§ 2.42 p.m.
§ LORD DRUMALBYNMy Lords, I beg leave to ask the Question which stands in my name on the Order Paper.
§ [The Question was as follows:
§ To ask Her Majesty's Government whether in regard to company dividends the twelve-month standstill period is intended to be the year beginning on 20th July within which any dividend payment (other than an interim dividend payment) falls, or a company's financial year; and if the latter, which financial year.]
§ LORD SHEPHERDMy Lords, companies should not distribute more to shareholders in respect of a financial year than in respect of the preceding financial year, and they should not pay out more to shareholders in the twelve months after July 20, 1966, than in the twelve months before that date.
§ LORD DRUMALBYNMy Lords, while thanking the noble Lord for that Answer, may I ask whether that makes it quite clear that the period of limitation is one of twelve months only, in the same way as it is for prices and also for earnings?
§ LORD SHEPHERDMy Lords, may I say in the first instance that this restraint applies to the twelve months running from July 20. I am quite sure that the noble Lord, Lord Drumalbyn, with his wide experience in terms of our economic situation, would agree that even after these twelve months which we are now considering we shall have to have the same form of restraint, and I think this would apply not only in terms of general incomes but also to dividends.
§ LORD DRUMALBYNMy Lords, may I ask further whether there is to be any difference in regard to dividends in the period of severe restraint, as compared with the period of standstill?
§ LORD SHEPHERDMy Lords, the request which the Government have made to directors of companies to restrict their dividends so that they do not exceed those of the previous twelve months applies for the full period of the twelve months.