New Clause.—(REDUCTION OF ENTERTAINMENTS DUTY.)

HC Deb 22 June 1953 vol 516 cc1525-89

There shall be substituted for the third scale of entertainments duty set out in Part II of the First Schedule to the Finance Act, 1952, the third scale of entertainments duty set out in the Schedule (Entertainments Duty—Third Scale) to this Act.

Provided that as respects payments for admission to entertainments described in subsection (3) section two of the Finance Act, 1952, held before the nineteenth day of July, nineteen hundred and fifty-three, the third scale shall consist of the rates set out in Part II of the First Schedule to the Finance Act, 1952— [Mr. H. Wilson.]

Brought up, and read the First time.

Mr. Harold Wilson (Huyton)

I beg to move, "That the Clause be read a Second time."

I take it that it will be in order at least to refer to the Schedule which is proposed, because it would not make very much sense to discuss the new Clause without discussing the Schedule. The detailed changes which we propose in the duty as it relates to cinemas are set out in the Schedule, of course, and not in the new Clause, and the effect of the Clause is to propose an alternative scale to that which was inserted by the Government during the Report stage of the Finance Bill of last year.

On that occasion, apologising for the late entry of the Government Amendment on to the Order Paper—which we all understood—the Financial Secretary said that last year, and as it happened in the last two years, it had not been possible to obtain the final views of the industry until almost the last minute. That was, of course, due to the cat-and-mouse treatment of the industry by the Treasury.

Whatever may have been the position last year, there is no question that this year the Treasury has had the trade's views before it and, of course, the proposals which are included in the new Clause, at a very early stage, some months before the Budget was opened by the Chancellor, and I think the whole Committee will recognise that these proposals which were made to the Treasury some months ago are in no sense a bargaining bid. There was no question of asking for a very big concession in Entertainments Duty which, after considerable discussion and various changes, and after debates in Committee and on Report, would finally be whittled down to some compromise proposal. This new scale was put forward at that time as something which is reasonable and very modest in its effects on the revenue, and I hope the Chancellor will agree that the proposals should not be whittled down, as was the case last year.

The surprising thing, in view of the early stage at which these proposals were made, was that no reference was made to them in the Chancellor's Budget speech. Despite that, these proposals have been formulated and there have been several offers from the trade to discuss them with Ministers or representatives of the Customs and Excise. At any rate, there is one thing on which we can all congratulate ourselves, and which I hope will make the debate slightly easier; there is no disagreement on the figures. There is no disagreement on the approximate cost to the Treasury of the tax amendments which are proposed by us this evening.

Answering a Question put by my hon. Friend the Member for Attercliffe (Mr. J. Hynd) on 19th March, the Chancellor said that the Treasury estimate of the cost of these proposals was £3¾ million, compared with the estimate of the trade of £3.7 million. I think we can say that those two figures are roughly the same and so there is progress in that direction at any rate. If the Financial Secretary had been a little less sure of the accuracy of his figures last year we might have made more progress then. There was disagreement, as the hon. Gentleman will recall.

I remember saying then, on the Report stage, quoting the "Economist" that the exhibitors were more likely than the Treasury to be right about the cost involved though I recognised that there was a considerable margin of error in any case. According to Hansard, the hon. Gentleman "indicated dissent," and put his faith in the accuracy of the Treasury estimate. I warned the Treasury at that time that they were likely to lose a lot of money on their own proposals because those proposals were not realistic in terms of the particular charges for particular levels of seat prices.

One has only to ask what has happened. Answering a Question I put, the Chancellor said on 21st April that the yield last year was actually £37¾ million compared with the estimate he had made earlier of £39.35 million; a loss of £1.6 million. But, as I have said, this year at any rate there is no disagreement about the cost of the proposals we are moving.

This new Clause is estimated to cost about £3.7 million or £3.75 million on the present basis of admissions. Admissions may fall and in fact they are falling, and there is nothing in our Clause which is likely to increase admissions—I will come to that point in a moment—except that it will be likely to prevent future bankruptcies in the cinema industry, a point which should be in the mind of the Chancellor. We can then accept the figure as the difference in a full year between the present level of taxation and the level which will be in force if our new Clause is accepted. The cost for this current financial year—I think that again the Chancellor will accept this estimate—is about £2½ million.

5.45 p.m.

I do not need to remind the Committee that the effect of Entertainments Duty on cinemas has been debated almost every year since the war and generally about this time of the year. In fact, I could produce a sheaf of quotations, which would be embarrassing for certain right hon. and hon. Gentlemen opposite, revealing the savage attacks that they made at various times on what they have called the iniquities of this Entertainments Duty. One thinks particularly of the right hon. Gentleman, now Secretary of State for the Colonies, who, year after year, in debates on Finance Acts and on the cinema industry, and at other times, has made slashing attacks.

One has only to turn back to the Finance Act debates of two years ago, when the then Opposition spokesman, now translated to another place, Lord Hudson, made a most passionate speech for altering the Entertainments Duty. We recall the speech of the hon. Member for Rushclifle (Mr. Redmayne) who now sits on the Government Front Bench. I am not sure whether he is a Lord Commissioner of the Treasury or an Assistant Whip, unpaid, but that is where he sits.

He said: It is not beyond suspicion in the minds of a great number of people in this country that Socialism wants to drive out the small man in every branch of enterprise. I think that the Chancellor now has a chance, if he wants to take it, of proving that he has some claim to anything but the bitterest criticism and opposition from the small men in every trade and enterprise in this country, and I believe that in the cinema industry that class is as wide as in any other enterprise."— [OFFICIAL REPORT, 5th June, 1951; Vol. 488, c. 950.] I take it that if he still holds that view he will support this new Clause today. The hon. Baronet or the hon. Baronet-designate—I am not quite sure which it is— the Member for Croydon, East (Sir H. Williams) said on the same occasion that taxation on this form of entertainment had gone beyond the economic limit, that was the real issue.

The Economic Secretary himself who, on that occasion, spoke from the Opposition back benches, and who spoke, as he always does, with a great knowledge of the cinema industry, because so large a part is concentrated in his division, said: We must consider whether the position has now been reached when official taxation will lead to diminishing returns. He went on: Turning to the exhibition side of the industry. I think it is quite clear that the position of the exhibitors has been seriously deteriorating … The figures I have been given show there has been a substantial drop in gross box office receipts in the commencing months of this year. That was 1951, and the hon. Gentleman knows there has been an even more serious fall in box office receipts in the commencing months of this year.

He went on: The only other point I want to make is the one raised earlier by my right hon. and gallant Friend the Member for Gainsborough (Captain Crookshank)"— yes, the Leader of the House was in this business two years ago and should be lending his support to our Amendment— … it is the method of taxation of this industry which combines the provision of revenue with the operation of price control. The Government have done nothing to alter that in the last two Budgets. I do not believe that we shall ever succeed in solving this problem while maintaining the essentials of the present system intact. It may have worked in the past, but with the present rate of duty "— that is, in 1951— it appears to be becoming unworkable."— [Official Report, 5th June, 1951; Vol. 488? c. 956–8.] Lastly—I shall not weary the Committee by embarrassing too many Members opposite—there was the present Secretary of State for the Colonies, who wound up the debate and said he wanted to object to the level of Entertainments Duty for three main reasons. He said: First, we think that the law of diminishing returns is beginning to operate, quite violently. … It also affects the amenities of the cinema-going public in the picture houses. The second reason why we are against this Clause is because we wish to draw attention to the cinema jungle and jumble which everything the Financial Secretary said presupposes is to be perpetuated. Of course, the then Financial Secretary was my right hon. Friend the Member for Battersea, North (Mr. Jay). The third reason is that there are very great anomalies in levying these duties."— [OFFICAL REPORT, 5th June, 1951; Vol. 488, c. 959.] Every word said in those days, though there was good reason for the conditions then—the situation in the cinema industry was nothing like it is today—is true now, and true to a much greater extent.

My right hon. Friend the Member for Leeds, South (Mr. Gaitskell), like Sir Stafford Cripps before him, resisted some of the extreme views of right hon. Gentlemen opposite. We did not believe, for instance, that the ills of the industry could be cured by sweeping remission of Entertainments Duty. It was calculated that to help the producers to the tune of £1 million a year would have meant a reduction in Entertainments Duty of £10 million, because of the losses and leakages and seepages at various stages before the money came through to the production side of the industry.

Therefore, in our film policy we concentrated on other means, on a process to reduce the cost of production by the National Film Finance Corporation—a piece of nationalisation which I am delighted to see the Government have decided to maintain for another three years because of its great success. We also devised the National Film Production Levy which channelled revenue direct from the box office to the producer, instead of by the more costly methods which some hon. Gentlemen opposite had been proposing.

Our new Clause today is not related to the production side of the industry except of course in so far as its passage would help in creating the confidence required in the very difficult negotiations due to take place before long on the future of the film production levy. Of course, indirectly it has a bearing on film production because if there were to be any large-scale closure of cinemas on economic grounds, that would have a serious effect on British film production.

The new Clause arises—and there is no inconsistency with the views and statements of Labour Chancellors of the Exchequer—because of the present financial position of the exhibition side of the industry, and the present situation is a great deal worse than it was when my right hon. Friend had to reply to a debate on Entertainments Duty two years ago. I do not think there can be any argument about the present state of the many exhibitors in this industry.

I do not think anyone has ever accused me of any undue tenderness to exhibitors when I was at the Board of Trade. Indeed, most of the criticisms were all the other way round. But I must admit to being moved on seeing the independent figures—and, no doubt, most hon. Members have seen them—about the present finances of the exhibiting side. I want to make it clear that I am not talking about the big circuits. If we had been considering the position of the big circuits alone or mainly, we should not have brought forward this new Clause. We are considering a very much larger number of small cinemas, particularly in the very remote areas.

The Committee will know of the figures produced, and so far as I know never challenged, by Messrs. Stoy Hayward, the accountants, covering the year ended 30th June, 1952. These figures cover the whole trade—4,570 cinemas—and they are framed on two alternative bases. For the purpose of this discussion I think the convenient hypothesis to take will be that every exhibitor was the lessee of his cinema premises, or alternatively that every exhibitor was the owner but was setting aside a fair notional amount in respect of rent.

On that basis there was a deficit of £1,406,600 in the year ended 30th June, 1952—about £1.4 million—against gross takings of £109.6 million, but of course gross takings included tax, levy and many other expenses, and the exhibitors' share after the tax, the levy and film hire was about £44.65 million. We have to compare that with a deficit of £1,406,600. Lest there should be a disposition to compare the bases of these figures, I should say that the rent figure taken was equivalent to 3.2 per cent. on the replacement cost of the cinemas, which I do not think many people would be likely to regard as excessive.

That was the financial position of the cinema industry taken as a whole, some parts of it no doubt profitable and others in a very serious position, in the year ended June, 1952. Those figures are now more than a year old. If we could say that since that period the position had improved, then our case would be very much weaker, but in fact, as the Committee know, the position has deteriorated since the end of the year to which the Stoy Hayward figures relate. If we take the six months November to April last year, and if we take the monthly tax receipt figures issued by the Board of Customs and Excise, we find that there was a fall from £19.83 million in the period November to April, 1951–52, to £18.36 million in the six months November to April of last winter. That is a fall from the winter before last until last winter of over 7 per cent.

Indeed, the position within that period was getting worse. If we take the first three months of this year, the cinema tax revenue was £9,446,000 against £10,267,000 in the same three months of 1952, a fall of rather more than 8 per cent. That means that there has been a fall of 8 per cent. compared with the year covered by the Stoy Hayward report, a report which showed that exhibitors were already showing a deficit on their working of about £1.400,000.

I suggest that there is no point this evening in speculating on the reasons for this falling off in cinema attendances and cinema revenues. There has been the decline in industrial production, of course. There has been the increase in short-time, the loss of overtime earnings, and higher food prices, leaving a smaller margin for entertainment. There has been particularly the increase in the coverage of television over a great part of the country. The plain fact is that whatever the causes—and we all have our ideas about them—the Treasury have now reached the position, as previous Chancellors did with the beer tax two or three years ago, described so eloquently by the Economic Secretary two years ago when he was anticipating a little the position of diminishing returns.

There is no doubt that before long the Chancellor will have to re-cast the Entertainments Duty system so as to permit a reduction in prices—not merely an improvement in the share going to the exhibitors—and by these means stimulate admissions in order to safeguard his own revenue. But as I have already said, this new Clause is not as ambitious as that. It is not directed to lowering seat prices and towards helping to stimulate increased admissions. It is simply dealing with the problem of very many exhibitors in different parts of the country, particularly, but by no means confined to, Scotland, as a result of the present economic situation in the trade.

I do not need to tell the Committee of the already grotesque degree of discrimination which exists in Entertainments Duty and which is operating against the cinema industry and cinema attendances. We are all familiar with the fact that cinemas are taxed on admission charges up to 1s. while horse, dog and speedway racing and so on are free at that level—quite apart from the fact that cinemas have to pay in the form of a Film Production Fund levy. At 1s. 6d. the cinema pays 6d. to the Chancellor of the Exchequer while speedway and other racing and the rest pay 2½d. At 2s. the cinema pays l0d. out of the amount paid by the cinema-goer while anyone paying 2s. for a seat at some of the other entertainments that I have mentioned pays only 4½d. to the Chancellor of the Exchequer.

We are not suggesting in this new Clause wiping out this anomaly entirely. Indeed, we go only a very small way in the direction of reducing the differentiation in taxation between cinemas and other forms of entertainment. If this new Clause is accepted the 1s. seat will still bear 2d. tax whereas, as I have said, the other forms of entertainment will pay no tax out of their 1s. admission fee. If this new Clause is accepted there will, on the 1s. 6d. seat still have to be paid 4¾d. against 2½d. in the case of those patronising other entertainments. On the 2s. seat 9d. will still have to be paid against 4½d. paid by the other entertainments. This new Clause, which should commend itself to hon. Members in all parts of the Committee, differentiates between these forms of entertainment very considerably compared with some which were moved by hon. Members opposite when they were in opposition.

6.0 p.m.

One of the great qualities of this new Clause is that the easements are concentrated especially and to a very high degree on the cheaper seats, and, of course, for that reason, they are of most direct benefit to the smaller cinemas and the cinemas in the most remote areas. small villages, small industrial towns and so on. For instance, the 9d. seat would be free under these proposals, on the l0d. seat there would be a reduction of ¾d. in the Duty, and on the 1s. seat there would be a reduction of 1d.; on seats priced at from 1s. 3d. to 1s. 6d., the reduction would be l¼d., and, going above that level to seats priced at 1s. 9d. and 2s., there would be a reduction of 1d.: at 2s. 3d., a reduction of only £¼.; at 2s. 6d., a reduction of ½d.; at 3s., no reduction; at 3s. 6d., a reduction of ½d., and at 4s. a reduction of ¼d.

These rather odd fluctuations in the last part of the scale are an attempt on our part to clear up some of the minor anomalies and maladjustments in the present scale of cinema taxation, but the main effect of the proposal is that the biggest reductions in taxation would be on seats priced at round about 1s., 1s. 3d. or 1s. 6d., where the reductions are from 1d. to l¼d., whereas the duty on most of the more expensive seats is reduced by about ½d. or ¼d., or, in some cases, is not reduced at all. This concentration of our interest on the cheaper seats means a very great relief to the small cinemas, which, on the whole, are by far the worst hit in the present economic state of the cinema industry.

I have been looking at some returns published more than a year ago by the Board of Trade. When I first went to the Board of Trade, I should like to tell the Committee, I found that there were almost no statistics about the cinema industry, and I asked the statistics department to remedy that state of affairs. From time to time, about every quarter, since then, the Board of Trade Journal has carried detailed figures of great value, not only to the Government, but, I am sure, to those engaged in the industry.

In March, 1952, the Board of Trade Journal carried a table showing the charges made by cinemas of various sizes —up to 250 seats, from 250 to 500, and from 500 to 750 and so on. It is a very serious and ominous thing that the President of the Board of Trade seems to have stopped publishing these figures. Perhaps the Chancellor will inquire into the reasons for that, and I hope to get— though not this evening—an assurance that the Government will resume publica- tion of these figures, because it is certainly rather serious that, when we have these important debates on cinema taxation, their publication should have been stopped.

Using the latest figures—those published in March, 1952, and relating to cinema attendances in September, 1951, which are still broadly accurate—we can see the very heavy concentration of cheaper seats among the smaller cinemas. For instance, if we take cinemas having fewer than 250 seats, we find that about 56 per cent. of the seats are priced at 1s. 6d. or less; taking those with a seating capacity of between 250 and 500, 64 per cent. of the seats are under 1s. 6d., while no fewer than 50 per cent. of them are priced at 1s. or under. Taking cinemas seating from 500 to 750, and we are still pretty well in the region of the small cinema, 67 per cent. of the seats are priced at 1s. 6d. or less. In the big super-cinema, holding 2,000 or more people, however, only one-third or 34 per cent. of the seats are priced at 1s. 6d. or less.

Since the main concentration of the easements of this new Clause is on these cheaper seats of about 1s. to 1s. 6d., it is easily seen that its main help will be to the smaller cinemas, which have about two-thirds of their seats priced at the level of 1s. 6d. or less, whereas the amount of easement to the big cinemas and circuits is very much smaller by comparison.

If we take the matter further and consider seats priced at 2s., we have to estimate, because the figures are not very clear, but it appears that about 85 per cent. of all seats in smaller cinemas up to 500 were priced at 2s. or less. I cannot give the accurate figure for seats between 2s. and 2s. 6d. and one has to make an estimate, but it is this particular price level which will gain most from the operation of this new Clause.

I do not know whether it is necessary to give evidence of the smaller cinemas being the hardest hit, but I think that all hon. Members of the Committee will be aware from the cinemas in their own constituencies, and particularly those in the more remote parts of the country, that they are hit far more seriously than some of the big cinemas, especially those in the bigger circuits. The Stoy Hayward Report showed that, out of 4,570 cinemas of all sizes, 3,746 showed a loss on film exhibition in that year. The average cinema, according to the basis I have mentioned, showed a loss of from £800 to £1,000 for the year for three groups whose seating capacity ranges from 500 to 1,250, whereas in the cinemas of larger capacity there was a profit of £1,000 to £1,100 for cinemas seating between 1,500 and 2,000 and a profit of £2,300 for the biggest cinemas seating more than 2,000 people.

This new Clause is designed to help those which are most in need, and particularly those which fulfil the important role, as we all agree, of providing entertainment in the smaller towns and villages and the more remote industrial and mining districts, which are too far from the large towns to be able to be served by the larger cinemas and circuits. The new Clause is not put forward purely on the responsibility of the exhibition side of the industry. It is a very important fact that the Cinematograph Films Council, which is a statutory body established by this House, passed a resolution which, as far as I know, was carried without any vote to the contrary, supporting the point of view which has been put forward this evening and, with the leave of the Committee, I should like to quote a few words from that Report: When the British Film Production Fund was established and when it was subsequently revised, the terms were agreed to on certain expectations as to the share of the receipts from the adjustment of prices then negotiated which would be left with the exhibitors to assist them in meeting increased costs. These expectations have not been realised. The net position is that a large proportion of exhibitors, faced by the rising cost of operation, are confronted by a serious deterioration in their financial position, so far as their operations as exhibitors are concerned. The Cinematograph Films Council is satisfied that Entertainments Duty must be reduced. It wishes to register its great disappointment that recent reliefs which have been granted or announced have not been extended to the cinema industry. For 25 years, successive Governments have committed themselves to the policy of promoting the British Cinematograph industry. The council is not aware of any similar commitment in relation to, for example, dog racing. It does not think it is consistent with expressed policy that tax on the cinema industry should be the highest on any form of entertainment. In moving this new Clause, we have been more moderate than the Cinematographs Film Council in that we have not sought to remove the whole of the differential element in this discriminatory taxation, but have only gone a small way towards reducing it. I think I can say— though I prefer to leave this to my hon. Friend the Member for Nottingham, North-West (Mr. O'Brien)—that these proposals are supported by the workers in the industry in whose interests, of course, my hon. Friend has been very active in raising the miserable standards which many of them experienced not so many years ago.

I mentioned a few minutes ago the worsening, since the Stoy Hayward Report, of the matter of cinema attendances. From the financial point of view we must also take account—in comparison with the time of the Stoy Hayward Report— of the wage increase of £1 million, for which, I think, my hon. Friend was largely responsible, an increase which was by no means premature or excessive, but which adds to the difference in the economic position of the industry since the publication of the Stoy Hayward figures which, as I have already shown, reveal a very serious state of affairs.

I think that all of us recognise, as we have for many years, that it was not easy in the past few years for Chancellors of the Exchequer to give relief in Entertainments Duty on cinema seats, but in this Bill we see a whole string of major concessions in taxation which have been granted by the Chancellor this year. We on this side of the Committee think that they have been wrongly devised and given with a very wrong sense of priority. I would certainly not support this new Clause if it were a question of either having the Clause or an improvement in the position of, say, old age pensioners. But that is not the issue before us. Compared with the reductions granted in this Bill, a large part of which have already been dealt with by the Committee, the case for the new Clause is overwhelmingly strong.

In the preparation of this Bill the Chancellor has made concessions in taxation for television purposes. He has cheapened the cost of television sets by reducing the Purchase Tax. We have to face the fact—and many hon. Members can speak of this from a constituency point of view with more authority than I can from the point of view of my constituency—that there are many millions of people in this country to whom the Government still denies television coverage, and millions of people who cannot afford television sets and who have to rely for their entertainment on regular or irregular visits to the cinema. Therefore, on this ground also there is in equity the strongest case for the Government agreeing to accept this new Clause. I hope that when the Chancellor replies to the debate he will tell us that the Government are going to accept the Clause and thus give the cinema industry a better hope of survival than it would appear to have at present.

6.15 p.m.

Mr. W. G. Bennett (Glasgow, Woodside)

I believe that everyone, including the Treasury, is agreed that the cinema trade is having a bad time, particularly the smaller halls. While I propose to speak for the trade as a whole, I am especially interested in the present position of halls with a seating capacity of from, say, 600 to 900. I recently received a balance-sheet from a small circuit with five halls which had already closed two of them—one of them in my own division —and which was proposing shortly to close another unless the Chancellor agreed to give some relief in the rate of tax.

The small hall which is likely to be closed showed an adverse balance for the year ended January, 1953, of £197, while the Treasury had taken from it during the same period roughly £500. If this remission of tax were granted, it would allow a balance of £300, most of which would go on renovations. I visited the place and found that it had not been painted for several years simply because there was no money available.

This concession, if granted, would not cost the Treasury any money at all. On the other hand, if it is not granted, at the end of the day the Treasury will be the losers. If this hall were to close within the next few months the Treasury would lose the £500. The wage bill of the hall is something slightly over £30 a week, and there are seven employees. If those seven employees are thrown on to Public Assistance or unemployment pay that, again, will affect the Treasury. If the hall is empty the local taxes will also suffer. There would be a continual loss on every hand. From that point of view alone I believe that the question is well worth the Chancellor's consideration, and, I might almost say, bounty.

In seven out of nine of the larger cinemas in my division, the average price of a seat is 1s. 6d. I understand that it is impossible to provide a seat for 9d. and at the same time pay the Treasury even a halfpenny and still show a profit. The profit has to come from the higher priced seats. With seats priced at 9d., 1s. and 1s. 6d. there is very little on which to come and go, so that the majority of the halls in working class districts are living very close to the border line at the present time.

When I inquired into the cost of renovations and repairs, I was amazed to find that whereas the replacement cost of a cinema seat in 1938–39 was 19s. 9d., today's price is £5—five times the cost. The cost of carpeting the passages—and it must be strong and good quality carpet —is £5 a square yard today compared with, roughly, £1 a square yard before the war.

With costs such as these, one can well understand that renovations, alterations and the keeping up of a decent standard are a very costly business. Cinemas must be kept up to certain satisfactory sanitary standards. Painting costs a great deal of money today, and many cinemas are actually in need of the sanitary inspector's supervision.

Sometimes a man will go to a football match on Saturday and pay 1s. 6d.. out of which the Treasury gets 2½d., but his wife and two daughters will go to the chinema and pay the same price, and they each will contribute 6d. to the Treasury. A very strong case can be made out for relieving the entertainment of the wife and the two daughters. Last year my right hon. Friend the Chancellor of the Exchequer made a concession to certain other forms of entertainment; a strong case can be made out this year for the cinemas.

We have heard how the Chancellor of the Exchequer came to the help of the textile industry by his Budget proposals because the industry was suffering great depression. It now shows a wonderful improvement. If it is good for that one industry to have assistance in its time of trial, is it not worth the Chancellor's while to consider relieving the cinema industry, which will cost only £2½ million this year and £3¾ million in a full year?

I plead the cause of the small man in the cinemas in working class areas. Other hon. Members have material and statistics to give the case for the industry as a whole. I have nine cinemas in my constituency, only two of them charging more than 1s. 6d. One of those charges 2s. 1d. and the other 1s. 9d. They are all finding it very difficult to carry on, and I would ask the Chancellor to give this matter his very serious and anxious consideration. I am looking forward with very much hope to the result of this debate.

Mr. T. O'Brien (Nottingham, North-West)

My right hon. Friend the Member for Huyton (Mr. H. Wilson), has made my task, and, indeed, the task of those who are, like myself, supporting the Clause, very easy, or at least easier than it would otherwise have been. In a magnificent review he surveyed the problem in all its aspects. If this were a public meeting and not a Committee of the House of Commons I would get up and thank my right hon. Friend very much, and move a vote of thanks, and then sit down.

Very little can be added to the effective arguments that he has advanced, but I would take the opportunity of dotting the "i's" and crossing the "t's," as I plead with the Chancellor of the Exchequer for his serious reconsideration of the attitude of the Government towards Entertainments Duty as it affects the cinemas.

Last year, the Financial Secretary to the Treasury, as he will remember, challenged the cost of the proposals I submitted. This year, fortunately, there is an agreement, a welcome agreement, with the Government. The trade know exactly what the proposals are to cost. I do not think there is any dispute about what the proposed new Clause means, or that the cost will be about £3¾ million.

I do not think it can be disputed that cinema takings and attendances are decreasing. Much has been said in this Committee about the small cinemas and the smaller levels of prices of admission, but attention must be paid to the fact that prices of admission in cinemas, even including the high scales of Entertainments Duty, are not by any means the highest in the world. They are reasonable, and if they were cut to any large extent there would be a serious risk that the wages bill in the industry could not be paid, apart from the money required for renovations.

There are two factors to which I would like to draw the attention of the Committee. The first was referred to by the hon. Member for Woodside (Mr. W. G. Bennett), when he mentioned the difficulties of having cinemas renovated. Looking at the matter from the selfish point of view—the Committee will be aware of my interest in the industry—it is a good thing that exhibitors cannot afford to re-carpet, re-seat and renovate their cinemas. If they were obliged to do so there would be no money left in the industry. I am serious when I say that. This film industry has long left its eldorado stage. It is no longer the paradise of industries, everybody's milch cow. It is going through serious difficulties.

As a matter of fact, on the production side today, on which subject I have addressed hon. Members on more than one occasion, were it not for a voluntary arrangement made about the Eady Levy, there would be no British film production in this country. Governments, whatever their political party, must remember that it is very serious to go on taking taxation from an industry that stands the risk of going out of existence in the near future. It is not good enough for Governments to say that the industry can stand this continual high taxation. It cannot. It has tremendous responsibilities to its workers and to the public and it will not be able to carry on.

On the question of the competition that the industry is facing, it is generally known that the development of television is a large factor in the diminishing attendances. That has been proved in the United States to a very serious degree. My latest information is that nearly 3,000 cinemas in the United States have been closed as the result of changes in entertainment taste, largely due to television. If to B.B.C. television is added the further risk of sponsored television, I do not see how many small cinemas will continue to operate.

Many of the large cinemas in this country will have great difficulty in operating successfully and efficiently if further competition is developed of the kind now experienced. The development of the third-dimensional experiment may prove to be merely a passing fancy. It may not. These technical developments in cinema presentation may go on until they compel exhibitors to reconstruct their cinemas and to purchase colossal new equipment if they want the performances to go on.

In face of all these real risks and difficulties, the Government should look upon this matter not merely as one of having to pay another £3 million or £3½ million. It is monstrous that any Government can so discriminate with Entertainments Duty that it is considered just and fair for one of us to go to a dog race, horse show, football match, or any light entertainment, and pay 1s. admission without any entertainment tax at all, but when members of the working class pay 1s. at a cinema, tax is levied upon that sum.

I beg the Chancellor to remember that the industry as a whole is reaching a stage —I say this with a full knowledge and responsibility of what the words will mean and of the risks of their being misrepresented—when it will not be able to afford the payment of a basic economic wage to its employees.

I have negotiated on behalf of cinema technicians and cinema workers for nearly 30 years and I know the difficulties that have been experienced in getting exhibitors to apply a fair mind in this matter. But those years have gone. The profits that were made in those years are no longer being made, and whereas it is not the function of the Chancellor of the Exchequer to see that fair wages are being paid it is his responsibility to avoid taking money out of the industry that should go into the pockets of its workers.

6.30 p.m.

By the efforts that my organisation have made since the war we have abstracted from employers wage increases amounting to about £6 million to £7 million since 1945. Our recent increase is costing the industry £1 million. The one before that cost the industry nearly £1,750,000. Yet with all that, the average basic wage of cinema employees is below what the trade union movement regards as a subsistence level. There have been 10,000 dismissals of full-time employees in the industry during the past three years. Some of that full-time employment has been converted into part-time. Men and women in the cinemas are losing their livelihood every month and are going on part-time work. It is a problem with which my organisation is trying to deal in conjunction with the exhibitors.

The average wage for full-time male staffs in theatres, doing technical and non-technical work on a 48-hour-week basis, does not reach £5. There are some groups of cinemas, but they are very few, where there is a decent wage of about £7 10s. to £8. They are well in the minority. The Committee should take note of the fact that the overwhelming majority of cinema workers on full-time pay do not earn £5 a week. The case of the female wage earners is considerably worse. They work between 44 and 48 hours. In the main their employment works out at a 48-hour-week for which the average wage is about £3 10s. to £4 a week.

If we have taken all these years to raise the wage standards in an industry which was regarded as notoriously rich, one can imagine what the wage standards were before the war. It has been the task of some of us on this side of the Committee and of the trades union councils of this country for many years to try to bring the cinema workers, that body of hard working men and women who try to serve the public after their customers' working day is done, some kind of fair play.

The leaders of the industry, of the large circuits and the small exhibitors, the officers and executive committee of the Cinematograph Exhibitors' Association, are all seriously and genuinely bending their efforts and their minds to try to put the wage problem of the industry in order. The attitude of the industry today is far different from what it was 20 or 30 years ago. I am satisfied, and so is my executive, that there must be a reduction in the amount of money that is taken out of the industry by the largest abstractor, the Chancellor of the Exchequer. That nearly £40 million should be going out of an industry with a turnover of £105 million to £110 million is not good enough. That sum is far too great having regard to the difficulties that face the industry.

There is another aspect which is not really before us this evening but which bears on this question. The exhibitors have to find over £500,000 a year additional money for the privilege of opening on Sundays. Evidently one's soul is clean of any sin of opening a cinema on Sunday if one presents a certain amount of the takings to the local watch committee or some other organisation. There seems to be a long queue, a long line of beneficiaries from the takings of cinemas. Part of my case today is to say that the first priority claim on the proceeds of the cinema industry is that of the people who are working in it. They should be given a square deal first. The employers and the trade union concerned are getting together and I ask the Chancellor to be generous in his help. It is not his job to see that trade union agreements are effectively negotiated, but I hope that he will at least consider this aspect and give employers the opportunity of paying what we regard as an acceptable, decent, modern wage.

Colonel Sir Leonard Ropner (Barkston Ash)

During the last few weeks I have had the opportunity, indeed the privilege, of going fairly closely into the finances of the film industry with representatives of the producers and exhibitors and renters and other sections of the industry. They all agree and propose that there should be a reduction of taxation, and I believe that they made out a fairly good case. I assume that all hon. Members would desire to see the film industry survive, and I think we should all like to see it flourish. I remember hearing, a few years ago, that the United States was a second-rate nation until the cinema was invented. There is an element of truth in that remark. There is no doubt that a prosperous film industry is not only of national but of international importance to this country.

The Chancellor of the Exchequer is taking just about 40 per cent. of the gross takings of this industry and that is a "socking great chunk" out of any revenue, and particularly the revenue of an industry which is going through rather difficult times. I know that this new Clause, which was so ably moved by the right hon. Gentleman the Member for Huyton (Mr. H. Wilson), primarily affects the income of exhibitors, but, of course, it is the cash that goes in at that end of the industry that ultimately finds the money for the producers and other sections of the industry. That is the pool from which all sections hope to derive their livelihood and make the industry a success.

I have been struck particularly by the case which can be put forward for the small cinemas. There are a number of these cinemas in my constituency and there are a great number in the country. I believe that they are having a very hard time indeed. But I feel that I need add nothing to the arguments which have been used on their behalf by right hon. and hon. Gentlemen opposite and by my hon. Friend the Member for Woodside (Mr. W. G. Bennett). In case I should raise false hopes in the minds of those who are sponsoring the new Clause I should make it clear, however, that I shall not vote against the Government on this issue this evening, but I hope that the Chancellor has been as impressed by the arguments as he should have been.

Mr. John Rankin (Glasgow, Tradeston)

In view of the tone of the hon. Member's speech in support of our case and his declaration that he would not vote against the Government, will he abstain?

Sir L. Ropner

The hon. Gentleman had better wait and see, but I could not even raise his hopes to that extent.

Even if the Chancellor of the Exchequer cannot meet the substantial arguments which have been raised in this debate, I hope the impression they have made on his mind and on the Treasury is so great that he can lead us to expect that they will be remembered and that some effect will be given next year to the plea which is made by this new Clause.

Mr. J. Grimond (Orkney and Shetland)

Most of the arguments which can be advanced in support of this new Clause have already been effectively made, but I want to emphasise what was said by the hon. and gallant Member for Barkston Ash (Sir L. Ropner). It is curious that successive Governments have, on the one hand, recognised the national importance of this industry and gone out of their way to help it while, on the other hand, they have taxed it in excess of all comparative forms of entertainment and they now take 40 per cent. of its falling revenue.

It cannot be emphasised too often that when these new Clauses and Amendments are moved year after year they are not moved for the sake of obtaining any concession or Government assistance for this industry, but with the object of reducing the discrimination which is made against it. Whatever arguments there may be against a reduction in taxation just now, it is certainly very anomalous that this discrimination exists against an industry which is unquestionably facing a very difficult future.

Probably no one who supports this new Clause would argue that it will go anywhere near solving the problems of the cinema industry. There is no doubt that the industry itself has to do a great deal of fresh thinking. I often think it does itself a very bad service by its publicity. The public still know of it only through its film stars, champagne, world premieres, and so on, and it is extremely difficult to convince the ordinary taxpayer that this is a poor man's industry and a form of entertainment, which, at least in many parts of the country, is up against it; that many cinema circuits are making a loss and certainly cannot maintain their houses at a decent standard.

I want to stress the undoubted fact that in many places this is the normal form of entertainment for the normal family. There are very civilised parts of the country—not perhaps very central— where there is no dog racing, horse racing or television, and there is unlikely to be any for some time, and where the family amusement of the poorest people is still a visit to the cinema. It cannot be argued that this is an improper form of amusement; presumably this discrimination is not made on moral grounds. The industry has set its house in order and it is now a perfectly proper and healthy form of entertainment. If one lives in certain areas there is certainly an advantage about having entertainment under cover. However healthy dog racing may be in some cases, it is not healthy in others.

Apart from the obvious case which can be made out for the industry, I would stress the unfairness which is laid upon some people in some places by the high rate of taxation. It is also true to say that the industry will suffer additional difficulties through the falling off in sales of chocolates and ices in its cinemas.

I support what has been said by the hon. Member for Woodside (Mr. W. G. Bennett), that there has been enormous increase in the cost of decorating cinemas, which has fallen very severely on smaller cinemas and circuits and which, added to the other difficulties, makes it very difficult for them to carry on. If they cannot carry on we are depriving many people of their basic form of entertainment and we are also depriving the Exchequer of a substantial amount of revenue.

Mr. Charles Williams (Torquay)

The hon. Member for Nottingham, North-West (Mr. O'Brien), deliberately and rightly, emphasised how low are the wages of the people working in the cinema industry. I am sure the Chancellor of the Exchequer realises that, but I have been amazed in the last two years to hear how low these wages are as compared to those of the ordinary person, and that is a point which the Chancellor should bear in mind. I do not support this Clause, because a Clause which takes quite such a long, complicated and involved speech, which has very little to do with the subject—a speech such as we had from the right hon. Member for Huyton (Mr. H. Wilson) who put it forward—cannot demand much confidence from anyone who looks at it from a wide and impartial point of view.

There is one point which the Chancellor should look at. There is an anomaly in the case of the small cinemas, especially in rural districts. One cinema gets off very largely because of its rural or supposedly rural agricultural condition, while another, in almost precisely the same kind of town, within a few miles, does not get off. The Chancellor should look at that anomaly, coupled with the fact, which has been proved again and again, that the big losses are being made on the cheaper seats in these very small cinemas. I do not ask the Chancellor to accept this Clause, but he should consider the matter from that point of view

6.45 p.m.

Last year, when we were dealing with a similar subject, everyone was very disappointed because the Financial Secretary, in the course of a series of brilliant and intelligent speeches, suddenly seemed to put his hand into his drawer and pick out an awful speech of one of his predecessors and palm that on the Committee for no purpose. I hope that my right hon. Friend will not do anything of that sort but will give us a sympathetic and full answer, and see whether, between now and the Report stage, he can make a real concession in respect of the small cinemas, or at any rate look at the question between now and next year.

I am astonished at the correspondence I have received on this subject. I have had example after example of small cinemas in the Highlands which are doing very badly, and examples can be given right through the country to the west coast of Cornwall. There may even be some in the islands. The fact is that many of the small cinemas which are needed to keep together the people in our smaller towns are being put out of business. They are making losses and, in ever-increasing numbers, closing down which is not good for the revenue and not good for the people living in their districts.

Mr. A. Blenkinsop (Newcastle-upon-Tyne, East)

I want very briefly to give an example of the type of small cinema that could very well be helped by this new Clause. I do not see why the right hon. Gentleman the Member for Torquay (Mr. C. Williams) should have taken the view that he cannot support it. It seems to me to be a very modest one, not making a very great call on the Exchequer. From what he said, I gather that the right hon. Gentleman really supports its general tone and provisions.

Mr. C. Williams

No, I do not support the new Clause. I support one side of it, so far as small cinemas are concerned. I do not think there is the least need of it for the big ones.

Mr. Blenkinsop

This Clause, as has been rather patiently explained, is rather carefully concentrated on making provision to assist the small cinemas without making any real provision at all for the larger cinemas. It is, of course, the small cinemas with which we are mainly concerned, and particularly the cinemas that are not members of one of the larger circuits, though they, too, have to face some problems.

The cinema I have in mind, which is. I am sure, typical of very many, is in an industrial area in the north of England. Its proprietors are the proprietors of this and only one other cinema. They have gone to a great deal of trouble to make reasonable provision for the people in their area. It is not an old cinema; it was built comparatively recently, before the war, to serve particularly a large council housing estate.

The proprietors have done a great deal of valuable work for the people in that area, and have, like many other cinema proprietors, made special provisions for old people. It so happens that there is special provision on the housing estate for large numbers of old age pensioners, and special old age pensioners' houses. It is to the credit of the proprietors of this particular cinema that they have done a great deal to make it possible for them to get to the cinema fairly regularly.

They have made clear to me what, I am sure, is true of very many cinemas of the same size, catering for 700 or 800 people, that they just cannot go on on the present basis. They have to meet, very properly, increased charges for the staff. There are heavy charges for refurnishings, which are necessary even in a comparatively new cinema. In this case, as in so many others, the only charges to the public are charges of 1s. and 1s. 6d.

It is perfectly clear that a cinema of this sort cannot carry on indefinitely under the present rate of taxation, and I therefore appeal to the Chancellor to have in mind this type of cinema, and this type of proprietor, who is certainly doing his level best for the community he serves, in considering his reply to this debate. Even if the Chancellor is not able to accept the new Clause in full, although I do not see why he should not, I hope he will at least be able to tell us that he is considering the matter and will be able to make a reasonable and considerable concession.

Mr. William Shepherd (Cheadle)

The Chancellor must have been impressed, as I have been, by the reasonable way in which the right hon. Gentleman the Member for Huyton (Mr. H. Wilson) and those who have followed him have put the case for the cinema industry. As the hon. Gentleman the Member for Orkney and Shetland (Mr. Grimond) said, it would, perhaps, have been to the advantage of the industry had they themselves presented their case with such reasonableness. I fear that one of the reasons why the Chancellor was not so forthcoming in his Budget speech on this issue as many of us wished was the unfortunate effect which some propaganda efforts of the industry have had on the public mind and even on the mind of the Government. There has been far too much exaggeration in the case of the cinema exhibitors. They have always been at the door of the workhouse, but have never quite crossed over the threshold.

However, I make no bones about saying that today this industry finds itself in a really serious position which does demand some action on the part of the Government, action which is desirable and semi-necessary today and which will be absolutely necessary at this time next year. The industry today is in a grim position in the hands of the Chancellor. It has become a vehicle of taxation collection, and that is a grim position for any industry to be in.

The Chancellor of the Exchequer (Mr. R. A. Butler)

Perhaps my hon. Friend will explain how this industry is more in the hands of the Chancellor than many others which are taxed to a far greater extent. I shall be interested to hear.

Mr. Shepherd

I was about to proceed with the argument to show the point of view I am expressing. It is this. I was written to the other day by a man on behalf of dog racing. I wrote back to say I disagreed violently with dog racing socially, and that I hoped the whole of dog racing would close up. He replied that that might be my point of view, but what about equity? I wrote to him, "Whatever illusions you harbour, do not for heaven's sake harbour in your mind the illusion that the Chancellor is interested in equity."

The Chancellor's policy on this matter of taxation is one of grab. All I can hope is that the Chancellor will refrain from smash and grab, or, to put it in chronological order, from grab and smash. There is no question of equity here involved, and the Chancellor will take as much as he possibly can. He will take nothing from cricket if he thinks that cricket will not stand it; he will take something from dog racing, and something from the theatre, and an increased amount from the cinema industry.

Let us realise that the cinema industry is a very great source of revenue for the Chancellor. That, I have no doubt, is its attraction for him. I admit right away that there is a complication in trying to make the case for this industry, in that there is a sharp difference in the financial standing of the circuits and many of the independent exhibitors. The three big circuits and a number of small circuits are making handsome profits, and I can quite understand my right hon. Friend's saying, "Why should I add to the profits which are being made by those circuits, which are already substantial?" It is not an unreasonable point of view, but it is also true to say that the large circuits represent only a small proportion, about a third, of the total activity of the industry, and that the rest of the industry, in the main, is in a pretty serious condition.

It is ironical that this country, which has the largest cinema attendance per 1,000 of population in all the world, should find that its cinema industry is in so difficult a situation as it is at the present time. The situation is much more difficult than it has been made out to be so far in the debate. The industry does not pay its workers a fair and decent standard of living. There is no doubt about that at all. It pays as much as it can, but one does not pretend that the wages being paid are satisfactory and fair to the workers in the industry. Moreover, it does not maintain its premises in a fit and decent condition. Many of the cinemas are in a disgraceful condition and in need of substantial renovation. Therefore, the position of the industry is even worse than it appears to be from the figures that have been quoted.

I agree that there has been a great deal of exaggeration, and it irritates me when I hear people saying, as some exhibitors do, that they cinemas would not make a profit but for ice cream. A man showed me a balance sheet the other day which included all the expenses but only some of the receipts. I wrote back to him and said, "I like to see a balance sheet showing all the expenses and all the receipts, and if one runs a business like a cinema where there are incidental takings they must be recorded as part of the gross receipts." It is not satisfactory—indeed, it is nonsense—to show all the expenses but only some of the receipts, and to leave out receipts on the sale of such things as ice cream. All receipts should be included.

Mr. Hector McNeil (Greenock)

The hon. Gentleman is making a fair case. Would he agree that the receipts, which he said he was entitled to see, are now likely to diminish in view of the derationing of confectionery?

7.0 p.m.

Mr. Shepherd

I am not aware of any serious diminution in those takings, but I regard it as less than fair when people try to put forward the case of an industry by showing some of the expenses and only some of the receipts. I do not believe it is true that the industry's takings are seriously diminishing. I understand that the takings for 1952 were higher than those in the preceding three years, the average weekly take being £2,140,000, whereas in 1950 they were £2,023,000. Therefore, it is not true, as some hon. Members have said, that the takings of the industry are seriously declining. They are very substantial and they are perhaps many times what they were in 1939. Neither is it true that the attendances at cinemas are unduly low; they are at least as high as they were in 1939, and they are the highest per capita in the world.

Despite these conditions, the relatively good sales of sweets and other things, and a rate of attendance which is still very high, the industry cannot pay its way. The simple answer is that, whereas in 1939 the tax collector took £107,500, he now takes nearly £800,000. The tax imposed upon the industry has gone up by over seven times. That results in the real difficulty in which the people who are running the industry find themselves. They are faced with increased taxes and increased expenses, and they have no margin for themselves on which to work.

It is not only the small cinemas which are facing financial difficulty. I want to cite the case of a cinema in my area which is taking relatively a lot of money. Its gross receipts were roughly the same in 1946 and 1952, being about £51,000. In 1946, the Chancellor took £17,600 from the gross receipts and the trading expenses were £14,000, but with the same turnover in 1952, the Chancellor's take had risen from £17,600 to £20,000 and the operating expenses had risen from £14,000 to £18,000. From what has happened to that cinema of substantial size we see what is happening to the industry; costs have risen and tax has risen to a point where the cinema cannot pay.

Like other hon. Members, I very strongly support the case of the small exhibitor. I wish that hon. Members opposite, in putting down the new Clause, had been able to find a method by which the small exhibitor could obtain the sole relief. There is a doubt about the case if one is going to assist the larger exhibitor. If we accept the social desirability of the small cinema, there can be no case against helping it, because it is undoubtedly in a position where it cannot carry on. I have heard some hon. Gentlemen in high positions talk about the small cinemas in a somewhat derogatory manner and say, "You tell us that your business is failing? Why do you carry on?" The answer is that they carry on only by means of a number of devices.

In an effort to keep the cinema going, the man may go out to work himself, or he may get his wife to do some of the work, which she ought not to be called upon to do in view of her family responsibilities. He may batten down the renters to the lowest form of hire to make the business pay, leave undone all the renovation which ought to be carried out, borrow from the bank—I have seen some of the balance sheets—and leave unpaid a number of bills which really ought to be paid.

We can be certain that the position of these individuals is indeed a difficult one. If we are to make the decision that we believe that they ought to exist, we must do something to help them. If the Chancellor takes the view that the small cinemas in the less populated districts are not to exist, then he has to say so and we might be able to start some redundancy schemes for the industry. But if, on the other hand, we believe that these people serve a very useful purpose and are socially desirable, my right hon. Friend ought to seek some means of helping them.

If my right hon. Friend cannot accept the Clause, I suggest that he accepts the reductions only up to 1s. That would be a very small charge upon the Revenue and it certainly would not be open to liability to abuse. That reduction would positively help all the small cinema owners and it would not be attractive enough for any of the larger cinema operators to bring their prices down. If my right hon. Friend cannot go as far as some of us would like him to go, I hope he will do something——

Mr. Blenkinsop

Does the hon. Gentleman refer to the 1s. charge to the public or to the net figure received by the exhibitor?

Mr. Shepherd

I am referring to the figure charged to the public. If my right hon. Friend went that far, there would be no likelihood of abuse and he would certainly do something to help those who are most hardly pressed. I hope he will try to do something. I am satisfied that, despite the over-emphasis and exaggeration which there has been, the small exhibitors have a really serious case. If we want to keep them in existence we must do something to help them now.

Mrs. Eirene White (Flint, East)

I was most interested in the speech by the hon. Member for Cheadle (Mr. Shepherd), who, I think, knows nearly all the tricks in this trade. I was glad to hear his general deprecation, if not condemnation, of some of the propaganda which has undoubtedly been put out over the past few years by the industry. One can hardly approach an exhibitor without seeing his handkerchief raised to his weeping eyes. Nevertheless, I believe there is a case for reconsideration of the burden of taxation upon the industry.

I am fortified in this opinion by the fact that I have for some years served upon the Cinematograph Films Council whose business it is to advise the President of the Board of Trade. That body is drawn from all sections of the trade; producers, renters and exhibitors and the trade unions are represented on it, and it has also a number of independent members of the most varying political complexions. This heterogeneous body, after considering the matter, which is not the kind of subject which usually comes before it, felt that the present position in the industry was such that, although it did not generally presume to tender advice on financial or taxation policy, it would be right to send to the President of the Board of Trade, and ask him to remit it to the Chancellor, the opinion that there should be some reconsideration of the burden of taxation upon the industry.

Although the hon. Member for Cheadle said that attendances are still as high as they were in 1939, it is fair to say that they are showing a tendency to decline and that there is reason to suppose that that tendency is likely to continue for some time. It is very difficult as yet to know precisely what the impact of television will be upon the cinema industry. I do not think we shall be able to say that with any certainty for the next couple of years at least, but there are some primary factors which we have to take into account.

For one thing the entire country is not yet covered, so one has not the complete national picture; and another thing, persons buying television sets on hire purchase have to reduce other luxury expenditure until they have made all the payments on the television set. When they have done that, who can tell? Will they prefer television, sponsored or otherwise, or will they once again wish to go out of their homes and go to the cinema. There will be a very interesting sociological study as to the effect of the impact of the two forms of entertainment.

I do not think we are in a position to know, but it will be obvious to anyone that the advent of television means that there is a very serious competitor with the cinema. The effect of that has been evident in some degree and it is likely, on any reasonable argument, that, because of the increase in television viewing, cinema attendances will decline. It is true that the cinema owners are very apt to put forward that argument—and I am very glad that the hon. Member for Cheadle dealt with it—that they are losing on films and have to live on the sales of ice cream.

Why should they not? After all, they have ample opportunities for selling their ice cream or sweets, which they can more easily sell now than before. I do not see why one should have any pity on cinema proprietors because they live to some extent on their ancillary lines. Why should they not, when the nature of their business makes it possible for them so to do? For that particular argument I have no sympathy whatever.

We are concerned not merely with the large exhibitors but with the small exhibitors, and I think there is a stronger case for them. But some of us are also concerned with the production side of the industry, and are much more interested in that than in the exhibitors. We are only interested in the exhibitors because, after all, they are the means of financing production, and I cannot help feeling that if we continue to have the heavy tax burden on an industry which is declining rather than expanding, it will be more difficult to get the finances for any adequate production of British films.

At the moment, there is the Eady levy, which is imposed by the exhibitors under a voluntary agreement. Those of us who have the slightest acquaintance with the industry know that there have been many exhibitors who have been refusing to pay this levy, and in consequence the trade has been taking restrictive action against the exhibitors who refuse to pay, by refusing to rent films to them.

I suppose there was no other means open to them to enforce what is really a voluntary honourable bargain, but I think we are all agreed that that it is not a desirable thing to do. One would be in a very much stronger position to get a good voluntary agreement if one could go to the exhibitors and say, in effect, to them, "You have been fairly treated over this matter of tax, and, therefore, it is really up to you to play fair about the production levy."

Those of us who care so much for the production of British films feel that there is an indirect connection between the proposal we have before us tonight and the whole question of financing British film production. I would put it to the Chancellor that, after all, films are really not on the same footing as dog racing or cricket.

I believe myself that films have such an impact upon the mind and the outlook of so large a proportion of the population that they have a far greater influence upon the ideas and the ideals of the people and that we should do everything possible to foster and prosper an industry of this kind. [An HON. MEMBER: "Even of dog racing?"] I have no personal interest in dogs, and I would be prepared to tax them to the highest limit.

My heart does not warm to cricket, but I feel that where we have something which influences the ideas and the ideals of the people we should look very carefully at it and make certain we are not doing something which is likely to have a detrimental effect not merely on the exhibitors but, ultimately, on the production of British films.

7.15 p.m.

Sir David Robertson (Caithness and Sutherland)

I am sorry that the hon. Member for Flint, East (Mrs. White) does not warm to cricket. I wish she had been with me on Saturday afternoon when I drove across a substantial part of England from Sunningdale to South-East Sussex and we travelled by the by-roads. On every village green we came to there was this lovely English sight of a cricket match.

The Deputy-Chairman (Mr. Hopkin Morris)

The hon. Member, I hope, will take another opportunity of dealing with that.

Sir D. Robertson

Forgive me, Mr. Hopkin Morris, but as one who was brought up to believe that cricket was one of the best games, I was bound to retaliate on the hon. Lady.

I have figures here which I think more than anything else will convince my right hon. Friend the Chancellor of the Exchequer that the cinema industry in the Highlands of Scotland, and I believe, the small cinema generally, is badly in need of assistance if it is to avoid going into the bankruptcy court. I shall not weary the Committee with many figures, but I have some here of five cinemas on the coast of the Moray Firth and one on the Atlantic coast at Pentlands. In the former case there were £13,728 in takings, £5,715 went in taxes and levy and there was a loss of £371 before charging rent or interest on capital.

The Chancellor is the senior partner in that venture, and if this state of affairs goes on he will be the biggest sufferer, but the people will suffer too, because there is no living theatre, no dogs, no cricket and no such pastimes in this part of the British Isles. The people entertain themselves mainly, and it would be a very serious matter if these cinemas had to close down, particularly for the campaign which my hon. Friend the Member for Inverness (Lord Malcolm Douglas-Hamilton) and I have been waging to prevent a further depopulation of the Highlands. The cinema is the sort of thing which induces some of the young people to stay at home rather than go to the big cities and the bright lights.

The second figure I have is of £14,000 in takings, £5,338 in taxes and levy and a loss of £281. The other figures I have are all similar, and I shall not take up the Committee's time with them, but there can only be one end, the closing down of the cinemas, with the serious harm which that will do to the people who have no television, and for whom there is no sign of getting it soon.

A responsibility rests on the Chancellor to take into account all these factors and also the fact that there has been discrimination against this industry in respect of Entertainments Duty. The hon. Member for Cheadle (Mr. Shepherd) spoke about it being smash and grab or grab and smash. I think that during the war the money had to be got at any cost and the cinema industry, which, I believe, at that time enjoyed very great prosperity, a prosperity which we are seeing waning in recent times, was to hand for the then Chancellor to impose taxation. The sellers' market is over for the cinema, as it is over for so many other things, and that is a situation which will be accentuated as a result of competition.

The hon. Member for Orkney and Shetland (Mr. Grimond) wondered if discrimination against this industry was brought about on moral grounds. No industry has played a greater part in making us more teetotal than has the cinema industry. Not so long ago there was little for the ordinary people in many places to do other than to go to the public house. The experience of that industry has been that wherever a new cinema was opened up in the London area the takings in the public house went down. So, on moral grounds, quite a strong case can be made out for the cinema.

In conclusion, I would say that the Chancellor has been a good manager of the nation's finance, as hon. Members on all sides of the Committee will agree. Living up to the reputation which he so rightly deserves, may I ask him to cast his bread on the waters in this matter? I know that he has tremendous commitments to face, but it would be an act of good management if at this time he said, "We are just about killing the goose that lays the golden eggs." In the interests of the nation he would be performing a function well worth while by reducing this savage taxation.

Mr. John Taylor (West Lothian)

I was impressed by the final words of the hon. Member for Caithness and Sutherland (Sir D. Robertson) and I hope that the Chancellor will be touched by what was a strong point. The hon. Gentleman put the case for the small cinemas in his own constituency, and in my constituency in the Lowlands of Scotland the position is similar. There are about 20 cinemas and every one of them serves a small town or community and in each of them there is a financial crisis.

Like other hon. Members who have spoken in this debate, I was a little suspicious last year, when we were considering on the Finance Bill a similar new Clause, of the official propaganda in favour of some tax adjustment for cinema seats. I took the trouble to go into the matter rather carefully with the late Member for Dundee, East, Mr. Tom Cook, who was particularly interested in the matter last year. I was impressed by the data he had collected about the state of the small cinemas in Scotland and since then I have taken the trouble to interview the cinema managers and owners in my own constituency. I found them co-operative in giving me details of their accounts and their financial conditions.

Like the hon. Member for Caithness and Sutherland, I shall not take up the time of the Committee with the sheaf of instances I have here, but will put the present position of a small cinema in a village. The figures I am giving are the most recent that I have been able to obtain and they are for the three weeks of last month. In the first week the gross takings were £108 10s. 4d. The tax on that sum was £26, leaving net takings of £82 10s. 4d. In the second week the gross takings were £78 10s. 5d., the tax was £17 7s. 6d. and the net takings were, therefore, £61 2s. 11d. In the third week, there was a gross of £98 14s. 6d., a tax of £23 6s. 8d. and a net of £75 7s. 10d.

The irreducible, unavoidable weekly overhead charges for this cinema are £56 plus the film percentage rents which are normally at least one-third of the net takings. These overheads are constant and recurring and include such things as staff wages, cleaning, and so on. They do not include any reward for the owner of the cinema. It will be seen that the aggregates for those three weeks were gross takings of £285 15s. 3d., less tax of £66 14s. 2d., and net takings of £219 1s. 1d. less irreducible overheads of £168, which leaves £51 1s. 1d. Out of that the film rentals of approximately £73 have to be paid.

So the three weeks' loss of that one small village cinema is about £20. I cannot think of many other industries where tax has to be paid irrespective of a trading loss, and a fairly substantial one at that. As has been said, that state of affairs cannot go on. If, weary with this uneven battle, cinemas of this type close down, the Chancellor will get no taxes at all. Somebody has to cut the losses of the small cinemas in the small communities of this country—either the Chancellor or the industry. If the Chancellor leaves it to the industry, the Exchequer will be the greater loser because it will lose all the revenue from each cinema instead of retaining a portion of it.

It is obvious that there is no solution to this problem for the small cinema owner in an increase in the price of each seat. That is not a practical proposition for the small cinema owner. Already, in my constituency at least, instead of what the hon. Member for Cheadle (Mr. Shepherd) said about there being no aggregate reduction in the numbers of the cinema going public, the local picture-goers are spending as much as they are able to spend on this item of entertainment. The Board of Trade figures have made it clear that receipts are falling at the present time.

It must be remembered that in the small town or in the large village where there is a cinema the habit of cinema going is a family affair. It does not represent the expenditure of an individual but is an item in the family budget. It is usually a weekly visit though in some cases it is twice a week and there are some cinemas in my constituency which change their programmes three times a week. In a mining community where the geographical outlook is rather drab, where there is little to be seen on the skyline but pit bings, where there is very little colour and excitement in the lives of the inhabitants, the habit of going to the cinema is the one bright spot for the children and wives, even for the men, in the week's programme. If the prices are increased, those visits will be decreased. Those which are biweekly will become weekly and those which are weekly will probably become fortnightly.

Apart from that factor, if a cinema in those areas increases its prices it also increases its taxation. To obtain one extra 1d. per cinema seat, many cinemas in this category would have to increase each seat price by 3d. or so, such is the craziness of the existing system of cinema taxation. So, to increase prices, would not solve the problem but would only make it more acute and more people would stay away from the cinema. Neither I nor any other hon. Member who has spoken so far in this debate can see any salvation for the small cinema other than a degree of tax remission such as is proposed in this new Clause.

7.30 p.m.

I wish to mention the special problem of the small cinema in small towns and villages where the local welfare hall is licensed to show films. Welfare halls are, quite rightly, exempt from the cinema tax. Therefore, they can charge less per seat for comparable types of film. The local cinema owner, where there is another privately-owned cinema in the same community—who has to pay the full tax—has to fix his prices in competition with the welfare hall. It is unthinkable—no one would suggest it I hope— that we should levy a tax on welfare institutions for the showing of entertainment. There is an especially strong case in communities of that kind, where there exist side by side a one-man cinema and the welfare hall showing comparable films, for special examination of the problem of some tax remission for the private owner.

Generally, the case has been fully made out that there is no real logic in the continuation of this tax. It may be that the small cinema is regarded by the Exchequer as expendable. But, if that is the conclusion reached—they are going the right way to make it expended—they will be making a very grave mistake because this is a harmless, in many ways beneficial, and potentially much more beneficial entertainment of millions of ordinary common people of our land.

Brigadier Terence Clarke (Portsmouth, West)

The majority of hon. Members who have spoken in this debate seem to have come from the Highlands and Islands and I wish to produce a more southern aspect by speaking of the large city, of which I represent a portion, which is very poor and has a lot of small cinemas. If the Chancellor of the Exchequer does not do something for these small cinemas they will "go broke." Whereas most of us ask the Chancellor to give back some of the money he filches from us each year, on this occasion if he does not relax and accept the proposed new Clause he will lose money by diminishing returns. In addition, he will cause unemployment.

For those reasons—both very good—I hope he will accept the new Clause, or give us some alternative. In addition, I believe that the cinema industry will feel a very much bigger draught in the next two or three years. We are going to have sponsored television, we hope. If we do, more people will stay at home watching television while fewer people go to the cinemas. That will make it even more hard for the industry, which has to make itself more attractive in order to compete. I think the Chancellor must help it in this matter.

The hon. Lady the Member for Flint, East (Mrs. White) spoke of various sports. I do not propose to get out of order by referring to them in detail but all the sports she mentioned are helped by the alcoholic business in that they can sell drinks—at the dogs, boxing and racing—and that helps those industries. I have yet to go to a cinema where one can get a drink, although I admit that many of the films one sees would drive one to drink—if one could get it. I do not for a moment suggest that drink should be sold at cinemas, but they are handicapped in this respect.

Although we cannot expect him to give way in respect of all cinema businesses, I hope that when the Chancellor replies he will agree to help the smaller cinemas in this way, or will produce some suggestion which will help them to carry on and not to "go broke."

Mr. Julian Snow (Lichfield and Tamworth)

I think I have detected in most speeches this afternoon the argument that the particular duty applicable in this case is the cause of falling attendances and financial difficulties in the industry. Although I would not like to cross swords with the hon. Member for Cheadle (Mr. Shepherd) in respect of arguments deployed here—he has great experience of this industry—nevertheless, the drop in attendances between 1948 and 1952 should not be underestimated. I believe it runs to about 168 million per year.

One should recognise that this drop is not merely because the high duty levied puts the price of seats beyond the pocket of many people, but is really because the cost of living itself has made some retrenchment in personal expenditure necessary. It is not just this duty but the whole level of taxation and the resulting cost of living which has created these tendencies. If that is a fair assumption, as I believe it is, I should have thought it the duty of the Government to consider, where there is a high level of taxation on a number of industries and a relatively low level of taxation on other industries, whether those taxed more highly should be given better consideration.

I want to draw the attention of the Financial Secretary to the situation that exists in that great conurbation of the Midlands which surrounds Birmingham. If we study the residential structure of that conurbation, we find a difference in it compared with the structure around London. People employed in Birmingham do not come in from tightly packed suburbs in the same way as people who work in central London do, but tend to live in dispersed villages and townships, and come into the suburbs of Birmingham, where the major industrial interests are found. In those smaller villages and townships are to be found the small cinemas, which are very hard hit and whose existence is threatened.

People who normally have a tiresome journey from their communities into the industrial areas of Birmingham, do not want to do that journey once again in the evening in order to go to the cinema. In any case there is a big transport problem and a personal problem of expenditure as fares are going higher and higher. Altogether there are overwhelming reasons why there should be some encouragement for people to stay in the evenings within their own local communities. I shall not pursue that matter, but it is an important one in that the small cinema serves a definite need in keeping people in the locality once they get back from work.

I think it true to say that the small cinema is the best supporter of the independent producer in the cinema industry. I see that my hon. Friend the Member for Flint, East (Mrs. White) disagrees, but that is my impression and certainly my information. The independent producer finds it difficult to secure exhibition time with the big circuits. I am not criticising the big circuits; frequently the films produced by independent producers are not up to their estimate of what is required. Nevertheless, the small independent local cinema owner provides an important market for the independent producer and for that reason should receive some sort of assistance.

There is a technical point with which I will conclude and which I should like the Financial Secretary to consider at least departmentally. One small cinema owner tells me that there is some harshness in the collection of this duty from the small man. It is a technical matter which the hon. Gentleman might look into departmentally. I understand that the duty is collected without regard to the payment for rentals, which the industry distributor charges the small cinema exhibitor. If the payment practice to the renters could be related to the collections by the Treasury, I think some hardship might be avoided to these small people.

Lord Malcolm Douglas-Hamilton (Inverness)

I want to reinforce some of the remarks made by my hon. Friend the Member for Caithness and Sutherland (Sir D. Robertson). A great number of hon. Members have made a very good case for the industry and particularly for the small cinemas, but I want to draw attention to what is happening to six cinemas in the neighbourhood of Inverness, which may be the same as those which my hon. Friend mentioned. All are within the Highland area, but not in the remoter parts of the Highland area.

These six cinemas are in considerable difficulty. At the present rate of taxation, only one is making a net profit, and that net profit is less than £1,000 a year. The remaining five average a net loss of £370 a year. At the same time, these six cinemas are paying an average of £4,600 a year in Entertainments Duty. If they paid tax at the same rate as would be paid on football or other entertainments, it would be less than half of the £4,600, so that there is quite a considerable sum to play with in making these cinemas solvent. If they have to continue to pay the present tax, there is no doubt that they will go out of business, which will be a tragedy for these remote areas.

Surely we want to try to strengthen the remote areas in this country. The Chancellor of the Exchequer has been a very good administrator and manager of the nation's affairs, but I think a great deal more has to be done for, and more consideration has to be given to, the remote areas of Britain. I believe that this is one of the fiscal measures which the Chancellor could use. It would immeasurably strengthen the remote areas. I hope he will give earnest consideration to the new Clause, and particularly to the case of the small cinemas.

7.45 p.m.

Mr. John Rankin (Glasgow, Tradeston)

When we were discussing the cinema industry in Committee two years ago, the then right hon. Member for Southport, who has now been transferred to another place, used these words: …we are dealing here with an industry that is definitely sick."—[OFFICIAL REPORT, 5th June, 1951; Vol. 488, c. 916.] That was two years ago, and whatever differences of opinion may have been expressed within the House then as to the truth of that statement, it must now have been driven home to the Chancellor of the Exchequer that there is absolutely no difference of opinion today about its truth. He has been listening not to a party case but to a case presented by the House of Commons, and I hope very much that he will think very carefully indeed before he repudiates the case which has been so strongly made from every part of the Committee.

The hon. Member for Cheadle (Mr. Shepherd), who did not accept some of the arguments presented in support of the case, nevertheless came to the same conclusion as has been reached by every hon. Member who has spoken. He pinned the responsibility for the rescue of this industry from the sickness which pervades it on the shoulders of the Chancellor of the Exchequer. I hope the Chancellor will meet his responsibilities and will accept the case which has been presented today.

I will not elaborate the points which have been made, although I could present certain aspects from my own division, which is a purely industrial division, very closely congested, containing a number of cinemas which I should like to see more comfortable and better conditioned in every way, at least in the case of one or two of them, for the working class folk who go there—and that can be done only if the Chancellor yields to the representations which have been made to him.

But when we make these representations I think we recognise that the right hon. Gentleman has to find a vast amount of money for all sorts of important things. He must find this year £1,600 million for armaments and £1,200 million for social services. We recognise the tremendous pressure which is placed on his purse, and I am certain that the cinema industry is quite willing to assist him in finding that money. They recognise that in finding it he has to tread on people's toes, but their objection is that he is treading on only one toe, the toe of the cinema industry. The other toes, represented by dog racing, horse racing and speedway, have all been relieved of tax up to 1s.

People in the cinema industry are asking, not for that parity in taxation to which I consider they are entitled, but for partial parity. They are asking that the Chancellor return to them, this year, £2½ million in remission of tax. In a full year the cost to him would be £3,700,000. That is not a great deal, in view of the purposes fulfilled by the cinema today. It has not only a social purpose but, as was said by my hon. Friend the Member for Flint. East (Mrs. White) is aids production. No less than £3,800,000 goes in voluntary levy from the exhibitors to the productive side of this industry.

To some extent, because of the shortfall in the expectations of the operation of the Eady scheme, that £3,800,000 has become almost an additional tax. What people in the industry are asking is that the Chancellor should relieve them from the oppressive weight of that additional tax by lightening the burden imposed on them by the Exchequer. That is our demand. As I say, it is not a party demand, but a House of Commons demand, to which I hope the Chancellor, who has not so far yielded much, will now yield with the approval of the whole Committee.

Mr. Geoffrey Hirst (Shipley)

I have been very impressed with the unanimity of the speeches made—with one possible exception, due to a misunderstanding of the meaning of the new Clause—and I hope that unanimity will impress itself on the mind of the Chancellor.

Like my hon. and gallant Friend the Member for Barkston Ash (Sir L. Ropner), I have spent a considerable time during the last six months investigating the problems and conditions of the film industry. I should like to congratulate the right hon. Member for Huyton (Mr. H. Wilson) on his speech. He will remember that I referred to the Entertainments Duty during the Budget debate and expressed the hope that my right hon. Friend would give it consideration. That hope was expressed, not because I feel I have any influence over the Chancellor, but because it is a question of sheer good management. No one who has taken the trouble to go into the situation, particularly with regard to the smaller cinemas, can be left with any other opinion than that unless something is done quickly to help, many of them will be forced out of business.

Businesses which are not efficient do not add to the Chancellor's grab, and unless these industries are enabled to become efficient they will not be able to contribute or to take advantage of scientific progress and changes, such as that brought about by three-dimensional films. Whether such progress is good or bad is not a matter we should discuss today, but it does involve great expense. The point has also already been made that many cinemas cannot be kept in good condition.

One of my right hon. Friends did not approve of the Clause, because he said that only the smaller and medium-sized cinemas needed help. But those are precisely the cinemas which this Clause is designed to help. Two-thirds of the reduction suggested would apply to cinemas with prices up to 1s. 6d. and 90 per cent. to those with prices up to 2s. 3d.

The hon. Member for Flint, East (Mrs. White) mentioned the tie-up between entertainment tax and production and I beg my right hon. Friend to bear that important point in mind. It is impossible to have a healthy film industry—which has great export possibilities—unless it is based upon sound and healthy trading conditions at home. In other words, there must be sufficient cinemas available to justify the cost of film production. I have recently returned from a visit to Spain in company with the British Film Producers' Association to see what may be done there. I found that British films were popular though there were financial exchange difficulties. Export of British films provides an advantage to this country in spreading information about our way of life.

I do not see how, with all the good will in the world, the smaller cinemas can keep up their contributions to the Eady fund unless they are put in a position where they have no need to worry about whether they will be in the bankruptcy court the next day. If my right hon. Friend cannot go the whole hog today— though I see no reason why he should not—I would urge him to go some of the way and not to leave the industry empty-handed. They need help, not only on the grounds of equity and justice, but because if they do not receive it there will not be that source upon which my right hon. Friend or any other Chancellors may rely on towards meeting the various expenses confronting the country.

Mr. James Carmichael (Glasgow, Bridgeton)

There has not been a single speech in support of the present form of taxation on the film industry. Because of his heavy responsibilities, the Chancellor is entitled to handle the national exchequer with great care. But on the other hand, he must consider the views of the House of Commons, and for a long time I have not heard a debate where there has been such unanimity in the opposition to the present form of taxation.

I am in complete agreement with the point of view expressed in two good speeches made by my right hon. Friend the Member for Huyton (Mr. H. Wilson) who gave details of the figures associated with the industry, and my hon. Friend the Member for Nottingham, North-West (Mr. O'Brien), who spoke of the conditions of the workers in the industry.

8.0 p.m.

It would be unwise for any hon. Member to continue arguing the figures. The figures have already been given by my right hon. Friend the Member for Huyton (Mr. H. Wilson) in addition, the Chancellor himself knows from the evidence supplied by the industry what the figures are. No figures have been quoted today which can be repudiated. Indeed, the Chancellor is probably more conversant with the figures and the difficulties of the industry than anyone else. The wages in the industry average £6. I ask any hon. Member to get people to work in an industry with a feeling of contentment on a wage of that kind. Therefore, one of the first things to be done in the industry is to improve the conditions of the workers.

The other point which has already been mentioned is the renovation of the halls. It cannot be done on the present money going into the cinemas in working class areas. I represent a very congested area in the City of Glasgow. There are six cinemas in that constituency alone, and the prices are all below 2s. [Interruption.] I wish the Financial Secretary would speak a little more softly. If he wants to interrupt me I will have the greatest of pleasure in resuming my seat for the time being. I want to stress that the real form of entertainment in my constituency is the cinema and, as I have already said, there are six not one of which charges more than 2s. They have to change the programme twice a week and it is quite impossible on their returns to recondition the cinemas and make them comfortable for their audiences.

I regard the cinema as one of the most important social forces in the country. Some mention has been made of dog racing. I only went to a dog racing track on one occasion. I was there for three hours, and those three hours were wasted so far as I was concerned. I am a cinema fan to some extent, and therefore, I say to the Chancellor that his first obligation is to have regard to the conditions of the workers in that industry and to the improvement of the halls.

I remember that in former debates the suggestion has been made that if a reduction were made in the tax there might be a reduction in the prices of the seats. We are getting to the stage now where it would be false for the cinema owners to suggest, in order to get a reduction in the tax, that they would make an immediate reduction in the prices. They could not do it because the whole industry is in a very bad state.

The Chancellor will have seen from the figures which have been submitted to him today that he is at the stage of diminishing returns. He will estimate for a certain figure coming in from the cinemas, and I am certain that the returns from the rural and industrial areas, some of which I represent, will be less than he expects. I beg the Chancellor, if he is unable to accept this new Clause now, to give it very serious consideration so that, on Report, he might create an improvement in the present position.

If he cannot deal with the tax in the way proposed in this new Clause, I ask him at least to treat the industry in the same manner as he has considered football and other forms of sport and consider the possibility of reducing the tax on seats up to 1s. If that were done it would be a step in the right direction. I hope that he will not stonewall everything that has been said today and refuse to make any contribution to the industry. I hope, on the other hand, that his study of the proposition will enable him to consider it sympathetically.

Mr. Beveriey Baxter (Southgate)

I apologise for not having heard all the debate, although I think I know more or less well the arguments that have been made. These are days when showing people around the House of Commons has become almost the first occupation of Members of Parliament.

Mr. Richard Adams (Wandsworth)

There should be Entertainments Duty on that.

Mr. Baxter

The Chancellor of the Exchequer has always been responsive to anything connected with the arts, and the films must be included. As has been said several times today, this is a very sick industry. I do not want to go over the arguments about television, and so on, but the film industry is in the shadows, especially in the smaller districts of which the hon. Member for Bridgeton (Mr. Carmichael) was speaking.

I know that if the Chancellor were to grant a concession he would have to find the money somewhere else. It is not a very large amount. I am not sure whether I would be in order in suggesting to the Chancellor where he can find some money, but he could do it in the realm of art or self-expression. I think that if he did away with this very foolish nonprofit arrangement in the theatres, that would make some contribution to the amount necessary. I wonder whether the Committee realise that the company showing "A Streetcar Named Desire" not only pays no Profits Tax and no Income Tax but does not give the public the benefit of the Entertainments Duty, which it takes itself. It never reaches the Chancellor. The price is not reduced for the customer.

I do not want to be controversial, because it is not in my nature, but I am not certain that the Chancellor's investment in "Gloriana" at Covent Garden, which, I was told, had cost £20,000, might not have been better used to save some of the cinema people. I am sure that anybody who heard the opera would have been very glad to go to a cinema.

Mr. O'Brien

It is not as bad as all that.

Mr. Baxter

The Chancellor was there, so he knows what I am talking about.

Any concession at this moment, however small, would put life, hope and confidence into this industry. People do not like going to an empty cinema. It is like an empty restaurant; people will stay away from it. Once people get the idea that the cinema is a dying entertainment, then its death will come much quicker than it would have done otherwise. I hope that the Chancellor will throw out a little hope, even if it means that we will have to go and hear "Aida" or even "Madam Butterfly" instead of Mr. Benjamin Britten's works.

Mr. F. Blackburn (Stalybridge and Hyde)

I think that the Chancellor must have been impressed by the unanimity of the Committee today. In fact, there has only been one dissentient voice—the right hon. Member for Torquay (Mr. C. Williams)—and I was not quite sure whether his objection was to my right hon. Friend the Member for Huyton (Mr. H. Wilson) or to the new Clause, but it became apparent later that his objection arose from his misunderstanding of what the new Clause was for. Therefore, I hope that the weight of opinion on both sides of the Committee will have some influence on the Chancellor.

Three important questions have emerged from the debate. First, can a sound case be made out for some relief for the cinema industry? I do not think there is any doubt that the answer to that question is, yes. Second, is the burden of taxation that cinemas are carrying unfair compared with other forms of entertainment? Again, I think the answer is undoubtedly, yes. Third, if some relief is to be given, is this Clause fair and reasonable, and does it distribute the benefits where they are most needed? I think that everyone will agree that the answer to that question also must be, yes.

The statement has been made that last year the Chancellor was not quite aware what the views of the industry were. I do not think he can claim that this year, because my right hon. Friend the Member for Huyton referred to the Report which was submitted to him by the Cinematograph Exhibitors' Association of Great Britain—a Report which had been prepared by the accountants of the Association. If the Chancellor accepts the figures of that Report, he must also accept the view that something must be done for the industry, as the industry is in great need of help. Whether my way of relief of taxation or by some other method, it is certain that something must be done.

Some time ago, I met a deputation of proprietors of small cinemas, who put their case to me. After we had been talking for some time, I interrupted and said, "It is not helping your case when you overstate it. If what you tell me is true, you are merely existing on the sale of ice cream," and they said that that was exactly what had happened. I know that my right hon. Friend does not sec anything wrong in a cinema existing on the sale of ice cream, but I think it is a rather doubtful commodity on which to make the safety of that industry depend. If we read the Report which was submitted to the Chancellor, we shall see that the point was brought out that they do exist on the sale of ice cream.

My right hon. Friend quoted certain figures from the Report, and I should like to refer briefly to two of them, but on a different basis. On the basis of the figures submitted in the Report, if we assume that every exhibitor of the 4,570 cinemas covered by the Association was the owner, the average surplus available for each owner-exihibitor would be £1,355, always assuming that my arithmetic is correct. Out of that sum, they have to meet directors' fees, reserves, dividends and taxation. If we also assume that every exihibitor was the lessee, the average deficiency of each lessee-exhibitor would be £308, to which we have to add directors' fees and reserves. We do not know exactly what proportion are owner-exhibitors and what proportion are lessee-exhibitors, but the true position must be between the two figures I have given.

Again, if we look at the figures from another angle, the average cinema with less than 1,500 seats is making a loss on film exhibition, and is recouping its position on the sale of ice cream. The stress this afternoon has been on the help needed for the small cinema, and reference has been made to small cinemas in rural areas. I hope the Chancellor will not tell us that there is provision for exemption from taxation for cinemas in rural areas because of a concession made in the Finance Act, 1948. That concession does not always work as it was intended to work.

8.15 p.m.

I have in my own constituency a cinema which meets the requirement of having less than 400 seats, and it is a cinema in a village. Unfortunately, the village is one of three such villages which together form an urban district. When we add together the population of the three villages, the total comes to over 4,000, and, consequently, the cinema does not get the benefit of the concession which was given by the Finance Act, 1948.

A point has been made about attempting to bring about increased admissions. We all know that admissions are decreasing, and I think that this point has been sufficiently stressed by other hon. Members, and I shall not, therefore, go any further into it. I have set out the three questions to which I think affirmative answers must clearly be given, and I sincerely hope that the Chancellor will remember that these requests and suggestions have been made to him not from this side of the Committee only, but that almost every speaker from his own side has also laid stress on the need for some help to be given to the industry. I hope he will be able to have the pleasure this evening of making some concession to it.

Mr. R. A. Butler

We have debated this matter for three hours, and if we go on at this pace there is no alternative to having to sit late for two nights, because we have an undertaking from the right hon. Gentleman opposite that the Bill will be finished in two days, and this is only the first of the new Clauses. However, I do not take an altogether despairing view, because we expected that many hon. Members would speak on this subject, which is one of the most important, and it is, therefore, quite right that we should have a reasonable debate.

I do not think it would be unreasonable to come to a decision as soon as we can now, because, otherwise, we shall be in the position of being very much delayed. As we are trying to carry this Finance Bill without the use of the Closure, the only way to do that is by common consent, so we should maintain that principle and try to use it.

The first speech on this subject was made by the right hon. Gentleman the Member for Huyton (Mr. H. Wilson), who made one or two points with which I will deal immediately. He said that the trade had offered discussion. I can assure him that they not only offered discussion, but have been engaged in discussions with my hon. Friend the Financial Secretary, and I can conscientiously say that any line that has been taken by the Government has been taken after considering the views of all sections—the exhibitors, the producers, the renters and every section of the industry. It will not be the fault of the industry or of hon. and right hon. Gentlemen on the other side of the Committee if the case has, in any way, been misunderstood. I assure them that it is fully understood.

The second point that I should like to make is this. It is not remarkable that there should be unanimity in desiring a reduction of taxation. The tax collector, and particularly, the Chancellor of the Exchequer, very often stands in an isolated position, and is none the worse for that. There are a great many hon. and right hon. Gentlemen who are interested in this industry in one way or another, or represent constituency cinemas, and we are not surprised that there is unanimity on the view that taxation is too high.

The right hon. Gentleman raised the question of the Board of Trade figures. The position about that is a rather human one. It is quite true that the right hon. Gentleman himself encouraged the collection of statistics, but, in fact, it is the exhibitors who have found that the form-filling involved in the compilation of these figures is even more tedious than the officials of the Board of Trade themselves, and the result is, that the Board of Trade have tried to keep the collection of figures to a minimum.

Figures were last collected for September, 1951, and another series is now being collected, despite the human objections of the exhibitors, but they will not be ready for some time. I think that all sides of the industry, including the exhibitors, are really desirous of seeing that the information made available by the initiative of the right hon. Gentleman is continued.

The right hon. Gentleman next raised the question of the Cinematograph Films Council, and said that their views were unanimous. I do not think he quite did justice to the facts, because it is a fact that Mr. G. H. Elvin, the General Secretary of the Association of Cinematograph and Allied Technicians, himself claimed that there was no justification for tax reductions to benefit cinema proprietors, to which he said he was firmly opposed. His view was that any relief which accrued should benefit the producers, the employees and the public.

Mr. H. Wilson

I was, of course, aware of the views of Mr. George Elvin, with whom I have had very many dealings over the past few years, and I had him in mind when I chose my words rather carefully and said that it was passed without any contrary vote. I was not present, of course, but I understood that Mr. Elvin reserved his position. He did not, in fact, vote against the resolution.

Mr. Butler

May such a happy fate attend all measures of Government policy. I was only intervening in the interests of accuracy, because the right hon. Gentleman, himself a scholar, would not wish to offend in any way.

We had some other interesting speeches from the hon. Member for Woodside (Mr. W. G. Bennett) who referred, in particular, to the small cinemas—he has a particular knowledge of those in Scotland— with which the right hon. Gentleman who is to follow me will no doubt deal. I think that he, perhaps, over-estimated the needs of the small cinemas, because if we look at the accountants' figures to which the right hon. Gentleman made reference we find that it is not proved that the small cinemas are really suffering more than the medium-sized cinemas. Although there is obviously a case for the small cinemas—and here I refer to the speech of my right hon. Friend the Member for Torquay (Mr. C. Williams)— the trouble in the cinema world is not confined to the small cinemas.

The hon. Member for Nottingham, North-West (Mr. O'Brien), who probably knows as much about this subject as anybody in the Committee, referred to the low wages paid in the industry. The Government are well aware of that. If I may say so, the hon. Member put his case in a very reasonable and sensible way. My hon. and gallant Friend the Member for Barkston Ash (Sir L. Ropner), together with my hon. Friend the Member for Cheadle (Mr. Shepherd), referred to the fact that 40 per cent. of the takings of the cinema industry were seized by the Exchequer, and that, therefore, the industry was treated more hardly than any other industry. I would remind the hon. and gallant Member for Barkston Ash and the hon. Member for Cheadle, and others who raised this point, that in so far as the Exchequer preys on an industry it does not prey on this industry any worse than on some others.

Take the case of beer. Taking the average price of a pint at 1s. 4d., the average duty is 8½d. Therefore, in relationship to price, the duty is 53 per cent. —appreciably higher than in the cinema industry. Take tobacco. The price of a packet of cigarettes is 3s. 7d., and the public may like to know that the duty is 2s. 9d.—a percentage of duty to price of 77 per cent. Take the case of matches. The average price of a box of matches may be taken as 2d. The duty is l.1d., an average extortion of 55 per cent. Take the case of petrol. The average cost is 4s. 6d. a gallon and the duty is 2s. 6d., which bears a proportion of 55 per cent.

When we come to cinemas, the total receipts referred to by right hon. and hon. Members in the course of the debate amounts to £103,250,000 and the total Entertainments Duty to £37,250,000, which represents 36 per cent., compared with all these other duties to which we have just listened. Therefore, the case made by hon. Members in the course of the debate that cinemas are treated more hardly than other industries in the respective duties levied on them—although I confess at once that the duty is heavy in relation to the needs of the industry— cannot be sustained.

People think that the competition of television is unfair, but in the 1951 Budget the Purchase Tax on television sets, for planning reasons, of which we hear so much, was raised to 66⅔ per cent. and is now 50 per cent., so that even that form of competition has a higher levy upon it in the shape of tax on the set than is levied on the cinema industry.

Mr. H. Wilson

Would the right hon. Gentleman suggest that in the case of the television set the actual percentage of the price paid by the consumer is higher than the percentage in the case of the cinema?

Mr. Butler

No. The intellect of the right hon. Gentleman remains pure and firm even at this late hour, and the cases are not, to quote a Latin tag, in pari materia. They are not the same. I only quote it to show that the set itself is taxed to that extent.

So much for some of the points which have been raised. I now turn to the general arguments raised during the course of this debate. No hon. Member, I think, has mentioned the fact that very considerable concessions were made by the Government last year. Last year, we reviewed the effect of the duty on the industry on the Report stage of the Bill, and there were two main purposes in the changes we then made.

First, we introduced a new scale which gave much greater flexibility and freedom to the exhibitors to adjust their prices. Secondly, we reduced by a halfpenny the duty on the 9d. and l0d. seats at a cost to the Exchequer of about £150,000 to £200,000 a year. This is the answer to the hon. Member for Bridgeton (Mr. Carmichael), to the hon. Member for Woodside and to other hon. Members who referred to the cheaper seats. The one tribute which I think I can pay to this new Clause is that it makes an attempt, as stated by the right hon. Gentleman, to deal with the cheaper seats first.

Mr. McNeil

The right hon. Gentleman says that in the current year the concession of a halfpenny on the 9d. and l0d. seats cost the Exchequer £150,000 to £200,000. I suppose the right hon. Gentleman would want to make a calculation in relation to the other seats affected by that change, and perhaps he would tell us what was the effect on the Treasury.

Mr. Butler

I am giving the general level of the concession, and I am afraid I cannot add to that. It is a combination of the amount given. I have also referred to the flexibility of the scale.

The hon. Member for Nottingham, North-West then raised the question of the general position of the industry, and here I must remind the Committee that the state of the industry is not governed solely by the tax or duty levied upon it. When we discussed the cotton industry, hon. Members were very apt to say that all the troubles of the industry came from Purchase Tax. When we discuss the cinema industry hon. Members are very apt to say that the whole trouble of the industry comes from the Entertainments Duty.

That is not the case. The industry would be in difficulty whether we had a duty upon it or not, and I would remind hon. Members that under the quota system, the National Film Finance Corporation or the Eady levy, and in other less important ways, the Board of Trade and the Government do their best to pay attention to the needs and wishes of the industry. I cannot, in this debate, enter into the further references which one or two hon. Members have made to the Board of Trade. I am confining myself solely to the duty, and I do not believe, although it weighs heavily on the industry, that it is the major or sole cause of the difficulty in which the industry finds itself today.

I have had put before me the question of attendances. I do not believe that the attendances could reach the very high level which they reached in 1946— 60 per cent. above pre-war—but it is a fact that attendances today, though not at the high level of pre-war, have got back to within 20 per cent. of that level. The number of attendances in 1952, which stood at 1,310 million, was still about one-third higher than before the war although about 20 per cent. below 1946.

8.30 p.m.

Further, we are, according to U.N.E.S.C.O., the country who attend cinemas the most, the yearly attendances per head of the population in the United Kingdom being 28, and the nearest being 23 in the United States, 19 in New Zealand, 17 in Canada and Australia and 14 in Italy and Belgium. That will show that although attendances are down they are still up on pre-war and that, as a nation, we still have the highest attendance per head. So much for some of the arguments used.

I am quite ready to accept that in some respects the industry is having a difficult time. The truest remark made was by the hon. Member for Orkney and Shetland (Mr. Grimond), who said that the industry was wrongly represented in the public mind as a luxury industry owing to the extraordinary night parties, furs, and other agreeable objects which, normally, I desire to tax. They give the false impression of luxury in the public mind, and everybody imagines that those who work in it and those who exhibit and rent the films are plutocrats of a high order. The industry, as all who have been in negotiation with it, know, has a difficult time.

While the latest Revenue returns, for example, at the beginning of the current quarter, show a slight improvement, some of the latest figures are not so satisfactory. The position for the Entertainment Duty figures, which worked out about the same for April, 1953, as for April, 1952, are not as good in May, 1953, as they were in May 1952. I am giving the Committee all the information at my disposal so as to show that I recognise the difficulties of the industry. It would be possible for me to make a case saying, "All is going very well," but the very latest returns show me that the returns are not quite so good. Unfortunately, I am not in a position to offer to the Committee that I can accept the proposed new Clause, which would amount to a concession of about £3.7 million, as is known.

My hon. Friend the Member for Caithness and Sutherland (Sir D. Robertson), who has taken a considerable interest in this matter, asked me to be generous and to throw my bread upon the waters. I am not satisfied that I can go any further in this year's Finance Bill, but I will go as far as to say this about the future: I have only got the trend of this last month, May, which causes me a certain amount of anxiety. I have listened most carefully to what hon. Members have said. Therefore, I undertake to watch the trend in the next few months as carefully as I can. If this trend should continue, I undertake that the cinema's claim for relief will stand high among the competitive claims on a future occasion.

I had better not make any further statement to supplement that, because I do not want to raise false hopes. I shall watch carefully the effect on the small cinemas, but I want them to realise the change which we attempted to make last year. I undertake to regard this debate and the serious contribution made by hon. Members as something which needs watching by the Government and by the Customs, and which will have my personal attention in the months to come.

Mr. McNeil

The Chancellor will not be surprised if I say that his reply, and indeed his arguments, are exceedingly disappointing. It must be quite plain to the Committee that the Chancellor of the Exchequer is relying not upon his arguments but upon the efficiency of his Whips' Department.

Mr. R. A. Butler indicated assent.

Mr. McNeil

I am so glad I have got that admission from the Chancellor. It seems to me the only one we shall get this evening. There were only three points which the Chancellor dealt with. He pointed out that last year on the Report stage he gave a concession by remitting ½d. in tax upon the 9d. seat and a similar amount on the l0d. seat. I admit that the revised scales were a great convenience to the industry and to the public. The concession cost the Chancellor, as he has told us, £200,000, but he was being a little naive—not to put it otherwise—when he replied to my question saying that there was no compensation. Perhaps he did not quite say that. He said that he was unaware of the compensation.

I would put to him one result of that change, which was foreseen at the time, as my right hon. Friend reminded the Financial Secretary. At the same time I added my plea. What happened, as the figures plainly show, was that as a result of that change and the consequent change up to 1s., the 1s. 3d. admission disappeared almost completely and was replaced by the 1s. 6d. admission. The Exchequer thereby took an additional l½d. per admission for the number of changes made in that respect. I cannot offer the exact figures but I am inclined to think that the Exchequer made an additional £325,000 by that change. At any rate, it was plain to the Committee that the relief in relation to the 9d. and l0d. seats in the year ended April this year cost the Exchequer precisely nothing.

Let us look at the offer made by the Chancellor when he says that he is impressed by the debate and that he will watch the tendencies carefully. He refers to the figures of April and May this year. It will have occurred to the Committee that, unhappily, April of this year could not have been taken as a very typical April. We are used by adage to the quotation about April showers, but the April showers of this year were unremitting and the figures for cinema admissions were not typical. I do not think that the Chancellor would argue that they were.

Mr. Shepherd

Is the right hon. Gentleman saying that they were higher or lower as the result of April showers?

Mr. McNeil

I think that the hon. Member is familiar enough with this industry to know that when we have a wet holiday at Easter there is compensation to the cinema industry.

Mr. Shepherd

It depends on how wet.

Mr. McNeil

If the increase in the number of seats taken varied directly with the increase in rainfall then the receipts this April must have been very high.

Mr. Ellis Smith (Stoke-on-Trent, South)

Manchester.

Mr. McNeil

The Chancellor now tells us that he is impressed by the May figures, but the figures for November, December, January, February, March and April of 1951–52 show unhappily a steady downward tendency in this industry. As my right hon. Friend the Member for Huyton (Mr. H. Wilson) reminded us, and the Chancellor did not contradict him, they show a reduction of between 7 per cent. and 8 per cent.

I must say that the submission of the hon. Member for Cheadle (Mr. Shepherd) greatly surprised me. The Chancellor seemed to have only two supporters. One was the right hon. Member for Torquay (Mr. C. Williams) and it transpired as his argument developed that he supported the Chancellor because he did not understand the new Clause. The other was the hon. Member for Cheadle, who supported the Chancellor in part, I think, because he did not understand his own figures. The figures of admissions from 1948 onwards show a steady and unhappy change downward.

Mr. Shepherd

There is probably some misunderstanding of what I said. I said not that the attendances were up but that the takings were, and it is true that the takings in 1952 were higher than they were in 1951.

Mr. McNeil

It would have been a miracle if it had not been so because taxation had gone up in that year and the prices consequently had been adjusted. If he quotes gross takings, the hon. Member, who knows this industry much better than I do, cannot contend that that was anything but consequent on the movement in prices.

The figure upon which we must base our judgment is that for the number of admissions, and the figures published by the Board of Trade show a steady reduction from 1948 onwards. I shall quote them very briefly. In 1948, the figure was 1,480 million; in 1950 it was 1,396 million; in 1951 it was 1,365 million and in 1952 it was 1,312 million. In the light of those figures, for the Chancellor to assure us that he will pay attention to the trend from May onwards is to assure a substantial number of people in this industry that he will take care to give them elaborate headstones on their graves next year.

The startling feature of this debate is that the figures relating to the profitability of this industry are available. They are supplied by a reputable firm of accountants The Chancellor of the Exchequer and his hon. Friends have displayed the utmost courtesy to the industry and to hon. Members interested in the industry, but although, by my reckoning, since the spring of this year these figures have been available for discussion on at least five occasions, not once has the right hon. Gentleman, his hon. Friends or, as far as I know, any of his officials, challenged or questioned those figures and the estimates in any way.

Moreover, as the discussion has shown, we are concerned not only with the effect of the continuation of this position on the exhibiting side alone; we are discussing it in relation to British production. One hon. Member opposite pointed to the effect that the reduction in the number of cinemas would have in relation to the cost of producing British films. My hon. Friend the Member for Flint, East (Mrs. White) referred to the Eady levy, as did my right hon. Friend the Member for Huyton. In reply to a Question on 10th March the President of the Board of Trade referred to the hope of the Government that this voluntary agreement would not only be continued but would be extended for three years, and he went on to say that if this was not secured by voluntary agreement the Government would seek statutory authority.

The existing agreement runs out in August of next year. Although I am not acquainted with the production side of the industry I understand from the speeches made by people in the industry that planning for production that is going to start in August or September, 1954, must begin six, nine or 12 months before. The Committee must understand that agreement upon the levy must therefore be secured in the reasonably near future, by which I mean a matter of months, if British film production is to continue at the existing level.

If some of these exhibitors are being forced out of business, and if one group are being forced to the point where they must choose between paying their banker or paying the levy, my conclusion must be that they will not pay the levy, and no legislation or authority can make any difference to the arithmetic of that position. Everyone in this Committee knows that when we talk of British film production we are concerned not only with the men and women who make their livelihood from the industry, but with a vital British industry, which is sometimes dollar-earning and may be dollar-saving, and upon which British prestige and the British point of view in some degree depend.

8.45 p.m.

Tonight we have listened to the Chancellor telling us with great suavity and politeness that he cannot in the meantime do anything for either of these sectors of British industry. If this had been a Chancellor telling us at the beginning of the debate he could not assist a most deserving case in any sector of British industry we could have understood, even if we had not liked, his argument; but this is not such a Chancellor. This is a Chancellor who, from the moment he opened his Budget, has shown, for reasons not clear to us, that he is compelled to give away money in substantial sums, £45 million, £50 million, to British industry in general in the remission of taxation without qualification, without criticism, without any assessment of need for relief or relation to British production as a whole.

It is a very unhappy position, and I would say that my right hon. and hon. Friends cannot accept it.

The Chancellor seemed pleased with his reference to the taxes he obtains from other sectors of British industry—from liquor, from tobacco, from matches. I take it he was not telling the British cinema industry that the only way to save their necks was to organise themselves in a fashion comparable to the match cartel of this country; but he had no other cheer to give them. It was a poor argument. To say that the Chancellor takes more from others is an argument that certainly will not appeal to a man showing minus quantities in his weekly and monthly business.

The facts are there. Outside bodies such as the Cinematograph Council have passed resolutions asking for provisions comparable with those asked for in this new Clause. In this new Clause we have offered a solution, moderate, reasonable and practicable, to meet the needs, and only the immediate needs, of the industry, and if the Chancellor can say no more to us than he has said already, I must ask my hon. Friends to divide.

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

The Committee divided: Ayes, 195; Noes, 218.

Division No. 196.]	AYES	[8.50 p.m.
Acland, Sir Richard	Davies, Ernest (Enfield, E.)	Hastings, S.
Adams, Richard	Davies, Stephen (Merthyr)	Hayman, F. H.
Allen, Scholefield (Crewe)	Deer, G.	Henderson, Rt. Hon. A. (Rowley Regis)
Anderson, Frank (Whitehaven)	Dodds, N. N.	Hewitson, Capt. M.
Awbery, S. S.	Ede, Rt. Hon. J. C.	Hobson, C. R.
Bacon, Miss Alice	Edelman, M.	Holman, P.
Bartley, P.	Edwards, Rt. Hon. John (Brighouse)	Holmes, Horace (Hermworth)
Benn, Hon. Wedgwood	Edwards, W. J. (Stepney).	Holt, A. F.
Beswick, F.	Evans, Albert (Islington, S. W.)	Houghton, Douglas
Bevan, Rt. Hon. A. (Ebbw Vale)	Evans, Edward (Lowestoft)	Hudson, James (Eating, N.)
Bing, G. H. C.	Evans, Stanley (Wadnesbury)	Hughes, Cledwyn (Anglesey)
Blackburn, F.	Fernyhough, E.	Hynd, H. (Accrington)
Blenkinsop, A.	Fienburgh, W.	Irvine, A. J. (Edge Hill)
Blyton, W. R.	Finch, H. J.	Irving, W. J. (Wood Green)
Bowles, F. G.	Fletcher, Eric (Islington, E.)	Isaacs, Rt. Hon. G. A.
Brockway, A. F.	Follick, M.	Janner, B.
Brook, Dryden (Halifax)	Fraser, Thomas (Hamilton)	Jay, Rt. Hon. D. P. T.
Broughton, Dr. A. D. D.	Freeman, John (Watford)	Jeger, George (Goole)
Brown, Thomas (Ince)	Gibson, C. W.	Jeger, Dr. Santo (St. Pancras, S.)
Burke, W. A.	Glanville, James	Jenkins, R. H. (Stechford)
Burton, Miss F. E.	Gordon-Walker, Rt. Hon. P. C.	Johnson, James (Rugby)
Callaghan, L. J.	Greenwood, Anthony (Rossendale)	Jones, David (Hartlepool)
Castle, Mrs. B. A.	Grenfell, Rt. Hon. D. R.	Jones, T. W. (Merioneth)
Champion, A. J.	Griffiths, David (Rother Valley)	Key, Rt. Hon. C. W.
Coldrick, W.	Griffiths, Rt. Hon. James (Llanelly)	King, Dr. H. W.
Collick, P. H.	Grimond, J.	Kinlay, J.
Corbet, Mrs. Freda	Hale, Leslie	Lee, Frederick (Newton)
Cove, W. G.	Hall, Rt. Hon. Glenvil (Colne Valley)	Lee, Miss Jennie (Cannock)
Craddock, George (Bradford, S.)	Hall, John T. (Gateshead, W.)	Lever, Leslie (Ardwick)
Crossman, R. H. S.	Hamilton, W. W.	Lipton, Lt.-Col. M.
Dairies, P.	Hannan, W.	MacColl, J. E.
Dalton, Rt. Hon. H.	Hargreaves, A.	McKay, John (Wallsend)
Darling, George (Hillsborough)	Harrison, J. (Nottingham, E.)	McLeavy, F.
McNeill, Rt. Hon. H.	Price, Philips (Gloucestershire, W.)	Thomas, David (Aberdare)
MacPherson, Malcolm (Stirling)	Proctor, W. T.	Thomas, Ivor Owen (Wrekin)
Mainwaring, W. H.	Pursey, Cmdr. H.	Thomson, George (Dundee, E.)
Mallalieu, E. L. (Brigg)	Reid, Thomas (Swindon)	Tomney, F.
Mason, Roy	Reid, William (Camlachie)	Ungoed-Thomas, Sir Lynn
Mayhew, C. P.	Rhodes, H.	Usborne, H. C.
Messer, Sir F.	Richards, R.	Viant, S. P.
Mitchison, G. R.	Roberts, Albert (Normanton)	Webb, Rt. Hon. M. (Bradford, C.)
Moody, A. S.	Roberts, Goronwy (Caernarvon)	Weitzman, D.
Morgan, Dr. H. B. W.	Robinson, Kenneth (St. Pancras, N.)	Wells, Percy (Faversham)
Morley, R.	Rogers, George (Kensington, N.)	Wells, William (Walsall)
Morris, Percy (Swansea, W.)	Royle, C.	West, D. G.
Morrison, Rt. Hon. H. (Lewisham, S.)	Shackleton, E. A. A.	Wheeldon, W. E.
Mort, D. L.	Shinwell, Rt. Hon. E.	White, Mrs. Eirene (E. Flint)
Moyle, A.	Short, E. W.	White, Henry (Derbyshire, N.E.)
Mulley, F. W.	Silverman, Sydney (Nelson)	Whiteley, Rt. Hon. W.
Murray, J. D.	Simmons, C. J. (Brierley Hill)	Wilcock, Group Capt. C. A. B.
Neal, Harold (Bolsover)	Skeffington, A. M.	Wilkins, W. A.
Noel-Baker, Rt. Hon. P. J.	Slater, J. (Durham, Sedgefield)	Willey, F. T.
Oldfield, W. H.	Smith, Ellis (Stoke, S.)	Williams, David (Neath)
Oliver, G. H.	Smith, Norman (Nottingham, S.)	Williams, Rev. Llywelyn (Abertillery)
Orbach, M.	Snow, J. W.	Williams, Ronald (Wigan)
Padley, W. E.	Sorensen, R. W.	Williams, W. R. (Droylsden)
Paget, R. T.	Soskice, Rt. Hon. Sir Frank	Williams, W. T. (Hammersmith, S.)
Paling, Rt. Hon. W. (Dearne Valley)	Sparks, J. A.	Wilson, Rt. Hon. Harold (Huylon)
Paling, Will T. (Dewsbury)	Stewart, Michael (Fulham, E.)	Winterbottom, Ian (Nottingham, C.)
Palmer, A. M. F.	Strachey, Rt. Hon. J.	Winterbottom, Richard (Brightside)
Panned, Charles	Stross, Dr. Barnett	Wyatt, W. L.
Parker, L.	Swingler, S. T.	Yates, V. F.
Paten, J.	Sylvester, G. O.	Younger, Rt. Hon. K.
Peart, T. F.	Taylor, Bernard (Mansfield)
Popplewell, E.	Taylor, John (West Lothian)	TELLERS FOR THE AYES:
Price, Joseph T. (Westhoughton)	Taylor, Rt. Hon. Robert (Morpeth)	Mr. Pearson and Mr. Arthur Allen.
NOES
Aitken, W. T.	Dodds-Parker, A. O.	Keeling, Sir Edward
Allan, R A. (Paddington, S.)	Donner, Sir P. W.	Kerr, H. W.
Alport C. J. M.	Drayson, G. B.	Lambert, Hon. G.
Amory, Heathcoat (Tiverton)	Fell, A.	Lancaster, Col. C. G.
Arbuthnot, John	Finlay, Graeme	Law, Rt. Hen. R. K.
Ashton, H. (Chelmsford)	Fisher, Nigel	Leather, E. H. C.
Assheton, Rt. Hon. R. (Blackburn, W.)	Fleelwood-Hesketh, R. F.	Legge-Bourke, Maj. E. A. H.
Baker, P. A. D.	Fletcher-Cooke, C.	Legh, Hon. Peter (Petersfield)
Baldock, Lt.-Cmdr. J. M.	Ford, Mrs. Patricia	Linstead, Sir H. N.
Baldwin, A. E.	Fort, R.	Lloyd, Rt. Hon. Selwyn (Wirral)
Banks, Col. C.	Foster, John	Lockwood, Lt.-Col. J. C.
Barber, Anthony	Fraser, Hon. Hugh (Stone)	Low, A. R. W.
Baxter, A. B.	Fyfe, Rt. Hon. Sir David Maxwell	Lucas, Sir Jocelyn (Portsmouth, S.)
Beach, Maj. Hicks	Garner-Evans, E. H.	Lucas, P. B. (Brentford)
Bell, Philip (Bolton, E.)	George, Rt. Hon. Maj. G. Lloyd	Lucas-Tooth, Sir Hugh
Bennett, F. M. (Reading, N.)	Gough, C. F. H.	McAdden, S. J.
Bevins, J. R. (Texteth)	Gower, H. R.	McCorquodale, Rt. Hon. M. S.
Birch, Nigel	Graham, Sir Fergus	Macdonald, Sir Peter
Bishop, F. P.	Gridley, Sir Arnold	Mackeson, Brig. H. R.
Black, C. W.	Grimston, Hon. John (St. Albans)	McKibbin, A. J.
Boyd-Carpenter, J. A.	Grimston, Sir Robert (Westbury)	Mackie, J. H. (Galloway)
Boyle, Sir Edward	Hall, John (Wycombe)	Maclean, Fitzroy
Braine, B. R.	Harris, Frederic (Croydon, N.)	Macleod, Rt. Hon. lain (Enfield, W.)
Braithwaite, Sir Albert (Harrow, W.)	Harrison, Col. J. H. (Eye)	Macpherson, Niell (Dumfries)
Braithwaite, Lt.-Cdr. G. (Bristol, N.W.)	Harvey, Air Cdre. A. V. (Macolesfield)	Maitland, Comdr. J. F. W, (Horncastle)
Brooke, Henry (Hampstead)	Harvey, Ian (Harrow, E.)	Manningham-Buller, Sir R. E.
Buchan-Hepburn, Rt. Hon. P. G. T.	Harvie-Walt, Sir George	Markham, Major Sir S. F.
Bullard, D. G.	Hay, John	Marples, A. E.
Bullus, Wing Commander E. E.	Head, Rt. Hon. A. H.	Maude, Angus
Burden, F. F. A.	Heald, Sir Lionel	Maudling, R.
Butcher, Sir Herbert	Heath, Edward	Maydon, Lt.-Comdr. S. L. G.
Butler, Rt. Hon. R. A. (Saffron Walden)	Higgs, J. M. C.	Medlicott, Brig. F.
Campbell, Sir David	Hinchingbrooke, Viscount	Mellor, Sir John
Cary, Sir Robert	Hint, Geoffrey	Molsan, A. H. E.
Channon, H.	Holland-Martin, C. J.	Moore, Lt.-Col. Sir Thomas
Clarke, Col. Ralph (East Grinstead)	Holmes, Sir Stanley (Harwich)	Mott-Radclyffe, C. E.
Clarke, Brig. Terence (Portsmouth, W.)	Hopkinson, Rt. Hon. Henry	Nabarro, G. D. N.
Cole, Norman	Hornsby-Smith, Miss M. P.	Nicholls, Harmar
Conant, Maj. R. J. E.	Horobin, I. M.	Nicholson, Godfrey (Famham)
Cooper-Key, E. M.	Howard, Gerald (Cambridgeshire)	Nicolson, Nigel (Bournemouth, E.)
Craddock, Beresford (Spelthorne)	Howard, Hon. Greville (St. Ives)	Nield, Basil (Chester)
Crookshank, Capt. Rt. Hon. H. F. C.	Hulbert, Wing Cdr. N. J.	Nugent, G. R. H.
Crosthwaite-Eyre, Col. O. E.	Hurd, A. R.	Nutting, Anthony
Crouch, R. F.	Hutchinson, Sir Geoffrey (Ilford, N.)	Oakshott, H. D.
Crowder, Sir John (Finchley)	Hylton-Foster, H. B. H.	Odey, G. W.
Crowder, Petre (Ruislip—Northwood)	Jenkins, Robert (Dulwich)	O'Neill, Phelim (Co. Antrim, N.)
Davidson, Viscountess	Jones, A. (Hall Green)	Ormshy-Gore, Hon. W. D.
Deedes, W. F.	Joynson-Hicks, Hon. L. W.	Orr-Ewing, Charles Ian (Henden, N.)
Digby, S. Wingfield	Kaberry, D.	Osborne, C.

Partridge, E.	Scott, R. Donald	Tilney, John
Peake, Rt. Hon. O.	Scott-Miller, Cmdr. R.	Touche, Sir Gordon
Perkins, W. R. D.	Shepherd, William	Turner, H. F. L.
Peto, Brig. C. H. M	Simon, J. E. S. (Middlesbrough, W.)	Turton, R. H.
Peyton, J. W. W.	Smithers, Sir Waldron (Orpington)	Tweedsmuir, Lady
Pilkington, Capt. R. A.	Smyth, Brig. J. G. (Norwood)	Vane, W. M. F.
Pitman, I. J.	Soames, Capt. C.	Vaughan-Morgan, J. K.
Powell, J. Enoch	Spearman, A. C. M.	Wakefield, Edward (Derbyshire, W.)
Price, Henry (Lewisham, W.)	Spens, Rt. Hon. Sir P. (Kensington, S.)	Wakefield, Sir Wavell (St. Marylebone)
Prior-Palmer, Brig. O. L.	Stanley, Capt. Hon. Richard	Walker-Smith, D. C.
Raikes, Sir Victor	Stevens, G. P.	Ward, Hon. George (Worcester)
Redmayne, M.	Steward, W. A. (Woolwich, W.)	Ward, Miss I. (Tynemouth)
Rees-Davies, W. R.	Stoddart-Scott, Col. M.	Webbe, Sir H. (London & Westminster)
Remnant, Hon. P.	Storey, S.	Wellwood, W.
Renton, D. L. M.	Strauss, Henry (Norwich, S.)	Williams, Rt. Hon. Charles (Torquay)
Roberts, Peter (Heeley)	Studholme, H. G.	Williams, Sir Herbert (Croydon, E.)
Robertson, Sir David	Summers, G. S.	Williams, Paul (Sunderland, S.)
Robinson, Roland (Blackpool, S.)	Sutcliffe, Sir Harold	Williams, R. Dudley (Exeter)
Robson-Brown, W.	Taylor, Charles (Eastbourne)	Wilson, Geoffrey (Truro)
Rodgers, John (Sevenoaks)	Taylor, William (Bradford, N.)	Wood, Hon. R.
Roper, Sir Harold	Thomas, Rt. Hon. J. P. L. (Hereford)	York, C.
Ropner, Col. Sir Leonard	Thomas, Leslie (Canterbury)
Ryder, Capt. R. E. D.	Thomas, P. J. M. (Conway)	TELLERS FOR THE NOES:
Salter, Rt. Hon. Sir Arthur	Thompson, Lt.-Cdr. R. (Croydon, W.)	Sir Cedric Drewe and Mr. Wills.
Savory, Prof. Sir Douglas	Thorneycroft, Rt. Hn. Peter (Monmouth)

Question put, and agreed to.