§ Mr. Manderasked the Financial Secretary to the Treasury what steps he proposes to take in view of the fact that many companies continue to ignore the frequently expressed wish that no dividend should be paid in war-time higher than the pre-war standard?
§ Mr. AsshetonThe broad object of the Limitation of Dividends Bill introduced in 1940 was to prevent an increase in the amount of purchasing power in the hands of shareholders. The Bill proposed to achieve this object in the normal case by limiting the annual payment which any public company could distribute by way of gross dividends to the maximum amount distributed for any year ended between 30th June, 1936, and 30th June, 1939, adjusted for any changes in capital, or to 4 per cent. on its capital, whichever was the greater. There was provision for the consideration of an increase in the maximum in special circumstances. The Bill was withdrawn when its object was expected to be substantially attained by the increase of Excess Profits Tax to 100 439W per cent. But to the limited extent that the Excess Profits Tax did not have that effect, the Chancellor then expressed the hope, which he subsequently repeated, that the companies concerned would act in accord with the general principles underlying the Bill. On the whole, I think that they have adopted that policy and that any exceptions have not been sufficiently numerous or important to justify the revival of the previous proposals for legislation on the subject.