HC Deb 02 July 1917 vol 95 cc794-818

(1) On and after the first day of July nineteen hundred and seventeen Section one of the Finance (New Duties) Act, 1916, shall have effect as if the following scale of rates of entertainments duty were substituted for the scale set forth in that Section—

Where the payment, excluding the amount of the duty—

Does not exceed 2d ½d.
Exceeds 2d. and does not exceed 3d. 1d.
Exceeds 3d. and does not exceed 6d. 2d.
Exceeds 6d. and does not exceed 1s. 3d.
Exceeds 1s. and does not exceed 2s. 4d.
Exceeds 2s. and does not exceed 3s. 6d.
Exceeds 3s. and does not exceed 5s. 9d.
Exceeds 5s. and does not exceed 7s. 6d. 1s.
Exceeds 7s. 6d. and does not exceed 10s. 6d. 2s.
Exceeds 10s. 6d. and does not exceed 15s. 3s.
Exceeds 15s.—3s. for the first 15s. and 1s. for for every 5s. or part of 5s. over 15s.

(2) On and after the first day of July nineteen hundred and seventeen, where a person (not being a member of any of His Majesty's naval or military forces in uniform, or a nurse in uniform in attendance on sick or wounded sailors or soldiers in uniform) is admitted to, or to any part of, a place of entertainment without payment or on the payment of a less amount than that charged to the general public for such admission, entertainments duty shall be charged, levied and paid as though that person had paid on admission the same amount as members of the general public, and this provision shall have effect as if it were included in the Finance (New Duties) Act, 1916.

Mr. HOGGE

I beg to move to leave out Sub-section (1).

I should like to have some information as to whether the Government have altered the standpoint on which they originally imposed these taxes. Is the reason for now imposing them different from the one given by the late Chancellor or the Exchequer When the duties were imposed the late Chancellor of the Exchequer said in this House that they were to be used as a medium for collecting taxes from people who otherwise might not contribute to the revenue. When the present Chancellor of the Exchequer made his Budget statement speech he said that the reason for—

Mr. BONAR LAW

I am sorry to interrupt my hon. Friend, but he has made the point before. I can assure him that there is no difference in the intention, which was to tax not the trade as representing the people engaged in it but the public who go to this form of entertainment.

Mr. HOGGE

I am glad to hear the Chancellor of the Exchequer say that. It is important to establish the fact that this is war taxation. Whether it may or not be necessary in the future to collect the revenue, is another question. But it has not been established as a basis of this tax that the industry will bear the taxation. I should like to know what the Government intend to do with this Sub-section before we proceed to deal with the specific rates and, obviously, it would be more convenient for the Committee to have at the beginning information on these points as a whole, rather than that they should proceed to discuss each particular point on each particular rate. Generally speaking, the question that is involved in this additional taxation is the question of whether or not the entertainments—and when one says entertainments one must not forget the fact that it includes not only the cheaper forms of entertainment, such as the cinemas, but also large football clubs up and down the country, and big theatres, both in London and in the Provinces—and those of us who are in touch with any one of these three interests know already the very disastrous effect which the tax has had upon each one of them. This morning I had a letter from the secretary of the Heart of Midlothian Football Club, which is the largest club in East Scotland. I may incidentally remind the Leader of the House that the whole of the team of this club joined the 16th Royal Scots, and thus have been patriotic like everybody else. This club has been trying to carry on as other clubs have done, but the secretary informs me that, as a. result of last winter's football season, the club is down another £l,000. That is not an unusual thing in various parts of the country.

With regard to cinema entertainments, I may mention that the result of the imposition of this tax has been that over 700 cinemas have been closed in different parts of the country. With regard to the theatres in London and the provinces the proprietors are finding it increasingly difficult to carry the burden of this taxation. The general question is whether or not it is wise to tax amusements of this kind. This is a point upon which people may have various views, and my view is that it is unwise. There is little left for the people of this country through the anxieties created by the War. These entertainments constitute a useful method of catering for their leisure and recreation. If you impose taxation to such an extent as to deprive the people of these opportunities, you are doing a harmful thing. I was glad to hear, at any rate, when the right hon. Gentleman introduced his Budget, that this additional taxation is not to come into effect until October. That is a useful kind of fact to know, for it is more difficult to collect the tax in the summer months than in the winter, and it is certainly more difficult for the entertainments to carry it. I should be glad if my right hon. Friend will tell us what is to be the attitude of the Government with regard to this tax. Are they prepared to give any concessions whatever? My right hon. Friend said, with regard to the Tea Duty, that he must ask the Committee not to request that any taxation put on last year should now be taken off. But we do not ask for these taxes to be taken off on this occasion. What we do hope is that my right hon. Friend will not increase the taxation, and if he can give us an assurance on that point it will very much expedite the discussion of the various items.

Mr. HEMMERDE

I should like to ask the same question as my hon. Friend opposite. I want to know what attitude the Government is going to take up in regard to the new rates to be imposed. I gathered from the Chancellor of the Exchequer to admit that the trade is not one on which additional taxation can be fairly put at this time, and the suggestion is that the taxation will be borne by the people who go to the entertainments. But I am convinced that this taxation, if raised now, will not be borne by those people, but will fall to a considerable extent on the trade, and I therefore support the Amendment now before the House. I do not think it is correct to imagine that you can immensely increase the taxation on entertainments, and that it will be cheerfully borne and entirely borne by the people who go to the entertainments. In my opinion, the burden will fall, not on the spectators, but on the owners of theatres, and it will be a very real burden. There are several Amendments down for dealing with the proposals affecting the cheaper seats, but I do not propose to say very much about those. I rather wish to draw the attention of the Chancellor of the Exchequer to the proposals to increase the tax on the more expensive seats—proposals which will particularly effect the big London theatres. Take for instance the increase of the tax on seats ranging in price from 7s. 6d. to 10s. 6d. The tax is to be 2s. I think the tendency of that will be lamentable. It is quite true that during this year the people have been paying an increased price for the seats up to 11s. 6d., but it is also true that the Government entirely miscalculated the amount that would be raised by this tax. They said it would be between £4,000,000 and £5,000,000, and, indeed, it was suggested by the right hon. Gentleman's advisers that that was an under estimate. But as a matter of fact, the amount actually obtained was very much less than the estimate. The right hon. Gentleman told us that he is very anxious to preserve the revenue of this country. But in this case he is not going to increase it; he is merely going to hit the theatrical profession. Suppose you have a very expensive entertainment, such as people occasionally go to—some of those revues which are got up at very great expense and the performers in which get high salaries. I do not say it is impossible that in these cases the management may not be able to bear this extra burden, but I do say it will be impossible for theatres to continue to put on those forms of entertainment which the Government would wish to encourage for educational and other reasons, because it is impossible to imagine that people will go on paying 8s. or 9s. for dress circle seats and 12s. 6d. for stalls.

5.0 P.M.

I believe that you are going to hit the more serious entertainments very seriously indeed by these proposals without getting any more money whatever for the Exchequer. If I thought that it was going to be paid by the audience I should raise no objection at all, but I believe the result will be quite the contrary. I was: talking the other day to a well-known theatrical manager in Liverpool, who was telling me of his experiences during the last year, and he related how he managed, in spite of war conditions, to run a long season of opera arid make it pay. Those-who have realised what has been going on in London in this direction of making; operas pay know what that means. There you have a man running a form of high-class entertainment with a very small margin but making it go, and he told me that it would be perfectly impossible, if you are going to keep on even the existing: taxes, to run these high-class entertainments, which are run on a very narrow profit. I would also point out the character of the burden. This means, if I am right, that it will apply to all provincial theatres, and that the theatre-goer will want a good deal of this higher tax to be shifted on to the theatre owner. It has been extremely difficult during the past three years for the touring managers, and thereby for the provincial theatres, to keep going at all. In the first year practically every touring company, with two or three exceptions, could only get through that first year of war by largely reducing salaries, and it was a great struggle for everyone concerned. In the second year they managed to get back part of their losses in the first year—I am speaking of an average company. In the third year, owing to the enormous increase in the cost of railway travelling, printing, porterage, the lifting of scenery, and labour generally, it became practically impossible for any company to play to the same business as they were able to do in the second year. The burdens have gone on increasing all the time, and I cannot imagine anything more unfortunate than the possibility of putting a burden on that may produce nothing to the Exchequer and yet may do serious injury to the industry of entertainment, which is one of the few legitimate amuse- ments left to the people of this country. I hope the Chancellor of the Exchequer will be able to give to this matter of the raising of the tax to a higher level most earnest attention.

I know that in speaking against these increases I am voicing the wishes of the huge majority of the theatrical managers in this country, and particularly the views of those who have run in circumstances of great difficulty and with a very small margin of profit during these two or three years of war high-class entertainments all over the country. I think they are deserving of the greatest possible encouragement. The State does little enough in all conscience to encourage high-class entertainments. It is the only country that does not see that its people are educated through the theatre in foreign languages. We have a good deal to learn from foreign countries in that respect. But we have our own traditions in this country, and we have certain cases which show perfectly well what the public will stand and what they will not stand. To take a case of this kind; only the other day there was a new theatre opened in London to do what the managers felt sure they could do, namely, to make the public pay a guinea for the stalls. That lasted, I think, a fortnight, when the price was reduced to the ordinary price of 10s. 6d. The point had been arrived at, although the entertainment included many favourites, where it was impossible to make the public pay more than the price they had been used to pay. I believe you will find that that is so in this case, and that although some of the entertainments regarding which nobody cares whether they live or die may be able to pay, yet the very best class of entertainment in the country will find this burden that is thrown upon it too great. Let me take one other case. We know one man who unhappily is dead, although his son is carrying on his traditions, under the greatest discouragement, to establish grand opera here. You are going to put a tax on shows like that. I do not suppose that at any time during his career Sir Thomas Beecham has made a penny out of any season he has run, and here, just when he is doing what the State ought to have done, establishing at last something like an English opera in this country, you are going to raise his stalls to 11s. 6d. and then to 12s. 6d. I say that a high-class entertainment like that depends on the stalls, and you are going to do a great harm in this case. You are going to put on a tax which falls on the public-spirited man who has for years and years been trying to establish the highest class of musical entertainment in this country. I think, therefore, that not only in the case of cinemas, the Government, before they increase these taxes, should really take the greatest care that they are not making the same miscalculation that was made by their advisers a year ago. I think this is a most unfortunate tax. This is not the time to tax amusements any further. I am confident that we have reached the limit where in future the tax will fall on a profession and business which has, in circumstances of most extreme difficulty, managed to keep going during the War.

Sir H. DALZIEL

I desire in a few words to make a very strong appeal to the right hon. Gentleman to reconsider the proposal now before the Committee. I think this is the first occasion upon which I have objected to any taxation in any Budget since the commencement of the War, because I have always felt that at a time like this the Executive must be trusted to get the money required from the sources that they consider will bear them. I approach this question entirely from the point of view of whether the Government are taking a course which is going to be good for the country and good for the State. I do not think it is good for the Government or the country that they should ruin hundreds—it may be thousands—of people throughout the country. I can assure my right hon. Friend, from evidence that has been put before me, and which I have examined, that the result, in my judgment, will be that many men will be ruined, and that scores of theatres will be closed if he adheres to his present proposal. I do not think it is good for the country that you should have a whole section of the community feeling that they have been unfairly treated. There can be no other decision on the proposal of my right hon. Friend. Take, for example, the stalls. I am not pleading for the rich people; they must pay if they can afford it, but I do point out that the people who go to theatres are taxed in all sorts of ways, entirely apart from that, on their income and in other directions, and therefore we have to consider it as a tax upon the amusements, if you like, of the people.

Surely the Government do not want to come to us and say, "We are going to make prices so high that it will practically ruin the theatres, and the result will be that very large numbers of people will be unemployed ! I think it is unfair in proportion. Take, for example, the seat of 7s. 6d., which is to be raised to 10s. 6d. under this Act.

Mr. HEMMERDE

It is only to be raised by 1s.

Sir H. DALZIEL

If the stall is 7s. 6d., 2s. is going to be added to it up to 10s. 6d.

Mr. HEMMERDE

No; read the Bill.

Sir H. DALZIEL

Seven and sixpence up to 10s. 6d., 2s.

Mr. HEMMERDE

From 7s. 6d.

Sir H. DALZIEL

The line reads "exceeding—"

HON. MEMBERS

Seven and sixpence, 1s.

Sir H. DALZIEL

The Bill says that all seats above 7s. 6d.—

HON. MEMBERS

Yes, "above."

Sir H. DALZIEL

Seats above 7s. 6d. and up to 10s. 6d. are to be charged 2s.

Mr. HEMMERDE

That does not apply to the 7s. 6d. seat.

Sir H. DALZIEL

At any rate, the Chancellor of the Exchequer will be able to explain it when he gets up. That is how I read it; but in any case what I want him to consider, whether that shilling is included or whether it is not, is that, in fact, it is included. As we all know, the theatre agencies practically buy the house in anything like a successful play, and therefore you have to pay your extra shilling through the booking agency. I say the percentage is far too high; it will have a ruinous effect, and it will prevent people going to the theatre who might otherwise go. Many theatres will have to be closed, and we shall have a large number of unemployed. The right hon. Gentleman will say, "No; they can well afford to pay it; they have paid it before," and so forth. It is the case that very large numbers—shall I say hundreds —of theatres throughout the country—I believe the correct number is 700—have been closed in consequence of the taxes that already prevail. I think they will now be too high, and that they will have an effect which the right hon. Gentleman does not anticipate. I do not think he will get the amount for which he has budgeted, and I think there is a very urgent case now for more inquiry. Take another class connected with this industry, the musicians. They represent thousands of people throughout the country. All those have gone to service who could be spared, and the secretary of the union assures me that it will practically mean that thousands of them will be unemployed in consequence of these taxes. Can we refuse to listen to an authoritative trade union of that character? I do not think we can. I do not know whether such a large addition in proportion has been imposed elsewhere as is proposed here, but I do not think it will come off. I think you will have the whole theatrical community of the country and the people engaged in it against you, because they will feel that you are doing them an injustice in imposing the large amount which you are putting upon them.

I am one of those who think that the Government is wrong in trying to deprive the people of the country of all sorts of recreation. I do think they are wrong. I will not discuss the question of racing. I do not know whether they have stopped it or not; they have been considering it for a month, and have come to no decision yet. I am pointing out that in that and other directions the Government appear to be kill-joys, and to be trying to stamp out all amusements. That is not the way to win the War. People who work twelve and fourteen hours a day are all the better for a little recreation in the evening, and the Government are wrong in trying to prevent them getting it. I submit that people are doing as well in going to a theatre as in listening to people preaching anti-war sermons. I do not think the Chancellor of the Exchequer will get his money, but that is a matter of speculation. The theatrical people are as patriotic as anyone else, and the heads assure me that no matter what is said here what I have stated will be the immediate effect. I appeal to the Government to modify the proposals they are putting forth. I should like the right hon. Gentleman to have some small independent committee sitting between now and October to investigate and put before him the real facts for consideration. If he will not adopt that, I have no doubt the majority of the Government will carry the proposal, but I think that will be a cause for just grievance to a large class of the community. I think the proportion is too high, and that the Government would be well advised to make a concession.

Mr. CHARLES ROBERTS

May I come to the right hon. Gentleman's assistance and make a suggestion, for I think that I can possibly point out a way in which he could satisfy the hon. Member who moved this Amendment as well as myself on a later Amendment which it would not be in order for me to discuss now. If the right hon. Gentleman will refer to the financial statement 1917–18. which was laid before the House when he was opening the Budget, he will see on page 9 that the Entertainments Tax was estimated to bring in a sum of a million, but that from that was deducted the abatement on Liquor Licence Duties, which amounts to £900,000. The real reason, therefore, he has put on this taxation to which the hon. Member for East Edinburgh (Mr. Hogge) and other Members object is that he has given an abatement of £900,000 on the Liquor Licence Duties.

Mr. HOGGE

I do not believe that.

Mr. ROBERTS

At all events, the right hon. Gentleman has had to make up this deficiency which I will argue when we come to Clause 7. The fact is that he is going to get out of this tax a sum which just makes up what he loses under the abatement he is introducing in Clause 7. If he will drop the abatement on Clause 7 and at the same time drop the Entertainments Tax, he will be square. He will be able to satisfy me and to meet fully the arguments the justice of which I will put to him later and, at the same time, satisfy those who are appealing to him on this Clause. That would be a much more satisfactory way out of the matter, both to him and to me, and to the hon. Member for East Edinburgh.

Mr. WARDLE

I desire to emphasise what has been said by my right hon. Friend the Member for Kirkcaldy (Sir H. Dalziel) and my hon. Friend the Member for East Edinburgh (Mr. Hogge) on this occasion. I should not like to say that I agree with what the hon. Gentleman opposite (Mr. C. Roberts) has said, because it was very difficult to follow his argument without having a good many more facts before us. With regard to the Entertainments Tax, I was in favour and am still in favour of the original tax that was imposed, but I believe that the increase now proposed is much too drastic a measure, even in these times. I should like to support the protest which has been made particularly against the increase of the tax on smaller amounts. On that we have an Amendment which will be moved presently. With regard to the whole question of increase, I submit to the Chancellor of the Exchequer that he will not succeed in getting any increase in revenue from the tax. It is a question of speculation and judgment, but if he does not succeed in that, then he will be doing a very serious injury both to the people who desire amusements and the people who run them. I am not one of those who believe that trade unions are always right or that employers are always right, but here we have a consensus of opinion both from those who run the theatres and the people who man them. My right hon. Friend the Member for Kirkcaldy referred to the Musicians' Union. They have been as patriotic a body during this War as any section of society. They have contributed their quota to the Front. Many of the men who play the violin or clarionette have found that the change from the artist's life to the conditions of the Army has been a much greater strain upon them than it is upon the ordinary citizen who is used to hard work. I have had cases sent to me in which in consequence of the tax they have suffered very severely. These people tell us that this increased tax will not come from the public and that it will have the effect of creating unemployment amongst the men and of injuring the theatrical and amusement profession in the country. If it does have that consequence it will be a very serious thing indeed. The nerve-racking effect of this War is such that anything which interferes with ligitimate joy or entertainment or amusement that has any tendency to soften the effect of the War would be a great injury to the State as a whole. I hope the Chancellor of the Exchequer may see his way not to make the increase at all this year. He has postponed it until October, and if he permits the experiment started last year to be continued I shall be satisfied.

Mr. SCANLAN

I rise to support the Amendment, which goes to the root of the proposal made by the Government in this Clause. The proposal to increase this particular tax is a most unwise one. I hope the hon. Member for Linooln (Mr. C. Roberts) will persist in his view that it is an unjust proposal, that he will support those who are prepared to oppose the Government in the Division Lobby, especially as he has expressed very cogent and solid reasons for his opposition to the proposal, and that he will trust his temperance reform to what the Committee may do when Clause 7 is reached. I shall not be prepared to make a bargain with him as to how I shall vote on that Clause. I should like to ask the Chancellor of the Exchequer what is really his object in making this proposal? Is it to kill entertainments or to increase revenue? If he takes the advice he has received not only from the Committee, but from those responsible for the conduct of entertainments and who are in a position to see what the effect would be of making this increase, he would be told that if revenue is his object that object is bound to be defeated. In the other object he most certainly will succeed, because in proportion as you decrease the revenue you decrease the drawings of houses of entertainment, and in that way you limit the legitimate facilities which people have for indulging in pleasant and harmless forms of entertainment. I would protest especially against the imposition of this tax so far as it applies to the lower-priced tickets. It is most unfair and unjust to the working classes and to those who cater for them in a number of legitimate entertainments. I sincerely hope the right hon. Gentleman will see his way to withdraw this proposal and that, at any rate, if he is not prepared to make a further concession in regard to the taxes already in force, he will allow the status quo to be maintained.

Sir J. D. REES

As palinodes are very popular just now and are associated with Prime Ministers or ex-Prime Ministers, I hope the Committee will allow a private Member to make a recantation. On a former occasion when this matter was discussed I said that I had been informed on very good authority—I thought it was— that this tax did not prejudice the promoters of entertainments to the extent which was then stated and because of which it was urged that it was open to serious objection. I was entirely wrong. It has been pointed out to me since then that it will seriously prejudice entertainments, that it hits hard the providers of enter- tainments, and that it cannot be passed on to the public. Therefore I hope the Chancellor of the Exchequer will see his way to-day to make some further concession on that score, and also because this is not a time when the public Should be deprived of such amusements as they may have. Already a glass of beer has become a rock of offence upstairs, and the "glad eye" is regarded as a mortal sin in another Committee room. If theatres are going to be closed or made more expensive it will seriously affect our soldiers. Anybody who works every day in the Strand, as I do, knows how popular these entertainments are. There are enormously long queues through which one can hardly force his way. Believing that many thousands of people should be allowed to have their legitimate pleasure, I sincerely hope the Chancellor of the Exchequer will see his way to make some concession.

Mr. DENNISS

It is no use threatening the Chancellor of the Exchequer with a Division. If we can convince him on the subject it would be the far better course. I hope the Chancellor of the Exchequer will take this matter into further consideration, because there is no subject upon which I have had more correspondence from my Constituents. As that contains 217,000 people, the tax is naturally a very burning question. Apart from the proprietors of these entertainments, who, of course, will pay less Income Tax and less Excess Profits Duty, an enormous number of people are employed in these entertainments. The general public in a large town such as I represent are very much affected by the tax. They are working very strenuously for very long hours, especially in my Constituency, and they feel that some amusement is absolutely necessary to them, and should be encouraged as far as possible. From the position in which we stand in regard to Russia and other things, it seems as if the War were going to be long-drawn out. In that case it is essential that we should keep the people as happy and contented as possible when they are making a supreme effort to win the War. The tax on the lower prices ought to be kept as at present, or at any rate the line should be drawn at 1s. Of course, if we can get the whole thing removed, we shall be very pleased; but something is better than nothing. All over the country, in all the larger towns, there is this unanimous appeal made to the Chancellor of the Exchequer not to increase the prices, especially the lower-priced seats. Perhaps he will know what the popular feeling is, and have a better idea of what the actual situation is, and will be able to give us some concession.

Mr. TYSON WILSON

I am sorry I was not here in time to move an Amendment similar to this one which is in my name. I hope the right hon. Gentleman will accept the Amendment or adopt the suggestion made by the right hon. Gentleman the Member for Kirkcaldy (Sir H. Dalziel), namely, adopt the present tax for this year and then appoint a Committee to go into the whole matter. If he does that he will have information put before him by the people interested which will convince him that he would not be able to introduce it in his next Budget—that is, assuming that he then occupies his present position. On behalf of the working men, I would remind the right hon. Gentleman of the old proverb that all work and no play makes Jack a dull boy. During the last two and a half years many of the minor theatres have done a great deal to allay unrest and discontent among the working people of the country. What is more, the cinemas and theatres have done excellent work for the Government in the matter of recruiting. Some notice ought to be taken of that. This is simply playing with taxation. The tax is a second Income Tax upon the incomes of a large number of working men. Some working men spend the afternoon off going fishing or boating. There is no tax on that. Others prefer to go to the theatre, or the music-hall, or the cinema, and there they have to pay a tax.

Mr. HOGGE

And football matches.

Mr. WILSON

I believe the Government have received protests from football clubs against the increase of the tax. I come from a part of the country where we have very good football teams, and I am told that the tax has had a very bad effect on the attendance at the matches during the last season. I want to give the right hon. Gentleman an illustration of what is happening. In a small provincial town there are two places of amusement—one which gives entertainments twice nightly, which is a music-hall, and the other one is sometimes used as a music-hall and sometimes as a theatre. In the year ending February, 1915, when there was no tax, there was a small loss on the twice-a-night house of £6 6s. 7d.

In the year ending February, 1917, with the tax, they made a loss of £490 4s. Although the shareholders suffered that loss they paid in tax to the Government £1,176. If you double the tax they will either close the place or there will be a bigger loss if they run it. Taking the other two houses, the Theatre Royal and the Grand, for the year ending February, 1916, with no tax, the profits amounted to £2,112 10s. For the year ending February this year, with the tax, the profits on the two houses dropped to £1,249, but the two places paid in tax no less than £5,024, making a total for the three houses of £6,100. The Managers of these places tell me that if the tax is increased they will undoubtedly have to close two of these places of amusement. Therefore you are going to take away the opportunity of amusements from the people, and at the same time you are going to ruin the theatre proprietors and get no tax. I am told by people who know that this prevails throughout the country with the exception of London, which is a world to itself. With these figures in front of him I hope the Chancellor of the Exchequer will give further consideration to the proposals of this Clause. I feel certain that it would be in the best interests of the Government and of all concerned if we dropped the increased tax for this year and reconsider it after taking the opinion of experts. The managers of these places have asked the Revenue officer to audit the books and satisfy himself that the statements I have made are correct. I am certain, on these figures that I have given, that if the same losses have been sustained in the other provincial towns the Government is going to lose a great deal more than it will gain, and at the same time a large number of people will be thrown out of employment.

Mr. DEVLIN

I should like to join hon. Members in making an appeal to the right hon. Gentleman to drop this tax, especially upon the cheaper of these cinematograph theatres. They have been a boon and a blessing to the working classes. They have enabled the very poorest in all our great industrial communities to have an opportunity of enjoying pleasures which are not only healthy but sometimes most informing. Anyone who has gone into the large manufacturing parts of cities like Belfast and seen, the children of the poor crowding into-these establishments and taking advan- tage of the opportunities which these cheap amusements afforded to them must recognise that it would be a great blunder on the part of the Government to rob these theatres of the advantages which cheap admission gives or to burden them with any larger tax. We already have it from those who have gone into this matter that no great financial advantage will really come to the State by the imposition of an additional tax, and therefore I hope the right hon. Gentleman will accede to what, as far as I have heard, is almost an unanimous appeal to the Government.

Mr. BONAR LAW

I am sure the hon. Member (Mr. Devlin) has been long enough a Member of the House to know that the inference which he has just drawn from the fact that everyone has spoken against the tax has not much weight. I should like to congratulate my right hon. Friend on the bench opposite on a sense of humour which I have not noticed before in some of his speeches, and I may congratulate myself on the fact that before he had uttered three words I saw exactly the point he was wishing to make. He suggested that we should set this off against another abatement which I have agreed to make, and that would be perfectly feasible if the Budget consisted of those two items. But it does not. There are a great many other items in the Budget. I can assure him that the last thing which was in my mind in putting on this additional Entertainments Tax was that we did it in order to enable us to take something off the Licence Duty. I have not heard much from hon. Members who have spoken that this is a kill-joy proposal, but I really have been amused to see in some of the papers connected with this trade the suggestion that that is the motive in my mind in putting on this additional tax. There is no one in the House who would be less likely to act from that motive. I feel very strongly that the most foolish thing any Government could do would be to try to prevent people getting legitimate amusement, and the most foolish thing an individual man could do would be to act on the assumption that people who work hard do not need a little amusement of some kind. In coming to the conclusion that we might increase this Entertainments Tax we believed that the people who go to these places of entertainment could afford to pay a little more and that that would be a legitimate way of getting a little additional revenue. That is my view. I have seen several deputa- tions and my hon. Friend (Mr. Baldwin) has seen a good many more and it is our belief that this additional taxation could be borne by the people without any danger of destroying either theatres or cinemas. That is my belief, and if I did not believe it I should not persevere with it to-day.

Everyone on whom you impose taxation has the impression—and this applies however patriotic they are and however willing of bearing their share—that this particular thing is not quite fair and that they are asked to bear more than their share of the burden. That comes with every tax you put on. It would be a very bad introduction to the taxes which give larger revenue if we were to yield to the request to reduce this tax. I quite agree that this is not a source of revenue which will make the difference between winning the War and losing it or anything of that kind, but, on the other hand, every million that we can get is needed and I am unwilling to take off any tax which I think fair and reasonable on the whole. On the whole I think this is, but I should like to make concessions where it is possible to do so. I should like to point out how difficult it is to make concessions in regard to the lower-priced seats. The rate at present is 1d. up to 3d., and then from 4d. to 6d. it is 2d. Suppose I were willing to say I will make it 1d. up to 6d., I should have to drop the tax altogether, because 80 per cent of the revenue is derived from seats of 6d. and less.

Mr. W. THORNE

That shows you are hitting the working classes.

Mr. BONAR LAW

The hon. Member has overlooked the point I was trying to make a moment ago. It is that, after all, the working classes should bear some share, and if you start on the basis that if a duty touches them at all therefore you are to take it off, that is a bad preliminary for the larger taxes on those who have more money. I have considered making the 1d apply up to but not including 6d.— i.e., to make it 1d. for 4d. and 5d. I will tell the Committee the objections to doing that. I am informed that you would really do harm to a great many of the owners of cinemas, as the result would be that the 6d. seat would practically disappear and they would not get the extra 1d. which they now get from their customers. The most I can do to meet the feeling that it is too high—and I shall be glad to do that —would be to make the 2d. begin at 5d. instead of 4d.—that is to say, to make the rate, which at present is 1d. up to 6d., a 1d. including 4d., and begin the 2d. tax at 5d. So much for the lower prices.

I have seen the representatives of the big theatres in London more than once. I really do not share the view of hon. Members that this addition will press hardly upon managers of theatres. My hon. Friend who advocated taking off the duties altogether mentioned in illustration of his argument the queues of people in the Strand waiting to go in. I should draw another inference. If there is such a demand they would probably be willing to pay a little extra. But there is a point of view from which the recommendation made to me deserves consideration. Even in time of war we should like to have as much of the higher class of theatrical life as we can. There is no doubt that, in a time like this, when we are all living in a state of nervous tension, the people are more inclined to go to the more obvious forms of amusement. I should, therefore, be willing to make this concession in regard to these higher prices. At present the rate stands in this way: The duty on seats of 5s. and not exceeding 7s. 6d. is 6d., and the proposal is that that should be made 1s. That is only an addition of 6d. Then we come to exceeding 7s. 6d. but not exceeding 10s. 6d., and the rise is from 1s. to 2s.—that is, twice as much as the increase in the previous rate. In the same way, exceeding 10s. 6d. but not exceeding 15s. there is also a 1s. rise. I should be willing to make it a 6d. rise in all these cases. I do not for a moment contend that this is a vital thing for the Government or anyone else, and I say, further, that the fact that I have introduced it would not make me hesitate a moment in taking it off if I thought it desirable, but I have been trying to look into the matter, and I think those who frequent places of entertainment can afford to contribute a little more to the revenues of the country, and I sincerely hope the Committee will support me in carrying through the provisions with the Amendments I have announced.

Sir H. DALZIEL

I think we ought to recognise that my right hon. Friend has tried to meet us, and I am sure the Committee will appreciate the spirit in which he has approached the question. So far as I am concerned, I thank him for his concession, and I hope it will be generally accepted. I think we ought to accept this concession and see whether his anticipations are realised.

Mr. HOGGE

As I moved the Amendment in the absence of my hon. Friend (Mr. T. Wilson) and as I have been in close touch with the Chancellor of the Exchequer I recognise that he has made a large advance towards those of us who are interested in this taxation. Speaking for myself, I am prepared to accept his compromise in regard to the lower-priced seats. As a matter of fact there are not many 5d. seats in any of these theatres, and I think the cinema industry could carry the 2d. on the 6d. seats. I was really concerned about what occurred during last year, namely, the crushing out of people in the lower-priced seats—the very lowest-priced seats—and depriving them of amusement. If the Chancellor of the Exchequer will put these figures into the Sub-section, I, speaking for myself, would be prepared to accept them.

The DEPUTY-CHAIRMAN

Does the hon. Member withdraw his Amendment?

Mr. HOGGE

It was not my Amendment, but I beg leave to withdraw it.

Amendment, by leave, withdrawn.

Amendment made: In Sub-section (1), leave out the word "July" ["first day of July"] and insert instead thereof the word "October."—[Mr. Bonar Law.]

Mr. BALDWIN (Joint Financial Secretary to the Treasury)

I beg to move to leave out "3d." ["does not exceed 3d."], and insert instead thereof "4d."

Mr. GOLDSTONE

This Amendment, I take it, replaces the Amendment which is down in my name, to leave out 3d. and insert 6d. While I welcome the concession which has been made by the Chancellor of the Exchequer I think he might have gone the length which is indicated in my Amendment. I have worked out the percentage of tax which is applied to these minimum prices, and, as usual, the people who pay, whether for food or entertainment, small amounts, are the most heavily taxed from the percentage point of view.

Sir F. BANBURY

No.

Mr. GOLDSTONE

If the hon. Baronet will allow me to quote two figures he will find that what I say is correct. He will find that on the 1s. seats, where the tax is 4d., it represents only 33⅓ per cent., but on the smaller-priced seats the tax is 40 per cent, now, and before the concession was made it was 66⅔ per cent. It would appear to me that if justice is to be done all round, the concession should go a little further than it has done, and I appeal to the Chancellor of the Exchequer, even now, to accept the Amendment which is down in my name, so that on all tickets of 6d. and less the lower tax should be applied. He has stated that 80 per cent, of the revenue comes from people who pay the smaller amounts for admission to these entertainments. I think that again shows the unfair incidence of the tax, and is another reason for making the change which I suggest. I beg to move, therefore, to leave out the word "3d." and insert "6d."

The DEPUTY-CHAIRMAN

We have another Amendment before the Committee.

Mr. GOLDSTONE

Then mine will have to take the form of a protest against the acceptance of the Government Amendment.

Sir F. BANBURY

The percentage test made by the hon. Member is quite fallacious when you get to small sums of this sort.

Amendment agreed to.

Further Amendments made: Leave out "3d." [" exceeds 3d."], and insert instead thereof "4d."

Leave out "two shillings" ["exceeds 7s. 6d. and does not exceed 10s. 6d.—two shillings"], and insert instead thereof "1s. 6d."—[Mr. Baldwin.]

Mr. BALDWIN

I beg to move to leave out the word "three" ["exceeds 10s. 6d. and does not exceed 15s. — three shillings "], and insert instead thereof the word "two."

Mr. BONAR LAW

No, 2s. 6d.

HON. MEMBERS

No, 2s.

Mr. LEIF JONES

The right hon. Gentleman said that the increased tax would be 6d. less in every case.

Mr. BONAR LAW

My hon. Friend (Mr. Baldwin) understood it in that sense, so I must have been indistinct. I will accept it.

Amendment agreed to.

Further Amendments made: Leave out the word "three" ["exceeds l5s.—three shillings "], and insert instead thereof the word "two."

Leave out the words "one shilling," and insert instead thereof the word "sixpence."—[Mr. Baldwin.]

Scale, as amended:—

Where the payment, excluding the amount of the duty—

Does not exceed 2d ½d.
Exceeds 2d. and does not exceed 4d. 1d.
Exceeds 4d. and does not exceed 6d. 2d.
Exceeds 6d. and does not exceed 1s. 3d.
Exceeds 1s. and does not exceed 2s. 4d.
Exceeds 2s. and does not exceed 3s. 6d.
Exceeds 3s. and does not exceed 5s. 9d.
Exceeds 5s. and does not exceed 7s. 6d. 1s.
Exceeds 7s. 6d. and does not exceed 10s. 6d. 1s. 6d.
Exceeds 10s. 6d. and does not exceed 15s. 2s.
Exceeds 15s.—2s. for the first 15s. and 6d. for every 5s. or part of 5s. over 15s.

Mr. HEMMERDE

I beg to move to leave out Sub-section (2).

I do not know whether the Chancellor of the Exchequer can tell us how much money is expected to be raised by Subsection (2), but it strikes me that it must be a very small sum. If I gather the object of this Sub-section aright, it is to tax the person, who is popularly known as a deadhead. In many ways that is an excellent plan, especially to people who do not understand theatres. Hon. Members may not understand what the effect of this tax will actually be. We do not want to put the tax upon the proprietors of theatres. Let us take the first night of a new production, when, say, about 150 newspaper critics go in. Who is going to pay that tax? They are all invited, and they do not pay for their seats. Are the newspapers going to pay the tax? I do not think so. I think it will mean that the theatre proprietors will have to send free tickets, tax paid, to the newspapers, so that the tax will fall upon the theatre. Let us take the second night, when practically always, except in one or two theatres very long established and great popular favourites, the house has got to be substantially paper—almost always—and that may be not only for a few nights, but for a longer period. I could give, although I am not permitted to do so, the name of one of the greatest successes there has ever been in a London theatre —at the performance of which I certainly saw several members of the Government Front Bench—which was largely kept with paper by the management for some weeks, and ultimately it ran for hundreds and hundreds of nights. I give that instance as showing how, in an absolutely legitimate success, by careful management of the theatre, by the sending out of tickets to people, the proprietors are enabled to keep the house in such a condition that the public think the play is going rather better than it is. That is by no means an unfair method. Many of the successes that have been known in the last twenty years have been made owing to skilful management, and owing to the excellent free list attached to the theatre, enabling the management to keep the house properly dressed for the first few weeks of the play. You arc going to put the whole of that burden in future upon the theatre.

6.0 P.M.

A syndicate—and, after all, most plays are run by syndicates—in future in putting up a play will have to calculate not only for the expense of the production and for the expense of running the play, but they will have to calculate to a certain extent that they have to pay this tax through inviting a certain class of the public, who are always invited, to theatres of standing to dress the house. Let us see the sort of people to whom free seats are given. We all know there is a certain type of person who always gets free seats if he can, and very often he is a person who can perfectly afford to pay. Take the sort of free list that is used by the leading theatres in London. I will not mention any by name, because it would be invidious, but I will take a theatre of first-rate reputation in the West End. What is the free list it adheres to? The first persons on the list would be probably staffs of hospitals and the second on the list would be institutions dealing with students for the stage—clubs like the Three Arts Club. You get a number of young women with very little money, living together during their collegiate existence, and every decent theatre makes a point of sending to these young women who are studying for one or other form of art free tickets to go to the theatre. Who is going to pay the 1s. 6d. tax? Those who are given these tickets will either have to pay it—and although it is a small sum these young women cannot afford to pay it—or the theatre has got to pay it when they are sending out these tickets. It either means taxing these persons, who in most cases are really very poor or taxing the theatres, although you start out by saying that you do not intend to do so. The idea that there is a large free public in this country which goes to the theatre without paying, though it can afford to pay, is, I believe, a profound illusion. Take the provinces, a play which goes there does not play, as many would imagine, to the full capacity of the house. It is doing very good business as the ordinary play goes, if it plays to a house one-fifth full. A house capable of holding a couple of hundred pounds, if it took £40 would probably be doing a good business and making a profit. Every provincial house throughout the country has its free list of people who are invited on the first night. That does not mean people who have not paid, because very often they are people connected with the theatre in one way or another—people who advertise by putting bills in windows are given free tickets. All that is going to fall on the theatre, and you are going to take away all this method of getting plays advertised in the country. You are simply going to throw the whole of that expense on the management. At the present time managers are running the provincial shows with the greatest possible difficulty, and if you are going to put down the giving of tickets to these people who come every Monday night, and indeed during the week, you are going to do a very serious injury.

I am much more concerned with the injury which this does to people who are after all doing something to learn through the stage—all the young students, all the people connected with colleges and schools. That is another class that escapes to a great extent. When you got managers producing Shakespeare, and plays that perhaps do not draw the largest houses, in London a great many tickets arc sent to schools and places of education generally, and you are going to put a heavy tax upon the schools, which I am quite sure they will not pay, or you are going to put the tax on the managers. I believe that in every decently conducted theatre it will be found necessary, according to the traditions of the British theatre, to a certain extent, to dress the house. That is going to fall upon the manager. It is going to yield an infinitesimal sum, but it is going to cause the greatest possible trouble. It is going to try something which I think is practically impossible. How are you going to prevent a man who owns a theatre from in- viting his friends into the theatre to see the show? Are you going to put inspectors there when tickets are being sold? How are you going to prevent, if someone knows a manager, supposing this tax was in operation, calling to the theatre, talking to him, walking in with him, and staying in the theatre with him? I do not see how you are going to collect such a tax. You certainly will not have the goodwill of the theatre managers with whose legitimate business you are interfering. You certainly will not get the assistance of the theatrical community in enforcing such a tax. You rely very much in collecting this tax on the cordial co-operation of theatrical managers. I do not think you will find these taxes easy to collect. If one could hit the deadhead, the person who might be called the stage deadhead, the person who is supposed to be able to pay and does not, everybody would be very glad, but I believe that the people who dress the theatre are largely people of very small means—students, nurses, and so on. This tax reminds one of another tax which was once proposed. Some people seemed to imagine that every one who went into a restaurant for luncheon ate about five courses, and the persons who started this tax have exactly the same idea of a theatre. I cannot imagine any tax that would be more completely futile and more completely subversive of running theatres in this country, and that would be of less value in raising money for the State.

Sir F. BANBURY

I have never had a free ticket in my life, and I have not been to a theatre since the War began.

Mr. HOGGE

Does my right hon. Friend never get a free ticket on the railway?

Sir F. BANBURY

I was not talking about railways; I was talking about theatres. I have a pass on railways, but if I went to a theatre and presented it I do not think that I should be admitted. Though I have not the knowledge of the hon. and learned Gentleman in reference to London theatres, and know nothing whatever about the system of dressing theatres, of which I never heard before, I do think that there is something to be said in objection to this particular tax, though on other grounds. A tax should be on something received and not on nothing received. In this particular case the theatrical proprietor receives nothing. Why should he be taxed for receiving nothing? That does not seem to me to be fair. The hon. and learned Member says that he could not bring in his family with these. That does not appeal very much to me. I put the matter more on the financial ground, which, I think, is a valid objection, that a man should not be taxed on what he has not got.

Mr. BALDWIN

I confess that, so far as I am concerned—and 1 believe that I am speaking for my right hon. Friend (Mr. Bonar Law)—my hon. and learned Friend has been voyaging through strange seas of thought. I was very much interested in what he said, and perhaps I have learned something. When we put in this Subsection we did not expect to make much revenue, but my right hon. Friend had seen representatives of the London theatres, and he certainly thought that by putting in these words he was meeting the desires of some of them.

Sir H. DALZIEL

Can you give the name?

Mr. BALDWIN

But we are quite prepared, if the hon. and learned Member will leave these words as they stand now, to look into this matter again before Report stage and, if we find that the case which my hon. and learned Friend has made can be sustained, we shall be pleaded to reconsider it.

Mr. HEMMERDE

I think that I could name, although I will not do so, the people who have taken the view of the theatrical profession which has just been referred to, but the people for whom I am speaking are the very people whom the Chancellor of the Exchequer said he would assist, and they are certainly those whom the public want to assist and do not want penalised. In the circumstances I beg to ask leave to withdraw my Amendment.

Amendment, by leave, withdrawn.

Amendment made: Leave out the word "July" and insert instead thereof the word ': October."—[Mr. Bonar Law.]

Clause, as amended, ordered to stand part of the Bill.