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Dividend Limitation

Volume 465: debated on Thursday 26 May 1949

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asked the Chancellor of the Exchequer what action he will take in cases where insurance and cement companies have raised their dividends and thus contravened his request for limitation of dividends.

The policy of dividend limitation is based on the voluntary co-operation of industry generally and this precludes action by the Government in individual cases. I am still satisfied with the general results, and I do not consider that the failure of individual insurance or cement companies to co-operate would justify departing from present policy.

Can the Minister say whether such dividend increases are designed to influence the share values of industries that may be suitable for nationalisation, and whether they do not represent an attempt to hold up the community to ransom?

I deplore the action of the cement companies in raising their dividends, which is contrary to the public interest and is setting a bad example to other companies; on the other hand, it does prove the case for the nationalisation of cement.

Is the hon. Gentleman aware that, since the Prime Minister made his appeal in February, 1948, wages have risen on an annual basis by £108 million?

The Prime Minister's appeal never said that there should be no wage increases whatever.