§ 42. Mr. Allasonasked the Chancellor of the Exchequer what prior investigations were made before letters were written in August and September asking firms why they had increased their dividend distribution and addressed to firms which had not increased their dividend distribution.
§ Mr. CallaghanIf there is any suggestion of a dividend increase, the reliable way of estimating the facts is by correspondence with companies.
§ Mr. Bruce-Gardyneasked the Chancellor of the Exchequer why the Board of Inland Revenue has been authorised to waive the requirement placed on investment trusts to distribute 85 per cent. of their income while close companies have dispensation from the Government's call for a dividend standstill; and what is the position of an investment trust which is also a close company.
§ Mr. DiamondClose company dividends are only excluded from the standstill to the extent that they are paid to comply with tax rules designed to prevent loss of revenue. An investment trust which is a close company cannot be approved by the Board of Inland Revenue under the Finance Act, 1965, and is therefore treated like other close companies.
§ Mr. Bruce-Gardyneasked the Chancellor of the Exchequer what steps have been taken to bring the sections of the Prices and Incomes Act which apply the Government standstill policy to dividend increases into legal operation; and by what authority the Government is empowered to investigate individual dividend increases.
§ Mr. MacDermotThe Government have asked companies to co-operate in 129W a voluntary dividend standstill, and to consult the Treasury if they think that exemptions from the standstill are imperative. The Treasury also invite some companies to provide information about dividends in order to make the voluntary standstill effective.