HL Deb 18 July 1974 vol 353 cc1231-2
LORD HEWLETT

My 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, taking cognisance of the present serious state of the capital market which so inhibits investment and growth, they will give a firm undertaking to cease dividend restraint in the immediate future.

LORD JACQUES

My Lords, the Government are now considering the future of dividend controls, not only in relation to our intention to review the Price Code and to end the statutory controls on pay, but also in the context of the Government's general policy towards industrial investment. We shall take fully into account the points made by the noble Lord and also the views that have been put to us by the C.B.I. and other interested bodies, but we are not yet in a position to make a statement.

LORD HEWLETT

My Lords, I thank the Minister for his helpful reply. May I ask whether the Government are aware of the general feeling of unfairness at the present time? We are to-day to abolish the Pay Board, and there is a feeling that those dependent upon savings income, charitable bodies, trade union benevolent funds and so forth, which depend upon earnings made by industry, should receive early and positive hope in this regard. This does not, I believe, call for a statement in budgetary conditions, for it is a separate matter from a Budget, so on grounds of common fairness could there be a very early announcement in this regard? The 5 per cent. limitation which has applied for so long has really damaged a great number of people who are highly dependent on the earnings of industry, and has inhibited investment, too.

LORD JACQUES

My Lords, I would remind the noble Lord that the net dividends received by shareholders paying income tax at the standard rate increased by 20 per cent. in 1973, while the pay of the workers increased by 12 per cent.

BARONESS WOOTTON OF ABINGER

My Lords, will my noble friend agree that most investment is now undertaken by corporate bodies of one sort or another, and that therefore the prospects of promoting growth and investment are greater if the money is left in the hands of corporations and not distributed by way of dividends to spendthrift persons like some of us?

LORD JACQUES

My Lords, I think that is a useful contribution to this Question Time.