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Volume 649: debated on Tuesday 21 November 1961

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asked the Chancellor of the Exchequer by what percentage dividends declared in the first half of 1961 differed from the first half of 1960, after making due adjustment for increased capital employed.

Gross ordinary dividends declared in the first half of 1961 were about 15 per cent. higher than in the first half of 1960. The best estimate that I can make in answer to the second pant of my hon. Friend's Question is that there was on increase in the capital employed of roughly 2 per cent. by new issues of capital, and of roughly 5 or 6 per cent. by ploughing back of profits. It, therefore, seems likely that about half the increase in dividends can be attributed to an increase in the capital employed.

While thanking my right hon. and learned Friend for that Answer, may I ask him whether this does not, in fact, show that the true increase in dividends on the capital employed is, first of all, a great deal less than people had at one time been led to believe, and, secondly, is, in fact, very similar to the true increase in wages during the same period?

I think that my hon. Friend is right on both those points. Of course, these figures refer to the first half of 1961.

On the contrary, does not this show the complete unfairness of having a wage pause without a dividend pause?

The hon. Gentleman will know that there was no wage pause in the first six months to which I am referring. In fact, during the second quarter of this period wages and salaries went up by nearly 10 per cent.?

Will the right hon. and learned Gentleman tell us how he describes members of his own party who agree to a dividend increase and then vote in favour of a wage pause?

Is it not rather misleading to include profits ploughed back, since the shareholders were not asked to put up money in that sense at all?