HC Deb 29 June 1978 vol 952 cc1553-4
5. Mr. Budgen

asked the Chancellor of the Exchequer whether he has any plans to renew the powers to control dividends.

Mr. Joel Barnett

I have nothing to add to the reply given to the hon. Member for Stoke-on-Trent, Central (Mr. Cant) on 6th June.

Mr. Budgen

Does the Chief Secretary agree with the evidence given by the Treasury witnesses to the Wilson Committee, to the effect that dividend control has tended to distort the equity market and thus to increase the cost of new capital, which provides new wealth and new jobs?

Mr. Barnett

The hon. Gentleman is quite right. Of course there is something in that, but it must be considered in the wider context of counter-inflation policy.

Mr. Fernyhough

Will my right hon. Friend bear in mind that if capitalism and capital are allowed uncontrolled rewards there is little possibility of labour, through the trade unions, agreeing to wages being controlled?

Mr. Barnett

I am not entirely sure that I would agree with every syllable of my right hon. Friend's comment, but I shall bear in mind what he says.

Mr. Biffen

Did the statement, a week ago, by the Leader of the House, that the Government had no intention of fresh legislation on this subject, represent Government policy?

Mr. Barnett

The hon. Gentleman should not pick out one or two words from what my right hon. Friend said. He also said that a statement would be made at an appropriate time.

Mr. Ron Thomas

Does my right hon. Friend agree that with all the methods of avoiding dividend control by one-for-one issues, and the rest, all this nonsense about control over dividends is really one of the biggest of myths?

Mr. Barnett

My hon. Friend will no doubt have seen all the figures about the growth of dividends over the last 10 years or so, and will have noted that the actual growth has not been all that great.

Mr. Lawson

Does the Chief Secretary not realise the imperative need for certainty in industry and commerce over this matter? Will he at least give an assurance that, following the gaffe by the Leader of the House, dividend control will either be continued by law or abandoned altogether, and will not be perpetuated by an arbitrary system of blacklisting and economic sanctions?

Mr. Barnett

I will give this assurance to the hon. Gentleman: a statement will be made at the appropriate time.

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