware that there are a new rich and a new poor in our society. The new rich are those who belong to the big unions which fought for massive wage increases during the early years of this Government. In 1975, 1976 and 1977, wage increases of 25 or 35 per cent. were secured.

Those who were left on small fixed incomes suffered gravely as a result of inflationary pressure. They suffer still today because the value of their savings has been whittled away, and the dividends which they receive from their investments, which are the fruits of a lifetime of toil, are being smashed by today's inflationary pressures. The Bill gives them no hope for the future. It also restricts and inhibits investment in productive industry, and in the long run it will inhibit employment and growth. For that reason, I am glad to oppose it on Third Reading.

1.30 a.m.

Mr. Nicholas Winterton

The House is being very unfairly treated by the Government. As my hon. Friend the Member for Worthing (Mr. Higgins) has said, very valid points have been put to the Treasury Bench during our debates on the Bill but very little in the way of answers has been forthcoming.

My hon. Friend the Member for Walsall, North (Mr. Hodgson) raised a very interesting matter, to which we have received a totally unsatisfactory reply. If I correctly interpreted the Minister of State's answer at an earlier stage, I believe he was indicating that the Government were legislating for horse trading. That is a most extraordinary state of affairs. The Minister was clearly indicating that Treasury officials would have to negotiate with each and every company on the situation that will be created by the Bill.

This is quite extraordinary. The Government are not legislating for order and efficiency. They are legislating for chaos and horse trading. It is certainly my understanding that whatever Government hold power in Britain, that is not the sort of situation for which legislation is passed through Parliament.

I pass on to the important matters raised by my hon. Friends the Members for Eastbourne (Mr. Gow) and for Thanet, East (Mr. Aitken). Have the Government given serious consideration to the many elderly people who are at present trying to maintain some standard of living from investment income? Of course, investment income rings all sorts of bells in the minds of Labour Members, particularly those below the Gangway. They think that it is merely inherited wealth. The fact is that today that is very far from the truth. In the main, many of those who are living on investment income have accrued that money out of the money they have earned and saved during their working lives. Dividend restraint in recent years has held down the return which those people are fully justified in feeling they should have on the money that has been invested. That money, which they have struggled to save from their wages and salaries during their working lives, is probably maintaining jobs. If the Government are to pay more than lip service to employment, they should understand this.

I said earlier in our proceedings that the Bill would probably have very little effect. As the hon. Member for Colne Valley (Mr. Wainwright) has clearly indicated, there are many companies, particularly the larger ones, which have solicitors and accountants who can advise them on these matters. There are ways of driving a coach and four, perhaps even a coach and six, through this legislation.

I believe that the seed corn of the prosperity of this country is the small firm. The small firm needs investment, and it gets it from the market. But if there is dividend restraint, that investment will not be forthcoming. Therefore, far from really caring about the 1½ million people out of work, the Government are kicking them in the teeth and providing very little opportunity for the additional jobs needed to reduce the present intolerable level of unemployment.

The present Government inherited only 600,000 unemployed. In the four years of their term of office, they have succeeded in increasing unemployment from 600,000 to 1½ million. That is a serious indictment. [HON. MEMBERS: "Out of order."] I shall take "Order" only from the Chair, not from the rabble in sedentary positions on the Labour Benches below the Gangway.

This is a very serious Bill. I am gravely concerned about the levels of unemployment. I hope that the Chief Secretary, who comes from the same part of the country as I do, is concerned about the very high level of unemployment in Greater Manchester and the north-west. It is a level to which he has contributed by the present Government's policies. He has contributed to the disastrous levels of unemployment that the people are now having to tolerate.

If the Chief Secretary is not to reply to this debate, I hope that he will instruct the Minister who is to reply to deal seriously with the very valid points that have been raised by Opposition Members. It is not unique for a Bill such as this one to be pushed through the House in a day, but hurrying through in one day a measure of this importance is misusing the procedures of the House. There is concern not only in the Conservative Party but in the Liberal Party. I am sorry that the party which helped the Government to their majority on Second Reading has not been represented here during the later debates. This is a serious Bill and I hope that we shall have a serious reply.

I am here because I am concerned about unemployment. The small businesses, which do not have the facilities of larger companies to get around such a Bill, should be encouraged to expand and provide extra jobs. They, and not the ICIs and the other large companies, will solve the unemployment problem. They will be disadvantaged by the Bill. The Chancellor of the Duchy of Lancaster, who was here briefly earlier, has responsibility for small businesses. I hope that he has had a quiet word with Ministers and that one or two amendments will be considered to ensure that the Government do not press ahead with this ill-considered, unnecessary and badly drafted legislation.

1.37 a.m.

Mr. Ivan Lawrence (Burton)

I have been appalled by the attitude of Labour Members during the speeches of my hon. Friends. Most of this Parliament has been concerned with one of the worst unemployment situations we have had, probably in this century and certainly since the 1930s. I am a member of the Sub-Committee of the Select Committee which has been looking into the problem over the last 12 months, and I had understood that that concern was shared throughout the House. There has been conflict about what can be done, but not about the seriousness of the problem.

I seek to make not a party point but one which should arouse the concern of Labour Members when I say that in February 1974 there were 600 people out of work in my constituency and that the figure is now 1,800—a threefold increase. Whether that is due to the state of the world economy or to the behaviour of this Government—

Mr. Deputy Speaker (Mr. Oscar Murton)

Order. I think the hon. Gentleman knows the rule that on Third Reading one may refer only to what is in the Bill. We are discussing dividends, not unemployment.

Mr. Lawrence

I am coming to the point which is directly referable to the Bill, but to do so I had to say why it was important. If unemployment is the most serious matter that this Parliament has had to consider, and if little seems likely to be done in the foreseeable future to deal with it, the Bill is directly referable to that problem. I cannot understand the behaviour of Labour Members during discussion of an important aspect of this legislation—its effect on unemployment. I do not know how many hon. Members on the Government side have ever thought about the system of private enterprise and how it works. A large number of com- panies, approaching 1 million, I believe, provide work under a free enterprise system for a very high proportion of employees.

One of our problems is that there are not enough small businesses taking on new workers. That should be a matter of concern to everyone, not just to us on the Opposition side but to Labour Members. Perhaps, if hon. Members opposite thought a little more about these problems, they would not be supporting a Bill which presents a direct disincentive to both small and large businesses to invest capital in the sort of assets and equipment which will enable them to make profits and take on more workers.

The strongest objection to the Bill is that its effect will run directly counter to the desire of all those of us in this place who want to see more people in employment. Not enough attention has been paid to that by hon. Members on the Government side. They seem only to think back to the past idea that someone with unearned income must be rich and that, because in the old days the unions worked for and supported those who were poor, there thus being a conflict, to placate the unions one somehow must reduce any benefit which went to the rich.

That has gone. It went years ago. We now live in a new situation. It has been made absolutely clear that not only is 50 per cent. of the investment in industry investment by organisations, by pension funds and insurance companies, but a high proportion of that investment is the investment of small and poor people.

I think that it was one of the reports put to the committee headed by the right hon. Member for Huyton (Sir H. Wilson), or, if not that, certainly to the Diamond Commission, which pointed out—[Laughter.] It is not a name which should cause any laughter, although I seem to recall that the Diamond Commission has been headed by a gentleman who was at one stage a member of a Labour Government.

The fact is that, in 1972 and 1973, 50 per cent. of individual shareholders in these institutions had a total statutory income from all sources of less than £2,000 a year, and 25 per cent. had a total statutory income of under £1,000. Hon. Members opposite who seem to wear on their jackets the badge of conscience that they speak for the poorest sectors of society might pause for a moment and recognise that the poorest at present are often people who are investing in pension funds and institutions. [Laughter.] I find it appalling to see hon. Members below the Gangway opposite—some of the faces there are a little unfamiliar tonight—laughing and joking. I assure them that there are many people in my constituency who do not earn substantial incomes, who perhaps live in private rented accommodation because they cannot get on to council housing lists and cannot afford mortgages—

Mr. Deputy Speaker

Order. Council housing is not a matter of dividends. The hon. Gentleman must confine himself on Third Reading to what is in the Bill.

Mr. Lawrence

I think that you misunderstood me, Mr. Deputy Speaker. I am making the point that what is in the Bill is harming not only those who are at present unemployed but those who are very poor in my constituency and many other constituencies throughout the country. I cannot understand what hon. Members find so funny in that and why they come here at this hour of the morning to hoot when a matter of this importance is being discussed. They should be ashamed to behave in that way. 'They only make it the more obvious to people outside that the Labour Party does not really care either for the unemployed or for the poor. [HON. MEMBERS: "We have got the point."] If Labour Members have the point, perhaps they will reflect that the best thing that can be done with the Bill is not to give it a Third Reading. Perhaps they can have time to reflect, and the proceedings on the Bill can be completed at a time when they have given the matter more consideration. [Interruption.] When the hon. Member for Hartlepool (Mr. Lead-bitter) speaks, he wishes to command the silence of the whole House—[HON. MEMBERS: "Order."]—

Mr. Deputy Speaker

The question of order is a matter for the Chair and not for any right hon. or hon. Member.

Mr. Lawrence

I seek the protection of the Chair, Mr. Deputy Speaker, when I am making not spurious points but points of substantial importance. It is difficult to make myself heard above the cacophony from Labour Members. I can only conclude that they do not take seriously the Bill or the two underlying matters which I have drawn to the attention of the House. For all I know, they have been drawn to the attention of the House repeatedly during the debate. Maybe Labour Members have not heard them before because they have not been in the Chamber.

The Bill is harmful to the unemployed—unemployment is the greatest problem in our society at present—and to the poor, for whom Labour Members always claim to be the spokesmen. They are not, By their shouting and their attitude towards the Bill, they have shown the people that they do not care a fig for the poor and the unemployed.

1.47 a.m.

Mr. Ian Gow (Eastbourne)

I hope that the Minister who replies to the debate will deal with the point about clause 2(2), which deals with the necessity or otherwise of having the reference to Northern Ireland in the Bill.

The Bill is a sham and deception, because although its purpose is to give the people the impression that somehow the Government can do battle with inflation, a Bill of this kind is irrelevant to defeating inflation. I do not believe that its enactment will in any way affect the rate of Inflation.

I think that the Bill will do great damage, because it applies to all shareholders in companies incorporated in the United Kingdom, whether or not those shareholders are resident in the United Kingdom. It is very likely that the continuation of this legislation will make it that much more difficult to raise capital from overseas for investment in the United Kingdom, because we have a restriction on dividends which does not apply in many of our industrial competitor countries.

Therefore, I think that the Bill is a deception. It is to give the impression that the Government can, by legislation, do something about inflation, whereas the key to inflation lies in very strict control of the money supply. I repeat that I think that it will make it much more difficult for us to attract overseas capital and overseas investment into this country.

For those reasons, I shall oppose the Third Reading of the Bill.

1.49 a.m.

Mr. Peter Rees

We can part with the Bill without sorrow, without regret, and with no praise. There has been no serious defence of the Bill, even from the Treasury Bench. [Interruption.] All interventions from the Labour Benches have been from a sedentary position, except, as far as I can recall, those from the Treasury Bench.

The principles and details of the Bill have been thoroughly canvassed from the Opposition Benches. Indeed, the Bill has had a more thorough examination than perhaps it deserved.

The Financial Secretary said that dividend restraint could not be continued indefinitely. He also made the rather challenging statement that when inflation was firmly under control we could dispense with the measure. As I understood it from our debates—we have had many over the past months—the Government's proudest claim on our affections and respect is that they have now got inflation under control. They concede that unemployment has not been remedied and that industrial production has not gone up, but, they say, inflation is under control. Mr. 8.4 per cent. still presides.

This is a bad Bill. It has been thoroughly debated from the Opposition side of the House but not from the Government side. We shall go on reminding the Government, for as long as they survive, that they have said that dividend restraint cannot be continued indefinitely; we shall go on reminding them that they have said that it can be discarded as soon as inflation is firmly under control. We wait for an assurance that inflation is properly under control.

Subject to that, I have no more to say, except that we on the Opposition Benches have endeavoured to inject a little sense into the debate. We have met with no corresponding response from Labour Members. I hope that the Financial Secretary will at least have the courtesy to deal with the various points made in deep seriousness and based on considerable experience from the Opposition side.

1.52 a.m.

The Financial Secretary to the Treasury (Mr. Robert Sheldon)

The hon. and learned Member for Dover and Deal (Mr. Rees) said that the Opposition had injected some sense into our debates, but the comment that the Bill does damage to the poor and the unemployed and injures the economy is a grossly exaggerated statement, which bears no relation to the purposes and measures that we have been debating.

What we have been discussing during the lengthy debates that started at 4 o'clock on Thursday afternoon has been whether pay and prices should be regarded separately from dividends. The view that the Government have put forward is the same as Governments in 1940, 1947, 1962, 1967, 1972 and 1973 put. They all came to the same conclusion—that pay, prices and dividends were inseparable as a means of control when once one enters these areas.

In the Bill, the Government have presented the question of dividend limitation in a more flexible form. I thought that that would have been received with greater enthusiasm by the Opposition. This is a valuable measure, brought forward to extend the provisions for one further year, and it should claim the approval of the House.

Question put and agreed to.

Bill accordingly read the Third time and passed.

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