THEATRICAL COMPANIES (Hansard, 10 March 1954)

§ Mr. Woodrow Wyatt (Birmingham, Aston)
I beg to move, That leave be given to bring in a Bill to control non-profit making theatrical companies. That need for this Bill arises out of the way in which some people have been operating Section 8 of the Finance Act, 1946. This Section lays down that any play which is performed or put on by a non-profit making company whose objects and aims are partly educational may be exempted from the payment of Entertainments Duty. This provision in the 1946 Budget has produced excellent results in many ways in the theatre in Britain. As a result, we have seen more of Shakespeare in good productions and we have seen more of the classics.
The principal non-profit making company enjoying this Entertainments Duty concession in London is called Tennent Productions, Limited, which has done extremely good work in improving the standard of theatrical production. If the people who ran this non-profit making company were to confine themselves to their non-profit making company, there would be no complaint whatever; but they do not do so.
There is another company called by a strangely similar name, H. M. Tennent, Limited—a profit-making company. The two companies—the profit-making company and the non-profit-making company —share the same principal director, a Mr. Hugh Beaumont, who also happens to be the largest shareholder of the profit-making company. By skilful use of the law which allows this Entertainments Duty concession, Mr. Beaumont has built up his profit-making company on very substantial lines and has created a great theatrical empire.
2240 It is done very easily. The Finance Act, 1946, says that a non-profit-making company enjoying this concession must be partly educational, but only partly educational, because the losses on many of the educational productions have to be offset by other means. That is why there have been performed or put on by the non-profit-making company such plays as "Waters of the Moon," which ran for over two years without paying Entertainments Duty, "A Street Car Named Desire," or a play by Miss Daphne Du Maurier called "September Tide," and even a revue.
Today, the principal example of this type is a play called "A Day by the Sea," which is running at the Haymarket Theatre and has in its cast three Knights and a Dame—Sir John Gielgud, Sir Ralph Richardson, Sir Lewis Casson and Dame Sybil Thorndike. The use of these obviously non-educational plays has enabled great reserves to be built up for the non-profit-making company, but it also has done a great deal more.
With "A Day by the Sea," for example, this is what is happening. In the Haymarket Theatre the prices of the seats for this production have been put up, so that the stalls now cost 16s. 6d. and the dress circle seats now cost 13s. 6d., this in spite of the fact that no Entertainments Duty whatever has to be paid. The production is earning well over £3,000 a week. The Entertainments Duty, which in the normal way would be going to the Chancellor of the Exchequer, is in the region of £500 a week, but because of this concession it does not leave the theatre. It is used to make the production better and bigger and also to pay the actors far more substantial salaries. That is why the company has been able to concentrate these three very distinguished male actors and one very distinguished lady actor in this theatre.
This enables also the non-profit making company to take the best actors away from other managements and use them for themselves until they want to put them into the plays run by the profit-making company. It prevents other managements from getting into any theatre that is being operated by the non-profit making company; and there is, of course, keen competition for the best theatres in London, and the Haymarket in particular.
2241 By the use of this concession, one or other of the Tennent firms; H. M. Tennent, Ltd., or Tennent Productions, Ltd., has been in possession of the Hay-market Theatre for over five and a half years. At a suitable moment, the actors now retained by the non-profit making company can be switched to the profit-making company.
Each play which is put on by the nonprofit making company pays £40 a week in management fees to the profit-making company, and sometimes there are as many as seven of these plays running in London at once: in other words £280 a week is then paid by the non-profit making company to the profit-making company as a managerial fee.
Today, there are three such plays put on by Tennent Productions, Ltd., running in London and in a few weeks two more will be coming to London. Five of these plays, therefore, will be paying H. M. Tennent, Ltd., the profit-making company, some £200 a week, and not one of these plays can be called in any way educational. Roughly, £10,000 a year is earned in management fees by the profit-making company by this means. This comfortably pays the staff salaries, the office expenses and the premises for the profit-making company, which is then able to go into business against its rivals, the other commercial firms, with a substantial base provided by the taxpayer.
It is interesting to note that in a recent balance sheet the profits of the profit-making company, after payment of very substantial directors' fees, amounted to £8,000, the almost exact equivalent of the management fees that they were receiving from the non-profit making company.
In all, in a few weeks' time Mr. Beaumont, in either his non-profit making or his profit-making capacity, will be in charge of 10 productions on the London stage; five profit making productions run by H. M. Tennent, Ltd., are already going in London today. So he will be in charge of 10 productions in one form or another. Sometimes Mr. Beaumont has more than 10—the number has been up to as many as 15 at one time—and they are always at the best theatres in London and always with the best actors. Other managements and producers are rapidly being squeezed out by the operation of this growing monopoly.
2242 As a consequence, many independent managers who have worth-while plays to perform cannot secure the services of a prominent actor, because Mr. Beaumont has already bought him for his profit making company or for his non-profit making company. That is why there are four who are perhaps the most distinguished actors on the British stage today all performing at the Haymarket in a play which is not educational and, in my opinion, is not very good. [An HON. MEMBER: "It is tripe."] As one of my hon. Friends has said, it is tripe.
This operation of the non-profit making company enables it to make higher bids for plays. For example, when "A Street Car Named Desire," which came from America, was on offer in London it was the non-profit making company of Tennents which made the highest bid and prevented any other management from getting it. It could afford to do this having no Income Tax to pay, no Entertainments Duty to pay, and not having to bother about profit. It could prevent any rival commercial management from having the opportunity to make money out of that play. In the provinces the best theatres in large towns also go to Tennent Productions Limited, the non-profit making company, because that company does not have to worry about Income Tax, nor profits, and can offer better terms, productions and stars than commercial companies, thus further crippling commercial rivals.
I have nothing against Mr. Beaumont personally. I understand that in his business dealings he is a man of the highest possible integrity and that he has always honoured any engagements entered into with the Arts Council with scrupulous exactness. But the point is that he is very cleverly and skillfully using a concession which was intended for another purpose to build himself up as the greatest theatrical impressario in London and operating what is nothing less than a capitalist monopoly. I realise that while we have a capitalist system we shall always have monopolies, but I do not think it is the intention of anyone, on either side of the House, that Parliament should contribute to the creation of private monopolies. Consequently, I want to make some alterations in the law on this matter.
I do not propose that the Entertainments Duty concession as laid down in 2243 the 1946 Finance Act should be taken away from non-profit making companies. I think it is right and good that people should be encouraged to put on good productions of plays which are a part of our national heritage, even though they cannot be expected to make a profit; and that they should be assisted in so doing. That is very important and has been of great benefit to the theatre. I hope it will continue to be so in the future.
What I do propose is that any director or principal official of a non-profit making company may not also be employed or have a financial interest in a profit making company. In other words, the non-profit making companies should live and be of themselves and do the particular job they set out to do without buttressing a profit making company. I also propose that a non-profit making company must run its own affairs entirely and not be allowed to pay a management fee in respect of any of its plays to a profit making company.
The profits of Tennent Productions, Limited—the non-profit making company—have been very substantial. The value of the tax concession must be at least £50,000 a year to them, if not more, and it can well afford to run its own affairs out of its own profits without paying something to an associated profit-making company.
I believe that if a Bill were introduced along these lines, the intention of Parliament that help should be given to the production of plays which are a part of our national heritage without profit being made, directly or indirectly, by the promoters, will then be honoured and not frustrated as it is today.

§ Mr. Sydney Silverman (Nelson and Colne)
rose—

§ Mr. Speaker
Does the hon. Member for Nelson and Colne (Mr. S. Silverman) rise to oppose the Motion?

§ Mr. Silverman
Yes, Sir. I had no idea what was in the mind of my hon. Friend the Member for Aston (Mr. Wyatt) when I saw his Motion on the Order Paper giving notice of this Bill. I came into the House with a completely open mind having a bias, if any bias at all, in favour of supposing that my hon. Friend, who is an extremely intelligent 2244 person, would probably be right. I am bound to say that, as a result of his speech, I have come to the conclusion that he is wrong. I find myself completely unable to understand his approach to this matter.
If I understood his speech correctly— or one part of it—he appeared to be saying that if there were a monopoly in entertainment it would be better if it made a profit and distributed profits to shareholders than if it were a non-profit making undertaking. That, at any rate, he seemed to be saying in one part of his speech—

§ Mr. Wyatt
No.

§ Mr. Silverman
My hon. Friend said it quite clearly; I know we cannot debate it at any length, but that is the impression he left on my mind and, I think, on the minds of many others. Another impression he left very firmly on my mind was that he thought no play ought to be put on by a non-profit making company unless it was already part of our national cultural heritage.

§ Mr. Wyatt
I did not say that.

§ Mr. Silverman
My hon. Friend says that he did not say that either. I listened to what he said and I am saying that that is the impression he made upon me. He used the exact phrase, "national heritage." A heritage is usually what one inherits from someone who dies and the usual connotation of the phrase is that our national heritage includes what has been handed down to us and not the products of our own age, which may in future become part of that heritage. I am relieved to hear that my hon. Friend did not intend to convey that impression, but I can assure him that if he looks at his speech in the OFFICIAL REPORT tomorrow he will realise that there was good reason for it to have left that impression on the minds of his hearers.
My hon. Friend proceeded to cite a particular play. He said that he had no personal feeling or bias—I have forgotten which word he used—against a certain Mr. Beaumont. I have none, because I never heard Mr. Beaumont's name until my hon. Friend made his speech. My hon. Friend spoke in slighting terms of a particular play at the Haymarket as though it were a work of no importance and no one could ever suppose that 2245 it ever was or ever could become part of the national cultural heritage of this country—that it was a bad play and that the use of this machinery, exempting it from Entertainments Duty, and conferring financial advantage upon this play was an obvious and incontrovertible example of an abuse of the purpose of these concessions.
Matters of taste are matters of taste and it is an old principle that it is useless to argue about them. I can only say that I happened to see this play and that I do not agree with my hon. Friend. I consider it an extremely good play. If there are a number of people willing to pay high prices to see it, that is a great compliment to the improving taste of the theatre-going public. Instead of bemoaning that fact, my hon. Friend ought to rejoice at it.
If my hon. Friend had a point in his speech at all, it seemed to be that there may in some cases be an abuse of this Entertainments Duty concession. If there is such an abuse each case ought to be dealt with on its merits and examined impartially on its merits. If a play is bad, let objection be taken to it. But, because there may be instances where abuses can be proved, to bring in a Bill which would have a completely crippling and paralysing effect on every attempt to encourage real theatre in this country by non-profit making companies seems to me to be completely out of proportion. I hope that the House will not give a First Reading to this Bill.