HC Deb 19 June 1956 vol 554 cc1270-345

  1. (1) The third, or highest, scale of entertainments duty set out in Part III of the First Schedule to the Finance Act, 1954, shall have effect subject to the amendments stated in the next following subsection in relation to payments for admission to which that scale and this section apply.
  2. (2) The said amendments are that the two first-mentioned amounts of payment and the corresponding rates of duty shall be omitted 1271 and that in relation to all other amounts of payment shown in the said scale the appropriate rate of duty shall be reduced by one penny.
  3. (3) This section shall apply, and shall be deemed to have applied, to payments for admission (wherever made) to entertainments consisting wholly or mainly of the exhibition of a cinematograph film or cinematograph films and held on or after the sixth day of August, nineteen hundred and fifty-six; and where entertainments duty has been charged on any payment made before that day and by virtue of this section a less amount of duty should have been charged than the amount which was in fact charged, the person by whom the duty was paid shall be entitled to repayment of the overcharge.—[Mrs. White.]

Brought up, and read the First time.

The Temporary Chairman (Mr. James H. Hoy)

It would be for the convenience of the Committee if we also discussed the next new Clause in the name of the right hon. Member for Huyton (Mr. H. Wilson), concerning the reduction of Entertainments Duty on small weekly takings at cinematograph theatres; the new Clause in the name of the hon. Member for Honiton (Mr. Mathew), for the amendment of Section 17 of the Finance Act, 1948; and the new Schedule in the name of the right hon. Member for Huyton concerning the reduction of Entertainments Duty on small weekly takings at cinematograph theatres.

Mrs. White

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

As all these new Clauses and the Schedule deal with different aspects of the cinematograph film industry, it would be convenient to consider them together. I will devote most of my attention to the two Clauses in the names of my right hon. Friends and myself. Those two Clauses have been put on the Order Paper to draw attention to what we believe is a very serious situation in the cinema industry.

I am aware that this industry may have the reputation of crying "Wolf", and therefore it is perhaps not recognised that the present situation in the industry is such that there is urgent need for some action to be taken. I want to draw the Financial Secretary's attention to some of the general considerations before I address myself more specifically to the details of the new Clauses.

The position at present is that the cinema industry pays a very much heavier rate of Entertainments Duty than any other form of entertainment. Very few business enterprises in this country are expected to bear a tax which last year amounted to about 32 per cent. of its gross takings and approximately 50 per cent, of its net takings. That is an extremely heavy imposition. The Chancellor draws from this industry about £33 million a year. That amount has declined over recent years, and is presumably still declining, owing to the decrease in attendances at cinemas.

I would say, in parenthesis, that this tax is charged upon the sale of tickets for entry to cinemas and is not a tax on profits. This very heavy tax may have to be paid even though both the exhibitor, who collects the tax on behalf of the Government—and incidentally charges nothing for doing so—and the producer of the film being shown are involved in a financial loss. It therefore bears particularly heavily on any industry which for one reason or another is in a state of decline.

Unfortunately, no doubt owing largely to the counter-attraction of television, one cannot escapt the conclusion that at the moment the cinema industry is in particular difficulties. Attendances in 1955, compared with those in the previous year fell by 7 per cent. This fall was marked in all regions of the country but particularly in the southern, London and south-eastern regions, where television, including commercial television, was available as an alternative.

In spite of rising costs, which the industry experiences in common with all others, the industry's gross takings in the last full year fell by nearly 4 per cent.— £4 million. With the change in the value of money one would have expected them to rise. It has been calculated that the drop in the profits of the exhibiting side of the industry amount to nearly 48 per cent. since 1951—and that despite increases in seat prices in that period. The British Film Production Fund, which is directly related to takings, has never yet reached the estimated total; it has been less each year than was hoped, both relatively and absolutely.

In the last year there has also been a decline in the number of British films registered, from 476 in the year ending 31st March, 1955, to 388 in the year ending 31st March, 1956. I will return to that aspect of the matter in a moment.

5.15 p.m.

I have said enough, I am sure, to convince the Committee that there are definite reasons for which some action should be taken at this time; and we have therefore put down these two new Clauses. The first is directed primarily to drawing attention to the general position in the industry and, through that, to the needs of the producers. The second new Clause has a slightly different emphasis in that it is directed more particularly to the special difficulties of the smaller exhibitors.

May I say frankly at the outset that neither of the new Clauses is so drafted that, if carried, it would meet the needs of either of the two bodies about whom we are concerned. The reasons are different for each of the Clauses. For the first, where we are more specially concerned with producers, we have suggested in the new Clause withdrawing the Entertainments Duty altogether in the lowest part of the scale and reducing it by a nominal amount of 1d. at all other stages in the scale. That amount of ld. is put down in order to afford an occasion for a debate. We do not pretend that that amount would be satisfactory, but the Financial Secretary will appreciate that had we not done it in this way it would have involved extremely complicated calculations in the Schedule on Entertainments Duty.

It would have had another disadvantage. Had we been more specific in our recommendations, they might have tied us to a particular figure for total relief. I say this advisedly. We are all aware that on this occasion the industry has managed to reach an unusual state of agreement, in that all sections of the industry approached the Chancellor with the report of the All-Industry Tax Committee, putting forward a joint case. That joint case was based on certain calculations which, frankly, my right hon. Friends and I could not accept without reservations. If those calculations had been accepted by the Chancellor, the result would have been a remission of tax of nearly £20 million a year; and that, after all, is a very considerable sum. Before supporting the All-Industry Tax Committee's demands, we should have to take into account a great many details, which we on this side of the Committee are not in a position to do.

The matter would also have to be further considered in that that the recommendation of the Committee was based on accepting as normal two rates of profit —25 per cent. for the producer and 15 per cent. for the exhibitor, over their total trading for the year. They are rates of profit which, quite frankly, we believe to be questionable. I do not think anyone in the Committee would be prepared to accept without considerable investigation the suggestion that 25 per cent. overall should be regarded as a normal rate of profit, although clearly in such a very chancy industry as film production, one might reasonably hope to obtain 25 per cent. on some enterprises. For those reasons we have put down what is obviously a nominal amount.

Although the form in which the new Clause is drafted is as I have described it, the intention is emphatically to urge that the Chancellor should give some measure of relief in the matter of Entertainments Duty which would have the result of benefiting the production of British films. We have a long story of legislation in this country concerning the cinematograph film industry, and most of it has as its object, very properly, the encouragement of the production of British films. Clearly, the exhibiting side of the industry is a necessary part of this operation, but we are primarily concerned in our efforts in the House to see that British films have a fair chance.

We have quota legislation, which does not concern us this afternoon, and we have other methods which are sometimes spoken of in such a way as to suggest that this industry is being heavily subsidised. That is not the case. The British Film Production Fund is a levy on the industry and not a Government subsidy. It is paid after tax has been collected. It may be argued that the level at which that levy can be collected is to some extent dependent upon the rate of tax which the Chancellor collects. In fact, many of us would wish to argue that there is a definite relationship between Entertainments Duty and the Eady levy.

It has been fashionable in the Treasury recently to try to suggest that that is not so, but the Treasury cannot have it both ways. One might say that there is an element of indirect subsidy, in that if the Chancellor decides to remit a certain amount of tax the Eady levy can be increased, but there is no direct subsidy involved. The only direct subsidy has been through the National Film Finance Corporation. In that connection, one can point out that during its existence the National Film Finance Corporation has lost a sum of £3¾ million, but that sum has been lost in a period in which the Chancellor has collected £70 million from performances at which a British film was the first feature and, presumably, the main attraction of the programme. When one takes that £3¾ million on the one hand and the £70 million on the other, I think the Committee will agree that it cannot for one moment be argued that the film industry is heavily subsidised. On the contrary, it heavily subsidises the Chancellor of the Exchequer.

There is also the fact that the film industry is making considerable overseas earnings. Its product has sometimes been called the ideal export because, the films having once been made here, there are very few other expenses and we are exporting something which we believe is of great advantage to us nationally, in that the films depict what we are apt to call the British way of life. The Rank Organisation claims that about 50 per cent. of its earnings come from exports. For the film industry as a whole, roughly one-third of its total earnings, as far as I can judge, come from overseas. It is, therefore, of obvious importance to the Chancellor that the industry should be encouraged and not discouraged.

Even taking these overseas earnings into account and making allowances for the British Film Production Fund, there is still a deficit on British film production. Without going into the debatable question of the level of profit which should be regarded as normal, it is perfectly clear that there is, without taking profit into account at all, a gap of some £1 million a year which has to be met if the industry is to break even, without making any allowance for any rate of profit or for putting money to reserve, which is essential in such an industry.

I therefore think that we are fully justified in asking the Chancellor to look at this matter again and to consider further the representations which have already been made to him from all sections of the industry. Otherwise, what will happen is that this industry will either decline or will be more and more dependent on outside sources and, in particular, on United States money. While we may not object to that up to a point, I am sure that we would all agree that it could easily go beyond the point at which we felt we were maintaining a satisfactory state in the British industry.

In particular, future production in this country is being jeopardised because of the uncertainty about the levy. I hope that since the Second Reading of this Bill the Financial Secretary has had some consultations with his right hon. Friend the President of the Board of Trade, and may be able on this occasion to make some announcement of the President's intentions, which so closely concern what we are now discussing. The Eady levy is due to expire in October, 1957, and I have already explained during an earlier stage of the Bill it is absolutely vital that the industry should know as early as possible what action the Government propose to take. If, as is said by the exhibitors, they will refuse to carry on the levy unless they have firm assurance of tax concession, it seems to me that there is a complete case from the producer's end for a Government statement of policy at this present time.

I turn briefly—because my hon. Friend the Member for Govan (Mr. Rankin) will deal more fully with it—to the second new Clause standing in our name. That has the more limited but very desirable object of assisting these small cinema exhibitors who are in peculiar difficulties at the present moment. Once again, I admit frankly that the Clause as drafted is perhaps not an easy one to defend, but the Financial Secretary will fully appreciate that it is virtually impossible to put down on the Order Paper a Clause which is both in order and workable. That is largely owing to the way in which the Money Resolution has been drawn, and also to the persistence of what has become, we believe, a fiction, that Entertainment Duty is paid by the person buying the ticket and not by the proprietor of the cinema.

My own personal belief is that it would be very much better if this tax were levied on gross takings. That still would not alter the fact that it was levied on gross takings and not on profits, but it would be very much simpler, if the industry would bring itself to urge that the tax should be levied on gross takings rather than on individual admissions, because then at least one could do something more practical in the way of rebates, different rates of tax and so on. if one wished to help a particular section of the industry. At the moment, it is very difficult to do so.

I recognise that in a later new Clause another method is suggested of trying to extend the rural areas provisions, as they are called, but, of course, they too have led to some most peculiar anomalies in the past. One could possibly try to do it by taking cinemas which seat five hundred or fewer, or four hundred or fewer —whatever figure might be chosen—wherever they happened to be situated and regardless of the particular area. There are various ways in which this might be dealt with, and if the Financial Secretary brought forward some scheme which the Treasury thought workable, I am sure that as long as that scheme fulfilled the main purpose we would have no objection to it.

Whatever method is chosen, the fact remains that, with rising costs and lower attendances, a large number of these smaller cinemas will be obliged to close in the fairly near future unless some measure of relief is given to them. To abolish the tax altogether on admissions to cinemas of five hundred seats or under would cost, calculated on recent figures, not more than £1¼ million, but there would then be the problem of the very big jump in the next category of cinemas. I am assured by those concerned that, with their present takings, they simply cannot keep their premises in decent repair or meet the cost of renewals of carpets, seating and so forth.

I have a number of letters on this subject, but I will read only one or two sentences from one of them. This is from an outraged cinema proprietor in a small town in the West Country. He says: During the last three years, I have carried on hoping that business would improve and that tax exemption would be granted by the Chancellor of the Exchequer to all small cinemas. I have had no pay for all my trouble and expense during these three years, although I have some £1,000's sunk in this cinema. How would you like to work for nothing and have no interest on your capital and be unable to sell out at any reasonable price? 5.30 p.m.

I have another correspondent who sends me chapter and verse for the first quarter of this year. He points out that, with a cinema seating 550 people, he has had to pay in Entertainments Duty £559 over the quarter, although he has made a loss of £420 after paying that Duty, and has been able to draw a total of only £11 a week as wages for both himself and his wife who works with him in the cinema. I have a number of other letters, Sir Rhys, but I will not weary the Committee with them now.

It is incontrovertible that these smaller cinemas are threatened with closure. There were 53 which closed last year, and an article on cinema statistics in the Board of Trade Journal points out that a higher proportion of the net closures than in 1954 was of cinemas seating fewer than 500 persons. We believe that is only the beginning of what may have to be a very large-scale closure, unless something is done.

It may be argued, against what I have been saying, that if these cinemas are in such difficulties they should put up prices. As we all know, a decision has been reached by the circuits—it is open to the individual cinema to do what it likes about it—to put up the prices of a numbber of seats. But, of course, under the present tax structure, if the prices in a cinema are put up, it is not the proprietor who benefits primarily but the Chancellor of the Exchequer. We all know that, particularly as regards the cheaper seats, which are the ones having a preponderance in the smaller cinemas, the Chancellor gets a completely disproportionate amount from any increase. The recent increase from 1s. to 1s. 6d. makes this clear. Fourpense of that increase goes to the Chancellor, a ¼d. goes to the Eady levy, and only 1¾. goes to the proprietor who is trying to meet his costs but is unable to do so for the reasons I have given. That is, of course, another argument for reconsidering the basis of the present system of taxation. In the meantime, it is perfectly clear that, even with this increase in the price of seats, it is unlikely that cinemas will be able to meet their commitments.

I have endeavoured to find out what the estimates are of what the returns from this proposed increase will be, and, frankly, I have been unable to obtain any firm figure, although I have been to the very highest quarters for information. One reason is that, even in the circuits it has not been decided that this increase shall take place in every cinema. The advice I have been given is that those concerned hope that the increase now agreed upon, which is to take place, will at least balance the expected decline in attendances. In other words, they put it very little higher than that; they say that while they think the increased price will keep their gross takings in balance, they do not expect any positive increase from the increased prices, because they fear that the decline in attendances, which is already apparent, will continue. We cannot, therefore, turn to that expedient as a remedy for the very serious ills which affect this industry at the present time.

I would conclude by pointing out that the British cinema industry has, as its main competitor, the cinema industry of the United States of America. In the United States, the industry has, in terms of box office values, 60 per cent. of the world market within its own country. In similar terms, we have about 15 per cent. In the United States, the tax has been reduced since the advent of television. The result is that in the United States the industry has to bear a tax of roughly 10 per cent., compared with roughly 33 per cent. in this country.

We on this side of the Committee believe that the burden which the cinema industry is being asked to carry in present circumstances is out of proportion to the real facts of the case, and we ask, therefore, that some immediate indication of relief should be given.

Mr. Robert Mathew (Honiton)

I shall confine my remarks to the proposal contained in the new Clause standing in my name and the names of several of my hon. Friends to amend Section 17 of the Finance Act, 1948. I wish to draw attention to a small, but important, section of the cinema industry which is suffering particular hardship at the present time, namely, the small country cinema with less than 400 seats, situated in a small country town serving primarily a rural community and which is surrounded by a landward farm area from which people come to the small town for their entertainment.

Might I remind the Committee that Parliament granted exemption from Entertainments Duty to some, but only to some, of this type of cinema under Section 17 of the Finance Act, 1948. There is in that Act a formula arrived at which provides that to claim exemption a cinema must not have more than 400 seats and must be in a local government area with an average population of not more than one to the acre, that is to say, 640 to the square mile. This formula has not worked out as it should, and half of this class of cinema still lies outside the exemption. I ask my right hon. Friend to bring all small cinemas into this category for which the exemption in the 1948 Finance Act was designed.

What has happened is that the accident of size of population in urban districts has meant that a large number of these smaller cinemas in tightly packed small towns—usually old towns, with narrow streets and small houses, with a high population on that account—still pay tax, whereas in certain other, very often urban, districts which for some historical reason have included a great deal of sparsely populated landward farm area having a low average population per square mile, small cinemas escape Entertainments Duty altogether.

I know that this subject has been raised in this Committee year after year. Nevertheless, I say to my right hon. Friend that it is now of the utmost urgency, since the problem is solving itself over the years and now even month by month by bankruptcy and the extinction of the cinemas themselves. It is not merely a matter of the extinction of a modest family business, but also the extinction of a rural amenity. In practice, it has been found that when one of these cinemas goes out of business, falls by the wayside, it is not replaced by one of the big combines or a bigger cinema business coming in. The scope of business in most of these areas is so slender as not to attract the combines or big cinema circuits; it is something which can only be met by a family or a small modest business and by no other form of organisation.

A great deal is said by hon. Members from time to time about the drift from the land. One of the major factors in that drift is the lack of modern amenities, including entertainment. When small cinema of this kind goes out of business the people living nearby, who wish to have some entertainment after their working hours, have to go by car or bus to the nearest big town, which may be 15 miles away, instead of being able to go perhaps only three or four miles to their nearest smallest country town.

I am told that when exemption was first granted there were about 600 cinemas in this category, of which about 300 obtained exemption. I doubt whether half the 300 which failed to obtain exemption are still in existence. The others have all fallen by the wayside. I know that others are waiting to know what will happen as a result of this Bill before deciding whether or not to close, and still others are being carried on in circumstances of the greatest difficulty. As I have said, they are mostly family businesses, and I know a number of cases where they have been carried on by husband and wife, but where one of the partners has now had to take outside employment to supplement the family income, thus increasing the difficulties of running the cinema.

I have seen a number of figures concerning cinema proprietors in my own and other areas, which show that, on the average, between 31 and 34 per cent. of the takings goes to the Chancellor. I have heard it suggested that this problem is a purely local one, confined mostly to two areas—the west of England and the south-west of Scotland. It is true that the problem occurs in acute form in the west of England. It exists in my own constituency of Honiton to a marked degree. The areas of Exmouth, Topsham and Budleigh Salterton are not exempt because they are tightly packed, whereas Sidmouth is exempt because, for certain historical reasons, it happens to have included within its administrative area a former rural district. This particular case, I believe, is known in the cinema world as "the classic anomaly."

During the last fortnight I have received letters from the Midlands, Lancashire and rural Wales, and even two from Scotland, supporting my Clause. I ask my right hon. Friend to reconsider the problem again before the Bill reaches the Report stage. Next year it may be too late.

The concession to these small rural cinemas cannot amount to very much in terms of revenue, and it cannot be beyond the wit of man to devise a form of words which would not be so comprehensive as to include cinemas for which the benefit was not intended. The whole problem is on a small scale. I suggest that the formula contained in my Clause is worthy of consideration in that it leaves the ceiling at 400 seats and increases the population formula from one to the acre to four to the acre. I am told by the experts in the cinema industry that this would include between 150 and 200 cinemas which are now suffering through what amounts to an injustice. Although this is a small matter in terms of revenue, I suggest that hon. Members have a duty to these modest family businesses which are rapidly becoming bankrupt, and also to the rural communities which they serve.

5.45 p.m.

Mr. Rankin

I want to speak particularly to the proposed new Clause dealing with the weekly takings at small cinemas. On 10th February I had the privilege of introducing a Motion which provided a debate upon the state of the industry. I think it is fair to say that on that occasion hon. Members on both sides of the House were seized of the immediate gravity of the situation which we are presenting tonight.

Upon that occasion the Parliamentary Secretary to the Board of Trade intimated that he would see that the views expressed were borne to the Chancellor of the Exchequer. The right hon. Gentleman has therefore had ample time in which to make himself familiar with what has been already said, and we hope that the additional arguments put forward tonight will result in a concession of some kind being made before the debate terminates. He has already displayed a tendency towards giving and the House always "loveth a cheerful giver." We hope that when he considers the arguments he will continue the attitude which he displayed on the previous proposed new Clause.

I am told that the Clause to which I am speaking is in order but is not workable. Prior to framing the one which is now on the Order Paper, we had prepared one dealing with remission from the point of view of a rebate. That Clause was not in order, but we were told that it was workable. I do not want the Chancellor to fall between two stools, and I therefore suggest that he should not seek an escape on the ground that the Clause to which I am speaking, while in order, is not workable. He should try to examine carefully the serious plight of the small cinema. If he believes that a case is made out for it he can take the appropriate steps to meet that case on Report.

Some of the evidence has been presented by my hon. Friend the Member for Flint, East (Mrs. White) and also by the hon. Member for Honiton (Mr. Mathew). Within the last few months, we have been told with authority that in the south and east of Lancashire no fewer than 15 small cinemas have closed down; since Boxing Day, 1955, no fewer than 57 cinemas in various parts of the United Kingdom have also closed, while 15 closures have occurred since the Chancellor intimated in his Budget that he could see then—although, we hope, not now—no chance of doing anything either for the small cinemas or for cinemas in general. Such closures continue and will go on. I have been informed within the last few days that one of the oldest cinemas in Nottingham, the Boulevard, is closing down because, in the words of the proprietor, the Chancellor has taxed it out of existence.

The strange thing, which I hope is present in the Chancellor's mind when, by his policy, he causes cinemas to close, is that he is losing income by such action. In this year, because of the closing of cinemas, he has already lost some £100,000 in tax. We have, then, the evidence that the cinemas are closing down simply because they are unable to continue in operation under the weight of Entertainments Duty.

Sir Michael Balcon, one of our greatest film authorities, writing in the Financial Times of 8th June last year, said: Only a very large reduction in the rate of entertainments tax, enabling a much larger proportion of box office receipts than at present to be paid as film rentals, will enable British film makers to continue in production. The continuance of the production of films depends directly on the amount that is levied by way of tax on box office receipts. Many of us may deplore that way of keeping the film industry going, but it is the way which exists, and if we are to help the production of British films under the existing system, the only way of doing it now, in the view of Sit Michael Balcon, is to reduce the Entertainments Duty. The Chancellor, it is clear, is steadily killing the geese which have been laying the golden eggs.

I want to quote one or two letters in support of the case that is being advanced. The first letter comes from my own city of Glasgow, and I quote it because it is from a gentleman who is well respected in the city of Glasgow and who bears an honoured name in the cinema world, and I quote it also because it is the first time he has ever written to me about the position of the industry as it affects him particularly. This letter is from Mr. George Singleton who, as he tells me, with his brother runs eight cinemas in Glasgow. One of them is particularly well known because it seeks to provide programmes of a different type from the average cinema programmes. He writes: We do not want our cinemas to get into a state of disrepair, nor do we want to sell out to the circuits; we want to carry on doing what we sincerely believe to be a job of some social importance, i.e., providing cheap entertainment to thousands of working people every week. But we cannot continue as at present. My hon. Friend the Member for Flint, East said cinema owners might raise prices. Mr. Singleton comments: We, too, should like to do this, but our problem is Entertainments Tax. Our basic admission price is 1s. Of we raise this by 6d. (50 per cent.) we will only benefit by 1¾. The incidence of tax and the levy takes 4¼d. I take a letter which I have received from Mr. W. J. King. I have never met the gentleman, and I do not know him. Many hon. Members, I assume, have had similar letters from this gentleman. I quote this one because he is dealing with his own cinema, the Ritz at Potters Bar. He points out: It was reopened on Boxing Day, 1954, and notwithstanding the improved conditions it runs at a loss. During the year ending Boxing Day, 1955, more than £8,000 was paid in Entertainment Tax. No rent has been paid and no interest on capital charged, and obviously this cinema will have to close unless some relief is afforded. Obviously something has to be done. The case that we are presenting to the Chancellor has now been substantiated by the trade unions. I have here a pamphlet, a joint statement, from all the unions connected with the industry, with both the productive and exhibiting sides, in which they state: The Government has lamentably failed to respond to the approaches from the industry to lessen the grossly unfair burden of the entertainment tax on the cinema industry. I think the case is well made out by those who are interested in the industry. With whatever aspect of it they are connected, they are unanimous in the view that something has got to be done; and what has got to be done is to reduce Entertainments Duty.

We may well ask what is done in other countries. is the cinema industry, assisted there? In America it is helped by way of a tax which is three times less than what is paid in Great Britain. In America the tax is 10 per cent. as compared with the tax of 33 per cent. in our own country. America helps the industry.

In Italy there is at the moment a Bill before the Italian Chamber of Deputies. I have a copy of it here sent me by Signor Nicolo de Pirro. [HON. MEMBERS: "In Italian?"] I have a translation of the Bill. I do not want to deal with the production side, but I may briefly point out that the Italians are by this Bill, presently before their Parliament, seeking to aid the production side, to improve the qualitative aspect of films, to help the production of films for youth, and so on.

6.0 p.m.

I am not suggesting in any way that we are not trying to do the same thing. But we are not trying to do it with sufficient intensity, and that is what we on this side of the Committee are urging on the Government today. Italy has created under its Bill a 500 million lire production fund, and from that fund the small exhibitor is, able to help himself for the installation of equipment, improvements and furnishings. The Italian Parliament believes that the Bill will benefit the 2,000 small exhibitors in Italy who, like the small exhibitors in this country, find it very difficult to carry on. There are similar examples in other countries.

The Chancellor may say that, whilst he is anxious to emulate those examples, they run counter to his Budget policy. I suggest that he can help the small exhibitor, in particular, without any loss whatsoever to the Treasury. The big circuits are increasing their prices. If all cinemas in Great Britain follow that example, it will mean £13,830,000 of additional public expenditure. I do not know whether the Chancellor wants to see that taking place or not. If it is his action that is causing this increase in the price of admission to the cinemas and therefore causing the spending of more money, that decision runs counter to the policy which he is seeking to bring into effect.

Out of the £13 million additional expenditure, which will take place if all cinemas put up their prices, the Chancellor will receive £7,750,000, and to the industry will go £6 million. But of the £13 million additional money which will be spent, £64 million will be spent by those who patronise the new ls. 6d. seats and £3,170,000 will be spent by those who go to the new l s. 10d. seats. Therefore, it can be said with accuracy that over £9 million will come from the pockets of the working class. Does the Chancellor want to penalise the workers in particular? It seems like it if he does not do something about this matter.

As we have indicated, however, it is most unlikely that the small cinemas can afford to put up their prices. Therefore, if we assume that only the big circuits will increase their prices, as some have already done, the Chancellor will receive between £3 million and £4 million as a result of that action by the big circuits. They are providing the money with which the right hon. Gentleman can help the small cinemas if he wishes to do so.

I know that the right hon. Gentleman likes to play the part of Robin Hood sometimes, by taking something from somebody to give to somebody else. He is not required to take in this case. He is being given £3 million to £4 million, and I ask him to take £11-, million of that money and use it to help the small cinemas. Nothing will be required from the Treasury at all. At the end of the transaction the right hon. Gentleman will be at least Eli million to the good in a full year. In the remainder of this year it will be proportionately less.

I beg the right hon. Gentleman not to reject the new Clause of which I am speaking. There may be difficulties about the one which was so ably moved by my hon. Friend the Member for Flint, East, and it might possibly require him to yield something from the Treasury. but in the case of this Clause, dealing with small cinemas, he need not part even with a smile. The right hon. Gentleman appears to be sleeping and is not listening to what I am saying, and therefore I repeat that he need not part with anything at all. It is being given to him by the action of the big circuits, and I ask him to use the £3 million to £4 million which he will receive to help the small cinemas to carry on.

I plead with the right hon. Gentleman, therefore, to accept the case in principle and not to argue that, technically, the Clause is not workable. I ask him to allow his generous heart to have sway.[HON. MEMBERS: "Oh."] I have no doubt that, properly approached, the right hon. Gentleman has one. I am seeking the proper method of approach. I ask him to give away part of the money which is coming to him from the big cinemas and not to ride off on the escape route that the Clause, as framed, is not workable, but to put it in working order on Report. in which case, on both sides, we shall rise up to call him blessed.

Captain J. A. L. Duncan (South Angus)

I should like to add to the pleas which have already been made for some alleviation of tax on small cinemas. Year after year I have sent to the Chancellor of the Exchequer the audited accounts of small cinema concerns in my constituency, which show that they are not making a profit, nor are able to furnish their cinemas in the way in which they should be furnished. I have visited some of these cinemas and have seen the seating, lighting and other things, dingy, dark, shabby and worn-out. Money is not coming from the box office to keep the cinemas up-to-date.

The cinemas in my area contribute towards the amusement and entertainment not only of the local population, but of the holiday population. We do our best to encourage not only the English but many other nationalities from all parts of the world to see the beauties of our countryside. The cinema, as part of an entertainment in a local town, is all part of its tourist attractions. These small cinemas cannot make ends meet if they are shabby. Either they will have to close, as many of them are about to do, or they will not be a credit to the locality.

If these cinemas can keep open, it is only because they are making additional income by sales of ice cream and chocolates. If it were not so generally known that cinemas are in a bad way financially, the local confectioners and ice cream merchants would be up in arms at the cinemas selling their goods, but, because they know the position, they are bearing with it.

There is a further difficulty which the small cinemas are facing. Following the development of Cinemascope, the film producers are making more and more films for Cinemascope only. To convert the ordinary screen involves not only a new screen but a new set of lenses, the average cost of which is possibly £2,000.

Mr. Rankin


Captain Duncan

It may be more. I have put the figure low, but even that is a large sum for a small company or individual to put up, and there is not that surplus available with which to modernise these cinemas

That is having another effect, namely. that as the new films are not being produced to the size of the old screen, these cinema owners are getting more and more restricted in the films they can exhibit. The result is a lessening of the attraction of the programme, because they have to take old films which have been re-screened and which everybody has seen before. If these cinema exhibitors are to be helped to modernise their premises, they must have enough money available with which to put in the Cinemascope screen, lenses and cameras.

There is a further point of difficulty for the small cinemas. The key man in the cinema is the projectionist. I am not an expert on wages, but I am told that the wages of these skilled workers are deplorably low. I believe that rates are agreed by negotiation between masters and men in the normal way. However, both sides recognise that there is not sufficient money available in the industry, particularly in the case of the smaller cinemas. to pay the proper wage for the job. At Christmas it was a little more than £7 a week, but I believe that this has been raised slightly since then. So, even by agreement in the industry, it is not possible to pay the type of wage to a skilled chief projectionist which all of us would like him to receive.

For all those reasons, I make my plea in support of some action being taken now to help the small cinema. Whether the method should be that proposed by my hon. Friend the Member for Honiton (Mr. Mathew), or whether it should be the method proposed by the hon. Lady the Member for Flint, East (Mrs. White), I do not mind. Personally, I think that the best way would be to reduce the tax generally for the small cinema owners rather than to give some exemption to a small section, which my hon. Friend admitted involved only a couple of hundred cinemas.

6.15 p.m.

A few months ago I submitted a scheme of my own to the Chancellor of the Exchequer. My hon. and gallant Friend the Member for Roxburgh, Selkirk and Peebles (Commander Donaldson) mentioned it in outline in the debate which was initiated on 10th February last and which has been referred to this afternoon. Apparently, my scheme was not wholly satisfactory and it would not have been in order to put it on the Notice Paper. My object was to reduce tax on the small cinemas at the expense of the bigger ones which, from all reports, are not doing too badly.

If we could abolish the tax on, say, the first £100 of weekly takings and reduce it progressively up to, say, £450 of the weekly box office takings, that would help the small cinemas. I do not regard that as the only solution, but it was an attempt on my part to help the small cinemas, even if the big ones had to pay a little more.

The Chancellor does not seem to be forthcoming on this subject in the present Budget. The advantage of my scheme was that it would not cost him anything. The hon. Member for Govan (Mr. Rankin) has given the Committee information on the raising of prices which shows that the Chancellor not only will not be losing anything, but will be gaining something by the rise in the price of seats. I hope, therefore, that my right hon. Friend will reconsider his decision to do nothing for the cinema in view of the recent developments which show that he will be increasing his revenue, rather than losing any.

If my right hon. Friend cannot accept a scheme such as I put up to him, or one of the other suggestions, I hope he will bear the matter closely in mind and do something next year. [HON. MEMBERS: "Too late."] As my hon. Friend the Member for Honiton has said, this matter is serious. Many cinemas have closed, and others are threatening to do so. In those circumstances the revenue will go down, and my right hon. Friend will lose money if he does not do something quickly. It seems to me that in the interests of the general entertainment of the country, and of the small country districts in particular, my right hon. Friend ought to do something for the cinema in this Bill.

Mr. M. Philips Price (Gloucestershire, West)

I want to add my word for the small cinemas, of which there are a number in that part of my constituency which contains mining villages. They are a great advantage to the mining population who want a little recreation and relief, and for whom it is not always easy and convenient to take long bus rides of half an hour or three-quarters of an hour to the large towns. Cinemas, therefore, are a great amenity, and it is desirable in more ways than one that they should be kept open.

At present, there is tax exemption on the basis of population per square mile. I do not know how this works out as regards population per acre, but a small cinema owner in my constituency has written to me pleading, on the assumption that tax is not applied to a population of less than one person per acre, that it should be raised to 11 persons per acre. I have not worked out the figure, but it seems to be along the lines of the third new Clause we are discussing, which asks for the figure to be raised from 640 to the square mile to 2,560—[An HON. MEMBER:" Four] Is that four persons to the acre? [HON. MEMBERS: "Yes."] I see. Anyway, it is desirable that it should be raised by at least 50 per cent. to cover the small areas of low population where overhead costs are relatively great, the turnover not being equal to that in the more concentrated areas where. naturally, the overheads are less.

In view of the special amenities involved, taxation policy should take into consideration the areas where the overhead costs of running small cinemas are greater. These days the cinema has many competitors, including television, but in the areas about which I am speaking there is a section of population which cannot afford television sets—not yet, anyway. If the cinemas go, the people in these lower income groups will have nowhere to go.

Consequently, I would plead very strongly that the Chancellor should consider this proposal. By making a concession of this kind, he will not open the floodgates of expenditure and thereby increase inflation. He may lose a little money, but I do not think it will be very much.

Mr. Rankin

My hon. Friend must have missed the point made a little earlier, that, as the large circuits are putting up their prices, the Chancellor will not lose any money. If he gives this concession, he will actually gain money.

Mr. Price

I am very glad to hear that correction by my hon. Friend. It strengthens the point that I am making, that the Chancellor has nothing to lose by making a concession. Consequently, I hope that the Chancellor will consider this proposal.

Mr. Geoffrey Hirst (Shipley)

I am very grateful to the hon. Lady the Member for Flint, East (Mrs. White) and her hon. Friends for paving the way for a discussion on the important subject of Entertainments Duty, on which we spent some time on 10th February.

In the course of her remarks, the hon. Lady referred to the increase in prices announced by the circuits. Although we may regret it from the point of view of tact—I am not sure that it is the height of tact—it shows the abject folly of the present cinema entertainments tax, if it was not already clear to everybody. The hon. Lady and the hon. Member for Govan (Mr. Rankin) have shown how absurd it is in their example of the ls. 6d. seat. The Is. price goes up 50 per cent for a modest little seat, but only an extra lid. remains in the hands of the exhibitor.

There is some force in the argument advanced from both sides of the Committee that, the circuits having taken this action—they had to take it, because they do not feel much faith in what may be coming to them—and there being a possibility that other cinemas will have to follow their lead—I do not see how they can avoid following the lead given by the circuits—the tendency will be distinctly more inflationary than the modest concession which is proposed.

I know that a good deal of the increase goes in what I term "Exchequer grab", but the fact remains from the figures quoted, with which I concur, that £5 million to £6 million is left to the exhibitor and the rest goes in tax. These figures will definitely mean that more money has to be found by the public, and it will have an inflationary effect.

Mr. Rankin

The hon. Gentleman says that £5 million to £6 million will go to the exhibitor. When I quoted those figures I did not want to go too far into them. However, off that amount comes the Eady fund contribution, plus the 35 per cent. rental hire, which comes to nearly £2 million.

Mr. Hirst

Yes, I appreciate that. I was referring to gross figures.

In mentioning the concession, I refer to the Schedule. I must acknowledge that, however desirable it may be, it is not possible for my right hon. Friend even to consider the wider scheme put up by the industry. I am glad that box office figures are mentioned. The fact remains that total attendances have fallen from the highlights of 1946 by 400 million a year. Even if one takes a more normal year, 1953, they have fallen by 115 million. Those who do not follow as intimately as some of us do the film industry's statistics should not imagine from these depressing figures that the industry is not important and is not worth helping. In spite of the falls, the present figure is about 1,200 million attendances per annum. Therefore, this is a matter of great consequence to the country. The fall in attendance affects not only exhibitors, but my right hon. Friend's pocket and the British Film Production Fund.

The tax is of a punitive character. It is not right that this state of affairs should be continued in the knowledge of the increased competition which the industry undeniably has to face. It cannot be lost upon the Committee that, while attendances have fallen, costs of every character have gone up, several hundred per cent. in numerous cases, a far greater increase than the increases in price by the exhibitors. My hon. and gallant Friend the Member for South Angus (Captain Duncan) rightly referred to the cost of new techniques.

I recognise the difficulties about doing something at this stage, but it is shameful that the industry should have been so punitively taxed over the years. All Governments are to blame. None can escape the censure that those who are interested pass upon them for this state of affairs. The position has been reached that about 10 per cent. of the cinemas are on the verge of bankruptcy, and many more have remained open only by putting off renovation and repairs or because, in small towns, they are ancillary to other businesses, and are run in the hope that one day the situation will be different.

I hope that my right hon. Friend, unlike his colleague at the Board of Trade, will not trot out the absurd statistics that we have so often had about the precise number of closures which have taken place. My investigation tells me that that is not a measure of the case by any means. A large number of people, being prevented from doing renovations and repairs, have hung on, in many cases running the cinemas ancillary to other businesses, managing to keep in being, hoping not only that they will help British film production hut that one day some Government will help them out of their jam. The fact that that is so and that the numbers of closures have not been any greater is to their credit. The figures of closures should not be quoted as a reason for the smallness of the problem.

I want to give the example of a smallish cinema seating about 600 people. The takings for 13 weeks were just under £2,000, which represents a gross £153 per week. Of that, tax took £43. That left a net £110. Costs, including film hire, wages and all the overheads, came to £157 per week. This meant a net loss of £46. The loss was reduced to the extent of £14 by a profit on ice cream and sweets. This is a true case. I have been given the audited figures. To quote the letter giving me this information: In other words, in order to supply the Exchequer with £43 per week in entertainments tax. our business has had to be run at a net loss of £32 a week. That case, in my judgment, puts the position fairly clearly.

6.30 p.m.

I always argue, and I will argue again now, that it is absolutely essential that, if we are to have a healthy film industry, it should have a sound home base. That is not peculiar to this industry; it is the subject-matter of all industries. If the industry is to spread and bring in dollars from increased exports, it must have a firm base to develop here at home. I think that if we are to see the cinemas lose hope—and they will do so very soon unless something is done—we shall have a reduction of exhibition points in this country which will result in less capacity for British films to finance themselves to a very large extent upon the home market, which is their principal and great difficulty.

Now I come to the British Film Production Fund. I am very glad that the hon. Lady the Member for Flint, East drew attention to the very close link between the Entertainments Duty question and this fund, because the position is serious. The film industry must know in advance what is going to happen, because the present voluntary scheme comes to an end in 1957. There is no doubt that, after allowing for a little bit of threats and pressure and discounting that —let us be quite fair—it is the absolute fact that many exhibitors will not legitimately have the right to volunteer to go into the scheme unless they are assured that the industry will be healthy and taxed less.

We know only too well the difficulties of film production and exhibition in this country as compared with the United States. The tax here is 32–6 per cent. of the gross takings, or as the Americans put it 50 per cent., and against that or on the earlier basis in America there is a 10 per cent. tax. I gave an instance in the debate on the film industry on 10th February, and I will give it again now, because there were not so many hon. Members present on that occasion. If we take a major British film drawing £600,000 in Great Britain, it will pay about £120,000 in Entertainments Duty, whereas in America the same film pays £60,000.

That is an enormous difference of £60,000, and when it is sometimes said that British films do not do as well as they should do in the United States, no one who has studied the matter has very far to look for one of the substantial reasons. Of course, it is a case of propaganda and advertising to some extent, when we compare how they advertise over there with what we can do, but they can afford to do it.

If the industry is bled white at the source, how can it hope to expand and have money to spend in other countries to the great benefit, not only of dollar earnings, but, by being in a healthy state, in producing the films that are wanted here, thereby saving dollars to this country? I think that that is sufficient for me to say on that matter.

In conclusion, I applaud and want to pay my tribute to the work of the All Industry Tax Committee of the Film Industry. I think it has made out a first-class case, and that that case for massive reductions in the Entertainments Duty is absolutely sound, but that it is impossible for economic reasons at the present time. The industry has a first-class case, the sort of case which, if conceded, will put this industry on its feet, and stop all the talk about subsidies and all the rest, much of which talk is idle, anyway.

It is the fact that that case, if granted, will substantially reduce the Entertainments Duty. It will reduce it approximately from 32–6 per cent. to about 12–1 per cent., combined with a modest but quite useful increase in the production levy. I support that case, though I feel that it is impossible to concede it now, and I do not press it in any degree whatever, but I would ask my right hon Friend to take account the case of the small cinemas which has been so adequately and sympathetically made out from both sides of the Committee today. because they really are in a serious plight.

Some of us have had a look at them, and have been investigating their position and examining the figures, as I have done so, for one. This is not a case of propaganda or of sentiment, but of a genuine piece of hardship and of injury to the whole film industry. If we lose these points of exhibition, they will not come back, because nobody will be prepared to do that. They will say "I have had my lesson; I am not going to have another go."

It just happens that there is perhaps a lack of faith, which was demonstrated in the winding-up speech in the debate on 10th February, and I was not very much cheered by it myself. That speech and also the various comments made since have made it quite clear up to date that there is not much hope of the Chancellor of the Exchequer moving favourably in this matter, and the circuits have anticipated it to a certain degree. Because of this situation, there is still a genuine opportunity of helping the smaller exhibitor in particular,

It may not be the most popular decision, for the simple reason that the circuits will not get very much out of it, but we ought not to consider the profits of one section of the industry against the others in this matter. We have to think of trying to ensure that the film industry gets a fair deal. That fair deal can be given it, and I trust that it will.

Mr. E C. Redhead (Walthamstow, West)

I make only a brief intrusion into this discussion in order to embellish what has already been put forward as a very strong case on behalf of both the cinema industry generally and particularly the small cinemas. I share the hopes which have been expressed today that, on the Report stage, at any rate, the Chancellor will find it possible to give effect to the purpose of these new Clauses.

I fully admit that, as regards the small cinemas, the second of the new Clauses presents obvious administrative difficulties, which its supporters themselves have acknowledged. The third new Clause would in itself do something to give relief in that direction, but one has to point out that it would still be productive of anomalies. While expressing the very earnest hope that the Chancellor will be able to give effect to the purpose of this new Clause, because I believe that his advisers, with all their ingenuity, will find it possible to devise ways of meeting that purpose, I ask that the Chancellor should direct his attention to what I believe is the fundamental cause of the disquiet about this duty on the part of the cinema industry.

The blunt fact is that this duty, introduced 40 years ago, has now been so nibbled away by a whole succession of complex concessions, exemptions and various scales that it has now produced a situation which leaves the cinema industry making a contribution of about £35 million out of the total revenue of £41 million from this important duty. Therefore, if the Chancellor can meet the demands made in the discussion today, I do not suppose that he will delude himself into thinking that all his troubles are at an end.

I suggest most earnestly, and as a requisite approach to a fundamental review of the whole of this duty, that he should look at the whole basis of it in relation to what was introduced 40 years ago, which was a relatively simple duty, but which has now become an administratively cumbersome piece of machinery which is out of all proportion even to the total revenue that is derived from it. We have now not only three scales of duties, the highest of which falls on the cinema industry, but eleven statutory headings of possible exemptions and one repayment provision, hardly any of which can be brought to aid the cinema industry, with the possible exception of one relating to indoor entertainments in rural districts.

The whole business is bound to be one in which, so long as it is treated piecemeal, will meet, as it has met over the last few years, continual pressure from first one interest and then the other upon the Chancellor until what is produced is a thoroughly inequitable result. I urge the right hon. Gentleman, in approaching these matters, either in relation to this or to the long-term view, to bring into review the whole of the duty, and to produce something which would be more equitable and administratively more simple in ordinary practice.

My sympathy is extended not only to those who have brought forward this new Clause, but to those who have had to grapple with this duty in all its complexities. At another time I might have had to declare my interest, but, that no longer being so, I can say that, having struggled with this duty in administration for five years, my sympathy is equally extended to those who try to manage it today. I hope that the Chancellor will look at this problem fundamentally to see whether he cannot find an entirely new basis, one which is workable, administratively simple and efficient and, at the same time, equitable to all concerned.

Commander J. W. Maitland (Horn-castle)

I want to add my plea to that put forward by my hon. and gallant Friend the Member for South Angus (Captain Duncan) in support of the small cinema. Every year, like my hon. and gallant Friend, I write to the Chancellor and put the figures before him, but no answer is forthcoming. This is the most inequitable thing which I have never been able to get put right. I want to draw attention particularly to the formula through which small cinemas get some benefit, and which was mentioned by my hon. Friend the Member for Honiton (Mr. Mathew).

To give one example of the sort of anomaly which exists, if the boundary of a very small urban district is drawn close and tight, then a cinema in that district, however small it may be, may get no benefit. Next door, there may be—and there is in my constituency—a large, flourishing and go-ahead seaside resort which is still an urban district, but whose territorial boundaries are widely drawn, so that it is just able to keep the benefits for its cinemas. That is obviously and demonstrably not fair. It was not for that that the formula was designed.

As my right hon. Friend must know from having examined the figures, some small cinemas are really on the verge of closing. If they do close, it will be very difficult to get them going again. We shall get through our troubles and a good time will come, but when that good time comes I do not want to see cinemas in the small country towns in my constituency closed because my right hon. Friend could not understand. They are cinemas serving a large, hard-working, rural population.

Mr. A. E. Hunter (Feltham)

I rise to support the new Clause standing in the name of my right hon. Friend the Member for Huyton (Mr. H. Wilson) and my hon. Friends and myself. Everyone will agree that not all cinemas are in Leicester Square and not all cinema owners have large offices in Wardour Street. Many small owners are facing a very trying time today. Some of the large and powerful circuits have grown from small beginnings. Some are backed by American finance and by American film companies and are in a very strong position from the very fact that they often have the first releases of films, have central buying agencies, have the technicians and the new ideas such as CinemaScope and Cinerama and the other inventions which have come along in the last two or three years. These can well look after themselves, for some are of an international character.

However, owners of small individual cinemas in small towns, often in mining areas or agricultural and urban districts, sometimes even on the outskirts of London, or some of the new towns now springing up in the Home Countries, are facing a very severe time. During the last 40 years or so, the cinema has become an established part of the British way of life. I can remember—no doubt other hon. Members have similar memories—that as a small boy I used to go to Saturday matinees when ld. was charged for admission. I see that my hon. Friend the Member for Tottenham (Sir F. Messer) is nodding in agreement.

6.45 p.m.

Sir Frederick Messer (Tottenham)

That was all I could afford.

Mr. Hunter

In those early days, there was generally a piano being played and there were generally films about cowboys and Indians. We have moved very far from those days, but some small cinemas, although not showing "Redskins" and cowboys today, are still showing films and providing a useful service in entertainment in districts where the population is not large.

The Entertainments Duty was introduced during the First World War and it was suggested by the Chancellor of the day and the then Financial Secretary that it was a war emergency measure, and that it would be abolished as soon as possible. We have gone through the Second World War, another 11 years have passed, yet Entertainments Duty is still with us. I. do not want to weary the Committee with figures, but attendance figures have dropped alarmingly in the past few years. The peak figure for attendance was in 1946, since when there has been a very marked decline, reaching its lowest level in 1955. The Chancellor should make a concession to help small cinemas, for many have closed down in the last 12 months.

Last February we had a debate on the film industry which was initiated by my hon. Friend the Member for Govan (Mr. Rankin). From all parts of the House sympathy with the small cinema owner was expressed. In small country towns with populations of 8,000 to 10,000 one often finds that a cinema owner is a kind of working manager, often with only one assistant. One hon. Member has referred to the selling of chocolates, sweets and ice cream, but some cinemas are so small that they cannot afford the overhead charges involved in employing staff to sell sweets and chocolates which the large circuits admit to be one of the main sources of their profit.

It is for small cinemas especially that we are making this plea to the Chancellor. Small cinemas lack the capital which they often need for re-seating, new carpets and other things. It is not technically possible to introduce Cinema-Scope, because the cinemas would have to be substantially enlarged. Some owners of small cinemas are operating at a loss hoping to keep the cinema as a going concern. Others, even as owners, draw a wage of not much more than £10 to f12 a week. A reduction in Entertainments Duty will help small cinemas which are still a feature of the community life in British towns and village.

Mr. John Baldock (Harborough)

Like other hon. Members, I have had the opportunity of looking into the figures and accounts of some of the smaller cinemas. There is no doubt whatever that anyone examining them from an unprejudiced viewpoint must be firmly impressed with the extreme difficulties from which they are suffering. Those which have already gone out of business are the most eloquent proof of the pressure which is put upon them, and many others, as hon. Members have already said, were simply hanging on for the Budget or in the expectation of something being done for them in a very short time. I am quite sure that if nothing is done many more of these cinemas will be out of business before this time next year.

This is a somewhat different matter from the ordinary changes of taste and of the economic facts of life. It is not simply a case that people no longer want to visit the small cinema or have lost the inclination to do so. One must admit that if economic circumstances or public taste changes, various forms of entertainment, amusement and business must inevitably disappear. That is not quite the case with which we are dealing. It is the pressure of taxation which is extinguishing the small cinemas. It is not simply a question of economic changes or changes of taste, but it is something about which the Chancellor of the Exchequer can do something.

My hon. Friend the Member for Honiton (Mr. Mathew) has put forward a proposal which would help some of the rural cinemas, and I would welcome it, but the proposal by my hon. and gallant Friend the Member for South Angus (Captain Duncan) appealed more to me in that my hon. and gallant Friend's suggestion that a certain low level of takings should be exempt from taxation would help all small cinemas, whether in the town or countryside or anywhere else. They are all feeling the position equally badly, and in my view the small cinema has a case for existence.

In small towns, why should there be only one enormous cinema which is able to keep going? Why should the citizens of small towns not have the same right of choice as people in the big towns? Why should they not be able to visit the small cinema as well as the Odeon or other large cinema which is able to make a success? They could do so if some relief were given to the small cinema.

Mr. R. Moss (Meriden)

I wish to refer briefly to my own constituency, which is composed of three rural districts, with the City of Coventry on one side and the City of Birmingham on the other side. The constituency of Meriden, therefore. is composed of a multitude of small towns and villages and in these small centres of habitation there are small cinemas.

I do not intend to say anything about the general case for tax relief in the cinema industry. I consider that that case is sufficiently proved and has been excellently put by my hon. Friends and by hon. Members opposite. I have, however, done some research in my constituency and I should like to tell the Chancellor of the Exchequer what results I have found.

My first example is that of a cinema in a mining village remote from any large centre of population. I have looked at the day book which is kept for this small cinema and I found that on Saturday, 19th May, 1956, the total attendance was 310, the gross takings £15 8s. 10d. and the tax £3 Os. Old., leaving net takings on that occasion of £12 8s. 91{1. On Thursday, 19th April, this year, the total attendance was 40, the gross takings £2 7s. 10d., tax 9s. 101d. and the net takings, therefore, £1 17s.On whatever day I looked, I found that 20 per cent. of the gross takings and 25 per cent. of the net takings were always taken by taxation.

I next looked at two small cinemas in a small town not far from the City of Coventry. One of these small cinemas has already gone out of existence and the other is in great difficulties. I discovered the interesting fact that, over the past six years, these two cinemas have paid nearly £40,000 in tax and have made a profit of £1,743. The admissions in 1953 numbered 154,000; in 1954, 138,000; and in 1955, 131,000, thus showing a decline of 15 per cent. over the period.

I ask myself whether it is worth while for small cinemas to be preserved in small communities. I appreciate that, when competition is present, an enterprise might have to go out of existence. In considering the justification for maintaining small cinemas in small towns and villages, however, I find, first, that the police welcome their existence because in their opinion these cinemas play a great part in the entertainment particularly of young people, who might otherwise be a nuisance to the police if left on the streets. I found, also, that these cinemas are a source of entertainment and relaxation to workers, particularly those who have spent the day in the mines, and give them an opportunity to see on the screen the wider world of which they see so little at their daily toil. The small cinema plays an important part in the life of a small community, and every effort should be made to keep it in existence.

The small cinema, however, is today faced with peculiar difficulties. The hon. and gallant Member for South Angus (Captain Duncan) spoke of the wages which are paid in small cinemas. In my constituency, wages have to compete with wages as they are in the City of Coventry or the City of Birmingham, and no small cinema proprietor can engage labour unless he pays above the national scale. This presents a difficulty which is perhaps peculiar to areas of that nature.

Small cinemas are also losing revenue because of their inability to install modern apparatus. This aspect has already been mentioned in the debate. I am told, however, that the cost of this apparatus is the same for the small cinemas as for the large ones and, therefore, the overheads are relatively greater. I am told also that the transport costs are heavier for small cinemas because their programmes have to be changed frequently. Heating costs are higher in the case of small cinemas because of the reduced amount of showing time, which in the case of one small cinema I visited was 2 hours a day.

Another point to be borne in mind is that small cinemas have to employ subsequent runs. Frequently, local people who have, perhaps, made the journey to a neighbouring city for the purpose of shopping, have visited a cinema while there, and on a later visit to the village cinema they find that they have already seen the film which is being shown. Subsequent runs are the fashion in small cinemas and they lose the marginal custom which in their case is extremely important.

I think we all know that the small cinema is in great difficulty today, and repeat that there could be no stronger case than there is for relief of tax in the cinema industry and for the small cinema in particular. I beg the right hon. Gentleman to consider the social grounds which make it worth while to keep in existence the small cinemas which operate in the towns and villages of Britain.

7.0 p.m.

Mr. William Shepherd (Cheadle)

I think that my right hon. Friend has heard a good deal of very emphatic pleading this evening for a reduction in cinema taxation. There are always claims for reductions in tax. Some of them have more validity than others. I think that there is undoubtedly room for the view that the Government have today and for some time past been taking more out of this industry than it can really afford.

We have to accept the view that if an industry can bear a tax it must be taxed, but we have reached the position in the cinema industry in which it is now bearing a tax higher than is practicable for all purposes. Whether my right hon. Friend can do anything about it on this occasion or not is a matter to be seen, but I would impress upon him that this is a matter which cannot be left over for more than another year. The situation is altering very rapidly, and much of the durable equipment in our cinemas is below the level which the customer is entitled to expect. Many of the wages are below the level that any decent person wants to pay, and this is largely due to the somewhat avaricious nature of the Treasury.

Things have changed and it is true that there is a big reduction in the extent of the attendances. One could, of course, overstate this, and I do not want to overstate the case tonight, but to qualify something which my hon. Friends have been saying. It is very fashionable for industries, when claiming tax reliefs, to make great claims about the trouble they are in. Industries claiming tax relief are like cowards, they die many times before their death, and no doubt the hardened officials of the Treasury are accustomed to hearing these stories.

It is perfectly true that, whilst there has been a substantial reduction in attendances, nevertheless attendances today are 50 per cent. higher than they were in the average years before the war. so we are not really dealing with a dying industry in that sense. We are dealing with an industry which has materially improved its position over a period of years. despite the fact that there has been many more forms of competitive entertainment.

Mr. Donald Chapman (Birmingham, Northfield)

I am very interested in that figure. Do these attendance figures relate also to the small cinema?

Mr. Shepherd

I will come to the small cinema in a moment, because I think that we want to go into the position of the small cinema a little more carefully than has been done so far. The big circuits, as everyone knows, are enjoying a period of what looks like prosperity, according to their balance sheets. As they have put their prices up again, I imagine that they will produce a somewhat similar result next year. But the small cinema is definitely in a difficult situation. I want to deal for a moment with the small cinema, because that is the issue before us.

I dissent from the view that one can save the small cinema entirely by tax reduction. In the first place, there are today nearly 200 more cinemas than there were before the war. There are about 1,080 or 1,050 compared with 890 or 870 before the war. During the war, a large number of cinemas were equipped and opened because one could pack almost any kind of house. I do not believe that we can keep open all the cinemas we have today. I doubt very much whether it is in the interests of the industry to do so. I have stated already that they have increased by about 200 during the wartime period up till today. The curious thing is that, despite the fact that attendances have fallen on an average by about 8 million per week from the peak, the number of cinemas has not materially reduced.

There is no doubt about it that we have too many small cinemas in this country and they are contributing in a measure to the lower standards that we have in our cinemas. There are too many people trying to get the custom that is available. This is a matter entirely of facts, because standards have altered. The man or boy who could afford only a few pence to go into what was called the "flea pit" before the war, now has the money to go into a decent cinema with fairly good equipment.WON. MEMBERS: "011.1 Oh, yes, by and large he wants to go into a place that is better, and one does not blame him for that. We all try to improve our standards, and we must not object if the cinema-goer tries to improve his standards as well. Therefore, there is no doubt that we have too many small cinemas. in particular those seating 500 or under.

Mr. F. H. Hayman (Falmouth and Camborne)

How many of these small cinemas are already exempt from tax?

Mr. Shepherd

I think there are very few, because rural exemption is very difficult to operate, and I am not sure that that is the right way to do it. I am not at all happy about rural exemption. It is true to say that these cinemas are not now catering effectively for the class of customer which they had before the war. I have every sympathy with the small cinemas, and I am not suggesting that we should not do something for them, but I am asking. the Committee to have regard to the real facts of this case.

Mr. Edward Evans (Lowestoft)

The hon. Member says that there are too many small cinemas in the country. That may well be so, but is not that due to the fact that these cinemas are placed in centres of very small population, and if we ask people, because they earn more money, to go to the bigger cinemas, where are they to go? They have to go to the big towns, which may be a considerable distance away. I consider that these small cinemas play a very important part in our social life.

Mr. Shepherd

The hon. Gentleman has anticipated me, because 1 was dealing in a general sense with the small cinemas. The problem divides itself into two classes of small cinemas. One, I think, is socially wholly desirable, and for the others there is much less to be said. In small localities where the small cinema is the only amusement open to people, I think that its preservation is absolutely vital. I do not think that the cinema which is sixth, seventh, eighth or ninth in a relatively fair-sized urban town is anything like as vital to the community. I think, therefore, that we have a problem which is difficult to solve from the fiscal point of view by encouraging one without necessarily encouraging the other.

The small cinema has a further difficulty at the present time, in that the pattern of cinema-going has been very much affected by television to the extent that, whereas before the advent of television in any strength it was the case that one got a fair return from an ordinary film, and a fairly good return from a good film, and no return on a bad film, today the audience is much more selective. If one has an ordinary film today in an ordinary cinema position, one can be almost certain to lose money; but if one has a very good film one makes more money than ever before. This places the small cinema in a particularly difficult position, because it can usually get only re-runs—probably third, fourth or fifth re-runs. There may be bars making it difficult for it to get any value at all.

I raised this matter three or four years ago before the tax remission was given, and I tried to tell right hon. and hon. Gentlemen opposite, the Board of Trade and others of my own party that we must have some system of relief which would help the small cinema. At that time there was not quite as much interest in the small cinema as there is at present. For those who took some interest in the industry, the writing was clearly on the wall for small cinemas some years ago. It is a great misfortune that at that time the cinema industry did not rally round to support the small exhibitor and suggest some assistance to get him out of his troubles.

I have given my views on the small cinema, because I think we have been a little too generalised in our comments. In the small cinema there is something of special social value, particularly in the rural areas. I want to see it encouraged, although I do not think the best interests of the industry will necessarily be achieved by maintaining exactly the present number of small cinemas.

Mr. Hirst

I follow my hon. Friend's argument, but surely if this were so it would be fair to say, "Let it be closed for economic reasons under sound and fair conditions of taxation"?

Mr. Shepherd

I would perhaps go even further; I am prepared, as I was three or four years ago, to let these cinemas have some preferential taxation treatment, because undoubtedly they fulfil a strong social purpose in rural areas.

The point with which I want to leave the Committee is that, even if we give them tax preference, I do not think all these small cinemas will remain open. I believe that there are social and economic reasons for which they will not remain open, but I urge my right hon. Friend to give consideration to the position of this industry. Whether we wish to maintain the existing cinemas or not is an open question, but what is not open is that the present volume of taxation which this industry is bearing is too heavy for all purposes. I ask him to give the matter urgent attention.

15 p.m.

Mr. E. L. Mallalieu (Brigg)

At this late stage in the debate I will occupy the time of the Committee for only a short time. I want to speak for a moment about small cinemas in the less populated areas. It may well be true, as the hon. Member for Cheadle (Mr. Shepherd) said, that not all existing small cinemas can remain in existence, but what seems to me to be quite stupid is for the coup de grace to be given by right hon. Gentlemen opposite, and indeed in some measure by their predecessors, when, according to the views of all, these small cinemas serve socially a useful purpose.

We had the same thing earlier today, when we were discussing the finances of Covent Garden. I will not go into that in detail, but as a matter of reference I might point out that we give available financial resources always to the big centres of population. Of course I want Covent Garden to receive the money, but I also want a fair share to go to the outlying areas which are not near a large town. If this taxation is continued, we shall, in my submission, not see this fair share. It may be that we shall not see it in any case, but at any rate let us not give the coup de grace to these outlyingcinemas by continuing the imposition of penal taxation.

It is often said that these cinemas must try to sink or swim according solely to economic circumstances. It is often said that they should raise their prices. What is the use of them raising their prices in these circumstances when so much of the price increase which they impose upon their customers goes straight into the coffers of the Chancellor? It seems to me that if we want these small cinemas to exist we must give them a chance to exist, if they have the economic strength, and not push them over the edge with penal taxation.

Television is no doubt in a large measure responsible for the losses which many cinemas are suffering, and it may well be that this comparatively new method of entertainment, which I welcome as a great boon to the countryside, will finish off the cinema, but let us not add to the difficulties of the cinema with penal taxation. I do not know which of the methods suggested in the new Clauses is right, but I suggest that it is the duty of right hon. Gentlemen, who have expert advice and experience at their beck and call, to find out and to tell the House of Commons the method by which we can achieve the results which hon. Members on all sides of the Committee obviously wish to see.

I want to ask the Chancellor two questions. Does he admit that at present the smaller cinemas, particularly in the more rural areas, are having a very hard time and are likely to go out of existence progressively if the present system of taxation is continued? Secondly, does he want it to happen? If he does not, will he make a proposal, even if the proposals embodied in the new Clauses will not achieve their purpose, which will give the smaller cinemas a chance of carrying on?

It is not enough for him to pick holes in the new Clauses. Let the Chancellor bring forward a scheme of his own, if these are not enough, for it is obviously the opinion of the Committee that the smaller cinemas, particularly in the rural areas, should not be put out of existence by any disadvantage from taxation.

Mr. William Yates (The Wrekin)

We have heard the arguments for the preservation and retention of the small cinema as a social necessity. Some hon. Members have said that perhaps the small urban cinemas are not necessary and should be put out of business. That is what this taxation is doing. Another hon. Member was anxious to have the maximum number of exhibitor points for the British cinema industry.

I am no expert in these matters, but I am interested in a definite injustice, and when a complaint reaches me about taxation—and we are here to protect people from the hands of the Revenue officers—I look into it. I therefore sent to the Financial Secretary of the Treasury the audited accounts of certain cinemas in the Wrekin area. As the Budget was in preparation, he simply returned them to me with due courtesy and invited me not to anticipate the Budget statement.

I am now in a position to ask him to appreciate what I have to say, and I want to put it quite clearly and without undue bias one way or the other. I agree that we should have fair competition, but what of a situation like this? I have a letter which says that the Regent Cinema, Wrockwardine Wood, and the Regal Cinema, Hadley, both pay full tax. Yet within two miles the Garrison Theatre—The Globe, Donnington—which seats about 1,000 persons, does not pay Entertainments Duty at all. It is an A.K.C. cinema, admitting, it is claimed, all people of the area and it does not pay tax at all.

This is just a method of slaughtering the small cinemas, and I shall not remain here without pleading that before the Report stage the Financial Secretary should, with his right hon. Friend, try to work out a method of taxation which would benefit this industry and help to maintain the small cinemas in business. I am not anxious for my right hon. Friend to lose revenue—I am not interested in that—but only anxious that he should try, before the Report stage, to present to the House sensible, logical proposals to protect the British small cinema industry.

Mr. Chapman

If I may say so, the most interesting speech we have had so far has been from the hon. Member for Cheadle (Mr. Shepherd). He tried to be very balanced, but I felt that in the end he overlooked in particular the case of the small cinema in the urban area. I rather sensed from his remarks that he dismissed them as those that will, of necessity, go out of existence, and that he did not really care if they did.

I want to speak of what happens in constituencies like mine. I live in a constituency which is one huge suburban sprawl on the edge of a great industrial town. In it I have a small chain of three cinemas, two of which are likely to go out of existence in the next 12 months. Why are all those cinemas important? Because, in a city like mine, the only alternative to visiting them is to travel for half an hour or three-quarters of an hour on a bus to a cinema in Birmingham. That is the first reason, and the second is that for many, and particularly for elderly folk and for those at the other end of the scale, it is what might be called that easy night out just round the corner. To that extent, such cinemas serve a useful social purpose in a suburb.

The third point about these suburban cinemas is that they cannot come in for the sort of help which the hon. Member for Honiton (Mr. Mathew) wanted to give them. It is no good offering my, suburban cinemas in Birmingham something based on population per square mile. On that basis, we shall never come within the sort of exemptions he wants. The only possible way in which this can be done is to treat the cinema industry on the basis either of its profits or of its gross takings.

In cinema industry taxation we are in very grave peril of extending what we in this Committee all know to be the existing danger. We always know that once a tax is put on it is the devil of a job to get it taken off, but it is now becoming the dickens of a job even to get it reorganised. What is really needed for the entertainments industry, and for the cinema section in particular, is to shift the burden of taxation from those who cannot bear it to those who can—inside the same industry, if necessary, and. therefore, without loss of revenue to the Chancellor.

Has the attention of the right hon. Gentleman been drawn to the typical takings of the small cinema? The small cinema today takes about £150 to £170 a week. I know that he will plead that it is not taxation that forces them out of existence, but he really cannot say that taxation is not making a difference to their existence, because out of takings of that order about £60 goes in taxation. In constituencies such as mine that means all the difference between existence and non-existence.

I ask the Financial Secretary to look at this problem in the broadest sense of the figures relevant to the industry. If he looks at the cinemas making a loss today, this is what he will find. Nearly half of them have less than 750 seats. Three-quarters of those that make a loss have a most-popular seat priced at under 2s. Three-quarters of them are in the suburbs and the small towns, and from half to three-quarters have gross takings of less than £150 a week. What it amounts to, as my hon. and learned Friend the Member for Brigg (Mr. E. L. Mallalieu) has said, is that it is Parliament that, by taxation. is totally distorting the economic situation in which those cinemas are placed and is itself forcing them out of existence.

I have no objection to purely economic forces pushing them out of existence, but what I do object to—and I think that it is a legitimate objection—is Parliament administering the final blow which kills them. That is what is going on in the small cinema industry today. I hope that the right hon. Gentleman, even if he cannot promise any revenue relief, will at least, for once, offer a reorganisation of the tax on entertainments.

The Financial Secretary to the Treasury (Mr. Henry Brooke)

This has been, to me at any rate, an extremely interesting debate. For the last two and a half hours we have discussed the cinema industry with a remarkable freedom from party bias. Hon. Members may say that they have all ganged up against the Treasury. Well, it will not be the first time that that has occurred, and certainly it has been done in a very pleasant spirit. I hope that I have suited the wishes and the convenience of the Committee by waiting until the majority of those hon. Members who showed at the outset a desire to take part in the debate had spoken, so that I could be sure that I had heard a representative selection of views from all quarters.

In view of the fact that at least the first two of these new Clauses have been commended to the Committee, not on the grounds that they are perfect in themselves, but simply because that was the way whereby, in accordance with the rules of order, the general idea could be put forward, I am not proposing to spend much time meticulously examining every word and every figure they contain, but rather to address myself to the more general issues that have been raised, and to seek to answer a number of the material points which have been adduced.

One point on which a number of hon. Members on both sides have spoken is the future of British film production. That is an extremely important subject. We had a debate on it on a Friday not so very long ago, and I myself heard a good part of the debate. I came here purposely to do so. The future of the Eady levy is, of course, a matter for my right hon. Friend the President of the Board of Trade. He is well aware that the present term of the levy expires in, I think, 16 months' time, and in due course he will reach and announce his conclusions on that matter.

When some hon. Members suggested that the kind of changes which are outlined in these new Clauses would redound powerfully to the benefit of British film production, I think that I must sound a cautionary note. It is the same cautionary note that was sounded by the right hon. Member for Huyton (Mr. H. Wilson) in this House on a date, curiously enough, five years ago to the very day. He then pointed out that, other things being equal, out of any remission of duty not much more than one-tenth would be likely to go back to the British film producer. I do not for a moment minimise the importance of one-tenth; I only wish to record that that is not a main issue in the general subject of the future of the Entertainments Duty which we are discussing today.

7.30 p.m.

Mrs. White

Would the right hon. Gentleman not agree that, while the financial effect may be as he described it, the psychological effect might be considerable?

Mr. Brooke

I am far from saying that it would have no effect, but the future of the British film industry is a much wider matter than that, and any decision reached by way of some slight alteration in the Entertainments Duty will not mean life or death for British films.

The general situation of the cinema industry is this. Takings, exclusive of duty, have remained generally stable over the past five years or so. It is perfectly true that there was a 7 per cent. falling off in attendances in 1955 compared with the previous year, but, as I think all hon. Members familiar with the industry will know, one must not spring to conclusions from short-term movements like that, which may depend upon the weather or the season. A fine summer keeps people out of doors; it puts up the sale of ice cream but puts down cinema attendances and the sale of toffee; a very cold and foggy winter may have its effect, and so forth. For that reason, I would deprecate anybody seeking to draw far-reaching conclusions from any short term change in attendances.

Mr. Hirst

If rny right hon. Friend will forgive my intervening, I cannot accept that as quite a true picture. If we take it on a weekly basis, the drop has been something of the order of 8 million since 1946, and it has been 21 million every single week since 1953. That is not a short-term basis.

Mr. Brooke

Though I do not wish to quarrel with my hon. Friend, when he refers back to 1946, I must remind the Committee that in 1946 attendance at all sorts of entertainments was extremely high because of the lack of other things on which to spend one's money.

Mr. Hirst

We have the figures since 1953 also.

Mr. Brooke

On all occasions when I have received deputations from various branches of the entertainments industry, including the cinema, they have all quite frankly agreed with me that those immediate post-war years were exceptional because of the special difficulties of the times and the relatively narrow choice of things on which money could be spent, and it is only in more recent years that we have got back to more normal, conditions.

As my speech goes on, the Committee will find that I am not seeking to prove that all is well and that no further attention needs to be paid by Parliament to all these matters; but the black side of the case has, on the whole, been put by hon. Members wishing to prove their arguments for a reduction in duty, and it is only right that I should put before the Committee other facts which also must be taken into consideration.

One of those facts is that cinema attendances per head per annum are still much higher here than in any other country in the world, and higher by a very substantial margin. The British public is not showing signs of losing the cinema-going habit, though I grant entirely to my hon. Friend the Member for Shipley (Mr. Hirst) that the trend is moving downwards.

Mr. Chapman

Hear, hear.

Mr. Brooke

The problem of the industry is that of rising costs, and it is by no means the duty which is the only cause of cinemas getting into difficulties. Quite naturally, when any cinema does get into difficulties, its proprietors look first of all at the rake-off which the Chancellor gets and spring to the conclusion that their problems would be greatly eased if they could get that load off their backs. All of us would do that; it is perfectly natural. But even if the Entertainments Duty on the cinema were miraculously removed altogether, and the Chancellor found he could forgo tens of millions of pounds of Revenue, the cinema industry, though it would have a wonderful day, would still not shake off all the problems which it has to face.

I had the pleasure of receiving on behalf of my right hon. Friend, a deputation from the All-Industry Tax Committee on 22nd February. That deputation helped me by bringing an interesting written memorandum, which I and my right hon. Friend have studied with great thoroughness. I noticed that the hon. Lady the Member for Flint, East (Mrs. White) said she could not go so far as the industry itself in urging upon Parliament that the present duty collected of some £33 million should be reduced to some £13 million. She was not asking for anything of that kind. But it is of value to have all these figures collected, and we are always seeking to inform ourselves more and more fully about the affairs of the industry. I realise that it must have been a disappointment to the industry that my right hon. Friend the Chancellor did not feel able to mention Entertainments Duty in his Budget speech as a field of taxation where he could make any concession.

What has happened in the industry since the Budget statement is that the leading circuits have accepted that, if rising costs cannot be met out of existing profit margins, then they must be charged to the public in higher prices. At any rate, I take it that that is the reasoning which lies behind the announcement that next week prices in the circuits are to go up. The hon. Member for Govan (Mr. Rankin) said that this would produce some £13 to £14 million extra, gross, of which less than £6 million would accrue to the industry itself.

Mr. Rankin

That leaves £7 or £8 million for the Treasury.

Mr. Brooke

I am not forgetting what the Treasury will get. The hon. Lady the Member for Flint, East on the other hand, said that the industry was not expecting any gain to itself from higher prices. I feel that a comparison of those two statements by well-informed hon. Members, and the contrast between them, proves how impossible it is to forecast with certainty what the effect of higher prices will be during the remainder of this year. The industry has decided on this. I cannot say how far independent cinemas will follow the lead of the circuits. Time alone will show what effect it will have on attendances and on the economic state of the industry generally. We must see how it will work out, and any forecast that I, or any hon. Member, sought to make today would be purely speculative.

A great part of today's debate has centred upon the small cinema. It is the small cinema, referred to in the second of these new Clauses, which has particularly engaged the attention and sympathy of hon. Members on both sides. The fact is that some small cinemas are doing badly and some large cinemas are also doing badly. We have examined this matter as closely as anyone who is not in the industry can and have found that it is quite impossible to draw a line of demarcation anywhere and say that cinemas with a seating capacity below that line are generally doing badly and not making a profit, while those with a capacity above the line are doing well and are not afflicted with problems.

Mr. Chapman

There are very definite figures upon this matter. If we take the number of cinemas showing losses in their balance sheets, we find that nearly half have less than 750 seats and three-quarters had less than 1,000. There are figures in connection with every aspect of the problem.

Mr. Brooke

The hon. Member imagines that I am seeking to prove more than I am. I am not seeking to prove either that there is a lack of information upon this matter or that small cinemas are not meeting difficulties. I said that we could not say that all cinemas below a certain size were unprofitable, or that all cinemas of a greater size were profitable. The problems of the industry are felt by cinemas of all sizes, though I agree that small cinemas generally feel them more.

The second of the proposed Clauses we are discussing takes a weekly turnover of £350 as the criterion—but a turnover of less than that sum per week is not in itself evidence of hardship. Hon. Members have spoken of cases in their constituencies, and I would not for a moment seek to deny the truth of their figures. On the other hand, it is likely in the normal course of things that hon. Members will have been shown the figures of the less successful cinemas in their constituencies. It is natural that anybody interested in a certain part of the country is likely to be given a picture which is just a little darker than is the real situation.

The Clause suggests that we should, in effect, change the law for the benefit of the small cinema. On the other hand, if two cinema proprietors draw the same income—Mr. A from two, three or four small cinemas and Mr. B. from one large one—it is not necessarily proved that Mr. A. should be the one to receive tax relief, as against Mr. B. Small cinemas are not alone. Many small undertakings of all kinds are facing difficulties in the twentieth century.

Hitherto we have not shaded our revenue from taxes on these grounds. We do not charge a lower tobacco duty to small tobacco factories.We do not charge a lower beer duty to small breweries. [An HON. MEMBER: "What about Income Tax?"] Lower Income Tax for small incomes is a different matter. Several hon. Members have made the point that Entertainments Duty is not a tax upon income. That is precisely why I am saying that it is difficult to justify special concessions which have no relation to profitability but are solely dependent upon size. My hon. Friend the Member for Cheadle (Mr. Shepherd), in his very interesting speech—although it did not commend itself to all hon. Members—certainly showed a perception of the fact that the problem of small cinemas is rather more complicated than has been suggested by many other hon. Members.

7.45 p.m.

The idea underlying the Clause is an interesting one but, if hon. Members study the matter, I think they will see that it would not work out so attractively in practice as it would seem to do at first sight. It would operate as a kind of concealed subsidy to certain cinemas. The cinema would normally fix its prices upon the basis of the full scale of duty and at the end of the week, according to the amount of takings, the proprietors would retain for themselves part of the tax which they had charged in their prices to the public. It would mean that the man who successfully increased his weekly takings might find that at the end of the week he had put himself into a higher duty scale and that my right hon. Friend the Chancellor skimmed off practically all the benefit which he had been hoping to secure for himself.

Sir Charles Taylor (Eastbourne)

I think that my right hon. Friend is getting the facts wrong. He talks about a concealed subsidy, but surely he means a concealed relief?

Mr. Mitchison

I have not taken any part in the debate, but I notice that the Clause provides for marginal relief.

Mr. Brooke

All I am saying is that this is not going to be so sensible in practice as it looks when one puts it down on paper. One of the criticisms against Entertainments Duty—and I believe that this consideration was in the mind of the hon. Member for Walthamstow, West (Mr. Redhead)—is that it is already too complicated, and it is also said that the differentials are excessive. But one of the three proposed new Clauses would entail an additional differential, making it that much more difficult.

I turn for a moment to the third of the proposed new Clauses, upon which my hon. Friend the Member for Honiton (Mr. Mathew) spoke with so much force. The rural areas exemption is based upon a formula which is constantly criticised by people in areas where it works anomalously—and I grant at once that one of the spectacular anomalies is that which exists between Sidmouth and Exmouth. Sidmouth receives the benefit and Exmouth is denied it. I hope that my hon. Friend will accept it from me that, over the country as a whole, the formula works surprisingly fairly.

Commander Maitland:

Not in my constituency.

Mr. Brooke

I know that hon. Members on both sides of the Committee have cause for local grievances in this connection. They are so few, however, that 1 can identify them all. They write to my right hon. Friend and me not infrequently upon the subject. But their very scarcity is interesting evidence that the formula works not at all badly.

Mr. Dudley Williams (Exeter)

My right hon. Friend was saying how difficult it was to work a differential rate of taxation. Is not that in fact what the Clause does?

Mr. Brooke

This is not a differential rate; this is an exemption which the hon. Member for Walthamstow, West would say was a simplification rather than a concession. It is certainly not a simplification for the Financial Secretary when my hon. Friend the Member for Honiton and certain other hon. Members —one of whom has now, fortunately, joined the Government and is therefore silenced, in public at any rate—complain about the situation in their constituencies.

It certainly does not eliminate altogether the difficult marginal cases. My hon. Friend the Member for The Wrekin (Mr. W. Yates) referred a moment ago to certain cases in his constituency. He was bringing them forward as evidence in favour of a general reduction for small cinemas. I was inclined to think that his words might have been taken for support of the removal of the rural areas exemption, which appeared to me to be the cause of the anomaly of which he was complaining.

We are always ready to examine new suggestions for this formula. A number have been put up, but none of them has so far seemed to us likely on balance to diminish the number of anomalies.

Mr. Hayman

Is the right hon. Gentleman prepared to accept a proposal which will mean a reduction in the revenue from this tax?

Mr. Brooke

Of course, any additional exemption will mean a reduction of the revenue. [HON. MEMBERS: "No."] Any exemption of additional cinemas will mean a reduction of the revenue. I am speaking at the moment of the rural areas exemptions. I am speaking exclusively of that.

My hon. Friend the Member for Honiton has alleged that the new formula embodied in his new Clause would work more fairly than the present one. I felt it must have emanated from somewhere near Exmouth, because it would operate just to bring Exmouth within the exemption. The whole purpose of this rural areas exemption is to bring special assistance to small places which otherwise might lose their means of local entertainment, through their population not being sufficient to keep a cinema in existence.

Mr. Mathew

The suggestion that this anomaly exists only in my constituency as between Exmouth and Sidmouth is not quite accurate. Indeed, since I tabled the new Clause, I have had letters from all over the country. Having seen their books and accounts, I know that a number of cinemas in the West Country suffer from the anomaly. I do not think it is quite as localised as my right hon. Friend would suggest.

Mr. Brooke

There are various grounds on which it can be argued that the anomaly is wrong, but the purpose of the exemption is, as I said, to do something for the relatively small places with no large population which might otherwise have difficulty in keeping a cinema in existence.

I have analysed my hon. Friend's proposal to see whether his new formula, which is based on multiplication by four, would lessen the anomalies. The test, as the Committee will remember, is whether it will satisfactorily define the rural areas which we want to help. My hon. Friend's new Clause would have the consequence of including as rural areas needing special assistance because of sparsity of population Esher in Surrey, Solihull in Warwickshire, Keighley in Yorkshire and Merthyr in Glamorgan, none of which, keen as we may be to help the hon. Members who represent those places, would naturally occur to any of us as a rural area which would have difficulty in securing for itself any local entertainment.

I quote those instances simply by way of illustration of the extreme difficulty we have in finding any way of improving the existing formula which would not create more anomalies than it would remove.

Mr. Glenvil Hall

As, I think, the right hon. Gentleman will recollect, I happened to occupy the position he now occupies at the time the legislation to which he is referring was put through. There was then a good deal of criticism of the formula, and the late Sir Stafford Cripps indicated that the Treasury would watch it. That was eight years ago, and much has happened since. It is quite obvious that in the intervening period small cinemas have got into deeper and deeper water and are having increasing difficulty in surviving. Would it not be possible for the Chancellor, between now and Report, to see whether some compromise could be drafted and put into the Bill, a compromise between the new Clause in the name of the hon. Member for Honiton (Mr. Mathew) and what the Financial Secretary is now saying?

Mr. Brooke

I would ask the Committee to maintain this distinction in its mind. There is a distinction, as the right hon. Gentleman, I know, realises, between the general problem of the small cinemas and the local problem of the small cinemas in rural areas, and it is that and that only to which the formula applies, and it is to that point alone I have been addressing my recent remarks.

In my speech in the Budget debate, on 19th April, I said that we had set on foot a thorough-going review of all sections of the Entertainments Duty. In order to prove that was not a mere window-dressing argument, I thought of bringing along to the Committee visible proof of the outcome of this review up to date, but because of its comprehensiveness, which would double or treble the thickness of the wad of paper which the Financial Secretary has to carry about with him during the time of the Committee on the Finance Bill, I resisted the temptation to do that. However this review has been set on foot.

My right hon. Friend has very carefully considered the case put to him by the All-Industry Tax Committee of the Film Industry, and all the other information which is available to him. He has reached the conclusion that this year, when he has had to introduce a firm—and some would say, severe—Budget to prove our national determination to surmount the difficulties of the time, it would be quite out of keeping to announce reductions of any kind this year in the Entertainments Duty. However, anyone who read between the lines of my speech in the Budget debate must have deduced from that, and deduced rightly, that my right hon. Friend is not permanently content with all the existing rates and arrangements of the Entertainments Duty as they stand. He considers that they are going to require further attention.

This is not the time when he can make any move, but between now and the time when he feels that it would be right for him to bring forward proposals, he intends to study very carefully all that has been said today and all that happens in the cinema industry during the coming period, with these price changes and so forth, in order that, at what he considers the appropriate and proper moment, he can bring forward proposals to the Committee.

8.0 p.m.

Mr. A. G. Bottomley (Rochester and Chatham)

In rising now, I want to make it clear to those hon. Members who have waited patiently for so long for the opportunity to speak that I do not intend that they should be shut out. I imagine that they will have a great deal more to say after having heard the Financial Secretary's speech. It was very disappointing. [HoN. MEMBERS: "Hear, hear."] The whole Committee seems to share that view, but I am always an optimist and I tried to find one bright spark within the right hon. Gentleman's speech.

I thought there was that spark when he did not seem to share the Chancellor's doctrine. The Chancellor said earlier that it was necessary to have only the Minister in charge of the Bill on the Front Bench, but the Financial Secretary, when we discussed films, earlier in the year, said that he recognised that it was right that he, as one of the responsible Ministers, should be present. Today he was supported by the Parliamentary Secretary to the Board of Trade, and I am very glad that both Ministers dissent from the Chancellor's doctrine.

My hon. Friend the Member for Flint, East (Mrs. White) moved the Second Reading of the new Clause with her usual charm and skill. As the Committee knows, she has great knowledge of the subject and she was able to deploy that knowledge in her argument, though obviously to no avail. She was supported by my hon. Friend the Member for Govan (Mr. Rankin), who initiated the debate on the film industry which was held earlier in the year. I was delighted to find the hon. Member for Honiton (Mr. Mathew) and myself in agreement for a change. We found ourselves in violent disagreement on two occasions when we fought for the honour of representing a constituency in the House of Commons.

I want to follow the Financial Secretary in examining the general position rather than in going too carefully into the Clauses. The right hon. Gentleman did not try to make play with the fact that the Clauses as drawn would be difficult to operate. He understood that the Clauses had to be put in that form in order to keep them within the terms of the Money Resolution. But what we desire by having the Clauses on the Notice Paper is to stress the urgent needs of the film industry and to do that immediately.

I am a rare visitor to the cinema and, therefore, I can perhaps speak more easily from the point of view of justice and equity. I am sure that everybody in the Committee would accept at once that films provide a universal and popular form of relaxation and that going to the cinema widens our experience. There are opportunities of seeing things which it would not be possible to see if we did not have this pictorial presentation. The cinema is also a very powerful medium for influencing the human mind, particularly the minds of the young. I went to a friend's house the other day when a story about the Cisco Kid was being shown on television. It took me back to my childhood days when I used to get extremely excited about such things and it made me realise what a powerful influence television can be on the young.

The British film industry at its best has a more uplifting character than any other. It typifies the best in the British way of life and, therefore, on the production side, we should do everything possible to see that it flourishes. British films are very much in the position of other industries which over the years have been neglected and have had to rebuild and reequip. But the British film industry has not had that opportunity. It has been very much in the same position as some of the nationalised industries, which were soaked of their resources and were then left to the country to re-equip and rebuild at a time when we could least afford it. In the same way, the film industry was starved by private enterprise in the past and has now not been given the opportunity to do the work which it is best fitted to do.

The impact of films on the public mind is probably as great as that of newspapers. Nobody would suggest for one moment that we should allow newspapers to come into the country from the United States freely to replace our own, but that could happen quite easily if there were the competition among newspapers that there is in the film industry. Because they receive support from the Government as the second major industry in the country, the American film companies are able to enter all kinds of markets, particularly the British market, and keep out British enterprise, which, if given the opportunity to develop, is of the best. The Chancellor is preventing British films having that opportunity.

The present Government, by their neglect and failure to help British film production, are further aggravating the position. There seems to be on the part of the Chancellor no sense of urgency about the need to continue the British Film Production Fund. That lack of decision leads to the postponement of projects by film companies who want to plan production programmes ahead. I had hoped that the Financial Secretary would have told us something about the fund. I hope that it is not too late even now for the right hon. Gentleman to refresh his memory and to consider whether it is not possible to make a further comment on that matter.

There is also the lack of decision on whether the National Film Finance Corporation is to continue or not. That is causing great distress to the industry, which is in a much more serious situation today, in spite of the optimism of the Financial Secretary, than it was when it was necessary for Parliament to interest itself in films in 1927 and we had the Cinematograph Films Act.

In view of the fact that we are shortly to have a Commonwealth Conference, it is perhaps worth remembering that a year before that Act came into being there was an Imperial Conference, at which the following declaration was made: The Imperial Conference, recognising that it is of the greatest importance that a large and increasing proportion of the films exhibited throughout the Empire should be of Empire production, commends the matter and the remedial measures proposed to the consideration of the Governments of the various parts of the Empire with a view to such early and effective action to deal with the serious situation now existing as they may severally find possible. Not only does our own industry need support. The Indian film industry is developing at a rapid rate.

It is not only important from the point of view of earning currencies for the sterling area that the Commonwealth film industries should have maximum support, but it is important in the struggle between different ideologies. Films are one of the means by which we in the British Commonwealth can perpetuate our democratic way of life. I hope therefore, that the Chancellor will see to it that the whole question of film production is considered by the Government and that the Government in turn will see to it that that is considered by the forthcoming Commonwealth Conference.

I find from HANSARD that the arguments which were used to support the Cinematograph Films Act, in 1927, were to repress foreign domination of our cinema trade and to do away with trade abuses, to alleviate unemployment by creating a new industry—and that is becoming more necessary now with a Conservative Government in office—to publicise Britain, its manufactured goodsc and methods by pictorial means, and to make use of the cinema for a British rather than a foreign education standpoint. These things are just as necessary today, and they underline the need for supporting the production side of the film industry. Indeed, the Government ought to be giving a much bolder lead to it than to some other industries at this time, because it can help us to overcome our political, social and economic difficulties.

Whatever the Financial Secretary may say about this tax not meaning the difference between life and death, at least it means the difference between health and sickness. The right hon. Gentleman should have been more forthcoming than he has been today about possible tax reliefs. Is he aware that the Cinematograph Exhibitors' Association, as a result of its losses, has already made it known that it may not be able to support the extension of the Production Fund, which is to end in October, 1957? So the question of production is linked closely with the support given to the cinemas.

Reference has been made by hon. Members on both sides of the Committee to the special need of the small cinemas. I want to stress the necessity for doing something to prevent the smaller cinemas from closing. For the Financial Secretary to dismiss this as of little importance shows that the right hon. Gentleman has not been in consultation with some of his right hon. Friends in the Government, because I have here a copy of a letter sent to the Minister of Labour showing that in May this year cinemas were closing in many parts of the country.

The letter lists the Princes Cinema, in Horwich, the Rex, in Bridgwater, the Palace, in Ammanford, the Gaiety, in Southampton, the Empire, in Rawdon, the Cameo, in Warrington, the Star, in Warrington, the Boulevard, in Nottingham, which has been mentioned this afternoon, the Tivoli, in Tiverton, the Black Cat, in Parkhead, the Grand, in Burnley, the Cinema, in Heaton Park, the Royal, in Chorley, the St. Georges, in Falmouth, and the Electraceum, in Oldham. In other words, information has been provided to a member of Her Majesty's Government, and I should have thought that this information would have been passed on, and that it would not have been kept in watertight compartments.

I know also, as a result of correspondence, that small cinemas are having great difficulty in keeping open. My right hon. Friend the Member for Huyton (Mr. Wilson) has given me a letter which he had received from a captain of the Royal Marines. I expressed special interest because for 200 years the headquarters of the Royal Marines was in my constituency. After the war this captain put his life's savings into a small cinema. In his letter he said that he is being hounded out of business by excessive taxation, that he is £1,000 "in the red," that he is having to sell his house and that he has to start life anew. He said that at the moment he is paying £40 a week in tax and is losing £35 a week on the cinema. He is going to sell the cinema to industry because he cannot afford to continue losing money. He added that it is the only cinema for miles around, so because of taxation people in that country district are being prevented from visiting the cinema and taking a small part in social activity.

This gentleman said in his letter that he had raised the matter with an hon. Member who is now a Government Whip, who passed it on to an hon. Gentleman opposite who is Chairman of the Conservative Films Sub-Committee. The writer added that although he was politically inclined that way, he was beginning to find that the Conservative Party had little or no interest in the small businessman.

Mr. Ede (South Shields)

His eyes are being opened, too.

Mr. Bottomley

As my right hon. Friend says, his eyes are being opened, too.

We all agree that the cinema is an essential part of our social fabric, and, as such, we ought to try to retain it. In some cases, as in the case of that country district, it is the only entertainment readily available to members of the public who can share it with their families.

8.15 p.m.

There was a time when, because of the flourishing condition of the industry, profits were high, Entertainments Duty was introduced. But there are not the same flourishing conditions today, and although the hon. Gentleman the Member for Cheadle (Mr. Shepherd) said that greater numbers are attending cinemas than ever before, that merely represents a general share in the increased prosperity of our land as a result of the Welfare State, full employment and better opportunities for everyone. Really, the cinema industry is not as flourishing as it should be, and the numbers of filmgoers are beginning to fall. This is revealed by the downward trend in attendances since 1946, when they amounted to 1,635 million. In 1954, the numbers had fallen to 1,276 million, and in 1955 there was a further deterioration.

The urgency of the need to help the small cinemas is illustrated by the fact that of the 4,500 cinemas in the country, 2,048 has a seating capacity of less than 750. It is among the latter that losses are being made, where the estimate is that net takings are less than £250 a week.

I say to the Chancellor, therefore, that he should try to help the smaller cinema proprietors. I have not yet heard whether the right hon. Gentleman cannot give them consideration in the same way as it is given to charity performances, in respect of which it is possible to get tax relief. Is it not possible to recover tax in the same way where it is clearly shown that a cinema must close if something of that kind is not done? Entertainments Duty is indeed extremely heavy. The amount collected in 1954 was 32.6 of the gross takings at cinemas, or 50 per cent. of the net takings. The total amount of Entertainments Duty collected last year was £35,330,000.

My hon. Friend the Member for Walthamstow, West (Mr. Redhead) spoke as one who has been employed in Customs and Excise and he referred to the exemptions and the concessions and the resulting difficulties. Is it not possible to subject the cinema industry to Income Tax and Profits Tax in the same way as other forms of industry? Why should it be singled out as an industry which has to pay an additional tax? Why is it the only industry that has to do so?

I agree that Entertainments Duty is not supposed to be a tax on profits, but a levy imposed upon the consumer. In fact, that is not so today and the tax is borne by the industry. Cinemas have been compelled to put up their prices. I should have thought this undesirable at a moment when we are trying to prevent inflation and to stop the cost of living from rising. As my hon. Friends have said, even if the exhibitor puts up the price of a seat from ls. to ls. 6d., he receives only l½d., which is not much help to the small cinema proprietor. This is a hardship not only on him, but also on the entire industry.

A Committee set up under the chairmanship of Lord Moyne, in 1936, reported as follows: the film is ߪ undoubtedly a most important factor in the education of all classes of the community, in the spread of national culture and in presenting ideas and customs to the world. Its potentialities, moreover, in shaping the ideas of the very large numbers to whom it appeals are almost unlimited. I conclude by saying that the British film industry is essential for aesthetic. social, trade and political reasons. I hope that the Financial Secretary has not said the last word, but that what has been put to him by several of my hon. Friends and his own supporters will be further considered. If not, we shall have no alternative but to force a Division.

Sir C. Taylor

The portion of the speech of my right hon. Friend which referred to the smaller cinemas was received with great disappointment in all parts of the Committee. I think that my hon. Friends who listened to it were extremely bitter in the disappointment which they felt. All of us have small cinemas in our constituencies, and have examined figures audited by qualified accountants, and know that a great many small cinemas have already gone bankrupt and a great number of others will do so in the future unless something is done to help them.

My right hon. Friend said that the Treasury had examined a great many suggested schemes for helping the smaller cinemas. All hon. Members can do is to put forward reasonable suggestions if they are convinced of the justice of the case. It is not the duty of hon. Members, and never has been, to find a perfect Amendment which may meet the case. I submit that, if we are able to convince the Government about the injustice meted out to the smaller cinemas, it is the duty of the Treasury to draft a suitable Amendment to meet the case.

Some of us feel extremely strongly about the subject, and I would urge my right hon. Friend to look into the matter again before the Report stage and to give us an assurance that he will further consider the subject in order to avoid more bankruptcies in the industry.

Mr. Joseph Slater (Sedgefield)

Listening to the Financial Secretary's speech, I was reminded of a man who used to belong to our local cricket team. If we wanted to keep the match going, we put him in, and he would stonewall for hours. The Financial Secretary seems to have the same attitude towards the appeal which has been made on behalf of the small cinemas.

I come from Durham County where, in common with other parts, we have the problem of small cinemas being forced to close through lack of support. The Chancellor of the Exchequer is no stranger to that county, for at one time he represented one of its non-county boroughs, and he will appreciate that the rural areas there have the same problem as is found elsewhere. I represent the second largest rural constituency in the county, and I am well aware of the difficulties faced there. A friend of mine went into the cinema business, but, because of lack of support from people in the area, he has had to close down.

One of the reasons given for lack of support for cinemas in rural areas is the advent of television. I believe that, if it were not for the sale of ice cream and sweets, other small cinemas would have to close. In my county there are small cinemas which are not making anything like the figure of £150 per week which has been mentioned.

I have come to the conclusion that the tenor of the right hon. Gentleman's speech was, "raise your prices if you want to keep your cinemas open". The cinema proprietors know that immediately they raise their prices they will lose support. Even if they do raise their prices, the monetary benefit that they receive is negligible, because the greater part of the increase goes to the Treasury. In view of the difficulties which the small cinema proprietors have to face, the right hon. Gentleman ought to have a second look at the matter.

I have received a communication from the Majestic Cinema, Ferry Hill, a cinema run by trustees, and kept open ever since I was a youngster, from the silent film days. The trustees say that, in view of the present reduced patronage due to the advent of T.V. and other attractions, coupled with the increased cost of maintenance, they are finding it very difficult to carry on. This is a cinema which it is not sought to run at a profit; it is merely desired that it shall pay its way and exist to maintain local social amenities.

I hope that the right hon. Gentleman will have further thoughts about the small cinema.

Mr. Hayman

At the risk of being unpopular, 1 feel that I must take part in the debate because it very seriously affects a county like Cornwall, where I represent an important constituency.

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

It also affects Knutsford.

Mr. Hayman

Yes, it affects Knutsford. Recent speeches show that other parts of the country are also affected.

The importance of the small cinema in the countryside is that it represents a vital amenity for the people who live and work there. The depopulation of the countryside is going on apace today, and it reminds us very much of what happened in the inter-war years. The cinema in the small urban town or large village which is unable to benefit from existing concessions deserves special consideration. In a county like Cornwall, where we have a big holiday population—we do not always get sunny weather—it is essential that there should be some small places of entertainment to which people can resort in wet weather.

A small cinema proprietor in Cornwall tells me that, after he has met basic expenses in respect of film hire, rent, rates, electricity, advertising, carriage of films, wages, etc., there is nothing left for depreciation of machines and seats. I will not disclose where the cinema is because I have no authority to do so, but it is obviously typical of many cinemas. I would point out that that catalogue of expenses does not include renovation and repair of the building.

Much has been said of the competition of television, and so on, but there are many thousands of people still in the countryside who cannot afford television, and cannot afford the high expense of travelling to a town 10 miles away. These small cinemas are strategically placed, one might say, throughout the countryside to serve the rural population.

In this particular cinema, the takings average £100 a week, and no less than one-third of that sum goes in Entertainments Duty to the Chancellor of the Exchequer. The Financial Secretary told us a little while ago that the mind of the Chancellor even now is not closed to some proposal, and he admitted to me that that might even mean a diminution in the revenue from this duty. I would suggest to him that this duty is bleeding to death this industry, or at least the small cinemas, and I hope that he will have further thoughts on this matter and bring in a proposal which will help them immediately.

8.30 p.m.

Sir Thomas O'Brien (Nottingham. West)

I will not detain the Committee more than a few minutes. First of all. the small exhibitors of Britain, whatever the outcome of this debate and whatever the final decision of the Government may be, will be very grateful for the warm sympathy which hon. Members on both sides of the Committee have given to their case.

I should like to make two points. I would support the suggestion made by the hon. Member for Eastbourne (Sir C. Taylor) that, the Chancellor having heard the debate and the proposals and observations that have been made, the Treasury or the Government should prepare an Amendment for the Report stage having regard to the information now in possession of the Treasury. The Treasury has all the facts already, and from the discussions that have taken place today adequate information can be provided. Therefore, I think it is incumbent upon the Chancellor himself to produce the suggested Amendment or new Clause that will meet this case.

It may interest the Committee to know that, in regard to the trade union which 1 represent, which caters for the technicians and other general staffs of the cinemas, we ourselves have been obliged in our trade union agreements with the Cinematograph Exhibitors' Association, representing both the small exhibitors and other exhibitors, to have what we call a financial hardship clause. I mention this in order to indicate that we as a trade union are convinced of the seriousness of the case of the small exhibitors.

We have willingly agreed that an exhibitor who is aggrieved financially and finds himself in a position in which he is not able to pay the trade union minimum rates of pay can appeal through acceptable chartered accountants to be released of the obligation of paying minimum rates of pay. I do not know of any other trade union in the country which has such a clause. However, I will leave that with the Chancellor, and assure him that we as a union and I myself are convinced that there are difficulties among these small exhibitors, even to the extent that a trade union leader such as myself has to agree to a remuneration below the ordinary standard of trade union conditions.

The last point about the Entertainments Duty is that it is no longer morally justified, but I will reserve my major comments on the other Clauses on the Order Paper and will probably speak again. On the subject of television, radio and so on, the Chancellor must take note of the fact that this new source and these new methods of entertainment, popular as they are, and they are becoming increasingly popular, have to be considered against what is left on the fringes of orthodox entertainment and which continues to pay the Entertainments Duty. We must look at that fact, and the Chancellor must also look at it.

If these new forms become so popular, such as television, both B.B.C. and commercial, and the radio, which are not affected by the Entertainments Duty, the people who are struggling with the orthodox forms of entertainment will really have to be helped, and I would ask him to consider whether on Report stage he will not put forward an Amendment to deal with this particular case.

Mr. Dudley Williams

I am very glad to have the opportunity of following the hon. Member for Nottingham, West (Sir T. O'Brien). I thought he made a most important point when he suggested that the trade union of which he is the head had to have a special arrangement with certain of these small exhibitors.

While on that point, I found it rather difficult to follow the argument of my right hon. Friend the Financial Secretary to the Treasury, who, I am sorry to say, is not here at the moment, when he said that the case was not made out for hardship amongst the smaller cinema exhibitors. I felt that the case was fairly well made out by what was said by hon. and right hon. Gentlemen on both sides of the Committee, but also, in particular, the remarks made by the hon. Member for Northfield (Mr. Chapman), who is no longer in his place. The hon. Gentleman said that about 75 per cent. of the cinemas with a capacity of 1,000 and under were losing money, and I am quite certain that that figure is correct.

I have a particular case in my own constituency, which is a rather unusual case. It is that of a theatre which, in order to be able to maintain its productions of live plays, has to show films for the greater part of the year, and that theatre is losing a very considerable sum of money. I have made a note of the losses which amounted to about £1,800 in the last year, while £10,900 was paid in respect of Entertainments Duty. It is most unfortunate that a theatre of that nature, which is a very important part of the social life of my constituency and which is struggling to keep alive by the showing of films, is now to be put out of business because of the burden of the Entertainments Duty.

I should like my right hon. Friend to pay attention to the plea made by the hon. Member for Nottingham, West and other hon. Members that he should have another look at the matter before Report. It would be a great tragedy if small cinemas were put out of business. They are owned and run by people who are financially extremely courageous. They have had very tough times and are very sore that they are to be knocked out while the large chains will be allowed to continue.

Mr. Glenvil Hall

I do not intend to detain the Committee for more than a minute or two, and I should not have intervened had the Financial Secretary concluded his speech as I had hoped, namely, with some concession to the very strong representations which have been made from all quarters of the Committee. There is one point which may not, I think have yet been made and which I should anyway like to underline. Much has already been said about the losses and difficulties which are now falling increas- ingly on the owners of small cinemas, and I shall not labour that issue.

I should like to put another point which may carry weight. We all know that the United States film industry can recoup itself within its own borders. It is extremely difficult for the British film industry to do that, owing to the fact that the number of cinemas here does not allow more than a very small margin on what can be described as popular films. Many cinemas, small ones in particular, are closing down in increasing numbers. That means that presently fewer and fewer British films will have a shop window where they can be shown in this country. Which in turn will mean that the British film producers will eventually have to go out of business. That would be a great loss not only to this country but to the world. I shudder to think of a world in which the films which most of us will see will be from Hollywood. We send abroad many films which are ambassadors for our way of life and for the British sense of tolerance. It would be a tragedy if fewer and fewer British films were made because they were unable to find screening in this country.

I hope that the right hon. Gentleman will not look upon this debate as a mere nuisance to himself and to the Treasury. In every quarter of the Committee hon. Members are very disturbed at the situation which now exists and the worse situation which we know will exist next year, unless something is done. I therefore hope that the right hon. Gentleman, even now, will be willing to retrace his steps and have another look at this Clause to see whether something cannot be done to meet the wishes which have been so forcefully expressed.

Major Sir Frank Markham (Buckingham)

I will not detain the Committee for more than a few minutes in putting my point of view on an issue upon which opinions have been expressed with force and great fairness; but it is a mistake to suggest that all the losses carried by cinemas in this country can be blamed on the present system of taxation.

The fact is that the cinema industry is a diminishing industry. It is a declining industry. These losses which have been shown so emphatically by hon. Members —and I can parallel them in cinemas in my own constituency—are not so much because of the incidence of the tax but because people are staying away from cinemas because of the added and improving attraction of television; and it is television which will improve much faster than the cinema.

No doubt, in a very short time we shall be having not only colour television, but colour television on much larger screens. These things are coming, and with them there will be more T.V. fans and fewer cinema fans. Therefore, we shall have, first, the appeal this year to exempt from tax the small cinema in rural areas. Next year or the year after, the cry will be for small cinemas in all areas, and the year after that it will be for cinemas everywhere. Then there will be a sustained cry throughout the country to subsidise cinemas to keep them going, not only as educational institutions, but also as places where young couples can do their courting. Let us recognise the economic facts behind all this.

There is one other point. In one's lifetime one has noticed the deterioration of the cinema programmes. There is not one of us in maturity who can but regret the exceptionally high percentage of American gangster films of brutality and thuggery which are dished out nowadays to young people. I would far rather that that influence on our young people became less than continue as it is today, and I should be a much keener advocate of cinema tax reduction if the programmes were less sadistic.

Yet, in spite of my two major arguments, first that the industry is declining anyway and, secondly, that it is often a bad influence on young people, I hope that my right hon. Friend the Chancellor will consider the representations which have been put up to him from all sides of the Committee for lowering taxation on cinemas in rural areas. There is something worth saving in this cinema industry. Even at its worst, it brings knowledge of the ways in which other peoples live; it brings great classics within the vision of all; and at its best it is one of the finest forms of education and amusement ever devised. It would be a bad thing for the country if cinemas went entirely from our rural areas, and I hope that on Report stage my right hon. Friend will be able to meet the point for ameliorating the difficulties of small cinemas in country districts.

Mr. Charles A. Howell (Birmingham, Perry Barr)

I hope that the hon. and gallant Member for Buckingham (Sir F. Markham) will forgive me if I do not follow his line of argument. It is not on all fours with the arguments which have been adduced today by other hon. Members on his side of the Committee.

One of my hon. Friends referred earlier to the generous heart of the Chancellor of the Exchequer and there was some rather caustic comment at the time. I wonder what he is thinking now about the generous heart of the Chancellor. I have some sympathy with the Financial Secretary in the task that was imposed upon him. He appeared to me to feel rather guilty in giving out the edict of his right hon. Friend the Chancellor.

While the right hon. Gentleman congratulated both sides of the Committee on keeping the debate free from party points, I make no apology for raising one now. It is not long since the Conservative Party was competing with the cinemas for space on hoardings. When walking along the road and seeing advertisements for "Seven Brides for Seven Brothers" and various other colossal films, one saw big placards pointing out that "Conservatism works". I remind hon. Members opposite who are now surprised at what is happening to the small cinemas that that is how Conservatism works. It looks after the interest of big business.

Walking around Leicester Square[Laughter]—not the way in which the minds of my hon. Friends are working. I hope they will follow my line of argument more closely than some of them seem to be doing. If one walks round Leicester Square one sees nothing but lots of colossal cinemas. [Laughter.] I must remind my hon. Friends that it is the hon. Gentleman who usually sits on the Front Bench opposite below the Gangway who refers to the shocking incidents in Leicester Square. I am thinking more on the aesthetic side of what one sees in the big signs—the bright lights, not the gaudy lights.

When one walks around there, one cannot help being struck by the colossal cinemas which one sees. There is no suggestion that any of those are going bankrupt. I do not know that the other people who seem to be amusing my hon. Friends are going bankrupt, either.

8.45 p.m.

Lieut.-Colonel Marcus Lipton (Brixton)

They do not pay tax.

Mr. Howell

It is perhaps not entertainment.

Mr. Ellis Smith

It does not pay.

Mr. Howell

What I am trying to convey to the Committee is that it would appear that the Chancellor of the Exchequer is Leicester Square-minded. These big cinemas can flourish, but the little cinemas can go to the wall. It seems to me that that is typical of Conservatism and its concern for big business. I am surprised that hon. Members opposite expect anything different. We shall see later, in the Division, whether some of the support which has been given to the new Clause by hon. Members opposite is as sincere when it comes to voting.

The Financial Secretary indicated—I would put it no higher than that—that the Chancellor is fully aware of the position of the small cinemas, but he went on to say that this is not the proper time to do anything about them, owing to the financial position of the country. Surely to goodness we are on a plateau of success. It is not so long ago that we were asked to "Invest in success." Is this success, or have we now come down to the truth that the success is only a myth, because if that is so then none can expect an amelioration of the tax. There can be no tax relief for small cinemas or anyone if the country cannot afford it.

Quite frankly, as I see it the Chancellor wants some money. He wants a global amount of money out of the entertainment industry. I would say to him that if he and his Financial Secretary cannot find a solution, we can at least ask him to refer to the Economic Secretary, who is now sitting with him on the Front Bench. He at least has brought into the House of Commons a new phrase, which is known in other spheres as Boyle's Law, and I do not think that it should be impossible for him to find a Boyle's formula for Entertainments Duty. I suggest to him that he accept the point of view put so cogently from both sides of the Committee that, if it is necessary to get a global amount of money from entertainment, then let us have an equitable formula which will find out where the money is, without putting other people out of industry.

When the Financial Secretary concluded his speech by saying," We may be able to come along later "—apparently when the country is more wealthy—he might have finished up by saying to the cinemas, "Later, Alligator."

Lieut.-Colonel Lipton

I am not going to follow my hon. Friend the Member for Perry Barr (Mr. C. Howell) around Leicester Square. The point that I want to make very briefly is this. Reference has been made to the plight of the cinemas in rural areas, in country and in provincial towns, but the point which I want to make is that the cinemas in London are also in a very difficult position. Unfortunately, the Financial Secretary does not seem to estimate the seriousness of the position in its proper magnitude. Even in London the cinema is going down.

I will mention the case of one cinema in Brixton. That cinema cannot be regarded as a very small one because it has seating capacity for 998 persons. I do not know from where the Financial Secretary got his figures showing that attendances are not very much down, because in this cinema on Brixton Hill the attendance went down from 350,000 in 1954 to 270,000 in 1955. In the same two years, the takings went down from £20,000 to £16,000.

The only point I wish to make is that this process cannot go on very much longer. The time has certainly arrived when, not only from the point of view of the small cinemas in rural areas, but even from that of the larger cinemas in inner London of the kind I have mentioned, action will have to be taken if we want to avoid the complete disappearance of the cinema from our social life.

Mr. H. Macmillan

I think it would be proper for the Committee now to reach a decision on this subject, which we have debated for some time. My right hon. Friend the Financial Secretary has made a very comprehensive statement on behalf of the Government, but I feel that it would be courteous of me just to add to it for a few minutes.

We have had an extremely interesting debate covering a very wide field, into some of the peregrinations of which I would not at my age venture. The debate has covered some really interesting points, both on the production side of the film industry—which were raised by the right hon. Member for Rochester and Chatham (Mr. Bottomley) and by the right hon. Member for Colne Valley (Mr. Glenvil Hall), in particular—and on the question of the cinema industry as a whole, with particular emphasis, perhaps, on the Clause relating to the small cinema.

I must be quite frank with the Committee and ask for its help and its sympathy. At the beginning of every Finance Bill—the new Clauses stage—a very large number of proposals are put upon the Order Paper. I saw the almost envious and admiring look of the right hon. Member for Colne Valley when his successor was speaking, because the right hon. Gentleman knows as well as I do that Treasury Ministers have to take a view of the whole position and very often have to resist a large number of proposals which in themselves have a great deal to recommend them.

After this Clause we are coming to another and then to more. All of these proposals are meritorious and, in many respects, commend our sympathy to make this or that concession here and there, but if we were to meet them all I am afraid that there would be very little left of the Budget surplus.

Mr. Ellis Smith

Meet one of them.

Mr. Macmillan

Perhaps the hon. Gentleman was not present during the debate on the first new Clause, which we accepted in principle.

Therefore, I ask the Committee to look at the position as a whole. I thought that one of the many interesting speeches made in the debate was made by the hon. Member for Nottingham, West (Sir T. O'Brien), who speaks with great knowledge of the trade union side of this industry. He speaks with perfect truth when he says that, in the present situation, the whole problem of the Entertainments Duty would have to be reconsidered in the light of new developments. That is true.

All sorts of changes are taking place, and it is quite right that the matter should be considered as a whole. On the other hand, this duty brings in a very large sum of money—over £30 million. I am very reluctant to start to touch the fabric of it in this year's Finance Bill. This year I had, as my first experience of a Finance Bill, to introduce a Budget which maintained a very large surplus. I also thought it right—unpopular but right—to add to that surplus in two directions, by indirect taxation of a considerable amount and by an almost equal amount of direct taxation. What were the arguments which made me feel that that was right? They were that the surplus in the present conditions, this year, should be fortified rather than dissipated.

The Financial Secretary has said that we will look at the whole structure of Entertainments Duty. Many changes may have to take place. I must ask the Committee on this occasion and in this Bill, however, to support the broad view which I am forced to take on this as on many other desirable proposals and to stand firm upon the main purpose which we have set ourselves, which is to maintain and strengthen the surplus and not to begin to fritter it away.

I know how strongly hon. Members feel about different aspects. Perhaps it would be fair to say that important as are the points of view of production and of the large-scale industry, perhaps the sympathy fell largely on the smaller cinemas, but I would remind the Committee that when this tax concession was made, it was based not upon the small cinemas but upon accessibility for the population. It was related to the character of the population. We are therefore getting rather confused if we talk about the small cinema as such in relation to the structure of the tax as laid down by Sir Stafford Cripps, because the concession was made, I think rightly, bearing in mind the character of the area.

Let us be frank, even there we find that a number of anomalies have taken place. Wherever we make a concession of this kind and wherever we draw the line, there is always something just the other side of the line.

I will look very carefully at all the arguments which have been put before us in order to examine the position, but it would be misleading the Committee for me to say that I can entertain any hope of making a change on Report. I must ask the Committee to support me in maintaining the structure of the tax in the broad considerations of the present financial situation—considerations which will have to apply to many other deserving or appealing cases. Having given the assurance that 1 fully recognise the problems set in modern conditions by the whole structure of the tax, I hope the Committee will support us in resisting these changes.

Question put, That the Clause be read a Second time:—

The Committee divided: Ayes 210, Noes 253.

Division No. 224.] AYES [8.59 p.m.
Ainsley, J. W. Hall, Rt. Hn. Glenvil (Colne Valley) Padley, W. E.
Albu, A. H. Hamilton, W. W. Paget, R. T.
Allaun, Frank (Salford, E.) Hannan, W. Paling, Rt. Hon. W. (Dearne Valley)
Allen, Arthur (Bosworth) Harrison, J. (Nottingham, N.) Paling, Will T. (Dewsbury)
Allen, Scholefield (Crewe) Hastings, S. Palmer, A. M. F.
Anderson, Frank Hayman, F. H. Parker, J.
Awbery, S. S. Hobson, C. R. Parkin, B. T.
Bacon, Miss Alice Holman, P. Paton, John
Balfour, A. Holmes, Horace Peart, T. F.
Bence, C. R. (Dunbartonshire, E.) Holt, A. F. Price, J. T. (Westhoughton)
Benn, Hn. Wedgwood (Bristol, S.E.) Howell, Charles (Perry Barr) Price, Philips (Gloucestershire, W.)
Benson, G. Howell, Denis (All Saints) Probert, A. R.
Beswick, F. Hubbard, T. F. Proctor, W. T.
Bevan, Rt. Hon. A. (Ebbw Vale) Hughes, Cledwyn (Anglesey) Pryde, D. J.
Blackburn, F. Hughes, Emrys (S. Ayrshire) Randall, H. E.
Blenkinsop, A. Hughes, Hector (Aberdeen, N.) Rankin, John
Blyton, W. R. Hunter, A. E. Redhead, E. C.
Boardman, H. Isaacs, Rt. Hon. G. A. Reid, William
Bottomley, Rt. Hon. A. G. Jointer, B. Roberts, Albert (Normanton)
Bowden, H. W. (Leicester, S.W.) Jay, Rt. Hon. D. P. T. Roberts, Goronwy (Caernarvon)
Bowen, E. R. (Cardigan) Jeger, George (Goole) Robinson, Kenneth (St. Pancras, N.)
Bowles, F. G. Jeger, Mrs.Lena(Holbn & St.Pncs,S.) Rogers, George (Kensington, N.)
Braddock, Mrs. Elizabeth Johnson, James (Rugby) Ross, William
Brockway, A. F. Jones, David (The Hartlepools) Royle, C.
Broughton, Dr. A. D. D. Jones, Elwyn (W. Ham, S.) Shinwell, Rt. Hon. E.
Brown, Rt. Hon. George (Belper) Jones, Jaok (Rotherham) Short, E. W.
Brown, Thomas (Ince) Jones, J. Idwal (Wrexham) Shurmer, P. L. E.
Burton, Miss F. E. Jones, T. W. (Merioneth) Silverman, Julius (Aston)
Butler, Herbert (Hackney, C.) Kenyon,C. Skeffington, A. M.
Callaghan, L. J. Key, Rt. Hon. C. W. Slater, Mrs. H. (Stoke, N.)
Castle, Mrs. B. A. King, Dr. H. M. Slater, J. (Sedgefield)
Champion, A. J. Lawson, G. M. Smith, Ellis (Stoke, S.)
Chapman, W. D. Lee, Frederick (Newton) Sorensen, R. W.
Chetwynd, G. R. Lee, Miss Jennie (Cannock) Sparks, J. A.
Clunie,J Lever, Leslie (Ardwick) Steele, T.
Coldrick, W. Lewis, Arthur Stewart, Michael (Fulham)
Collick, P. H. (Birkenhead) Lindgren, G. S. Stones, W. (Consett)
Collins, V. J.(Shoreditch & Finsbury) Lipton, Lt.-Col. M. Stross,Dr.Barnett(Stoke-on-Trent,C.)
Cove, W. G. Logan, D. C. Summerskill, Rt. Hon. E.
Craddock, George (Bradford, S.) Mabon, Dr. J. Dickson Sylvester, C. O.
Cronin, J. D. MacColl, J. E. Taylor, Bernard (Mansfield)
Grossman, R. H. S. McGhee, H. G. Taylor, John (West Lothian)
Cullen, Mrs. A. McGovern, J. Thomas, lorwerth (Rhondda, W.)
Darling, George (Hillsborough) McInnes, J. Thomson, George (Dundee, E.)
Davies, Ernest (Enfield, E.) McKay, John (Wallsend) Thornton, E.
Davies, Stephen (Merthyr) McLeavy, Frank Timmons, J.
Deer, G. MacPherson, Malcolm (Stirling) Tomney, F.
Delargy, H. J. Mahon, Simon Ungoed-Thomas, Sir Lynn
Dodds, N. N. Mallalieu, E. L. (Brigg) Wade, D. W.
Dugdale, Rt. Hn. John (W. Brmwoh) Mann, Mrs. Jean Weitzman, D.
Dye, S. Marquand, Rt. Hon. H. A. Wells, William (Walsall, N.)
Ede, Rt. Hon. J. C. Mason, Roy West, D. G.
Edwards, Rt. Hon. Ness (Caerphilly) Messer, Sir F. Wheeldon, W. E.
Edwards, W. J. (Stepney) Mikardo, Ian White, Mrs. Eirene (E. Flint)
Evans, Albert (Islington, S.W.) Mitchison, G. R. White, Henry (Derbyshire, N.E.)
Evans, Edward (Lowestoft) Monslow, W. Wilkins, W. A.
Evans, Stanley (Wednesbury) Moody, A. S. Willey, Frederick
Fernyhough, E. Morris, Percy (Swansea, W.) Williams, David (Neath)
Fienhurgh, W. Morrison, Rt.Hn.Herbert(Lewis'm,S.) Williams, Rt. Hon. T. (Don Valley)
Fletcher, Eric Mort, D. L. Williams, W. R. (Openshaw)
Forman, J. C. Moss, R. Williams, W. T. (Barons Court)
Fraser, Thomas (Hamilton) Moyle, A. Willis, Eustace (Edinburgh, E.)
Gibson, C. W. Mulley, F. W. Wilson, Rt. Hon. Harold (Huyton)
Gooch, E. G. Neal, Harold (Bolsever) Winterbottom, Richard
Gordon Walker, Rt. Hon. P. C. Noel-Baker, Rt. Hon. (Derby, S.) Woodburn, Rt. Hon. A.
Grenfell, Rt. Hon. D. R. O'Brien, Sir Thomas Woof, R. E.
Grey, C. F. Oliver, G. H. Yates, V. (Ladywood)
Griffiths, David (Rother Valley) Orbach, M. Zilliacus, K.
Griffiths, Rt. Hon. James (Llanelly) Oswald, T.
Griffiths, William (Exchange) Owen, W. J. TELLERS FOR THE AYES:
Grimond, J. Mr. Pearson and Mr. Simmons.
Hale, Leslie
Agnew, Cmdr. P. G. Gower, H. R. Mawby, R. L.
Aitken, W. T. Graham, Sir Fergus Maydon, Lt.-Comdr. S. L. C.
Allan, R. A. (Paddington, S.) Grant, W. (Woodside) Monckton, Rt. Hon. Sir Walter
Alport, C. J. M. Grant-Ferris, Wg Cdr.R. (Nantwich) Morrison, John (Salisbury)
Amory, Rt. Hn. Heathcoat (Tiverton) Green, A. Mott-Radclyffe, C. E.
Anstruther-Gray, Major Sir William Grimston, Hon. John (St. Albans) Nabarro, G. D. N.
Arbuthnot, John Grimston, Sir Robert (Westbury) Nairn, D. L. S.
Armstrong, C. W. Gurden, Harold Neave, Airey
Ashton, H. Hall, John (Wycombe) Nicholson, Godfrey (Farnham)
Atkins, H. E. Harrison, A. B. C. (Maldon) Nicolson, N. (B'n'm'th,E. & Chr'oh)
Baldwin, A. E. Harrison, Col. J. H. (Eye) Nield, Basil (Chester)
Balniel, Lord Harvey,Air Cdre. A. V. (Macelesfd) Nugent, G. R. H.
Barber, Anthony Harvey, Ian (Harrow, E.) Nutting, Rt. Hon. Anthony
Barlow, Sir John Harvey, John (Walthamstow, E.) Oakshott, H. D.
Barter, John Harvie-Watt, Sir George O'Neill, Hn. Phelim (Co.Antrim, N.)
Baxter, Sir Beverley Hay, John Ormsby-Gore, Hon. W. D.
Bell, Philip (Bolton, E.) Heald, Rt. Hon. Sir Lionel Orr, Capt. L. P. S.
Bell, Ronald (Bucks, S.) Heath, Rt. Hon. E. R. G. Orr-Ewing, Charles Ian (Hendon, N.)
Bennett F. M. (Torquay) Hill, Mrs. E. (Wythenshawe) Osborne, C.
Bennett, Dr. Reginald Hill, John (S. Norfolk) Page, R. G.
Bevins, J. R. (Toxteth) Hirst, Geoffrey Pannell, N. A. (Kirkdale)
Bidgood, J. C. Holland-Martin, C. J. Partridge, E.
Birch, Rt. Hon. Nigel Hope, Lord John Peyton, J. W. W.
Bishop, F. P. Hornby, R. P. Pickthorn, K. W. M.
Black, C. W. Horobin, Sir Ian Pilkington, Capt. R. A.
Body, R. F. Horsbrugh, Rt. Hon. Dame Florence Pitt, Miss E. M.
Bossom, Sir Alfred Howard, Hon. Greville (St. Ives) Pott, H. P.
Boyd-Carpenter, Rt. Hon. J. A. Howard, John (Test) Powell, J. Enoch
Boyle, Sir Edward Hughes Hallet, Vice-Admiral J. Price, Henry (Lewisham, W.)
Braine, B. R. Hulbert, Sir Norman Prior-Palmer, Brig. O. L.
Braithwaite, Sir Albert (Harrow, W.) Hurd, A. R. Raikes, Sir Victor
Bromley-Davenport, Lt.-Col. W. H. Hutchison, Sir Ian Clark (E'b'gh,W.) Ramsden, J. E.
Brooke, Rt. Hon. Henry Hyde, Montgomery Rawlinson, Peter
Browne, J. Nixon (Craigton) Hylton-Foster, Sir H. B. H. Redmayne, M.
Buchan-Hepburn, Rt. Hon. P. G. T. lremonger, T. L. Remnant, Hon. P.
Bullus, Wing Commander E. E. Irvine, Bryant Cadman (Rye) Renton, D. L. M.
Burden, F. F. A. Jenkins, Robert (Dulwich) Roberts, Sir Peter (Heeley)
Butcher, Sir Herbert Jennings, J. C. (Burton) Robinson, Sir Roland (Blackpool, S.)
Campbell, Sir David Jennings, Sir Roland (Hallam) Rodgers, John (Sevenoaks)
Carr, Robert Johnson, Dr. Donald (Carlisle) Roper, Sir Harold
Cary, Sir Robert Johnson, Eric (Blaokley) Russell, R. S.
Channon, H. Joseph, Sir Keith Schofield, Lt.-Col. W.
Chichester-Clark, R. Joynson-Hicks, lion. Sir Lancelot Scott-Miller, Cmdr. R.
Cole, Norman Kaberry, D. Sharpies, R. C.
Cooper-Key, E. M. Keegan, D. Shepherd, William
Cordeaux, Lt.-Col. J. K. Kerby, Capt. H. B. Simon, J. E. S. (Middlesbrough, W.)
Corfield, Capt. F. V. Kerr, H. W. Smithers, Peter (Winchester)
Craddock, Beresford (Spelthorne) Kershaw, J. A. Soames, Capt. C.
Crowder, Sir John (Finchley) Kirk, P. M. Spearman, Sir Alexander
Crowder, Petre (Ruislip—Northwood) Lagden, G. W. Speir, R. M.
Cunningham, Knox Lambert, Hon. G. Spens, Rt. Hn. Sir P. (Kens'gt'n, S.)
Currie, G. B. H. Lambton, Viscount Stanley, Capt. Hon. Richard
Dance, J. C. G. Leavey, J. A. Stevens, Geoffrey
Davidson, Viscountess Leburn, W. G. Steward, Harold (Stockport, S.)
D'Avigdor-Goldsmid, Legge-Bourke, Maj. E. A. H. Steward, Sir William (Woolwich, W.)
Sir Henry Deedes, W. F. Legh, Hon. Peter (Petersfield) Stewart, Henderson (Fife, E.)
Dodds-Parker, A. D. Lindsay, Hon. James (Devon, N.) Steddart-Scott, Col. M.
Donaldson, Cmdr. C. E. McA. Lindsay, Martin (Solihull) Studholme, Sir Henry
Doughty, C. J. A. Linstead, Sir H. N. Summers, Sir Spencer
Drayson, G. B. Lloyd, Maj. Sir Guy (Renfrew, E.) Taylor, Sir Charles (Eastbourne)
du Cann, E. D. L. Longden, Gilbert Taylor, William (Bradford, N.)
Dugdale, Rt. Hen. Sir T. (Richmond) Low, Rt. Hon. A. R. W. Teeling, W.
Duncan, Capt. J. A. L. Lucas, P. B. (Brentford & Chiswick) Thomas, Leslie (Canterbury)
Eccles, Rt. Hon. Sir David Lucas-Tooth, Sir Hugh Thompson, Kenneth (Walton)
Eden, J. B. (Bournemouth, West) McAdden, S. J. Thornton-Kemsley, C. N.
Elliot, Rt. Hon. W. E. Macdonald, Sir Peter Tiley, A. (Bradford, W.)
Errington, Sir Eric McKihbin, A. J. Tilney, John (Wavertree)
Erroll, F. J. Mackie, J. H. (Galloway) Touche, Sir Gordon
Farey-Jones, F. W. McLaughlin, Mrs. P. Turner, H. F. L.
Fell, A. Maclay, Rt. Hon. John Tweedsmuir, Lady
Finlay, Graeme Macmillan,Rt. Hn.Harold (Bromley) Vane, W. M. F.
Fisher, Nigel Macpherson, Niall (Dumfries) Vaughan-Morgan, J. K.
Fleetwood-Hesketh, R. F. Maddan, Martin Vickers, Miss J. H.
Fletcher-Cooke, C. Maitland, Cdr. J. F. W. (Horncastle) Vosper, D. F.
Foster, John Maitland, Hon. Patrick (Lanark) Wakefield, Edward (Derbyshire, W.)
Fraser, Sir Ian (M'cmhe & Lonsdale) Manningham-Buller, Rt. Hn. Sir R. Wakefield, Sir Wavell (St. M'lebone)
Freeth, D. K. Markham, Major Sir Frank Walker-Smith, D. C.
Galbraith, Hon. T. G. D. Marlowe, A. A. H. Wall, Major Patrick
Gammans, Sir David Marples, A. E. Ward, Hon. George (Worcester)
Garner-Evans, E. H. Marshall, Douglas Waterhouse, Capt. Rt. Hon. C.
Glover, D. Mathew, R. Whitelaw, W.S.I.(Penrith & Border)
Godber, J. B. Maude, Angus
Gomme-Duncan, Col. Sir Alan
Gough, C. F. H.
Williams, Paul (Sunderland, S.) Wood, Hon. R. TELLERS FOR THE NOES:
Williams, R. Dudley (Exeter) Wooilam, John Victor Mr. Hughes-Young and
Wills, G. (Bridgwater) Yates, William (The Wrekln) Mr. R. Thompson.