HC Deb 21 June 1926 vol 197 cc187-97

As from the fifth day of July, nineteen hundred and twenty-six, entertainments duty within the meaning of The Finance (New Duties) Act, 1926, shall be charged at the rate set out in the First Schedule to this Act.—[Colonel Day.]

Brought up, and read the First time.

Colonel DAY

I beg to move, "That the Clause be read a Second time." The duties we propose are set out in full in the Schedule on the Order Paper and I do not propose to read them. The only modifications suggested are with regard to the price of admission up to 5s. 6d., no change is suggested over the price of admission of 5s. 6d. As far as I am concerned I would prefer to move the total abolition of these duties and it would be more in accord with the views of the present Chancellor of the Exchequer as stated nineteen months ago. Then he gave his considered opinion as follows: I am strongly in favour of the abolition of this duty, and I think it has a high claim on the Exchequer surplus. When the Chancellor of the Exchequer expressed those views he did not expect that so shortly afterwards he would occupy the high office he now holds, but considering his expressed views I hope we shall not only have his sympathy but his support as well. Every Chancellor of the Exchequer since its introduction has been opposed to it. This Entertainments Duty was introduced as a War-time duty, and consequently was a bad tax. It was clearly intended by the right hon. Gentleman who proposed it that when the War came to an end, or not later than two years after the Armistice, it would be abolished. The late Chancellor of the Exchequer, the right hon. Gentleman the Member for Colne Valley (Mr. Snowden), when he made minor remissions, expressly stated that he never liked the duty, and what he did was to he taken merely as an instalment, and it was his earnest intention later on, bad he remained in office, to have made some further remissions in the duty. The present Chancellor has expressed himself in favour of the total abolition of this vexatious duty. This duty has been called a "luxury tax," but it is far from that. It is a vicious tax. This country accepts the principle that the wealthier people should pay the larger proportion of all taxes, but in this case the poorer people pay the heavier proportion. I will give the Committee a few examples of how this oppressive tax falls more heavily on the poor than the rich. Those who pay 8d. for admission pay 2d. tax or 25 per cent.; those who pay 9d. for admission pay 2d. tax, or 22½ per cent.; those who pay is. 4d. admission pay 4d. tax, or 25 per cent,; and those who pay ls. 6d. admission pay 4d, tax, or 22½ per cent. Now look at percentages paid by those who patronise the higher-priced seats. Those who pay 5s. admission pay 9d. tax, or 14 per cent.; those who pay 7s. 6d. admission pay ls. tax, or 14 per cent.; those who pay 30s. for boxes pay 3s. 6d. tax, or 11'6 per cent.

Further, proprietors and managers of music halls and theatres have to employ clerks to prepare the necessary returns and accountants to check and vouch the returns, and have to enter into guarantee bonds with insurance societies approved by the Government and pay their own insurance and, as a matter of fact, they do the work of the ordinary tax collectors. When the duty was introduced it was full of anomalies, some of which have been removed once, but we now find the ridiculous position that the programmes presented at theatres and music halls where the duty is paid, can also be presented at night clubs and hotel cabarets where no duty is payable. Music hall and theatrical artists wearing the same dresses, singing the same songs, in practically the same scenery, do actually appear at night clubs and cabaret performances in hotels. The right hon. Gentleman who introduced the duty said it was a device on his part to compel people who otherwise would not contribute to the revenue of the country, which he was raising from all classes, to do so. Wealthy visitors from the Continent and America, patronise the night clubs and cabarets. I have no objection to that, but I object to the fact that our citizens should have to pay a duty for seeing these performances in the music hall or threatre, while the other people see them in the cabarets without paying any duty. Apart from that, it is severe opposition to the music hall and theatre industry.

There is a further factor that was not contemplated when the duty was introduced. That is broadcasting. You have hundreds and thousands of people in this country who have the privilege of listening in to entertainments given at music halls or theatres, and the people who patronize the theatres and music halls have to pay a tax for those entertainments. But those who have the benefit of listening in sets or broadcasting sets get those performances for nothing. In view of the pledges given by previous Chancellors of the Exchequer, and of the opinions that have been expressed by the present occupant at that office, I hope he will see his way clear to accept this Amendment.

This tax is not like ordinary taxation. It is not a tax on profits, and it is not a. tax on income, but it is a tax, as far as many theatrical managers and proprietors are concerned, on losses. It is not only a vicious tax, it is a repressive tax, and many of these people are being driven into bankruptcy by it. The Government have in the past introduced many measures to assist other industries. Is it not possible in the goodness of the Chancellor of the Exchequer's heart, to remove this intolerable burden and give the entertain-merit industry a chance to progress?

We have heard a lot about bogus managers, and I want to tell the Committee that this Entertainments Duty has had a lot to do with these bogus managers, because where bogus managers are created, it is mostly from touring managers, who are touring the provinces with companies, and when you take into consideration the fact that practically 25 per cent. of their takings is taken away in tax, these people do not have sufficient money at the end of the week to pay their salaries, the consequence being that the weakest as a rule suffer, and that is as a rule the chorus ladies. It is through the infliction of this tax on the managers mostly that some of these girls at the weekend have not sufficient money to pay their board and lodging and have to resort to other means of getting the money before they can leave the town.


Were there no bogus managers before the Entertainments Duty?

Colonel DAY

Very few. [Laughter.] That may bring laughter from some hon. Members opposite, who do not understand the entertainment business, but there were very few bogus managers prior to 1915 and 1916. There were occasionally; you always find black sheep in every fold, but they have been greatly increased since the Entertainments Duty has been on, simply because 25 per cent. of the takings is taken away from their share each week-end. Let us see how ridiculous this tax is. If you go to the opera house to see opera, you have to pay Entertainments Duty. If you want to see Shakespeare or drama or the Russian ballet, you have to pay tax, but if you want to see a ballet or hear singing in a night club or at a hotel cabaret, there is no tax to pay. That position is absolutely fantastic.

This tax violates all the fundamental principles of public finance. When we take into consideration the theatrical managers' expenditure, we find that they have restricted every possible avenue of expenditure. They have reduced their staffs and their artistes, and they have cut down wages to a minimum. They have reduced their lighting expenditure, and everything more or less now, especially with the smaller managers, has been reduced to an irreducible minimum. If you take this £3,000,000 or £4,000,000, which is not a great deal of money to the Chancellor of the Exchequer, in the reduction of this taxation, you are placing it in the hands of the working classes and giving them more money to spend. By doing that, you are creating employment in other industries. Thereby you would be helping to solve a great portion of the unemployment problem. That is very vital. I am sure it is just as vital to hon. Members opposite as to those on this side of the House. Especially what I should like to ask some hon. Members is this: Are they forgetting the pledges they made to many of their constituents when they agreed that they would support the abolition of the Entertainments Duty? I can remember the short time I have been in Parliament of meetings being held upstairs, attended by many hon. Members from all quarters of the House, unanimously agreeing to support the abolition of the duty. When it comes to the House of Commons I should like to know whether hon. Members are going honourably to fulfil their pledges and give a negative vote, or support the duty, or not vote at all.

When the Labour Government was in power a great deal of pressure was brought to bear upon them by hon. Members on the other side of the House to get the Chancellor of the Exchequer to reduce or entirely to abolish the Entertainments Duty. There was also a great deal of pressure brought to bear upon the last Conservative Government by hon. Members opposite. A lot of criticism was meted out because certain remissions only were made. Perhaps hon. Members who then criticised will now support the proposed new Clause. Perhaps they will, in any event, assist us with their support? Some people have said that the remissions made by the ex-Chancellor were not handed on to the public. I have yet to find any responsible manager who has not in the kingdom handed on to the public the remissions that were made in the duty by the late Chancellor. I hope the right hon. Gentlemen opposite will follow the good example of his predecessor and accept this Clause. The change will not only do a great deal for the industry but for the working classes as a whole.


I share the prejudice of a great many hon. Members against the duty. Such as it is, however, it has come down to us from my predecessor, who modified it in those directions, and to that extent, that he thought right and proper. His remissions all took the form of relief to the cheaper kinds of entertainments, and the persons attending those entertainment, and they involved considerable sacrifice of revenue.

The hon. and gallant Gentleman, on this New Clause, seeks to carry still further the process on which the late Chancellor of the Exchequer embarked. In consequence, he would emphasise the character of the relief to the cheaper seats and the cheaper entertainments. I do not myself feel, if this tax is to be dealt with at all, that that is exactly the direction in which we should need to go. I believe the character and the quality of the stage and the drama are, to a very large extent, maintained out of the very high prices which are charged for the higher class of seats—[Interruption] —that is my view—and if we were to continue a process which would, in effect, cast greater burdens on them while relieving all the other seats in the house, we should promote a continual movement towards the cheaper seats, and rob the drama of one of the main sources of the supplies which enable it to maintain its artistic and powerful position as a factor in the life of the country. Therefore, if I were inclined to alter the tax it would be, I think, rather in the direction of extending the relief which the late Chancellor of the Exchequer gave to cover all the forms and qualities of theatrical entertainment. But I must not excite hopes in one quarter or fears in another by suggestions that it is in my power to take any action. It is not in my power to give any relief. The schedule proposed by the hon. Gentle- man would cost £1,350, in a full year and about £.1,000,000 in the current financial year, and I have not got that amount, and do not know where to find it; we have searched high and searched low, and there is no means of supplying the deficiency which would be croft[...]d a sacrifice of £1,000,000 in the present year. I do not know whether the hon. Gentleman expected any fruitful result from his Amendment, but I hope he will acquit me of any want of sympathy with the theatrical profession when I tell him that it is not in my power to assist him further with any remission.

Lieut.-Commander KENWORTHY

I did not notice in the Chancellor's speech such a tone of gratitude as I expected to hear in view of the new source of revenue which has been pointed out to him by the hon. and gallant Member for Central S[...]uthwark (Colonel Day). I do not think the right hon. Gentleman took in all that was being said. Did he observe that there is a new source of revenue in the cabaret shows, the restaurants, the clubs and hotels referred to by the hon. and gallant Member? I beg him to look at the OFFICIAL REPORT to Members if he did not quite seize the point. We have heard a speech from an acknowledged expert on these matters. I was not quite sure whether he was speaking all the time from the point of view of theatrical proprietors or from the point of view of the poorer public., but he is a man of wide sympathies, and perhaps he was speaking for both. We have it on his authority that the same artists, in the same dresses, singing the same songs, as appear at theatres and music-halls, give entertainments at the so-called cabarets—I suppose entertainment is the proper word to use, hut they take place so late at night that I think the pleasure must be forced; and that whereas these cabaret performances

escape the tax, it is levied at those music-halls and theatres which are attended by-those good citizens who take their pleasures before 11 o'clock at night. This is unfair to the legitimate entertainers, to the regular professional theatrical proprietors and music-hall proprietors, and these poachers, these restaurant keepers, these cabaret proprietors, and night club proprietors and bogus night club proprietors are being let off scot free.

I hope the right hon. Gentleman will join forces with the Home Secretary and myself in looking into the question of the taxation of bogus night clubs who give entertainments at all hours of the night. We have had many Debates in this House upon the Entertainments Duty, and the main argument used to be that it was a war-time measure. What has been the result of this tax?

The DEPUTY-CHAIRMAN (Captain FitzRoy)

The Amendment is to reduce the tax, not to do away with it.

Lieut. - Commander KENWORTHY

With regard to the British film industry, as a result of this taxation how many films does the Chancellor of the Exchequer think are being produced in this country? Only four are being produced. Only those who have a large market can afford to produce the films the public wish to see. What is the sort of theatrical performances that pay Simply those which the Home Secretary-himself deplores because of their undoubted effect on public morals. Those are the plays that pay, and the real good drama can hardly be made to pay at all. I do not want to advertise the plays that have a long run and fill the theatres but one cause of the result I have referred to is due to the degradation following the Great War and which has always followed after any great wars. [Hon. MEMBERS: "Time!"] I claim to have adduced some fresh reasons which this tax should be still further reduced.

Question put, "That the Clause be read a Second time."

The Committee divided: Ayes, 60; Noes, 185.

Division No. 298.] AYES 11.45 p.m.
Alexander, A. V. (Sheffield, Hillsbro') Buchanan, G. Day, Colonel Harry
Ammon, Charles George Cape, Thomas Dunnico, H.
Barr, J. Charleton, H. C. Gardner, J P.
Ercad, F. A. Compton, Joseph Greenall, T.
Bromfield, William Crawford, H. E. Grundy, T. W.
Bromley, J. Delton, Hugh Hall. F. (York, W.Ft,, Normanton)
Hall, G. H. (Merthyr Tydvil) Lawson, John James Sullivan, J.
Hartshorn, Rt. Hon. Vernon Lee, F. Sutton, J. E.
Hayday, Arthur Lunn, William Tinker, John Joseph
Hayes, John Henry Paling, W. Townend, A. E.
Henderson, Right Hon. A. (Burnley) Pethick-Lawrence, F. W. Walsh, Rt. Hon. Stephen
Henderson, T. (Glasgow) Potts, John S. Watson, W. M. (Dunfermline)
Hirst, G. H. Purcell, A. A. Watts-Morgan, Lt.-Col. D. (Rhondda)
Hirst, W. (Bradford, South) Richardson, R. (Houghton-le-Spring) Westwood. J.
Hudson, J. H. (Huddersfield) Rose, Frank H. Wilkinson, Ellen C.
John, William (Rhondda, West) Shaw, Rt. Hon. Thomas (Preston) Williams, David (Swansea, East)
Johnston, Thomas (Dundee) Sitch, Charles H. Williams, Dr. J. H. (Lianelly)
Jones, T. I. Mardy (Pontypridd) Slesser, Sir Henry H.
Kelly, W. T. Smith, Ben (Bermondsey, Rotherhithe) TELLERS FOR THE AYES.—
Kennedy, T. Spencer, G. A. (Broxtowe) Mr. Charles Edwards and Mr. Barnes.
Kenworthy, Lt.-Com. Hon. Joseph M. Stephen, Campbell
Lawrence, Susan
Acland-Troyte, Lieul.-Colonel Goff, Sir Park Newman, Sir R. H. S. D. L. (Exeter)
Agg-Gardner, Rt. Hon. Sir James T. Grant, J. A. Nuttall, Ellis
Amery, Irving James Greene, W. P. Crawford Oakley, T.
Applin, Colonel R. V. K. Guinness, Rt. Hon. Walter E. Oman, Slr Charles William C.
Ansley, Lord Gunston, Captain D. W. Perkins, Colonel E. K.
Ashley, Lt.-Col. Rt. Hon. Wilfrid W. Hall, Lieut.-Col. Sir F. (Dulwich) Perring, Sir William George
Balniel, Lord Hammersley, S. S. Peto, Basil E. (Devon, Barnstaple)
Barnett, Major Sir Richard Hanbury, C. Peto, G. (Somerset, Frome)
Betterton, Henry B. Hannon, Patrick Joseph Henry Preston, William
Bird, E. R. (Yorks, W. R., Skipton) Harland, A. Radford, E. A.
Boothby, R. J. G. Harvey, G. (Lambeth, Kennington) Raine, W.
Bourne, Captain Robert Croft Harvey, Major S. E. (Devon, Totnes) Remer, J. R.
Bowyer, Capt. G. E. W. Haslam, Henry C. Rhys, Hon. C. A. U.
Braithwaite, A. N Hawke, John Anthony Richardson, Sir P. W. (Sur'y, Chls'y)
Brass, Captain W. Henderson, Capt. R. R. (Oxf'd,,Henley) Ropner, Major L.
Brassey, Sir Leonard Henn, Sir Sydney H. Ruggles-Brise, Major E. A.
Bridgeman, Rt. Hon. William Clive Hennessy, Major J. R. G. Russell, Alexander West (Tynemouth)
Briscoe, Richard George Herbert. S. (York, N. R., Scar. & Wh'by) Salmon, Major I.
Brocklebank, C. E. R. Hills, Major John Waller Samuel, Samuel (W'dsworth, Putney)
Brooke, Brigadier-General C. R. I. Hilton, Cecil Sandeman, A. Stewart
Broun-Lindsay, Major H. Holland, Sir Arthur Sanderson, Sir Frank
Brown, Maj. D. C. (N'th'I'd., Hexham) Holt, Capt. H. P. Sandon, Lord
Buckingham, Sir H. Hope, Capt. A. O. J. (Warw'k, Nun.) Sassoon, Sir Philip Albert Gustave D.
Burton, Colonel H. W. Hopkins, J. W. W. Savory, S. S.
Cadogan, Major Hon. Edward Horlick, Lieut.-Colonel J. N. Shaw, Lt.-Col. A. D. Mcl.(Renfrew,W.)
Campbell, E. T. Hudson, Capt. A. U. M. (Hackney, N.) Shaw, R. G. (Yorks, W.R., Sowerby)
Cazalet, Captain Victor A. Huntingfield, Lord Shepperson, E. W.
Chadwick, Sir Robert Burton Inskip, Sir Thomas Walker H. Skelton. A. N.
Charteris, Brigadier-General J. Jephcott, A. R. Smith, R. (Aberd'n & Kinc'dine, C.)
Christle, J. A. Kennedy, A. R. (Preston). Somerville, A. A. (Windsor)
Churchill, Rt. Hon. Winston Spencer Kidd, J. (Linlithgow) Spender-Clay, Colonel H.
Clayton, G. C. Kindersley, Major Guy M. Sprot, Sir Alexander
Cobb, Sir Cyril King, Captain Henry Douglas Stanley, Lord (Fylde)
Cochrane, Commander Hon. A. D. Kinloch-Cooke, Sir Clement Steel, Major Samuel Strang
Cope, Major William Knox, Sir Alfred Streatfeiid, Captain S. R.
Couper, J. B. Lamb, J. Q. Strickland, Sir Gerald
Courthape, Lieut.-Col. Sir George L. Lane Fox, Col. Rt. Hon. George R. Styles, Captain'H. Walter
Croft, Brigadier-General Sir H. Little, Dr. E. Graham Sugden, Sir Wilfrid
Crookshank, Col. C. de W. (Berwick) Loder, J. de V. Templeton, W. P.
Crookshank, Cpt.H.(Lindsey, Gainsbro) Lord, Walter Greaves- Thompson, Luke (Sunderland)
Curzon, Captain Viscount Lougher, L. Thomson, Rt. Hon. Sir W. Mitchell.
Davidson,J.(Hertf'd, Hemel Hempst'd) Lucas-Tooth, Sir Hugh Vere Tinne, J, A.
Davies, Maj. Geo. F. (Somerset, Yeovil) Luce, Major-Gen. Sir Richard Harman Tryon, Rt. Hon. George Clement
Dawson, Sir Philip Lumley, L. R. Warner, Brigadier-General W. W.
Duckworth, John MacAndrew, Major Charles Glen Warrender, Sir Victor
Edmondson, Major A. J. Macdonald, Capt. P. D. (I. of W.) Watson, Rt. Hon. W. (Carlisle)
Edwards. J. Hugh (Accrington) MacIntyre, I. Watts, Dr. T.
England, Colonel A. McLean, Major A. Wells, S. R.
Evans, Captain A. (Cardiff, South) Macmillan, Captain H. White, Lieut.-Colonel G. Dalrymple
Everard, W. Lindsay McNeill, Rt. Hon. Ronald John Williams, A. M. (Cornwall, Northern)
Fairfax, Captain J. G. Macquisten, F. A. Williams, Com. C. (Devon, Torquay)
Falle, Sir Bertram G. MacRobert, Alexander M. Williams, Herbert G. (Reading)
Falls, Sir Charles F. Makins, Brigadier-General E. Wilson, M J. (York, N. R., Richm'd)
Fermoy, Lord Manningham-Buller, Sir Mervyn Wise, Sir Fredric
Fielden, E. B. Margesson, Capt. D. Womersley, W. J.
Ford, Sir P. J. Mason, Lieut.-Col. Glyn K. Wood. E. (Chest'r, Stalyb'ge & Hyde)
Foster, Sir Harry S. Mitchell, S. (Lanark Lanark) Wood, Sir Kingsley (Woolwich, W.)
Foxcroft, Captain C. T. Monsell, Eyres, Com. Rt. Hon. B. M. Wragg, Herbert
Gadle, Lieut.-Col. Anthony Moore-Brabazon, Lieut.-Col. J. T. C. Yerburgh, Major Robert D. T.
Ganzonl, Sir John Moreing, Captain A. H.
Gibbs, Col. Rt. Hon. George Abraham Morrison H. (Wilts, Salisbury) TELLERS FOR THE NOES.—
Gilmour, Lt.-Col. Rt. Hon. Sir John Morrison-Bell, Sir Arthur Clive Sir Harry Barnston and Mr. Frederick Thomson.
Glyn, Major R. G. C. Nall, Lieut.-Colonel Sir Joseph

The New Clause—(Amendment of Schedule A, No. III Rule 2) —standing in the name of the hon. Member for Norwood (Mr. Greaves Lord) is not in Order, because it might very likely increase the charge.


On a point of Order. May I submit that this Amendment would in no circumstances increase the charge, because it can only come into operation provided the profits were increasing, and it would only then come into operation to substitute for the higher year as the basis of taxation the lower year. Under these circumstances it must decrease the charge and not increase it.


As I understand the hon. Member's Amendment he proposes to ante-date the change from the five years' average to the preceding year. It would operate in 1926–27, and the profits of the preceding year taken that year might very easily be larger than the profits of the average of the five preceding years, thus increasing the charge.