My hon. Friend is fully entitled to the credit for being the originator of a plan to which the Chancellor found it possible to agree and which resulted in the whole-hearted co-operation of the great mass of directors of companies, as has been proved by the loyalty with which the policy of the limitation of dividends has been observed, with one or two minor exceptions which do not in any way spoil that record.
If I may take as an example the case of a holding company, for the dividend policy of which I am very largely responsible with my colleagues, I would say that we have not for years paid a higher dividend than 5½ per cent. Can anyone suggest that that is an unreasonably high dividend? I think not. Last year, we earned enough money to declare another 1½ per cent. We did not do it; we left it at 5½ per cent., and the rest of the profit was placed to reserve or included in the carry-forward, which comes to precisely the same thing.
We are not quarrelling with this tax of an extra 5 per cent., considered as one single item. The trouble is that, after agreeing to limit dividends, we are met with a 25 per cent. tax on distributed profits, and now, after loyally observing the Chancellor's request for another 12 months, we have another 5 per cent. added to the tax on the distributed portion of profits earned. In the case I have quoted, am I to ask the shareholders, who have been receiving only a modest 5½ per cent., to agree to a lower figure so that I might be able to place more money to reserve? I could not ask the thousands of shareholders in this particular concern, who asked at the last general meeting why we did not give them a little extra when we had earned it, to agree to that. I was one of those who, like my hon. Friend the Member for Edgbaston, persuaded his colleagues in industry to agree to the Chancellor's request, and therefore I should be the last to suggest that we should depart from that policy.
The arguments so frequently used in this House, and particularly by hon. Gentlemen on the other side, cannot be of general application. There are hundreds of concerns like my own where modest dividends have been paid for many years past, and which are not in a position now, in fairness to their shareholders and after treating their work-people fairly, to reduce their dividends in order to make sure that the amount of money carried to reserve shall not be less than before. It is a discouragement to those of us who really are honestly doing our best to help the Government, at this time of financial crisis, to extend our business to overseas dollar countries. After we have striven for months past to do our best, and when we are now endeavouring to re-double those efforts, it is a discouragement to have a Bill which is gong to add, not a very large amount, but still a further additional tax on the efforts that we are making, and which we shall, in spite of all, continue to make.
There is an old saying about the last straw breaking the camel's back, and this Bill may perhaps be described as the last straw. "Take care," I say to the Government, "lest your policy does not break the camel's back."