HC Deb 21 May 1957 vol 570 cc1043-187

Considered in Committee.

[Sir CHARLES MACANDREW in the Chair]


3.43 p.m.

Mrs. Eirene White (Flint, East)

I beg to move, in page 1, line 22, after "payment" to insert: after deducting the amount of any levy payable under the Cinematograph Films Act, 1957, and ".

The Chairman

It would be convenient for the Committee to discuss this Amendment with the next Amendment on the Notice Paper, in page 1, line 22, after "duty", to insert: and excluding the amount of any levy payable under the Cinematograph Films Act, 1957 ".

Mrs. White

On the Notice Paper there are two versions of the Amendment which I have moved, and I will explain that they both have precisely the same objective in mind and that the only difference between them is one of drafting. If the Chancellor expresses a wish to accept one rather than the other, we shall have no objection.

The matter which is raised in the Amendment is of considerable importance to the cinema industry. The House recently passed a Bill which imposes in statutory form a levy upon the exhibitors in the cinema industry. For some years they have had a voluntary levy for collecting what was known as the Eady fund, the object of the fund being to help the production of British films. It was decided after consultation with the industry that the time had come to turn this into a statutory and obligatory levy, no longer voluntary.

In those circumstances, we wish to establish quite clearly and definitely that this levy, which is now a statutory tax, in a sense, on the industry, should not itself be taxable. We feel that it is wrong in principle that the exhibitors should be obliged by law to pay this levy under regulations which will be made by the President of the Board of Trade, and which will be presented to the House as a Statutory Instrument, if also, as we understand the present law, they are obliged to pay tax upon it. We understand that tax will be paid on it unless specific provision is made exempting the levy from tax.

That, in its simplest form, is the purpose of the Amendment. There is one great difference between the levy and what is still known as Entertainments Duty, although under the Finance Bill what was previously an Entertainments Duty becomes purely and exclusively a cinema tax, and I think that in future we should refer to it as a cinema tax and not as an Entertainments Duty. Now only cinemas are being asked to contribute to this tax.

In theory, that tax is paid by the person who buys the ticket at the cinema box office. It is theoretically a tax on the customer. But for many years it has been considered with some reason in the trade, if not in law, that the money is deducted from the proceeds which the exhibitor has at his disposal, and it makes for certain difficulties that the tax is legally on the consumer whereas this levy is on the exhibitor.

We have as yet no knowledge of the precise manner in which the levy under the Cinematograph Films Act, 1957, will be collected. That has still to be decided by regulations, and the regulations have not yet been published and may not be published until we have gone a considerable distance with the Finance Bill. We do not know whether the regulations which the President of the Board of Trade will present to the House will include a provision that the levy shall be chargeable upon every seat in the cinema or a provision that it shall be upon only certain seats. We do not know whether it will be a levy at a flat rate on every seat, or whether the higher-priced seats may have to carry a higher rate of levy. All of that is still hidden from us.

It is possible that the suggestion which has been made by the exhibitors' organisation, that there should be a flat rate of 1d. on every seat, will commend itself, but I could not say. It is suggested that that would bring in roughly the amount which the levy has to bring in, which is £.3¾ million in the first year; but, of course, the amount of the levy may be varied from year to year provided, according to the Act, it does not amount to less than £2 million or more than £5 million.

As I have said, it might be 1d. on one set of seats, 2d. on another and possibly 3d. on the higher-priced seats. All these are possibilities. Nothing is laid down in the Act, and as yet we have no regulations.

If we continued as things are at present and made this levy, included in the price of the seats, taxable, it would have certain very great disadvantages. It would have a serious moral disadvantage. We should be taxing the same thing twice, and that is a very strong argument behind the Amendment. A second practical argument is that we should be reintroducing into the scale of cinema prices an element which would to some extent outweigh the advantages of the simplified form of tax which the Chancellor has introduced this year.

The cinema industry is, I know, very glad that at long last there has been a review of the incidence of tax on the different prices of seats which will make it in future very much simpler and in some ways more advantageous for the cinema exhibitor. If he wishes to increase the price of his seats he will now have a straightforward and fair share of any increase in price. He will go fifty-fifty with the Chancellor; as the Bill stands, above 11d., then the difference between 11d. and the price of the seat, whatever it may be, is taken one-half for the cinema tax, as I prefer to call it. and the other half for the exhibitor. If the exhibitor wishes to increase his price by 3d., for example, at any stage in his price schedule, he knows that of that extra 3d. he will get 1½d. and the Chancellor will get 1½d. With certain seat prices in previous years, if the price was increased by 6d., then 5d. went to the Chancellor and only 1d. to the exhibitor. I think that those are the figures.

That system has been abolished, which is a very good thing; we are all grateful to the Chancellor for it and we appreciate that this simplified scale is much more reasonable than the old complex jungle which had grown up.

If the levy itself is to be taxed, however, then if the levy should be changed from time to time, or if there should be a different rate of levy on seats of different prices, we reintroduce something of the old difficulty. Then, in addition to the levy, if it were taxable it would also involve an extra payment to the Chancellor. Suppose—and I put this only for the sake of argument, because we are not yet in a position to discuss what the levy would actually be—that a 6s. seat should carry a levy payment of 3d., and that was taxable. In effect, we would be adding 4½d. and not 3d. to the cost of that seat, because one would have to pay the levy and also the 50 per cent. tax on it.

One could give similar examples at other levels. If we had a 2d. levy, 1d. would go to the Chancellor and, in effect, we would be paying on a 3d. levy and not a 2d. levy. It would lead to certain practical difficulties. The Chancellor would be bringing back into the whole system an element of difficulty arid rigidity which he has eliminated by the new arrangements, which would be a very great pity. Therefore, we feel very strongly indeed that there are at least two very good reasons why the Chancellor should accept this Amendment.

Whether or not it would involve the right hon. Gentleman in some lower amount of total tax depends to some degree on what happens to other Amendments later, and also on whether the industry itself should decide to increase its prices or not. But I do not think that we should argue on that basis, because I think the real basis for this Amendment is primarily the moral one that if we are making people, by law, contribute to a statutory fund we should not at the same time say, "And you must also pay tax on the amount that you are contributing".

It is very important that in this first Finance Bill after having passed the new Cinematograph Films Act we should make perfectly clear that this is our view. I hope that the Chancellor will agree with us, and I hope, also, that his right hon. Friend the President of the Board of Trade may have had a word or two with him about it. No doubt, as the Chancellor was at the Board of Trade himself before he took his present office, he will be familiar with the argument. It would be a pity to spoil the Act which has just been passed to set up the levy by then arousing a great deal of ill-feeling and a sense of injustice in the trade by taxing a statutory levy.

Mr. Eric Fletcher (Islington, East)

I support the Amendment. It is quite true that there is a similar Amendment in the name of some of my hon. Friends and myself, but, as my hon. Friend the Member for Flint, East (Mrs. White) said, both Amendments are designed to secure the same object. I do not think that there is anything to choose between the two so far as form is concerned, and I support the Amendment for the reasons which my hon. Friend has so fully and ably given.

As my hon. Friend has said, there are two reasons. First, there is the moral, or, as I would call it, the logical argument. What used to be a voluntary levy is now to be replaced by statutory levy. We had some debates about the details in connection with the Cinematograph Films Act. It has been accepted by the industry and it has been passed by the House. It changes the whole nature of the levy and in a sense there is no difference between a levy and a tax. They both exact, with the approval of Parliament, something from the unfortunate taxpayer, whether it is the exhibitors or the public who pay. But it really would be anomalous to put tax upon levy or tax upon tax.

The second argument is that of simplification. Here I think that the Chancellor is to be congratulated on having introduced a considerable measure of simplification into what has previously been a highly complicated structure for raising Entertainments Duty in the cinemas. It has been a method which, in the past, has led to a great many anomalies and difficulties from which the Revenue as well as the industry and the public have suffered. We now have an opportunity of a much tidier and more sensible structure which will, in its train, bring a great deal of administrative economy to Her Majesty's Customs and Excise and to the industry itself.

That measure of simplification will, it seems to me, be jeopardised unless an Amendment of this kind is accepted, because otherwise we shall be back where we were, with very complicated calculations to be made in fixing the range of cinema seat prices and in making the calculations about the amount of duty payable.

There is the further advantage which I hope will appeal to the Chancellor, which is this. As my hon. Friend said, we do not know precisely what is in the Government's mind with regard to the amount of the levy to be imposed. Parliament has given statutory authority to the Treasury to fix a levy which will produce between £3 million and £5 million. It is generally accepted by the industry that there will be a levy of 1d., and it so happens that a levy of 1d. will produce, so it is estimated, the approximate sum required of between £3¾ million and £4 million.

One cannot be too precise in estimating these things because it depends upon cinema attendances in the future, but if the figure were to be 1d. it would bring the 11d. up to 1s. and would enable the industry to have the maximum flexibility with all its advantages, economic, administrative and financial, and would also enable the Treasury, as participants to the extent of 50 per cent. above the 1s., to share in those benefits.

Therefore, it seems to me that here we have an Amendment which ought to commend itself to the Government on moral and logical as well as on financial and economic grounds, and I hope that the Chancellor will accept it.

The Chancellor of the Exchequer (Mr. Peter Thorneyeroft)

It might be convenient if I gave the Government view about these two Amendments. The hon. Lady the Member for Flint, East (Mrs. White) put the case with her customary clarity, and she speaks with considerable experience on this complicated matter of film finance. I am very glad to see her on the Opposition Front Bench. There are, as she said, two Amendments and they both have broadly the same effect. Our attitude to both is broadly the same, for the reasons which I shall give.

I shall have to advise the Committee not to accept the Amendments. The effect of them as they stand, and if nothing else happened, would be to lower somewhat the rate of duty and the revenue which was collected by the Exchequer. The Committee will forgive me for mentioning that relevant factor. It would lower the revenue by approximately £2 million if nothing else happened.

As the hon. Lady said, it is possible that other things might happen. The prices might go up, and indeed, some such suggestion as this has been canvassed in the film world, that we should lower the rate of duty and, on the face of it, the revenue, but reimburse ourselves by putting up the prices of the seats and thereby increase the revenue in that way.

4.0 p.m.

I think that a lowering of the rate of duty combined with Government encouragement for a sort of price maintenance arrangement to put up the cost of seats would not, on the whole, be acceptable to the Committee. There has already been enough criticism that the lowering of the tax has not been accompanied by a reduction in the price of seats. What is being said is, "We are going to find a way out of our difficulty by compensating by means of higher prices to the public and, therefore, higher revenue to the Exchequer."

That illustrates in one way—there are other ways in which one could illustrate it—the extraordinary difficulty of trying to marry up the duty and the levy. They really are separate things. The duty is an indirect tax imposed for the purpose of bringing revenue to the Exchequer. The levy is a form of redistribution of income within the industry itself. It is true that it has now been put on a statutory basis, but the effect is just the same; it is the collection of income from people who exhibit films and the channelling of that income back to the people who produce the films.

Various attempts have been made by the Socialist Party, when in power, and by the present Government, at different times, to come to voluntary arrangements whereby one enters into some kind of bargain in relation to Entertainments Duty. The answer to it all is that it does not work. It really is not a very orderly or sensible arrangement for the Exchequer to try to strike such kinds of bargain every year.

If we accepted the Amendment we should be inextricably linking it all up together. It would mean that the Revenue was entirely at the mercy of a decision about the levy. The moment one says that any extra pence added are for levy purposes and not taxable, a combination of decisions by the industry as to prices or by the Government as to the levy—that is, industrial money moving from one sector of the industry to another—derogates from the amount of revenue that is collected. I am not saying that there are not arguments which can be adduced in favour of this. Indeed, I am sure there are such arguments. We have already tried a number of ways of arranging this, but my firm advice to the Committee at this stage—I have had some experience with this at both the Board of Trade and the Treasury—is that this Government and any future Government should do everything in their power to separate the two.

In fact, we took into account when we were making our assessment about the duty—I have to be careful about my choice of words—the fact that there would be a levy. I believe that that is the sort of relationship that one should have in matters of this kind. The levy on a voluntary basis was, when it was being collected, £2½million. As the hon. Gentleman said, it will now be about £3¾ million. There is, therefore, some increased burden on the exhibiting side of the industry. One has to face that and accept that that is so.

The relief in tax here is about £6½ million, much bigger than the increase in the levy which will be passed from one sector of the industry to another. Frankly, we weighed that among the other factors which we had in mind when we fixed the tax at the point at which we did. We said, "Fifty per cent. of everything above 11d." We might have said, "Fifty per cent. of everything above 10d." We canvassed many suggestions.

However, I strongly advise the Committee to accept the Clause as drafted in this respect and not to be drawn along to any scheme, however superficially attractive, which links up in some way the levy and the duty. We shall be led, year in year out, into endless and rather fruitless discussions if we allow that. We shall say each year, as the hon. Lady said, that we do not yet know what the levy will be. How can we then fix the duty? Close connections of that kind are, I think, dangerous and profitless.

Mr. John Rankin (Glasgow, Govan)

My hon. Friends and I do not for one moment under-estimate the difficulties which face the Chancellor. The right hon. Gentleman is fully aware that we appreciate his position. I gave a quotation on Second Reading to show that it was not my hon. Friends and I who sought to marry tax and levy, but that it was in the Board of Trade where it was laid down as a guiding principle a number of years ago that the tax and the levy should be married.

In fact, the right hon. Gentleman himself—we do not criticise him for it—has acknowledged the principle in his present Budget. He has just said that he is giving the industry relief in respect of Entertainments Duty amounting to £6½million, but he gave that £6½ million because the levy would absorb £3¾ million of it. In other words, by his decision he recognised that if the levy had to be increased as it is being increased, the Entertainments Duty must be diminished.

It has become a popular misconception that the exhibitors had a relief of £6½million. Perhaps when they met the Chancellor they were convinced that they had got £6½ million from him, but when they left the meeting they found that a retiring collection was being taken by the President of the Board of Trade. In fact, from the £6½ million the right hon. Gentleman took £3¾ million. Whether the Chancellor had previously been aware that the President of the Board of Trade would take a retiring collection after the meeting I do not know, but that is what happened. By doing that, the right hon. Gentleman recognised the tie-up between tax and levy. Honestly, I fail to see—

Mr. Douglas Glover (Ormskirk)

Will the hon. Gentleman give way?

Mr. Rankin

Well, I have not been speaking long. However, I do not mind giving way. At all events, I will do it with grace.

Mr. Glover

I appreciate the hon. Member's giving way with such grace and charm, which I am sure will be noted in other parts of the Committee. I think that we ought to get this matter straight. The industry was paying a voluntary levy of £2½ million previously. It is getting a tax concession of £6¼ million. It also has another £1¼ million of levy which is becoming a statutory levy. Therefore, the benefit from taxation under the Budget is £5 million.

Mr. Rankin

I hope that we do not get on to the curves which the hon. Gentleman has mistaken for straight lines. He is working out in space where there is nothing straight, but everything is curved. The explanation which he gives may deceive himself, but it does not convince the people in the industry. Indeed, the Chancellor himself does not accept it, for the simple reason that the actual relief to the industry in respect of tax is £.2¾ million and no arithmetical process can get round that simple fact.

Here is the position facing the Chancellor. It is admitted by most people that in all probability the levy will require to be raised to £5 million. The All-Industry Tax Committee, which was met be the Minister or one of his colleagues, agrees—I think we all agree—that the production fund will require more assistance than it is now getting and that it will in all probability rise—provision is made in the recent Cinematograph Films Act if that should happen—to £5 million.

What will the Chancellor do? Will he take it out of an industry in which, in 1956, more than 200 cinemas closed down? The source of his revenue is diminishing, and that is because of the effect of his Entertainments Duty. Yet he will be compelled in future to take from a diminishing number of cinemas a larger tax to sustain the production side.

Consequently, the right hon. Gentleman is faced with the fact that if the levy rises. as it may well do, then, if he is to get more levy for the production side, he will require to reduce the Entertainments Duty still further. Under the present system of organisation, the two are inextricably bound together, and as the one goes up the other will have to go down if the source of revenue is to remain open to the Chancellor.

We feel that our attempt in the Amendment, which may not, in the drafting sense, be all that it ought to be, is a genuine effort to help an industry which we concede the Chancellor wants to help. The Amendments on the Notice Paper also show that his hon. Friends are just as anxious to help as many of my hon. Friends are.

In the relief which the Chancellor has given—as my hon. Friend the Member for Flint, East (Mrs. White) said, it is something that we welcome—there is a measure of injustice. We do not say that it is intended injustice. However, in the course of his Budget speech the Chancellor said that there would be a fifty-fifty split of the sum beyond the exempted figure of 11d. A fifty-fifty split usually means equal shares, a division into halves, and I am certain that was in the right hon. Gentleman's mind when he spoke on Budget day.

However, on that evening after the right hon. Gentleman spoke I put the question of the fifty-fifty split to the Financial Secretary and asked how it was to work. I took the 1s. 3d. seat as an example. There the proposal was that 11d. should be tax-free and that 2d. should go to the Chancellor and 2d. to the exhibitor. I asked whether the levy was to come out of the exhibitor's 2d. If it is to come out of the exhibitor's 2d., it is not a fifty-fifty split, for it means that the exhibitor is getting 1½d., the Chancellor 2d., and the levy ½d. No one can say that that is an equal division between the Chancellor and the exhibitor. That is regarded as unfair and it has caused a certain amount of grievance. To that unfairness the Chancellor adds the penalty of double taxation.

4.15 p.m.

We feel that the Chancellor should not say, in effect, to the Committee, "This Amendment is not a good one. It will not work and, therefore, I say to the Committee, Stick to the evils that we know rather than run into dangers which at the moment we just cannot assess.' "That is to nullify completely the spirit of adventure which ought to be widespread in the Committee. Why should the Chancellor, believing in the competitive spirit and the spirit of adventure and in the creation of new and finer worlds, say to all of us. "Sit tight. Do not go any further. It might be very risky indeed."

I am surprised that the right hon. Gentleman should display such an extreme lack of courage from the Front Bench. After all, he is a leader and a leader ought to lead us to something new and more spirited than sitting still and hanging on to something that we all say is wrong. The Chancellor himself will not say that it is right. He simply says that it is the best that we can do. We have greater confidence in the right hon. Gentleman than he has in himself. If he gets down to it I think that he can do something better and fairer for the industry that we all want to help.

Mr. Geoffrey Hirst (Shipley)

I am rather sorry that so early in the proceed- ings my right hon. Friend sees himself in the rôle of Iron Chancellor. I do not want to embarrass my right hon. Friend and I do not want to follow the hon. Member for Govan (Mr. Rankin) in the wider views he expressed, because they little concern me and there may be more opportunities later of discussing them. When my right hon. Friend said that there should not be any bargain between the matter of the levy and the Entertainments Duty, it presupposes, also, that there should not be in my right hon. Friend's judgment an alignment between the two, as indeed there must be.

I should like to draw attention to what was said by Mr. Barclay, the Chairman of the A.I.T.C. in a paper which he read at the Conference of the Cinema Exhibitors' Association, at Gleneagles. He said: What is the logic in introducing legislation to provide for the sustenance of the British film production industry if, at the same time, adequate provision is not made to enable its main sources of revenue, the box office, to be maintained? That is obvious, but my right hon. Friend answers that he has made provision for it in his review which was promised by his predecessor.

That is the part that I do not like. I said so in the debate on the Budget. I said that in my judgment my right hon. Friend probably did for the entertainments industry all that was reasonably possible within the framework of the overall figure that he could give away or reduce in taxation for the current year. I accepted that and I still do, but I cannot accept that the result of the reduction is the answer to the review that was promised.

In a letter which a member of my right hon. Friend's Department sent to the Secretary of the A.I.T.C.—and I read only two or three sentences—it was said: In reply to your letter of 11th April, the Chancellor of the Exchequer has asked me to say that before the Budget he conducted a review of the whole structure of the Entertainments Duty which his predecessor had promised last summer and he took into account the various representations which were made to him…As the outcome of this full examination of the position, the Chancellor proposed in his Budget statement a substantial reduction in Entertainments Duty on cinema admissions and the substitution of a much simpler scale of duty for the present complicated scheme. I accept the latter part, that it is a more simple scheme, but it must be said here and now that this gross reduction of £6½million is not, in fact, the answer to the review promised. It is an instalment. If at the beginning of this important discussion, which may possibly take a great deal of time, we had that fact established, the good will between the two sides of the Committee and my right hon. Friend would be greatly enhanced and a great deal of time might be saved.

The word "bargain" is in some people's minds an unfortunate one and we must interpret this as an alignment between the two sides. I am amazed to hear that the Amendment would cost £2 million. If that is the case, it obviously might be something that would not be considered within the framework of the Budget, but before we get too far in the debate and spend too many hours on this subject let us have an understanding of where we stand in the matter.

It is firmly in my mind that this reduction in the Budget is only an instalment and the overall idea that the taxation on the industry should be reduced from the present 26 per cent. to at least 10 per cent. is asine qua nonto the capacity of the industry to pay its way and be competitive in the world.

Mr. George Jeger (Goole)

The words "morality" and "logicality" have been used about this matter and they are very sensible words to be used. Anyone who is associated with the film or entertainments industry knows that the revenue is divided into two sections, gross and net. There is net revenue after deducting statutory tax or levies from the gross. In this case, the Chancellor proposes to make the voluntary levy a statutory one, and liable to taxation. That surely is against all the laws of fairness, logic and morality.

The entertainments industry will not only be the collecting agent for the Chancellor in collecting Entertainments Duty, which it has been doing for far too long without any payment by the Chancellor of the administrative cost of collection, but it will also be the collecting agency at the exhibition end of the industry for the statutory levy, which is no longer voluntary and has by law to be collected. It seems to 'me that the fact that the levy will be redistributed within the industry is a non-relevant factor. It will go to a completely different branch of the industry.

The Chancellor knows very well that the exhibition and production sides of the film industry hardly ever meet and when they do they are hardly ever on speaking terms. Each thinks that the other is "doing it down" and each thinks that the other ought to be reduced and its expenditure pruned and its profits allocated in different ways. To try to link together the beneficiary and the collecting agency, as the Chancellor is trying to do in this case, is a mistake which is bound to have a very bad effect upon the industry as a whole.

This statutory levy should be separated entirely from the ordinary revenue at the box office. It should be regarded as a levy or a tax which is imposed by the Government and collected at the box office for distribution to somebody else for some other purpose. It certainly should not have to bear the imposition of tax upon it. It is not enjoyed by the distribution or exhibition side of the industry, which is merely a collecting agent. To put a tax upon money so collected is completely immoral, unfair and nonsensical.

I know that the Chancellor has to look everywhere he can for his revenue, and it may be that £2 million is the amount in this case, but the right hon. Gentleman has distributed large sums of money in other and far less worthy directions. If he is to make a widespread redistribution of money, as he is to do in this case, then to resort to immoral practices to raise the money is something that he should avoid. We should help him to avoid it if possible. The right hon. Gentleman, therefore, ought to accept our assistance and revert again to moral methods of taxation.

Mr. Glover

I should like my right hon. Friend the Chancellor of the Exchequer to have another look at the Amendment, despite what he has said. First of all, I agree with my hon. Friend the Member for Shipley (Mr. Hirst), and I hope that this concession is a step on the road to removing this burden from the cinema industry altogether. The hon. Lady the Member for Flint, East (Mrs. White) was wrong in referring to it as a cinema tax. The correct reference to it is as a purchase tax. It is just as much a purchase tax as a tax on a commodity bought over the counter. I should have thought that it was bad Government policy to tax a contracting purchasing element in the community. By all means let tax be used to stop expenditure on something which has expanded too far, but to use a purchase tax to hasten a contracting of a form of expenditure is illogical from a budgetary point of view.

Mr. G. Jeger

I accept the view that this is a purchase tax, but I hope that the hon. Member realises that it is a purchase tax on the retail price whereas normally Purchase Tax is on the wholesale price.

Mr. Glover

I thank the hon. Member. I was just coming to that point. When this was a voluntary levy the situation was rather different. Now that we have a compulsory levy, the State has decreed that either the cinema must charge less for its seats or must put up the prices to get the same gross return. Therefore, the element of compulsory levy is not part of the price of admission but part of the price paid by the public for the production of the film. For that reason, I should like my right hon. Friend to have another look at this proposal.

I had no intention of speaking in Committee today, and I do not regard myself as an expert. I have no connection at all with the cinema industry, but after listening to the arguments, it seemed to me that there was something illogical in the taxation of a compulsory levy, which I see as no longer part of the admission price paid by people entering the cinema.

Mr. Glenvil Hall (Colne Valley)

think that what the hon. Member for Ormskirk (Mr. Glover) has said should enable the Chancellor to have another look at this matter. Perhaps it is a pity that the right hon. Gentleman spoke when he did. If he had waited a little longer and had seen that even his own hon. Friends had been impressed by the arguments of my hon. Friend the Member for Flint, East (Mrs. White) and others, he might have given a different reply.

I do not want to go over the arguments they used, but I think that they are extremely cogent and powerful. I should like, however, to comment upon one thing which the Chancellor said which I do not think is strictly true. He said that the levy was a redistribution within the industry. Certainly the producers and the cinema exhibitors are branches of a larger industry, but, except for some of the larger units, there is no connection whatever when it comes to profit making between the owner of the cinema, that is the exhibitor, and the producer. If the levy has to be imposed by statute to assist the producer, it is time that we tried to do something for the exhibitor.

4.30 p.m.

I know that some exhibitors and producers are one and the same. We have that in the Rank Organisation and other organisations of a similar kind. Speaking for the cinemas in my own division —and I am sure that I am speaking also for small cinemas throughout the country —I can assure the Chancellor of the Exchequer that they do not look upon themselves as part of the larger industry. I think we all realise the difficulties they are experiencing and believe that we should do something to help them, particularly when we remember that, by statute, they have to find their share of the levy for those who, in comparison, are much more able to bear the burden.

I suppose that this is one of the few industries, possibly the only industry, where an expense of this kind—I am talking now about the levy—is not one which can be deducted when it comes to making up an Income Tax return for payment under Schedule D. That is very unfair. Most industries, firms and others when they come to pay their Schedule D tax are allowed to set off such expenses as they inevitably have to incur. Here we have an instance where the small exhibitor who is struggling very hard and frequently wondering whether he can carry on from week to week has to find his share of the levy which he is not allowed to set off for Income Tax purposes.

I think that for that and other reasons the Chancellor should have another look at this. He is aware, as I am, that he can speak as often as he likes to this Amendment, and I hope that we shall hear from him again before we pass on to the next one.

Mr. Leslie Hale (Oldham, West)

I must confess that I speak under some difficulty in this matter. I took home the Order Paper for the weekend to prepare for the discussion on this Bill and I saw that the first Order was a Motion in the name of the Chancellor of the Exchequer to take first the First Schedule. I make no complaint about that. We all know that what the Government say on Friday they are not likely to say on Monday. I should have been prepared for that. But my homework was done on the First Schedule and not on Clause 1, which we find we are now fortuitously discussing. I therefore listened with exceptional attention to the speeches which have been made on both sides of the Committee.

I was greatly impressed by the speech of my hon. Friend the Member for Govan (Mr. Rankin), who enunciated a philosophy on taxation with which I am in almost complete agreement, although I did not follow his earlier remarks about the wedding of the levy to the tax. It did not seem to me that a marriage could produce such a bastard Clause. But in the later stages I found myself following him very closely and with very deep sympathy.

This problem of entertainments tax is a very old one politically. I remember it as a very vexed question in the first Parliamentary Election which I fought, now, for my sins, twenty-eight years ago, and I was asked whether I was in favour of the abolition of entertainments tax. May I interrupt myself and say that before discussing Clause 1—[Laughter.]—I was seeking to have hon. Members follow the argument by indicating that I was speaking in parenthesis although relevantly to the Amendment—we ought to have in mind a few fundamental principles about taxation.

The trouble with all Budgets is that there is not much principle about them. There is not much principle in the Chancellor of the Exchequer's observations that he could not consider this, because it would mean that he would lose a bit of revenue. If we start these long discussions in that spirit we shall have difficulties to face of a very considerable kind. I recall the Chancellor, in an earlier speech, saying something even more shocking. He said that, on the whole, entertainment was a fit subject for taxation. Why it should be a fit subject for taxation, I do not know. That ends the parenthesis and I will now come back to the Election of 1929.

I have always thought Parliamentary Elections to be the moment for the enunciation of the eternal verities. I proceeded to enunciate them. I was asked whether I was in favour of the abolition of Entertainments Duty and I sent a short reply to say that I was in favour of the abolition of all rates and all taxes. That is a fundamental principle from which every Member of Parliament should start. Of course, taxation is an evil thing and rates are an evil thing. Government interference in the lives of individuals is an intolerable thing. except in so far as the necessities of the State and of the Government render it essential in the public interest. I should have thought that this was a Tory principle.

If I had lived in 1790 I might have preferred to be a Tory rather than a Whig, but I should have been as I always have been, a Radical. Those were the days when the Tories had some principle. I should have thought that the speech of the hon. Member for Ormskirk (Mr. Glover), who put his case, I thought, with too much brevity but with considerable clarity, would have moved the Chancellor. Let me say in a friendly way to the Chancellor, and not in any sense of criticism, that he cannot stand any more revolts in the Tory Party. The time has come for him to be benevolent and considerate. It was a very fair case which the hon. Member put, and I agree with every word of it. The fundamental principle is that we do not tax a man twice on the same thing. We do not tax the rich because we do not like the rich; we tax the rich only because there are poor people.

This is a narrow Amendment and I have no intention of going outside its very narrow limits. It is precisely the same problem as that of differential rents. The reason why I am in principle opposed to differential rents is that when we have taxed a man once on his income because he is rich we have no right to charge him extra for precisely the same reason. Here, again, I thought that I was enunciating a principle which the Tory Party, in so far as it has any principles, might feel was one that it could adopt as its own.

What are we saying here? We are saying, "You are imposing a tax on the industry to help the producer." I find that quite an astonishing proposition, but we have all done it and we are all tied up with it. It is astonishing because to tax the retailer to subsidise the wholesaler is precisely the reverse of what one does in every other industry. The retailer's whole object is to keep prices down and the retailer likes to see the wholesaler in a bit of difficulty and in a market where the retailer can buy cheaply. In this exceptional industry we have taken a very unusual course and one which I think that both parties would agree is, on the whole, undesirable unless the necessity of the situation imposes it as something which has to be done to save a considerable industry.

We ought to look at this with some dubiety and some reluctance. As the hon. Member for Ormskirk has said, this is now a compulsory levy. A compulsory levy is a tax, so we are taxing the industry to the tune of £6½ million a year. The hon. Member for Govan expressed some interesting mathematical principles on the basis of fifty-fifty. I think that hon. Members on both sides of the Committee will recall the old story of the man who made a great reputation by selling lark and beef pie until a customer complained that he could not taste the lark. The waiter was sent for and explained that the lark was there. The customer asked, "In what proportion." The waiter replied "Fifty-fifty." The customer raised his eyebrows in astonishment and said, "Exactly what do you mean?" and the waiter said, "One horse, one lark." That is hardly a mathematical principle which should be incorporated in our financial operations. I suggest that the Chancellor tries to steer away from it.

The principle of our opposition to double taxation on both sides of the Committee, has been enunciated in the last ten years over and over again. It is something that we all do not wholly like. It seems primarily designed to enable eminent members of the Tory Party to live in a distant clime on reduced taxation. But the principle is there.

Why should we now say to the people we are anxious to help, the very people whom the Chancellor has said are in need of assistance and must get it. "We will apply to you a principle which we do not apply to anyone else, not even to millionaires on the Riviera or in the Bahamas."? Why should we apply to them the prin- ciple of a tax upon a tax in circumstances which are even more alarming because, as my hon. Friend the Member for Govan has pointed out, it is envisaged that this levy may be increased. It is envisaged that a new problem may arise at any moment. It is envisaged that the expansion of the production side of the industry will involve new negotiations in which the Chancellor himself will have to face this desperate problem, but the exhibitors will be saying, "Very well, if we increase this, you also increase our tax." The Chancellor made only a brief intervention. I hope he will deal with the point more fully, because we know how good it would be if we could start these debates, which may take some time, with a happy dawn. It would be an augury of co-operation in the national interest in future.

TheSunday Expresshas made it clear that it expects every Member of Parliament this day will do his duty, and we are trying to perform it. Here we have a situation in which the exhibitor is to pay a tax upon a tax. He has agreed to the levy. Now he is asked to pay Entertainments Duty on top of that. Then will come the next step, when there will be talks about a new negotiation and a new levy. But we shall have already passed, before this levy is imposed, the very thing, namely, an increased tax on an increased levy.

That is a most undesirable proposition and one which, with every desire to help the financial proposals of the Government, would make me feel bound to support my hon. Friends if they decide to go into the Lobby.

Mr. G. M. Thomson (Dundee, East)

I cannot compete with my hon. Friend the Member for Oldham, West (Mr. Hale) in coming fresh to this subject, but I ask the Chancellor to pay heed, if not to the arguments advanced by this side of the Committee, to those advanced by his hon. Friend the Member for Ormskirk (Mr. Glover), who also informed us that he came fresh to this subject and that he had not expected to speak. It is a most unusual experience for any hon. Member to rise and say that he has been convinced by the arguments from the opposite side of the Committee, and so I hope that this process of conviction may carry weight with the Chancellor.

I was particularly impressed by the argument that the Government had decided that financial help should be given to the producing end of the film industry through the statutory levy and that, therefore, the ordinary cinema goer ought to be expected to put his hand in his pocket to help British films. Therefore, in this situation the cinema proprietor is simply a collecting agent for the Government, and so it seems hard in those circumstances that he should be taxed upon that collecting duty.

We have two Amendments before us. Both have this in common, that they involve a reduction in the amount of Entertainments Duty, that they are asking for a financial concession from the Chancellor. They also, however, have one considerable difference between them. One Amendment raises an important issue of principle, which has been mentioned by almost everybody who has spoken, and I was extremely disappointed that the Chancellor should not have taken any cognisance of it.

It is well established that there should not be double taxation, that the cinema proprietors should not be singled out amongst all the citizens of the community to pay tax twice. I did not follow the Chancellor's argument that the statutory levy could be completely divorced from the Entertainments Duty—which is now really a cinema tax. The statutory levy is a Government decision in the interests of the country to help the producing side of the cinema industry, and it is too much to imagine that we ought to accept the position where the Chancellor is not expected to be aware of what his right hon. Friend the President of the Board of Trade is doing. They are both decisions by Parliament on behalf of the State, and, therefore, are both taxes in essence. So it seems unreal and unprincipled to take up the position that this is merely asking for a tax concession and does not raise an important issue of principle.

4.45 p.m.

I would have thought that on the ground of principle alone the Chancellor would have felt able to accept the Amendment, and I hope he will reconsider his attitude in the light of the representations made and of the considerable case for a reduction of Entertainments Duty.

The case for the second Amendment raising 11d. to 1s.

Mrs. White

We are not discussing that Amendment.

Mr. Thomson

I apologise, Sir Robert. That important issue of principle has been raised in this discussion, and so I hope the Chancellor will say something more, namely, that he will reconsider the matter.

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

I support the Amendment because the amount involved is very near the difference between success or failure for many small cinemas throughout the country. I cannot give an indication of the number, but I know that in the rural county in which I live, Cornwall, it makes that difference.

Most of us here have probably received a leaflet from the All-Industry Tax Committee of the British Film Industry, which give a rough summary of how the takings are spent. For instance, 6s. 5d. goes to Entertainments Duty, 6¼d. to the levy and 5½d. represents profit. So the levy represents a little over 2½ per cent. and the profit a little under 2½ per cent. The amount which goes now compulsorily, by legislation, is around 36 per cent. This is breaking the small cinemas which are a vital amenity to the countryside.

I may have something to say on a later Amendment, but I hope the Chancellor will reconsider this one, because so many small cinemas are going out of production and this small amount will make all the difference for them between success or failure.

Mr. Joseph Reeves (Greenwich)

I hope the Chancellor will realise that the industry is facing real difficulties and that the smaller the cinema the greater the difficulties experienced. There is not the slightest doubt that television will become a damaging competitor to the ordinary cinema and that many readjustments will have to be made in the years ahead because of its competition.

The Chancellor must bear in mind that the industry on the exhibition side is providing a reasonable sum of money which he wants to keep at its present level if humanly possible. There is no point in killing the goose that lays the golden egg. I feel sure that the right hon. Gentleman has already realised this danger, becauses he has imposed a tax on television licence holders. This, therefore, will be contributing towards offsetting any loss experienced by the Chancellor in his taxation of the cinema.

When discussions were being held about relief from Entertainments Duty, the industry felt that when the levy was made compulsory it would receive reasonable treatment by the Chancellor, and it now feels that it has been let down by the arrangement. I know that no promises were made, but it was understood that as soon as the levy was made compulsory, certain concessions would be given. Those concessions have been given, but the fact that the levy has been made compulsory has made the position most difficult. In spite of the fact that this concession would cost £2 million, in the long run it would pay the Chancellor very well if he would accept the Amendment.

Mr. G. R. Mitchison (Kettering)

The right hon. Gentleman the Chancellor has not had a single word of support from either side of the Committee. I do not propose to provide it. That I regard as the business of his hon. Friend the Financial Secretary or, let us hope that we shall have a few words from himself to reverse what he said earlier.

The refusal to accept this Amendment seems to me to be wrong both theoretically and for good practical reasons. I regard it as wrong theoretically because this is a tax on the person who pays for entertainment in a cinema, and that person will have the price of his entertainment put up by something which the right hon. Gentleman himself said he thought ought to be regarded as separate from the tax he is now putting on, that is to say, the levy.

At the moment it is a voluntary levy. There is, however, power to make it a statutory levy. We know what it is to be and no doubt it will be put on shortly. The voluntary levy was originally no matter of tax, and it was separate. It is now sought to put on a statutory levy so that the price the patron will pay for a cinema entertainment will be composed of three elements. One is the tax element. The second, if one can separate it, is the levy element. The third is the actual payment to the cinema proprietor.

It seems to be wrong that the levy payment should be confused— because it is confusion—with either of the other two matters, and I agree with what the right hon. Gentleman said, that it ought to be kept separate. He could easily have done that. If this was a question of raising his revenue, the straight thing to do, not only from the point of view of his dealings with the public, but also from the point of view of principle, would have been to have raised his amount in full and without regard to the levy, and to have exempted the levy from it.

Whatever the right hon. Gentleman wants out of it, he has not chosen to do it in that form. The refusal to do it in that form, apart from being wrong in principle, seemed to me to involve another practical difficulty. The levy is not imposed by the right hon. Gentleman in practice. In practice, it is a matter for his right hon. Friend the President of the Board of Trade. It is put on for purposes of the industry, and the replacement of a voluntary levy by a statutory levy is due to the decision of the Government that it is required for the benefit of the industry as a whole. It is due, too, to a fact which the right hon. Gentleman ought to bear in mind, namely, that there have been considerable practical difficulties in getting the voluntary levy collected, and those practical difficulties have arisen particularly in connection with the small cinemas.

Those practical difficulties have arisen particularly in connection with the small cinemas. It is they who have been the occasion for the statutory levy, and it is they, it seems to me, who will suffer particularly if this concession cannot be made. While I understand that some of the larger cinemas may be able to carry the whole of the tax, I cannot see but that it will fall heavily upon the smaller cinemas.

There is the further point of whether the President of the Board of Trade ought to be influenced in his decision, not only on the first form of the levy, but on any subsequent changes in it, by fiscal considerations. I should have thought it was absolutely wrong in principle for one Department of the Government to make an arrangement for the good of the industry knowing all the time that the amount and the extent of that arrangement would affect the national revenue, and affect it directly.

I agree that it is not strictly parallel, but surely in the case of taxation in general, if a levy has to be paid and then questions arise as to the taxation of income, there is never any question but that that levy is removed first before commencing to tax the income. I do not say that it is a strictly parallel case, but it illustrates the principle.

I earnestly ask the right hon. Gentleman to reconsider the matter, not only because of the unanimous views which he has heard from both sides of the Committee, not only because it seems doubtful in principle and at least liable to misunderstanding in the light of the bargain that was made, but also for what I believe to be the weightiest reason of all, the one given by the right hon. Gentleman himself, that the levy ought to be separate from taxation questions and that to have it as something taxable and not to exclude it from the Entertainments Duty must mean that questions of the national advantage as regards the industry are bound to be confused with questions of raising revenue; and that cannot be right.

Mr. Stephen Swingler (Newcastle-under-Lyme)

I hope that we are to hear something further from the Chancellor of the Exchequer. Those of us who were members of the Standing Committee on the Cinematograph Films Bill must feel that there has been a breach of faith with the leaders of the industry on this subject. After all, the Chancellor of the Exchequer himself, when President of the Board of Trade, recognised quite clearly that if the levy became statutory it would become a tax. It is a tax for the specific purpose of giving a State-recognised subsidy to British film production.

We all know that it is not called a tax and that the benefits given from the British Film Production Fund are not called a subsidy, for the special reason that if they were they would be in contravention of international agreements. That is why this special administrative arrangement of the statutory levy and payments out of the British Film Production Fund has been made.

As was pointed out during the discussions on the Cinematograph Films Bill, however, that machinery could just as well have been established if a certain proportion of the receipts from Entertainments Duty had been earmarked to be paid into a special fund for the purpose of stimulating British film production. Indeed, some of us made that suggestion during discussion of the Bill.

It was pointed out that because of G.A.T.T. and other international trade agreements, however, that would not he an appropriate method of giving financial assistance and stimulus to British film production. On that basis, the exhibitors accepted the statutory levy, but everybody recognised that it was now a duty that was indistinguishable from Entertainments Duty.

5.0 p.m.

What the Chancellor is doing, therefore, by refusing to accept this obvious step of preventing double taxation is inciting the exhibitors to raise their prices to try to get some of it back from the consumer. I regard that as most harmful. It is already being discussed in the trade. As hon. Members have pointed out, there are already difficulties in the trade because of declining attendances and the financial problems of the small exhibitor, including higher capital costs and the rest.

If the Chancellor insists on collecting the tax in this double fashion, he will be giving an argument to the exhibitors to attempt to fleece the consumer to try to get something additional back from him by raising the price of cinema seats. That would be deleterious. I hope, therefore, that the Chancellor will reconsider the whole matter.

Mr. P. Thorneycroft

I have listened to some persuasive speeches, which as the hon. and learned Member for Kettering (Mr. Mitchison) pointed out, have come from both sides of the Committee, as to why we should alter the form of tax set out in the Bill for something different on the lines of one or other of the Amendments.

I have not arrived at my conclusions speedily. I have had the opportunity, both at the Board of Trade and at the Treasury, of seeing the various problems of the industry at close quarters, and I would say this about the industry, because I do not want to be too dogmatic. As an industry, it is unique. There is no other industry which in any way compares with it, and there are—and I must say I am glad—no other arrangements which could compare with the difficulties of a film levy.

Hon. Members who say that it is not one industry are quite right. People at one end of the industry do not regard themselves as being the same as people at the other end. Very often, they regard it as though money were being taken from them for payment to people almost from another planet.

Having considered all these matters, I have certain other considerations in mind. The Amendment would cost the Exchequer a reduction of £2 million in revenue. That is not something which should be lightly entertained. The purport of the argument is that this is a tax upon the levy. If it is, it is a tax which has been going on for quite a long time.

Mr. Rankin

It was voluntary.

Mr. Thorneycroft

It may have been voluntary or compulsory, but as far as exhibitors are concerned I assure the hon. Member that it was as unpopular when it was, so to speak, voluntary as when it is compulsory. It has always been a thoroughly unpopular arrangement on the exhibiting side that money should be collected off the industry and channelled back to the producers.

At no stage, quite rightly, was this considered as some kind of levy on the public. The box office collects the money from the public; and on the price of the ticket on everything over 1ld. 50 per cent. Entertainments Duty is charged. That is something quite separate. That is the Entertainments Duty side of it.

As an altogether distinct operation, arrangements are made to mulct, if I may so use the expression, the net revenue of the exhibiting side by a levy. That could be done in various ways. It could be done by so much on admission or on the net income of the exhibitor. In answer to the right hon. Member for Colne Valley (Mr. Glenvil Hall), however, it is allowable under Schedule D, which, as the right hon. Gentleman will know from his Treasury experience, marks the point I am making. It is something quite distinct and different. It is as revelant or irrelevant to the problem of Entertainments Duty as, say, the ice cream sales which are carried on inside the cinemas and which bring a considerable and welcome profit to the exhibiting side of the industry. It is, however, quite separate, and my advice to the Committee is that it must be kept separate from the ordinary question of how much is charged for a seat and what Entertainments Duty is paid upon it.

The hon. Member for Oldham, West (Mr. Hale) and others have made suggestions to me. I find myself in broad agreement with the principles of taxation which the hon. Member put forward, but I am bound to advise the Committee that sound taxation in this case consists in keeping the Clause as it is drafted.

Mr. Swingler

Will the right hon. Gentleman not recognise that so long as it was a voluntary levy some exhibitors need not, and did not, pay it? Now they will all be compelled to pay it, and in that sense it is exactly the same as any other tax.

Mrs. White

I am sorry that the Chancellor has not given us any further reasons for refusing our Amendment than he gave in his first speech. If he wants more revenue, we feel that he should get it by more straightforward means.

Speaking as someone who has some connection with the advice tendered to the President of the Board Trade on the regulations made under the Cinematograph Films Act, I would say in all seriousness that it will be far more difficult to frame acceptable regulations if the money to be raised in this manner is also to be subject to tax.

It is all very well for the right hon. Gentleman to say that he wants to be free of any questions of levy, but his right hon. Friend the President of the Board of Trade who is responsible for the levy might equally say that he wants to be free of all questions of tax. I should have thought that it was much healthier to do it in the way we suggest in the Amendment. We are entirely unconvinced by the arguments of the Chancellor or the Exchequer, and I must advise my hon. and right hon. Friends to press the Amendment.

Question put, That those words be there inserted:

The Committee divided:Ayes 198, Noes 247.

Division No. 110.] AYES [5.7 p.m.
Ainsley, J. W. Griffiths, William (Exchange) Parkin, B. T.
Albu, A. H. Hale, Leslie Pearson, A.
Allen, Arthur (Bosworth) Hall, Rt. Hn. Glenvil (Colne Valley) Pentland, N.
Allen, Scholefield (Crewe) Hamilton, W. W. Popplewell, E.
Awbery, S, S Hannan, W. Price, J. T. (Westhoughton)
Bacon, Miss Alice Harrison, J, (Nottingham, N.) Price, Philips (Gloucestershire, W.)
Balfour, A. Hastings, S. Probert, A. R.
Bellenger, Rt. Hon. F. J. Hayman, F. H, Proctor, W. T.
Benn, Hn. Wedgwood (Bristol, S.E.) Healey, Denis Pryde, D. J.
Benson, G. Henderson, Rt. Hn. A. (Rwly Regis) Rankin, John
Beswick, Frank Herbison, Miss M. Redhead, E. C.
Bevan, Rt. Hon. A. (Ebbw Vale) Hewitson, Capt. M. Reeves, J.
Blenkinsop, A. Holmes, Horace Reid, William
Blyton, W. R. Houghton, Douglas Rhodes, H.
Boardman, H. Howell, Charles (Perry Barr) Robens, Rt. Hon. A.
Bowden, H. W. (Leicester, S.W.) Hoy, J. H. Roberts, Albert (Normanton)
Bowles, F. G. Hubbard, T. F. Roberts, Goronwy (Caernarvon)
Braddock, Mrs. Elizabeth Hughes, Cledwyn (Anglesey) Robinson, Kenneth (St. Pancras, N.)
Brockway, A. F. Hughes, Hector (Aberdeen, N.) Ross, William
Broughton, Dr. A. D. D. Hunter, A. E. Royle, C.
Brown, Thomas (Ince) Hynd, J. B. (Attercliffe) Shinwell, Rt. Hon. E.
Burke, W. A. Irving, Sydney (Dartford) Short, E. W.
Burton, Miss F. E. Janner, B. Silverman, Julius (Aston)
Butler, Herbert (Hackney, C.) Jeger, George (Goole) Simmons, C. J. (Brierley Hill)
Butler, Mrs. Joyce (Wood Green) Jenkins, Roy (Stechford) Skeffington, A. M.
Callaghan, L. J. Jones, David (The Hartlepools) Slater, Mrs. H. (Stoke, N.)
Carmichael, J. Jones, Elwyn (W. Ham, S.) Slater, J. (Sedgefield)
Castle, Mrs. B. A. Jones, J. Idwal (Wrexham) Snow, J. W.
Champion, A. J. Jones, T. W. (Merioneth) Sorensen, R. W.
Chapman, W. D. Kenyon, C. Soskice, Rt. Hon. Sir Frank
Chetwynd, G. R. Key, Rt. Hon. C. W. Stewart, Michael (Fulham)
Clunie, J. King, Dr. H. M. Stross, Dr. Barnett(Stoke-on- Trent, C.)
Coldrick, W. Lawson, G. M. Summerskill, Rt. Hon, E.
Collick, P. H. (Birkenhead) Lee, Frederick (Newton) Swingler, S. T.
Collins, V. J. (Shoreditch & Finsbury) Lee, Miss Jennie (Cannock) Sylvester, G. O.
Corbet, Mrs. Freda Lipton, Marcus Taylor, Bernard (Mansfield)
Cove, W.G. Logan, D, G. Thomas, Iorwerth (Rhondda, W.)
Craddock, George (Bradford, S.) Mabon, Dr. J. Dickson Thomson, George (Dundee. E.)
Cronin, J. D. MacColl, J. E. Timmons, J
Crossman, R.H.S. McGhee, H.G. Tomney
Cullen, Mrs. A. McInnes, J. Ungoed-Thomas, Sir Lynn
Dalton, Rt. Hon. H. McKay, John (Wallsend) Viant, S.P
Darling, George (Hillsborough) MacPherson, Maloolm (Stirling) Watkins, T. E.
Davies, Ernest (Enfield, E.) Mahon, Simon Weitzman, D.
Davies, Stephen (Merthyr) Mainwaring, W. H. Wells, Percy (Faversham)
Deer, G. Mallalieu, J. P. W. (Huddersfd, E.) Wells, William (Walsall, N.)
Donnelly, D. L. Mann, Mrs. Jean West D.G
Dye, S. Marquand, Rt. Hon. H. A. Wheeldon, W.E
Ede, Rt. Hon. J. C. Mason, Roy White Mrs, Eirene (E Flint)
Edwards, Rt. Hon. Ness (Caerphilly) Mayhew, C. P. White, Henry (Derbyshire, N.E.)
Edwards, Robert (Bilston) Mellish, R. J. Wilock, Group Capt.C.A.B.
Edwards, W. J. (Stepney) Messer, Sir F. Wilkins, W. A.
Evans, Albert (Islington, S.W.) Mitchison, G. R. Willey, Frederick
Evans, Edward (Lowestoft) Monslow, W. Williams, David (Neath)
Fernyhough, E. Moody, A. S. Williams, Rev. Llywelyn (Ab'tillery)
Flenburgh, W. Morrison, Rt. Hn. Herbert (Lewis'm,S.) Williams, Ronald (Wigan)
Finch, H. J. Moss, R. Williams, Rt. Hon. T. (Don Valley)
Fletcher, Eric Moyle, A. Williams, W. T. (Barons Court)
Fraser, Thomas (Hamilton) Mulley, F. W. Willis, Eustace (Edinburgh, E.)
George, Lady Megan Lloyd Noel-Baker, Rt. Hon. p. (Derby, S.) Winterbottom, Richard
Gibson, C. W. Oliver, G. H. Woodburn, Rt. Hon. A.
Gooch, E G. Orbach, M. Woof, R. E.
Gordon Walker, Rt. Hon. P. C. Owen, W. J. Yates. V. (Ladywood)
Greenwood, Anthony Paget, R. T. Zilllacus, K.
Grey, C. F. Paling, Rt. Hon. W. (Dearne Valley)
Griffiths, David (Rother Valley) Palmer, A. M. F. TELLERS FOR THE AYES:
Griffiths, Rt. Hon. James (Llanelly) Pannell, Charles (Leeds, W.) Mr. J. Taylor and Mr. G. H. R. Rogers.
Agnew, Sir Peter Baldwin, A. E. Biggs-Davison, J. A.
Aitken, W. T. Barber, Anthony Birch, Rt. Hon. Nigel
Allan, R. A. (Paddington, S.) Barlow, Sir John Bishop, F. P.
Alport, C. J. M. Barter, John Black, C. W.
Amory, Rt. Hn. Heathcoat (Tiverton) Baxter, Sir Beverley Body, R. F.
Anstruther-Gray, Major Sir William Beamish, Maj. Tufton Bowen, E R. (Cardigan)
Arbuthnot, John Bell, Philip (Bolton, E.) Boyd-Carpenter, Rt. Hon. J. A.
Armstrong, C. W. Bell, Ronald (Bucks, S.) Boyle, Sir Edward
Ashton, H. Bennett, F. M. (Torquay) Braine, B. R.
Atkins, H. E. Bevins, J. R. (Toxteth) Braithwaite, Sir Albert (Harrow, W.)
Brooman-White, R C. Holt, A. F. Orr, Capt. L. P. S.
Browne, J. Nixon (Craigton) Hope, Lord John Orr-Ewing Sir Ian (Weston-S-Mare)
Burden, F. F. A. Hornby, R. P. Osborne, C.
Butcher, Sir Herbert Hornsby-Smith, Miss M. P. Page, R. G.
Butler, Rt. Hn. R. A.(Saffron Walden) Horobin, Sir Ian Pannell, N. A. (Kirkdale)
Campbell, Sir David Horsbrugh, Rt. Hon. Dame Florence Partridge, E.
Carr, Robert Howard, Hon. Greville (St. Ives) Pickthorn, K, W. M.
Cary, sir Robert Howard, John (Test) Pilkington, Capt. R. A.
Channon, Sir Henry Hudson, W. R. A. (Hull, N.) Pitman, I. J.
Chichester-Clark, R. Hughes-Young, M. H. C. Pitt, Mist E. M.
Cole, Norman Hulbert, Sir Norman Pott, H. P.
Conant, Maj. Sir Roger Hurd, A. R. Powell, J. Enoch
Cooke, Robert Hutchison, Sir Ian Clark (E'b'gh, W.) Price, Henry (Lewisham, W.)
Cooper, A. E, Hutchison, Sir James (Scotstoun) Prior-Palmer, Brig. O. L.
Cordeaux, Lt.-Col. J. K. Hyde, Montgomery Profumo, J. D.
Corfield, Capt. F. V. Hylton-Foster, R. Hon. Sir Harry Raikes, Sir Victor
Craddock, Beresford (Spelthorne) Irvine, Bryant Godman (Rye) Rawlinson, peter
Grosthwaite-Eyre, col. O, E. Jennings, J. C. (Burton) Redmayne, M.
Crowder, Sir John (Finchley) Johnson, Eric (Blackley) Remnant, Hon. P.
Cunningham, Knox Joseph, Sir Keith Rentton, D. L. M.
Currie, G. B. H. Joynson-Hicks, Hon. Sir Lancelot Ridsdale, J. E.
Dance, J. C. G. Keegan, D. Rippon, A. G. F.
Davidson, Viscountess Kerby, Capt. H. B. Robertson, Sir David
Davies, Rt. Hon. Clement(Montgomery) Kerr, H. W. Robinson, Sir Roland (Blackpool, S.)
D'Avigdor-Goldsmid, Sir Henry Kirk, P. M. Rodgers, John (Sevenoaks)
Deedes, W. F. Lambert, Hon. G. Ropner, Col. Sir Leonard
Digby, Simon Wingfield Lambton, Viscount Sandys, Rt. Hon. D
Dodds-Parker, A. D. Lancaster, Col. C. G. Schofield, Lt.-Col. W.
Donaldson, Cmdr. C. E, McA. Langford-Holt, J. A. Scott-Miller, Cmdr. R.
Doughty, C. J. A. Leather, E. H. C. Shepherd, William
du Cann, E. D. L. Leavey, J. A. Smithers, Peter (Winchester)
Dugdale, Rt. Hn. Sir T. (Richmond) Legge-Bourke, Maj. E. A. H. Smyth, Brig. Sir John (Norwood)
Duthie, W. S. Legh, Hon. Peter (Petersfield) Spearman, Sir Alexander
Eden, J. B. (Bournemouth, West) Lindsay, Hon. James (Devon, N.) Speir, R. M.
Elliott,R.W.(N'castle upon Tyne.N.) Linstead, Sir H. N. Spens, Rt. Hn. Sir P. (Kens'gt'n, S.)
Farey-Jones, F. W. Liewellyn, D. T. Stanley, Capt. Hon. Richard
Fell, A. Lloyd, Maj. Sir Guy (Renfrew, E.) Stevens, Geoffrey
Finlay, Graems, Longden, Gilbert Steward, Harold (Stockport, S.)
Fisher, Nigel Low, Rt. Hon. A. R. w. Steward, Sir William (Woolwich, W.)
Fletcher-Cooke, C- Lucas, P. B. (Brentford & Chiswick) Stoddart-Scott, Col. M.
Fort, R. Lucas-Tooth, Sir Hugh Storey, S.
Fraser, Sir Ian (M'cmbe & Lonsdale) McAdden, S. J. Stuart, Rt. Hon. James (Moray)
Freeth, Denzil McCallum, Major Sir Duncan Studholme, Sir Henry
Garner-Evans, E. H. Macdonald, Sir Peter Summers, Sir Spencer
Glover, D. McKibbin, A. J. Sumner, W. D. M. (Orpington)
Godber, J. B. Mackie, J. H. (Galloway) Taylor, Sir Charles (Eastbourne)
Gomme-Duncan, Col. Sir Alan McLaughlin, Mrs. P. Teeling, W.
Goodhart, Philip Maclean, Fitzroy (Lancaster) Temple, John M.
Gough, C. F. H. MacLeod, John (ROES & Cromarty) Thomas, Leslie (Canterbury)
Gower, H. R. Macmillan, Rt. Hn. Harold (Bromley) Thomas, P. J. M. (Conway)
Graham, Sir Fergus Macmillan, Maurice (Halifax) Thompson, Kenneth (Walton)
Grant-Ferris, Wg Cdr. R. (Nantwich) Macpherson, Nial (Dumfries) Thompson, Lt.-Cdr. R.(Croydon, S.)
Green, A. Maddan, Martin Thorneycroft, Rt. Hon. P.
Gresham Cooke, R. Maitland, Cdr. J. F. W. (Horncastle) Thornton-Kemsley, C. N
Grimston, Hon. John (St. Albans) Maitland, Hon. Patrick (Lanark) Tiley, A. (Bradford, W.)
Grosvenor, Lt.-Col. R. C. Manningham-Buller, Rt. Hn. Sir R. Turner, H. F. L.
Gurden, Harold Marlowe, A. A. H. Turton, Rt. Hon. R. H.
Hall, John (Wycombe) Marples, Rt. Hon. A. E. Tweedsmuir, Lady
Hare, Rt. Hon. J. H. Marshall, Douglas Vane, W. M. F.
Harris, Reader (Heston) Mathew, R. Vaughan-Morgan, J. K.
Harrison, A. B. C. (Maldon) Maude, Angus Vickers, Miss Joan
Harrison, Col. J. H. (Eye) Mawby, R. L. Vosper, Rt. Hon. D. F.
Harvey, Air Cdre, A. V. (Macclesfd) Milligan, Rt. Hon. W. R. Wakefield, Edward (Derbyshire, W.)
Harvey, Ian (Harrow, E.) Molson, Rt. Hon. Hugh Wakefield, Sir Wavell (St. M'lebone)
Harvey, John (Walthamstow, E.) Moore, Sir Thomas Wall, Major Patrick
Harvie-Watt, Sir George Morrison, John (Salisbury) Ward, Rt. Hon. G. R. (Worcester)
Hay, John Nabarro, G. D. N. Ward, Dame Irene (Tynemouth)
Heald, Rt. Hon. Sir Lionel Nairn, D. L. S. Waterhouse, Capt. Rt. Hon. C.
Heath, Rt. Hon. E. R. G. Neave, Airey Whitelaw, W. S. I.
Henderson-Stewart, Sir James Nichols, Harmar Woollam, John Victor
Hicks-Beach, Maj W. W. Nicholson, Godfrey (Farnham)
Hill, Mrs. E. (Wythenshawe) Oakshott, H. D. TELLERS FOR THE NOES:
Hill, John (S. Norfolk) O'Neill, Hn. Phelim (Co. Antrim, N.) Mr. Wills and Mr. Bryan.
Hirst, Geoffrey
Mr. Gordon Walker (Smethwick)

I beg to move, in page 1, line 22, to leave out "eleven pence" and to insert "one shilling".

The effect of this Amendment would be to raise the element in the price of a seat which is exempt from tax before the tax starts. I have been encouraged by one thing which the Chancellor said on the last Amendment. He said that many possibilities had been discussed by himself and his advisers on the question whether it should be 10d. or 11d., and he really spoke as if he could almost settle down at 1s. without any very grave or great difficulty.

In the review which he made of the Entertainments Duty which led to these Clauses in the Bill, I presume that he took into account that when this Duty was first levied it was a temporary tax levied under Mr. Lloyd George, as he then was, in the first war as a temporary duty. I suppose that in his mind this is a step towards the removal of this temporary, though rather long-lived temporary, tax which we have had ever since the First World War.

We are much in favour of the new method of tax to exempt to a certain figure and then levy a tax beyond that figure, which is so much more flexible than the old rather rigid and difficult system: but the tax is still a very heavy one. Whether one judges it by the weight or the nature of the tax, it is a very curious and onerous tax, which falls on a cinema whether or not it makes a profit, in this respect differing from our general taxation and almost every other tax we have, in that even if a cinema is making a loss it still has to pay the levy to the State. I am informed that about 25 per cent. of cinemas at the moment might very well be making losses but will be paying this tax without making the profits out of which the tax can only really come in the long run.

A tax of this nature would be a very heavy burden even on a flourishing industry, but nobody can pretend that the cinema industry is today a flourishing industry. This tax falls solely on cinemas, and, as my hon. Friend the Member for Flint, East (Mrs. White) said, it is now a cinema tax. It is a tax of a unique character, which falls on this one industry only, and the industry is really no longer capable of bearing so heavy a burden.

When this tax was first imposed on the cinema, the industry was, of course, a rising, flourishing and prospering industry, and it was quite a reasonable and sensible thing to have a tax, even of this onerous nature, upon it. Now it is a declining industry. It is suffering very heavily indeed, and cinemas are closing in all parts of the country—all types of cinemas. The fall in attendances seems to be increasing at an increasing rate. In 1955, there was a 7 per cent. fall in attendances, and in the first quarter of 1956, compared with the first quarter of 1955, that rate had risen from 7 per cent. to 8 per cent.

Disregarding for the moment the nature of the tax, the burden in actual weight is still extremely heavy on this industry, which is suffering fairly heavily today. The Chancellor is still getting, I think, £27 million a year out of the industry. The burden is heavy, and the relief he has offered to the industry in this Bill is not very great. It is a very little relief to an industry which has not got the full benefit of the £6¼ million which the reduction in the Entertainments Duty on cinemas will cost the Revenue, because it does have to pay, however one describes it, either as a tax or anything else, this extra levy. The net gain to the cinema from what the Government are doing by way of tax reduction and an increase in the levy will not he much more than £5 million. One does not know what the levy will be in future, but this relief will not be much more than £5 million.

When one considers that the chief competitor of this industry in its own field is the United States film industry, and also considers the very small amount of tax that industry has to bear in its own country, it makes the tax upon the British film industry appear all the more extraordinary. In the United States, I think that seats are exempt from tax altogether up to 90 cents, which is somewhere round about 5s.; that is, before they start paying tax at all. After that, the tax runs at only 9 per cent. When measured against the sort of tax burden which the American industry has to bear, our Amendment would be very modest indeed.

We say that the exemption limit should be 1s. instead of about 5s., as it is in the United States, and we have accepted that the tax thereafter should be 50 per cent. instead of the 9 per cent, which it is in the United States. I understand that the cost of our Amendment, subject to what the Chancellor will tell us after his inquiry into it, would probably be about £l¾million, or, may be, £2 million a year. This is really not a very great thing to ask for on behalf of an industry which is a very important industry, because if the cinema industry should collapse or very greatly contract it would have serious effects.

If the British film industry contracts it, would mean that the influence of foreign films on this country and its culture, and the hidden propaganda Which they carry with them, would be very much greater, and that our capacity to export films to the Commonwealth in particular and to other parts of the world will disappear. This is an industry of some considerable importance, which is not just an entertainment—of course, it is entertainment—but entertainment which is also a medium by which the culture of the country can be reflected and carried abroad. If American and other foreign films become the staple of our cinemas and are the only films which cinema-goers see, that will be a very heavy price indeed to pay.

Because of that, I ask the Chancellor to consider this very modest proposal that we are putting forward. Clearly, we could have formulated very much more far-reaching Amendments, and could have justified them with arguments. The cost is something under £2 million, as we understand, and it would be a very small price to pay in order to avoid the very grave and considerable consequences that might flow from a further collapse of this industry, which today is anything but flourishing.

Mr. Hayman

I rise again in order to support the Amendment, because the Chancellor refused the last one. I want to emphasise the fact that the small cinema is a vital part of the structure of our country. The party opposite rails against the United States of America, but in respect of the cinematograph industry it is allowing the United States to have a preponderant influence not only in this country but in most other countries. The producing industry depends upon films being exhibited in this country. It seems to me that small cinemas have been closing at such a rapid rate in recent years that there is a great danger of the whole industry collapsing.

The Government seem bent upon crushing the small man everywhere—the small farmer is being attacked; the small trader is being attacked, and in this case the small exhibitor is being attacked. The Chancellor of the Exchequer smiles, but in a similar debate twelve months ago I quoted a letter that I had received from the owner of a small cinema. Today that man is dead. The exhibitor of another small cinema, not far away, is also dead. [Laughter.] Hon. Members can laugh, but I believe that very considerable worry is caused to men who have all their capital locked up in small industries.

I hope that the Chancellor will accept some Amendments of this nature in order to assist small cinemas. I have seen some figures from a typical cinema which does not benefit from the rural areas concession. Those figures conform fairly closely with the ones I quoted just now from a pamphlet issued by the national association. Two million pounds, in a Budget of this kind, with the surplus for which the Chancellor is budgeting, and viewed against the background of the immense concessions which he has already made to extremely wealthy people, is a very small sum, and I hope that the Chancellor will now accept the Amendment.

Mr. R. Moss (Meriden)

I have spoken on the question of cinema taxation before —in the autumn of 1955. I support the Amendment because it affects the cinemas in my constituency which perform a useful social function. My right hon. Friend the Member for Smethwick (Mr. Gordon Walker) suggested that the cinema industry was still heavily burdened with taxation in spite of the concessions which the Chancellor has made. A cinema proprietor in my constituency has written to me likening the remissions to: giving a teaspoonful of water to a man dying of thirst. He may be grateful, but he will still die. In spite of the concessions which have so far been made, many cinemas face the prospect of closing. Where they are important social institutions in communities remote from large towns they deserve to be encouraged to keep going.

5.30 p.m.

I hope to have something to say later about the effects upon rural cinemas. The point I want to make is that the burden of taxation is still heavy. If we look at Table IX of the Financial Statement we find that the burden of taxation increases from 4 1/6 per cent. on the Is. seat—ls. being the gross charge, including tax—to 33 1/3 per cent. at 2s. 9d. That means that the tax increases progressively up to 2s. 9d. until, at that figure, Is. is being paid for entertainment worth 8d. Above 2s. 9d. the situation becomes worse, until the patron is paying Is. for entertainment worth only 7d. That is the position after the Chancellor's concessions have been made.

According to the Financial Timeson 10th April, it is expected that between 400 and 500 cinemas will be closing in the near future in spite of the reliefs which the Chancellor has given. It was reported in that newspaper that the cinema duty is yielding £33,560,000. It was also reported that cinema relief, not counting the increased incidence of the compulsory levy, will be £6½ million, but that is reduced to £5¼ million if we consider the compulsory levy. It was also stated that this concession amounts to 18 per cent. of the taxation which has been levied in the past, and that in spite of these concessions a large number of cinemas will close. The Chancellor ought seriously to consider whether he cannot make a further concession to support this great industry, which not merely provides entertainment but performs a social function in many communities where the police would like it to continue to operate. The Chancellor ought to consider the problem of the cinema industry from that point of view. It is worth helping it to survive because of the social function which it performs in many places, especially in rural districts.

I do not know whether I am right in my calculations, but it seems to me that the Chancellor's generosity during 1957–58 amounts to only £5 million when we consider that he is taking back millions of pounds through the imposition of the television duty. According to what I have seen in the Financial Statement, Table IX, the television duty during 1957–58 will recoup for him £6,300,000, whereas Entertainments Duty remission will cost him £11,200,000. This means that his generosity amounts to about £5 million in 1957–58 and to only just over £4 million this calendar year. I think, therefore, that on broad social grounds he can afford to be a little more generous to this great industry, which is in need of help.

Mr. P. Thorneycraft

The Amendment has a simpler and more direct approach than the previous one. It is not encumbered with any arguments, however good, about a tax upon a tax; about the levy, or about anything of that kind. All it says is, "Let us place the tax-free element 1d. higher." That is a perfectly logical and, indeed, superficially attractive argument, but it is not one which I could find my way to accept; nor is it one which I think the Committee should readily urge upon me. As the right hon. Member for Smethwick (Mr. Gordon Walker) said, it would involve a loss of revenue of £2 million. It would increase the tax relief by one-third above that which was originally envisaged in the Budget statement. I must make it plain that I could not accept a change of that character.

I accept what hon. Members have said about the importance of the cinema industry. They laid particular stress upon the importance of a home-produced industry. That is very important, and that is why we have such arrangements as the levy for channelling back money made—let us face it—to a large extent out of profits accruing from the exhibition of American films. That money is channelled back and put into the pockets of the people who are producing British films. The right hon. Gentleman has had some experience of the difficulties involved. Having tried various methods of overcoming these difficulties, the one that I have chosen seems the best that can be used at present. We use that; we use the quota, and we use the National Film Finance Corporation—all of which methods are designed to encourage the production of native films in this country. I agree with everything that has been said about this matter.

In addition, however, upon this occasion we have made what I regard as a substantial reduction in Entertainments Duty. The right hon. Gentleman said that this was introduced as a temporary tax. It was—by a former Member for Monmouth—Sir Reginald McKenna. I have, in part at any rate, made an honest man of him, in that I have abolished the tax in the case of sport and the living theatre. I cannot abolish it in respect of the cinema; it is too remunerative a tax. This is a large industry with a very large turnover, and there is no doubt that the amount of tax involved sustains our expenditure and revenue in a way which cannot be ignored. Nevertheless, on this occasion we have relieved it to the extent of £6½ million, and I think that we must be satisfied with that.

The hon. Member for Falmouth and Camborne (Mr. Hayman) and the hon. Member for Meriden (Mr. Moss) mentioned the smaller cinemas. We shall be discussing them later, but perhaps I can say that whereas the average tax reduction upon cinemas is about 18½ per cent., it is more in the case of the small cinemas because, on the whole, they charge lower prices for their seats. The reduction is 25 per cent. in the case of cinemas with a seating capacity of between 500 and 750, whereas it is only 15 per cent. in respect of cinemas with a seating capacity of 2,000 and over. So, even now, the new arrangements are tilted in favour of the very cinemas in whose support hon. Members have just spoken.

Mrs. Barbara Castle (Blackburn)

The Chancellor has told us that our arguments in favour of the Amendment have been simple and direct. His reply has been so simple and direct as to be almost naked of argument. He has entirely ignored the basis upon which our claim has been made. He has just one answer, namely, that the Amendment would mean that he would lose a certain amount of revenue, and he is not prepared to do that.

He has not answered the question whether, in distributing what concessions he is prepared to make in this Budget, he has made an equitable distribution. Our case is that cinemas—in respect of which we had all expected substantial reliefs to be given—have had an inadequate share of the cake that he has been distributing. The right hon. Gentleman knows that the cinemas did not expect to get the tax completely remitted or to be as lucky as the theatres and sport. They thought they would get about £12 million back out of the £33 million they had been paying. The Chancellor has given them half of what they expected and were becoming increasingly confident about. He ought to use a little more argument to show why he has given them so little.

The Chancellor ought also to examine the question whether the remission will meet its purpose. If it will not save the cinemas which are now facing bankruptcy he has wasted his money. All of us get letters from cinemas making it clear that the remission the Chancellor is giving will not save them from going into the red on a substantial scale. There is a preponderant number of small, independent cinemas in my constituency which have been anxiously awaiting this Budget from which they were expecting relief. The Blackburn Cinema Managers Association has made it clear to me that of its thirty-three members a number are facing bankruptcy and that the Budget will not save them. The Chairman of the Association commented, rather ironically: The Government have not come to the relief of the theatre until it is dead, at least in the provinces. We do not want the same to happen to us. It looks as though the situation is developing in that way.

It was rather sinister when the right hon. Gentleman said that the small cinemas ought to be most grateful because they got a bigger proportionate remission, being relieved to the tune of about 25 per cent. This is very misleading. The Chairman of the Association points out that his cinema, for example, has a seating capacity of about 840 and that the remission of tax under the Chancellor's proposals will mean a gain of about £16 per week. After deducting film hire, which is about 45 per cent., shall we say, this leaves £9, less the levy which has been doubled. He says that this is an example of an independent cinema which is comparatively well off and that some nine members of his Association will receive much less—down to a minimum of £3 per week. This just does not meet the situation. It will not be possible, for example, to carry out the review of wages which has been held up by financial hardship and by sheer incapacity to pay more.

The very offhand answer of the Chancellor is extremely shocking. He is saying, "I know this won't save you from bankruptcy. I am sorry, but I don't care. I have something else to do with this £2 million." It is not as though he had not a penny to give away in his Budget. He has given some substantial pennies to some very substantial people, and yet he is saying to the cinemas that he will not give them another £2 million. I hope that he may yet be persuaded to consider a further gesture to these desperately hit independent cinemas in the provinces, many of which have already closed down. A large number of the remainder will have to close down in the future unless the right hon. Gentleman shows greater sympathy.

5.45 p.m.

Mr. David Jones (The Hartlepools)

The Chancellor of the Exchequer is cutting off his nose to spite his face. He argues that he cannot do any more for the cinemas because this is a remunerative tax that he must have.

I did not hear him challenge the figures of my hon. Friend the Member for Meriden (Mr. Moss), who said that a reputable newspaper recently suggested that about 500 cinemas were going out of business in the not-too-distant future. Where will the Chancellor get his revenue if that happens? If he were to concede the additional £2 million now it might enable him to collect for some time longer the remunerative tax on cinema incomes.

The right hon. Gentleman went on to argue that because cinemas in the rural areas are getting about 25 per cent. relief the expenses of rural cinemas are not substantial, yet it is precisely in the rural areas that cinemas are likely to close down. I have correspondence from rural cinemas in the County of Durham saying, in almost the same language as was used by the gentleman who wrote to my hon. Friend the Member for Blackburn (Mrs. Castle), that the Chancellor's proposals were like offering a spoonful of water to a man who was almost dying of thirst.

If these cinemas close down, a serious social problem will be created for a large number of rural villages where, I have no doubt, the additional cost of preserving law and order will more than swallow the £2 million now being asked of the Chancellor to save the cinemas.

At least, the Chancellor was honest enough about the Amendment not to raise difficulties about its operation. The plain fact is that there is no difficulty except that it will cost the Chancellor a further £2 million a year, but if he loses 500 cinemas and the revenue he now gets from them he may be in a worse position than he is now. If he and the President of the Board of Trade were serious when they put the Cinematograph Films Act through the House to assist in the production of British films, they must realise that the obvious consequence is somewhere to exhibit the films. It is no use producing if we cannot exhibit. The cinemas cannot pay their way. Evidence has been brought to our notice time and time again that they are in considerable difficulties. The Chancellor ought to be interested enough in the revenue he gets from them to take the action we suggest to save them.

Mr. John Cronin (Loughborough)

It is difficult to comment upon the Chancellor's speech. He produced no evidence at all except of a somewhat repressive attitude. The question of revenue has been adequately dealt with by my hon. Friend the Member for The Hartlepools (Mr. D. Jones). It is better to revive a dying trade than to suffer the loss of revenue.

The Chancellor said that he could not contemplate completely removing the Entertainments Duty from the cinema. I am not quite sure why he said that, because I do not think that anybody in the Committee has suggested that he should. Obviously, there are very good reasons for not giving the cinema industry a complete remission of £21 million in a time of inflation. It is desirable to be rather careful about making large changes in the fiscal system. Hon. Members may agree that when trade organisations make representations about hardship there is often an element of hyperbole about them.

Nevertheless, we suggest, in the Amendment, a remission costing about £2 million. This is desirable to maintain the livelihood of the cinema industry and to improve prospects for the future. The Chancellor will be aware that about 600 cinemas are operating at a loss, which means that they will probably all go out of business, which, in turn, means that a large number of people will lose their only means of livelihood. The right hon. Gentleman will appreciate that it is a terrible thing for someone who has built up a business over the years, providing a very pleasant way of getting entertainment, to be driven out.

We must remember the loss of amenity by the closing down of cinemas in rural areas where the need for them is very great. My constituency is a mining area. By the nature of their work, miners are compelled to live in small, isolated, communities. Some of their cinemas are to be closed because of the rather repressive attitude of the Treasury. The Cinema Association was discussing at a recent conference the impending closure of a number of cinemas. It reminded one of the unhappy days after the First World War when similar conferences took place in numerous industries.

The cinema industry is distinctly deserving of support. It has kept its costs low compared with trade generally. The average admission charge in 1934 was 8.6d. In 1955, the net average admission cost, after taxation, was 14.2d. In other words, the cinema industry has nearly doubled its net prices since 1934, while a very large number of industries have increased their charges three, four or even more times.

It is important that we should think about the future of films. The industry has substantial opportunities in front of it. The volume of production is decreasing, and there is a real decrease in the volume of film production in the world market. Here is a splendid opportunity for the British film industry to cash in and make more films, if only the Treasury will remove the shackles and give it freedom of movement.

Very soon we may be approaching entry into the European Free Trade Area, when we shall have a large market comparable to the enormous American domestic market, which was the principal cause of the growth of the Hollywood picture industry before the war. How will the Chancellor help this industry to serve the European Free Trade Area? Here is an opportunity enormously to increase the volume of exports, but it will be completely wasted unless the Chancellor takes a more enlightened attitude to Amendments proposed from this side of the Committee.

Another very likely development in the near future will be piped television, or coin-in-the-slot television. That probably will spread over most of Europe in the next ten or twenty years, according to scientists who have studied these matters. There will be a big opportunity for the British film industry to make films for coin-in-the-slot, or piped, television. That will not merely apply to the domestic product, but one can foresee scientific advances of world television networks in which British films could be used for television to be seen all over the world.

There are tremendous opportunities for the British film industry here. I sympathise to a small extent with the rather hard-hearted attitude that one should not reinforce failure, but the industry is not failing; it is facing tremendous world opportunities and needs an enlightened attitude on the part of the Government to take advantage of them.

Mr. Swingler

Considering that the Chancellor was President of the Board of Trade for about five years, I am astonished at his superficial treatment of this problem. I can only think that it is based on the idea that he can get away with it as there is rather a lack of attendance in the Committee. He cannot go on, on Amendment after Amendment, saying, "I cannot afford to lose any more revenue." He has afforded plenty of revenue for some of the Surtax payers. He knows that it is our job to examine the pros and cons of these proposals not only according to the revenue involved, but according to the economic state of the nation and especially of the industries concerned.

The Chancellor knows very well, first, that there are some outstanding problems in the film industry and the cinema trade of Britain, all of which are connected with the tax burden. He knows that the cinema trade is a dollar-consuming trade. That, for the Chancellor and the Treasury, is an important aspect.

Secondly, he knows from his experience at the Board of Trade that this is an industry in which there are powerful monopolistic tendencies, and that those tendencies would be enhanced by the crushing of the small man in exhibition and the extinction of the independent man in production.

Thirdly, the right hon. Gentleman knows that film production has to be stimulated, propped up, bolstered and pillared in order to exist and that it is important for national, social and economic as well as financial reasons that it should exist. All those things are connected with the amount of taxation which is levied upon this industry, because that affects the amount of financial stimulus which is available for British film production based on the actual receipts at the box office, and the position of those at the small end of the trade affects very much the question whether one or two big magnates are to dominate the trade. That will have powerful economic and financial as well as social consequences if it takes place.

6.0 p.m.

There should also be in front of any Chancellor the prospect that some dollars might be saved by giving additional encouragement to the British film industry and cinema trade. We hope that we shall not have to go on with negative expedients to bolster film production, but if we have a wise State policy which encourages the showing of British films and stimulates a healthy financial state in the cinemas we might be able to improve our balance of payments and save something on the importation of films from abroad.

The Chancellor knows perfectly well that this is a very meagre concession; it is the minimum he could give. He knows very well that in the trade, quite apart from the closing of a large number of cinemas and declining attendances, there has been an expectation of a substantial reduction of Entertainments Duty because the Government were imposing a statutory levy on cinemas in place of a levy which exhibitors were not compelled to pay.

That was recognised by the President of the Board of Trade when he introduced the Cinematograph Films Bill. He indicated quite clearly a connection between the tax and the imposition of the levy and indicated in a speech which had certain Parliamentary consequences that this bill of the statutory levy would be shouldered in some way when we considered the Budget proposals. Therefore, the Chancellor's concession has to be considered in the light of the imposition of a statutory levy to the tune of £3¼ million a year to be paid by the exhibitors for the purpose, quite rightly, of stimulating British production. Judged in that light and in the light of all the concessions made by the Chancellor in the Budget, this is a very meagre concession.

The Chancellor cannot pretend that it is a concession that can save very many of the small cinema proprietors or stem the tide of closures which has been going on for the past few years. Therefore, we want to know from the Chancellor and the Government what their policy is in this respect. Do they regard it as a desirable thing that the small cinema proprietor should be forced into bankruptcy with the connivance of the State, which is imposing a relatively heavy level of taxation upon him and producing a state of affairs in which the cinema trade will become one of the subjects for inquiry into monopolistic practices? Do the Government regard that as an inevitable or desirable process? If they do not, it is quite clear that a more ambitious concession is necessary to attempt to save the remaining independent exhibitors.

I believe that time is running out very fast in this matter. Shortly, it will be no good talking about the survival of the independent exhibitor. Not many more cinemas have to close before the whole trade will have fallen into the hands of the major circuits. The proposal that we on this side of the Committee are making is a very modest increase upon what the Chancellor has done in the attempt to stem this tide, because we regard it as desirable that independent exhibitors should be maintained and the industry not allowed to fall under monopolistic control.

We also regard it as desirable that an additional financial stimulus should be given to the cinemas now that they are facing increasingly powerful competition from television, because that would contribute towards a healthy British film producing industry which, to put it in its narrowest sense to the Chancellor, might contribute to the saving of dollars. That is very important. Unless a bigger concession is given I do not think that the statutory levy and the British Film Production Agency will work well or with the good will of the exhibitors, which is a necessary condition for its success. Therefore, it would not give that encouragement to British film production which would enable a higher level of showings of British films in the cinemas.

That is the most important part of the case that the Chancellor should consider. If, in the light of that, he fails to consider not what is the amount of the concession that he has made, but what is the amount of taxation he is leaving on the cinemas, we shall still have a state of affairs in which there may be a slow decline of the trade and a result which will not contribute as it should to national well-being.

Air Commodore A. V. Harvey (Macclesfield)

I wish to apologise to the Committee for not having been present during the earlier part of the debate to put a plea to the Chancellor of the Exchequer. I know that the cinema industry is grateful for what my right hon. Friend has done, but from what I have seen of the trading figures of independent cinemas in my constituency, Macclesfield, and in Congleton they have made losses and occasionally very small profits. If they are to survive, my right hon. Friend will have to look at this matter again.

It is important that small cinemas should be able to keep going in small towns. We must recognise the fact that television is having its impact and effect on the cinema business. During the last few weeks we have seen that some weekly pictorial papers are to close down because of the competition of television. It is also having an effect on cinemas, but before they die they should be given a chance to trade successfully.

A successful film industry can have great beneficial effects on British trade overseas. We have seen what has happened in the United States over a period of years, during which its films have penetrated all over the world. As a rule, it has benefited from selling goods abroad. With the Common Market coming there will he great opportunities for British influence to be felt in Europe, apart from other parts of the world.

While we on this side of the Committee are grateful for what my right hon. Friend has done in his Budget. I ask the Chancellor to have another look at this question and consider whether he can give a little more so that small cinemas shall have the encouragement they need if they are to survive.

Mr. Rankin

On a point of order, Sir Gordon. There are three Amendments on the Notice Paper dealing with small cinemas. Now that we seem to be discussing small cinemas, may I be assured that those of us who wish to deal with the Amendments on small cinemas will not be ruled out of order when we reach those Amendments?

The Deputy-Chairman (Sir Gordon Touche)

Amendments on the small cinema are to be called.

Mr. G. M. Thomson

I hope that the Chancellor will listen a little more sympathetically to the plea made by his hon. and gallant Friend the Member for Macclesfield (Air Commodore Harvey) than he has listened to arguments from this side of the Committee.

I wish to take up a point made by my hon. Friend the Member for The Hartle-pools (Mr. D. Jones). My hon. Friend argued with considerable force that by resisting this Amendment the Chancellor might find himself losing a great deal of revenue. The case of the Chancellor as I understand it—it is a reasonable case for the Treasury—is that the cinema entertainment industry is a lucrative source of revenue and that he cannot cast aside £2 million of it easily or without careful consideration. As my hon. Friend pointed out, one of the results of resisting this Amendment may be closures on such a scale that at the end of the day the Chancellor might actually lose revenue.

I want to draw the attention of the Chancellor to certain surveys which have been made by the industry on this problem. It has made investigations in areas where there are three cinemas, say, near together and one has closed. An attempt has been made to find what happened about the public who previously went to the cinema which had closed. A very revealing figure was reached. It was found that only 10 per cent. of the former clientele of the small closed cinema transferred their patronage to the other cinemas. That is a simple figure, but it may well be that cinema-going for certain groups of people, particularly the middle-aged, has become partly a matter of habit. If the habit is interrupted they may decide that they will sit by their television sets instead of going to another cinema.

It may be that as a result of resisting the Amendment the Chancellor will find he is losing a great deal of revenue. The Chancellor made his case on the basis that he must have the revenue, but by his decision he is saying that the number of cinemas in the country ought to be very substantially reduced. That is the inevitable result which will follow if he persists in his resistance to this very modest Amendment.

I know that in my constituency a number of cinemas will he forced out of business as a result of the Chancellor's failure to extend his present concession. I have here the weekly summary of the Entertainments Duty on one small cinema in my constituency. These figures are before the proposed tax changes. It is a very old-established cinema in the city which performs a very useful job in one of the suburbs of my constituency. The gross takings for the week were £103, of which £23 went to taxation and £80 was left as net cash takings. The running costs of that cinema were £150 weekly. This cinema remained open to see what the Chancellor produced in his Budget. When the owners saw his Budget it was decided to stay open a little longer to see what happened in the Committee stage of the Finance Bill.

This cinema, with many scores of others, will have to go out of business very quickly if the Chancellor perists in his decision. The right hon. Gentleman has not attempted to make any case for closing down the very large number of cinemas which will be forced to go out of business as a result of his resistance to this Amendment.

Mr. Hirst

Hon. Members opposite have been making some very good arguments on this Amendment. I must say that out of fairness. One very important point is being overlooked. I have complete sympathy with the views of my hon. and gallant Friend the Member for Macclesfield (Air Commodore Harvey) on small cinemas, and we shall come to that subject later, but we are discussing here not only the small cinemas but also the question, ultimately, of maintaining the revenue for the Exchequer as well as maintaining the livelihood of the industry.

It is a fact that the industry has a growing sense of competition from television. It is an additional fact that we have some advantage, if we can only use it, in that we know the experience of the United Sates in this matter. In the United States they were taken substantially by storm, but we need not be taken by storm, nor need the Chancellor permit what has happened there to happen here.

It is true, as has been said, that there is a decline in the production at Hollywood. The fact remains that America has a large domestic market, three times as big as our market, which is a factor of some importance. Nevertheless, there has been a decline in the industry in America, and there may well be a decline here if we do not watch our step a little more carefully. We hope to fill the gap, as the hon. Member for Newcastle-under-Lyme (Mr. Swingler) said earlier, by obtaining a larger share of the export trade, but we cannot do that unless we maintain our home base. That is a comment which applies to nearly every industry, and the film industry is not peculiar in that respect.

What have they been forced to do in the United States? They have been forced to remove Entertainments Duty practically entirely. The first step was to reduce it from 20 per cent, to 10 per cent., but more recently it has been removed entirely from all except the most expensive seats. I think I am correct in saying that since September, 1956, 93 per cent. of the cinemas in the United States have been free from tax. Tax is now charged only on seats priced at the equivalent of 7s. 1d. and above, and even then the tax is quite modest.

6.15 p.m.

They had to do that in America to help their industry. I am asking that we should take action before we are forced to take it. What would happen if the Chancellor of the Exchequer, whichever party were in power—for I am impartial about this—were faced with that situation and if that tendency occurred here? Is it not very much better to try to deal with the problem in time and not to wait for cinemas to close right, left and centre, or to wait for the industry to return to the first-class mess from which we have been gradually recovering it?

Should we not anticipate that now and try to prevent cinema audiences from declining in size and from getting into other habits than attending cinemas? The only chance of a larger number of these medium and smaller cinemas operating successfully is that they should have the money by which to adapt themselves to new techniques which the public demand if they are to offer an alternative to television. How can that be done if they are taxed at the present rate?

This is the point which we must have in our minds. I do not want to be difficult about it. As I know only too well, my right hon. Friend knows a great deal about this subject, but it is no use his coming here and accepting the role of Iron Chancellor, as I said earlier. Indeed, he is now adopting the attitude of a Molotov. Let us get this problem in its true perspective and not look at it from the niggling point of view of the odd £1 million or £2 million of what we can afford in the Budget. We must think of the years ahead and what will happen to the revenue. That is a point which ought to appeal to my right hon. Friend and it is one of the strongest arguments which I have made to him. It seems to me that it is the by-product of maintaining a healthy home cinema industry.

Mr. G. Jeger

I do not know whether the last appeal which the Chancellor heard from his hon. Friend the Member for Shipley (Mr. Hirst) will have any effect upon him. Chancellors of the Exchequer of a Conservative Government do not look very far ahead; they have no need to and they can live from day to day, because they never know when their last hour will strike. It seems to me, however, that the unanimous views which have been expressed to the Committee this afternoon from both sides about the cinema industry should have some effect upon him and that he should look not merely to the years ahead, as his hon. Friend the Member for Shipley advised him, but also to the present situation in the cinema industry, which is causing everyone outside the industry as well as everyone in it a great deal of stress and thought.

In his eloquent remarks, the hon. and gallant Member for Macclesfield (Air Commodore Harvey) referred to the effect of television upon the cinema and upon picture papers. I thought that he was referring to Picture Post. If I may correct him on one point, I do not think that that pictorial paper went out of business or is about to go out of business because of the competition of television. I think the reason is that it changed its political allegiance a little while ago and that that was accompanied by a sharp decline in public support. There is a moral in that.

The hon. and gallant Gentleman referred to the concession which has been obtained from the Chancellor in respect of cinema taxation. Some of us do not regard it as very much of a concession, and I am sure that the film industry does not regard it as a concession. It is a very small, niggling amount indeed compared with what the trade expected and what it requires if it is to keep going as an industry and a trading concern of some value to the country.

If we look at the amount which has been conceded by the Chancellor and then look at the amount of additional taxation which has been imposed upon television sets, we see that the Chancellor has made very small concession. He has taken the burden from one branch of the entertainments industry and, to recoup himself, has placed it on another branch of the entertainments industry. There has been practically no concession.

From both sides of the Committee we are pleading that a concession be made to the film industry from taxation which would enable it to live and to continue to serve the public and, incidentally, to serve the Revenue by means of the Entertainments Duty which is imposed upon it. There has, quite justifiably, been some talk about the closure of cinemas. The number which have closed, being unable to pay their way, has reached considerable proportions. Cases have been brought to my notice. One is in my constituency, and I make no apology for referring to it because we all have small cinemas in our constituencies and, naturally, their problems have been brought to our notice.

In my constituency, there is one small cinema which will not close; it will fail to reopen. It was burned down a little while ago as a result of an accident and it has not been rebuilt and reopened. I have approached the owners of the cinema, as has the local council, because it is a local amenity in a mining village where very few amenities and entertainments are available to the people. The owners say that it does not pay them to rebuild the cinema and to reopen it under the present taxation system because they could not hope to get an adequate return upon their capital outlay.

This is an argument which should appeal particularly to the Chancellor, with his political philosophy. Here are owners who are out to make a profit, who are out to serve themselves as well as the public; but under his penal taxation and, particularly, the Entertainments Duty, they cannot see their way to make a small cinema pay if they now have to start from scratch. They would have to rebuild the cinema and start from scratch, not as a going concern; they would have to start de noveau.

This is a colliery village and the results of the cinema failing to reopen are far-reaching. There is one small cinema in the village, a short distance away, which means that there is very inadequate entertainment for the workers. As a result, they have to travel by bus about ten miles to the nearest large town, where there is another cinema. They go to the cinema and see the film they want to see; they spend a little time in the town afterwards enjoying themselves; and most of them try to get on the last bus back to the village. Because they arrive back in the village rather late, they are not in a fit state early next morning to get up and take the early shift in the pit. There has been a decline in the production of coal at that pit since the local cinema was burned down.

I would ask the Chancellor to look a little more carefully at this matter— to look a little beyond mere figures in the Budget and to consider the national production, for we need an increasing and not a diminishing coal production. This is one way in which we can have an increasing coal production—by providing normal civilising amenities, if we can call the present-day cinema a civilising amenity, for the people who demand them, and who would like to have them in their area.

This penal taxation has a far-reaching effect not merely upon the Revenue, but also upon the production of the country's wealth. I hope that the Chancellor will think of this and not merely of the extra noughts which he will be able to add to his Budget revenue this year if he resists this Amendment.

Mr. Frederick Gough (Horsham)

I will not detain the Committee for more than two or three minutes, but I should like to add my voice in particular to the observations of my hon. and gallant Friend the Member for Macclesfield (Air Commodore Harvey) and my hon. Friend the Member for Shipley (Mr. Hirst). I want to tell the Chancellor how grateful we on this side of the Committee are to him for having tackled the problem of the Entertainments Duty courageously.

The principal point which I want to make is a little different from those made by other hon. Members. The general theme in most of the speeches has been the danger of cinemas being closed down. Although most of my constituency is rural and I fully appreciate the importance of keeping cinemas going, there is another side to the problem and it is the risk of no cinemas being built.

In my constituency I have a new town, and most hon. Members have in their constituencies overspill or new towns or new housing areas. It is immensely important that in these areas the cinema industry should be sufficiently thriving for new cinemas to be built. We are suffering from this difficulty very much indeed in Crawley. I realise that my right hon. Friend has gone some way to deal with the problem, but I hope that he will sec his way soon enough to go a little further so that this amenity and this great social benefit will not be denied these large populations which are moving out of London and other areas into the new towns.

Mr. Victor Yates (Birmingham, Ladywood)

I have not previously intervened in a debate about cinemas, but I could not help but be impressed by some of the remarks made by the hon. Members for Horsham (Mr. Gough) and for Shipley (Mr. Hirst). I feel that in the spirit in which they have spoken we should ask from both sides of the Committee that the Chancellor should reconsider the whole problem. I am looking at it from the point of view of safeguarding useful leisure pursuits for young people.

Much has been said about the importance of the small cinema in the countryside, but, as a Member from Birmingham, I should say that the dangers to a large city arising from the closure of cinemas are equally great. In my own constituency, in the centre of Birmingham, there are two cinemas which face the kind of problem which has been mentioned today. In a large city like Birmingham it is quite a serious matter if the amenities for the people are withdrawn. During the last few years I have felt sad because we waited so long before trying to assist the living theatre. I strongly support the hon, Member for Shipley, who asked why we should wait until the cinemas closed, as we waited for the theatres to close, before trying to save them. Why should we not do something now?

I appreciate the Chancellor's problem, but we should do something to save the cinema from the sort of things which have happened in the theatre. The manager of one of the cinemas in Birmingham has said that 40 per cent. of his takings went in taxation, 7 per cent. for the levy and 53 per cent. went to the exhibitor, and he added that if the 53 per cent. met all his business expenses including wages, theatre maintenance and hire of films and allowed a reasonable margin of profit, there would be no need for a further tax deduction. But that is not the case. He added that after paying all the costs his cinema was facing a loss. This is in a very large industrial city. Similar requests have been made by the manager of another cinema in my constituency; otherwise, it will have to close.

From the remarks which have been made in this debate it is clear that the Committee as a whole would wish the Chancellor to go much further than he has indicated and that he will give us some hope that action will be taken to prevent cinemas from closing. What is more important is the safeguarding of good leisure pursuits at a time when there are great dangers of young people being on the streets without proper amenities, which will prove much more costly to the community in the long run.

Mr. Ede (South Shields)

I support the plea that has been made on both sides of the Committee, particularly on the lines of the speech made by my hon. Friend the Member for Ladywood (Mr. V. Yates). Around many large towns there still remain villages which have a life of their own. One of the centres around which such communities form themselves is undoubtedly the cinema off the main street of a big town, which serves a community which has come to regard that cinema as its own particular place of entertainment. I have such a cinema in my constituency.

The large cinemas which are connected with the big rings have well-advertised places on the main streets, but in some of the subsidiary streets we have these other cinemas which, at the moment, are having to struggle hard for their existence. We have also the cinema in what one might call the medium size town or the big colliery village.

Such a cinema is to be found in the mining town of Horden, in Durham, and there is another in Jarrow. Anything that adds to the gaiety of life in Jarrow is earnestly to be commended to everyone. There are other such cinemas in the mining village of Hetton, in Chester-le-Street, Birtley, Blaydon, and one or two others, all of which form the social centre for the community. It is deplorable that these cinemas should have to be fighting for their very lives, as they are today.

6.30 p.m.

Some people have referred to this tax concession as if it were something which went to the general population, but let us be quite sure that there has been no reduction in the prices of seats in most of these places. In fact, I have not heard of any cinema making any concession in the prices of seats. As I understand, this is a concession to the proprietors of cinemas in recognition of the difficulties with which they are faced.

I should have thought that the small additional relief which would be given if this Amendment were accepted would commend itself to the Chancellor. I know that he has inherited this difficulty from the pledge that was given last year by the present Prime Minister. At the time that he gave the pledge I said that one certain prophesy would be that he would not be here to fulfil it when the time came. I did not think that he would get out of the job in quite the way that he has. Nevertheless, this is a difficult matter, and I ask the Chancellor to meet us with this small additional concession which has been requested by both sides of the Committee.

Mr. Glover

The discussion on this Amendment has ranged over a much wider field than the terms of the Amendment itself. I do not suppose that anybody would suggest that the acceptance of this Amendment would save the cinemas from bankruptcy. The fact is that the cinema industry is a contracting industry. It will go on contracting because of new forms of entertainment and it will have a difficult task to hold its place in the affections of the public in the coming years.

I am sure that my right hon. Friend the Chancellor of the Exchequer is well seized of that fact, and I would commend to the Committee the generosity that he has shown in his last Budget to the whole of the entertainment industry and to sporting activities. He has seized a nettle which many Chancellors have avoided in past years, and I believe that he deserves the thanks of the nation for what he has done in this Budget.

The Chancellor has already stated that, within a figure of about £100 million, he has no further room for movement in the Budget. If the Chancellor would say that, provided the economic affairs of the nation go in the right direction, he has very much in mind the necessity to make further concessions in coming years towards this contracting industry, I shall be more than satisfied. The relief that he has already given in the Budget will be a real help to the cinema industry. It must amount to about £5 million, and that is not to he sneezed at. The acceptance of this narrow Amendment would make a very small difference to the£5 million.

The cinema industry, having obtained this first concession, must now begin to study the problem as put forward by Mr. John Davis and the leading accountant in the industry who spoke on the subject of rationalisation within the industry at the conference at Gleneagles.

These minor concessions which may be wrung out of the Chancellor will make him and the Treasury less likely to reconsider the whole question of Entertainments Duty in connection with this contracting industry. I hope that next year the Chancellor will be able to do something more towards reducing the basic rate, but I do not think the acceptance of this Amendment in addition to what he has already done will achieve a great deal.

Mrs. White

We have had an extremely interesting debate on this Amendment, and, although some of the speeches have ranged a little wide, I think it is only right that they should have done so.

This Amendment is concerned with the help of the cinema industry in general. Therefore, I believe it is perfectly fair for us to ask the Chancellor, as my hon. Friend the Member for The Hartlepools (Mr. D. Jones) and others have done, how many geese in this flock he thinks he can kill before the number of eggs which he and his successors are to receive will fall very substantially. In denying some relief now he may be doing permanent damage to the Revenue.

The other line of argument has touched the wider issues of the industry as a whole. My hon. Friends the Members for Loughborough (Mr. Cronin) and Newcastle-under-Lyme (Mr. Swingler), and the hon. Member for Shipley (Mr. Hirst) in particular, have raised some extremely important matters concerning the future of this industry. A serious situation is developing because the contracting trend among cinemas is very plain for all to see. Last year, 221 cinemas closed. Only 13 were built and 23 reopened. The net number of closures was 185, compared with 53 net closures in the year before.

Calculations have been made by the accountants who have been concerning themselves with the affairs of the exhibiting side of the industry, and they reckon that with the concession made by the Chancellor this year about 600 cinemas will be operating at a loss and a further 600 will be operating on a very narrow margin. I believe that the Financial Times did not go so far. Their correspondent suggested that 400 or 500 cinemas would possibly go out of business this year. That is a large proportion of the total number of cinemas in this country, which is approximately 4,000.

The Chancellor should ask himself whether he is not doing permanent damage to the sources of revenue if he regards this trend with equanimity. I am not suggesting that every cinema in the country can hope to remain open in perpetuity. One has to face certain changes in the industry, and the Chancellor should ask himself, looking at it from a wider point of view and not merely from the point of view of revenue, in what conditions the adjustments are to be made. Are they to be made in a panic? That might well happen. If the decline in cinema exhibition accelerates, one can well foresee a situation in the industry in which rationalisation may take place in panic or near-panic condition. That would be extremely unhealthy from many points of view.

References have been made to the two interesting addresses delivered at the conference at Gleneagles last week—I am sure that all those who are interested in the industry will have read them—by Mr. John Davis, of the Rank Organisation, and Mr. Clifford Barclay, the accountant in charge of the industry's tax committee. I do not think that anyone who read them could have been unaware of the possible danger that the small man might feel himself in such a weak position, that the monopolistic tendencies which are already in existence in certain respects in the industry might be very strongly increased if the closing of cinemas accelerated, and the small man would feel that he had no option but to close or be swallowed.

Those considerations are in our minds in putting forward the Amendment. I confess that I was rather disappointed that the Chancellor, in his opening remarks, at any rate, paid no attention to anything at all except revenue. He has had experience as President of the Board of Trade, and, therefore, perhaps we expect of him a rather wider view of the affairs of the industry than he displayed. What we are asking for involves about £2 million. That is not a very great sum when one recalls that the Chancellor will obtain, even under the revised rates, roughly £27 million from the industry. It would, at least, however, give some little margin for manoeuvre. That is what I am anxious about.

All of us realise that the cinema industry is in a difficult position. No one knows quite what the effect of television will be. Looking at the decline in cinema attendances over the last year, it is of some significance that the decline was not so great in Scotland and Wales where there is less television coverage than in parts of England, and that the decline was most marked in those parts of the country where television, including commercial television is at its peak.

Consequently, we do not yet know what the full effect of television will be when the coverage is wider than at present, but the continuing decline in attendances must cause us concern. Attendances dropped by 81 million last year, a 7 per cent. decrease. It would have been even more had we not had a peculiarly wet summer, which sent up the attendances in a number of holiday resorts to a very high figure in the third quarter of last year. The Chancellor cannot really count on having wet Summers; at least, I hope not. At all events, we must not base the revenue on wet summers.

We face a situation in which the industry may have to make considerable changes in its structure and organisation. This is not the time to discuss that, and in any case it would be far better that the industry itself should continue the discussions which it has already begun. However, Members of Parliament have some responsibility for ensuring that those in the industry who are trying to think of new ways of meeting the challenge should be able to do so in the most favourable circumstances possible. It is largely for that reason—it is a matter not merely of revenue or tax in the narrower sense, but of the conditions in which the industry can best put its own house in order—that we believe that our relatively very modest Amendment should be supported by the Committee.

6.45 p.m.

Lieut.-Colonel J. K. Cordeaux (Nottingham, Central)

My hon. Friend the Member for Ormskirk (Mr. Glover) said just now that we all hope that the Chancellor might be able next year to make some reduction in the basic tax, but that will be much too late for many hundreds of the cinemas that we have been discussing.

Clause 1 (1) shows only too clearly that "Entertainments Duty" is now rather a misnomer. It ought now to be called the "Cinematograph and Television Duty," because those are now the only forms of entertainment required to pay it. Television shows can no doubt look after themselves, but I feel it is rather unfair that the cinemas have been singled out as the only other part of the entertainments industry to pay the tax.

I was not in my place during part of the debate, but I understand that the Chancellor made the point that the revenue has to be provided. If that is the case, I cannot help feeling that the burden might have been spread somewhat more fairly. My right hon. Friend's predecessor exempted cricket from the tax, and now football and other forms of sport share the exemption. I appreciate that both cricket and football have found the burden very heavy in recent years and have been telling a hard-luck story a long time. Nevertheless, since the war no club in the English League has closed down for financial reasons.

The Chesters, the Gatesheads and the Crewe Alexandras of the Third Division (North) have struggled on, no doubt with the directors putting their hands in their own pockets. In the same way, the poor county cricket clubs have managed to carry on.

The Temporary Chairman (Mr. F. Blackburn)

We had better get back to the cinemas and leave the football and cricket clubs alone.

Lieut.-Colonel Cordeaux

I apologise, Mr. Blackburn. I was trying to make the point that none of the other forms of entertainment which have been exempted has been forced to close down, but cinemas have been closing down by the hundred. Four cinemas closed down in Nottingham last month. The ones most affected in the cities referred to by the right hon. Member for South Shields (Mr. Ede) were somewhat removed from the city centres, but even the larger cinemas in city centres have been badly affected.

I should like to give the attendance figures for a medium sized cinema, a very good one, in Nottingham over the last three years. In the year ending mid-April, 1955, the attendance was 330,000; in the following twelve months it was 291,000; and in the next twelve months, ending mid-April, 1957, it was 257,000. That is a drop in two years of 73,000, or about a quarter.

Many cinemas are only just keeping going now with the money which they obtain from advertising films and ancillary services and that is decreasing the whole time as attendances are falling. I feel very strongly that it is a pity that cinemas have had to be singled out as almost the only form of entertainment left to provide revenue. I hope very much that for that reason my right hon. Friend will be able to give them a little more assistance than is at present contemplated.

Mr. P. Thorneycroft

My hon. and gallant Friend the Member for Nottingham, Central (Lieut.-Colonel Cordeaux) has just strained the rules of order to remind the Committee that the purpose of the Clause is to reduce taxation over a fairly wide field. It is worth while remembering that. However, it is not only a matter of the Clause abolishing the duty on sport and the living theatre; this is, of course, a substantial reduction in taxation upon the cinemas.

There is no reason why an industry confronted with a substantial reduction in taxation should not ask for more— I do not complain about that; it is a legitimate request to make—but if it does so, it is certainly right that the Chancellor of the Exchequer should point out the loss to the Revenue that would result. Several hon. Members complained that I concentrated too much upon the loss of revenue. I remember being advised when a young man starting at the Bar, "If you had a good point, go on making it, in different words if you can think of them, but otherwise in the same." There is a good deal to be said for that in the courts or in the House of Commons.

After all, the point of the Amendment is a very simple one. It is to ensure that the Exchequer shall get £2 million less and the cinema exhibitors shall have £2 million more. I pointed out that I did not think that that was a sacrifice of revenue which I was prepared to make.

I have listened to the debate, which has ranged fairly widely. We shall cover some parts of it in more detail later. There is the rural cinema. We shall talk about that, but it is already specially looked after and will be more specially looked after under the arrangements included in the Finance Bill. Then there are the small cinemas, but it is not always the small cinemas that are in the greatest difficulties by any manner of means. Sometimes it is the small cinema with a very small staff that is doing quite well. We cannot decide profitability merely by the number of seats in the cinema. I hope that we shall remember that in our future discussions.

But look at it how we will, the proposal here is that we should somehow assist matters by sacrificing a revenue of £2 million. I must say frankly to the Committee that if someone had come forward and said, "The industry is in great difficulty and we want you to take away £20 million in tax" there might be some argument for that, but that is not the proposition here. Changing the tax-free element from 11d. to 1s. will not make the difference that hon. Members have in mind.

My hon. Friend the Member for Ormskirk (Mr. Glover) said that the industry is faced with many more problems than mere tax problems. I am certain that if it is to make a success of things it must switch its mind a little from the tax problems, which, naturally, has concerned it in recent months, to some of the more fundamental problems that confront the industry.

Mr. Gordon Walker

If we could put forward proposals that would give the cinema industry £20 million, does what the right hon. Gentleman has said mean that he would look upon that very much more favourably?

Mr. Thorneycroft

What I intended to say was that there would be much more

logic in that argument, although less chance of its acceptance.

As my hon. Friend the Member for Ormskirk said, the problems of the industry are much wider than those of taxation. They concern new techniques and new methods, and the profitability of cinemas will depend upon better films as well as the tax position. These are fundamentals that confront us. I am happy to have been able to make a contribuption in a really sizeable reduction in the size of the burden imposed upon the industry and we must be content with that.

Question put, That "eleven pence" stand part of the Clause:—

The Committee divided: Ayes 239, Noes 200.

Division No.111.] AYES [6.50 p.m.
Agnew, sir Peter Davidson, Viscountess Hirst, Geoffrey
Aitken, W. T. Davies,Rt.Hon.Clement(Montgomery) Holt, A. F.
Allan, R. A. (Paddington, S.) D'Avigdor-Goldsmid, Sir Henry Hope, Lord John
Alport, C. J. M. Deedes, W. F. Hornby, R. P.
Amery, Julian {Preston, N.) Digby, Simon Wingfield Horobin, Sir Ian
Amory, Rt. Hn. Heathcoat (Tiverton) Donaldson, Cmdr. C. E. McA. Horsbrugh, Rt. Hon. Dame Florence
Anstruther-Gray, Major Sir William Doughty, C. J. A. Howard, Hon. Greville (St. Ives)
Arbuthnot, John du Cann, E. D. L. Howard, John (Test)
Armstrong, C. W. Dugdale, Rt. Hn. Sir T. (Richmond) Hudson, W. R. A. (Hull, N.)
Ashton, H. Duthie, W. S. Hughes-Young, M. H. C.
Atkins, H. E. Eden, J. B. (Bournemouth, West) Hulbert, Sir Norman
Baldwin, A. E. Elliott,R.W.(N'castle upon Tyne.N.) Hurt, A. R.
Barlow, Sir John Errington, Sir Eric Hutchison, Sir Ian Clark (E'b'gh, W.)
Barter, John Farey-Jones, F. W. Hutchison, Sir James (Scotstoun)
Baxter, sir Beverley Fell, A. Hyde, Montgomery
Beamish, Maj. Tufton Finlay, Graeme Hylton-Foster, Rt. Hon. Sir Harry
Bell, Philip (Bolton, E.) Fisher, Nigel Irvine, Bryant Godman (Rye)
Bennett, F. M. (Torquay) Fletcher-cooke, C. Jennings, J. C. (Burton)
Bennett, Dr. Reginald Fort, R. Johnson, Eric (Blackley)
Bevins, J. R. (Toxteth) Fraser, Hon. Hugh (Stone) Joynson-Hicks, Hon. Sir Lancelot
Biggs-Davidson, J. A. Fraser, Sir Ian (M'mbe &Lonsdale) Kaberry, D.
Birch, Rt. Hon. Nigel Freeth, Denzil Keegan, D.
Bishop, F. P. Garner-Evans, E. H. Kerby, capt. H. B.
Black, C. W. George, J. C. (Pollok) Kerr, H. W
Body, R. F. Glover, D. Kershaw, J. A.
Bowen, E. R. (Cardigan) Godber, J. B. Kimball, M.
Boyd-Carpenter, Rt. Hon. J. A. Gomme-Duncan, Col. Sir Alan Kirk, P. M.
Boyle, Sir Edward Goodhart, Philip Lambert, Hon. G.
Braine, B. R. Gough, C. F. H. Lambton, Viscount
Braithwaite, Sir Albert (Harrow, W.) Gower, H. R. Lancaster, Col. C. G.
Brooman-White, R. C. Graham, Sir Fergus Langford-Holt, J. A.
Browne, J. Nixon (Craigton) Grant-Ferris, Wg Cdr. R. (Nantwich) Leather, E. H. C.
Bryan, P. Green, A. Legge-Bourke, Maj. E. A. H.
Bullus, Wing-commander E. E. Gresham Cooke, R. Legh, Hon. Peter (Petersfield)
Burden, F. F. A. Grimston, Hon. John (St. Albans) Lindsay, Hon. James (Devon, N.)
Butcher, Sir Herbert Grosvenor, Lt.-Col. R. G. Linstead, Sir H. N.
Campbell, Sir David Gurden, Harold Llewellyn, D. T.
Carr, Robert Hall, John (Wycombe) Low, Rt. Hon. A. R. W.
Cary, Sir Robert Harris, Reader (Heston) Lucas, P. B. (Brentford & Chiswick)
Channon, Sir Henry Harrison, A. B. C. (Maldon) Lucas-Tooth, Sir Hugh
Chichester-Clark, R. Harrison, Col. J. H. (Eye) McAdden, S. J.
Cole, Norman Harvey, Air Cdre. A. V. (Macclesfd) McCallum, Major Sir Duncan
Conant, Maj. Sir Roger Harvey, Ian (Harrow, E.) Macdonald, Sir Peter
Cooke, Robert Harvey, John (Walthamstow, E.) McKibbin, A. J.
Cordeaux, Lt.-Col. J. K. Harvie-Watt, Sir George Mackie, J. H. (Galloway)
Corfield, Capt. F. V. Hay, John McLaughlin, Mrs. P.
Craddock, Beresford (Spelthorne) Heald, Rt. Hon. Sir Lionel Maclean, Fitzroy (Lancaster)
Crosthwaite-Eyre, Col. O. E. Heath, Rt. Hon. E. R. G. MacLeod, John (Ross & Cromarty)
Crowder, Sir John (Finchley) Henderson-Stewart, Sir James Macmillan,R.Hn.Harold(Bromley)
Cunningham, Knox Hicks-Beach, Maj. W. W. Macmillan, Maurice (Halifax)
Currie, G. B. H. Hill, Mrs. E. (Wythenshawe) Macpherson, Niall (Dumfries)
Dance, J. C. G. Hill, John (S. Norfolk) Maddan, Martin
Maitland, Cdr. J. F. W. (Horncastle) Pilkington, Capt. R. A. Stoddart-Scott, Col. M.
Maitland, Hon. Patrick (Lanark) Pitman, I. J. Storey, S.
Manningham-Buller, Rt. Hn. Sir R. Pitt, Miss E. M. Stuart, Rt. Hon. James (Moray)
Markham, Major Sir Frank Pott, H. P. Studholme, Sir Henry
Marples, Rt. Hon. A. E. Powell, J. Enoch Summers, Sir Spencer
Marshall, Douglas Prior-Palmer, Brig. O. L. Sumner, W. D. M. (Orpington)
Mathew, R. Rawlinson, Peter Taylor, Sir Charles (Eastbourne)
Maude, Angus Redmayne, M. Teeling, W.
Mawby, R. L. Remnant, Hon. P. Temple, John M.
Medlicott, Sir Frank Renton, D. L. M. Thomas, P. J. M. (Conway)
Milligan, Rt. Hon. W. R. Ridsdale, J. E. Thompson, Kenneth (Walton)
Molson, Rt. Hon. Hugh Robertson, Sir David Thorneycroft, Rt. Hon. P.
Morrison, John (Salisbury) Robinson, Sir Roland (Blackpool, S.) Tiley, A. (Bradford, W.)
Nabarro, G. D. N. Robson-Brown, W. Turton, Rt. Hon. R. H.
Nairn, D. L. S. Rodgers, John (Sevenoaks) Vaughan-Morgan, J. K.
Neave, Airey Ropner, Col. Sir Leonard Vickers, Miss Joan
Nicholls, Harmar Schofield, Lt.-Col. W. Vosper, Rt. Hon. D. F.
Nicholson, Godfrey (Farnham) Scott-Miller, Comdr. R. Wakefield, Edward (Derbyshire, W.)
Nicolson, N. (B'n'm'th, E. & Chr'ch) Shepherd, William Wakefield, Sir Wavell (St. M'lebone)
Oakshott, H. D. Smithers, Peter (Winchester) Wall, Major Patrick
O'Neill, Hn. Phelim (Co. Antrim, N.) Smyth, Brig. Sir John (Norwood) Ward, Rt. Hon. G. R. (Worcester)
Orr, Capt. L. P. S. Spearman, Sir Alexander Ward, Dame Irene (Tynemouth)
Orr-Ewing, Sir Ian (Weston-S-Mare) Speir, R. M. Waterhouse, Capt. Rt. Hon. C.
Osborne, C. Spens, Rt. Hn. Sir P. (Kens'gt'n, S.) Whitelaw, W. S. I.
Page, R. G. Stanley, Capt. Hon. Richard Wills, G. (Bridgwater)
Pannell, N. A. (Kirkdale) Stevens, Geoffrey Woollam, John Victor
Partridge, E. Steward, Harold (Stookport, S.)
Pickthorn, K. W. M. Steward, Sir William (Woolwich, W.) TELLERS FOR THE AYES:
Mr R Thompson and Mr. Barber.
Ainsley, J. W. Fernyhough, E. McGhee, H. G.
Albu, A. H. Fienburgh, W. Mclnnes, J.
Allaun, Frank (Salford, E.) Finch, H. J. McKay, John (Wallsend)
Allen, Arthur (Bosworth) Fletcher, Eric MacPherson, Malcolm (Stirling)
Allen, Scholefield (Crewe) Fraser, Thomas (Hamilton) Mahon, Simon
Awbery, S. S. Gibson, C. W. Mainwaring, W. H.
Bacon, Miss Alice Gooch, E. G. Mallalieu, J. P. W. (Hudderstd, E.)
Balfour, A. Gordon Walker, Rt. Hon. P. C. Mann, Mrs. Jean
Bellenger, Rt. Hon. F. J. Greenwood, Anthony Marquand, Rt. Hon. H. A.
Benn, Hn. Wedgwood (Bristol, S.E.) Grenfell, Rt. Hon. D. R. Mason, Roy
Benson, G. Grey, C. F. Mayhew, C. P.
Beswick, Frank Griffiths, David (Rother Valley) Mellish, R. J.
Bevan, Rt. Hon. A. (Ebbw Vale) Griffiths, Rt. Hon. James (Llanelly) Messer, Sir F.
Blenkinsop, A. Griffiths, William (Exchange) Mitchison, G. R.
Blyton, W. R. Hale, Leslie Monslow, W.
Boardman, H. Hall, Rt. Hn. Glenvll (Colne Valley) Moody, A. S.
Bowden, H. W. (Leicester, S.W.) Hamilton, W. W. Morrison, Rt.Hn.Herbert(Lewis'm,S.)
Bowles, F. J. Hannan, W. Mort, D. L.
Braddock, Mrs. Elizabeth Harrison, J. (Nottingham, N.) Moss, R.
Brockway, A. F. Hastings, S. Moyle, A.
Broughton, Dr. A. D. D. Hayman, F. H. Mulley, F. W.
Brown, Thomas (Ince) Healey, Denis Noel-Baker, Francis (Swindon)
Burke, W. A Henderson, Rt. Hn. A. (Rwly Regis) O'Brien, Sir Thomas
Butler, Herbert (Hackney, C.) Herbison, Miss M. Oliver, G. H.
Callaghan, L. J. Hewitson, Capt. M. Orbach, M.
Carmichael, J. Holmes, Horace Owen, W. J.
Castle, Mrs. B. A. Houghton, Douglas Paget, R. T.
Champion, A. J. Howell, Charles (Perry Barr) Paling, Rt. Hon. W. (Dearne Valley)
Chapman, W. D. Howell, Denis (All Saints) Palmer, A. M. F.
Chetwynd, G. R. Hoy, J. H. Panned, Charles (Leeds, W.)
Clunie, J. Hubbard, T. F. Pargiter, G. A.
Coldrick, W. Hughes, Cledwyn (Anglesey) Parkin, B. T.
Collick, P. H. (Birkenhead) Hughes, Hector (Aberdeen, N.) Pearson, A.
Collins, V. J. (Shoreditch & Finsbury) Hunter, A. E. Pentland, N.
Cove, W. G. Irvine, A. J. (Edge Hill) Popplewell, E.
Craddock, George (Bradford, S.) Irving, Sydney (Dartford) Price, J. T. (Westhoughton)
Cronin, J. D. Janner, B. Price, Philips (Gloucestershire, W.)
Crossman, R. H. S. Jeger, George (Goole) Probert, A. R.
Cullen, Mrs. A. Jones, David (The Hartlepools) Proctor, W. T.
Dalton, Rt. Hon. H. Jones, Elwyn (W. Ham, S.) Pryde, D. J.
Darling, George (Hillsborough) Jones, J. Idwal (Wrenham) Rankin, John
Davies, Ernest (Enfield, E.) Jones, T. W. (Merioneth) Redhead, E. C.
Davies, Stephen (Merthyr) Kenyon, C. Reeves, J.
Deer, G. Key, Rt. Hon. C. W. Reid, William
Dugdale, Rt. Hn. John (W. Brmwch) King, Dr. H. M. Rhodes, H.
Dye, S. Lawson, G. M. Robens, Rt. Hon. A.
Ede, Rt. Hon. J- C. Lee, Frederick (Newton) Roberts, Albert (Normanton)
Edwards, Rt. Hon. Ness (Caerphilly) Lewis, Arthur Roberts, Goronwy (Caernorvon)
Edwards, Robert (Bilston) Lipton, Marcus Robinson, Kenneth (St. Pancras, N.)
Edwards, W. J. (Stepney) Logan, D. G. Rogers, George (Kensington, N.)
Evans, Albert (Islington, S.W.) Mabon, Dr. J. Dickson Ross, William
Evans, Edward (Lowettoft) MacColl. J. E Royle, C.
Shinwell, Rt. Hon. E. Taylor, Bernard (Mansfield) Wilcock, Group Capt. C. A. B.
Silverman, Julius (Aston) Taylor, John (West Lothian) Willey, Frederick
Silverman, Sydney (Nelson) Thomas, Iorwerth (Rhondda, W.) Williams, David (Neath)
Simmons, C. J (Brierley Hill) Thomson, George (Dundee, E.) Williams, Rev, Llywelyn (Ab'tillery)
Skeffington, A. M. Timmons, J. Williams, Ronald (Wigan)
Slater, Mrs. H. (Stoke, N.) Tomney, F. Williams, Rt. Hon. T. (Don Valley)
Slater, J. (Sedgefield) Ungoed-Thomas, Sir Lynn Williams, W. T. (Barons Court)
Smith, Ellis (Stoke, S) Viant, S. P. Willis, Eustace (Edinburgh, E.)
Snow, J. W. Watkins, T. E. Winterbottom, Richard
Sorensen, R. W. Weitzman, D. Woodburn, Rt. Hon. A.
Soskice, Rt. Hon. Sir Frank Wells, Percy (Faversham) Yates, V. (Ladywood)
Stewart Michael (Fulham) Wells, William (Walsall, N.) Zilliacus, K.
Stross, Dr.Barnett(Stoke-on-Trent, C) West, D. G.
Summerskill, Rt. Hon. E. Wheeldon, W. E. TELLERS FOR THE NOES:
Swingler, S. T. White, Mrs. Eirene (E. Flint) Mr. Short and Mr. Wilkins.
Sylvester, G. O. White, Henry (Derbyshire, N.E.)

7.0 p.m.

The Temporary Chairman

The next Amendment selected is the second in the name of the lion. Member for Waltham-stow, West (Mr. Redhead), in page 2, line 16, to leave out subsection (5).

Mr. E. C. Redhead (Walthamstow, West)

On a point of order, Mr. Blackburn. Will you tell me why the first of my two Amendments, to leave out subsection (4), is held to be out of order?

The Temporary Chairman

It increases the charge and I understand that the entertainments might lose the present benefits which they have.

Mr. Redhead

May I submit, with respect, Mr. Blackburn, that the effect is the contrary, and that if the subsection were, in fact, omitted, the Chancellor could rely upon an existing provision of the law whereby an assessment would be made which would have the effect that many entertainments would pay a smaller amount of duty than they would under the subsection now in the Bill?

The Temporary Chairman

That was not the advice given to me and I must ask the hon. Member to move the next Amendment.

Mr. Redhead

I beg to move, in page 2, line 16, to leave out subsection (5).

This is not a point involving a major issue of principle. It is very much a question of drafting and I apprehend that there may be some administrative difficulty and a possibility, although I do not think that it is intended in the slightest degree, of a measure of injustice in respect of certain payments that may he made covering entertainments.

The subsection which I seek to delete seeks to modify, by the omission of certain words, subsection (4) of Section 1 of the Finance (New Duties) Act, 1916.

That is the original Act introducing Entertainments Duty. The reasons for so doing are not apparent from the Bill, or at least not to me, and I foresee possible effects which are somewhat puzzling. Perhaps, if I outline what I have in mind, the Financial Secretary may be able to offer some measure of assurance, or, if not satisfied, he may be able to offer some means of reconsideration of the point at issue.

The provisions of the subsection in question in the original Act of 1916 authorise the Commissioners of Customs and Excise to assess for the payment of duty any lump sum payment paid by way of subscription or contribution to any club, association, or society, or as a payment for a season ticket covering a series of entertainments when that lump sum covers, in addition to the right of admission to dutiable entertainment, as the subsection describes it. … other privileges, rights or purposes…. It also authorises, or has at least been utilised for the purpose, the assessment of single payments for admission to entertainments which might consist partly of a dutiable element and partly of a non-dutiable element or any other privileges, rights or purposes. For example, a dance in which a cabaret formed part of the entertainment, the dance not being dutiable of itself but the cabaret being a dutiable entertainment.

This particular provision might well, in my view, have been relied on by the Chancellor in respect of the only type of mixed entertainment with which he will now be concerned, that of cine-variety.

The subsection seeks to delete the words: or covers admission to an entertainment during any period for which the duty has not been in operation Some such lump payments will have been made before the change in the rates of duty now contemplated in the Bill, but covering entertainments which will overlap the two periods, some before the changes were made and some after the duty is abandoned in respect of certain types of entertainment.

These lump sum payments will already have been assessed and the duty will have been paid on the basis of the duty that was then operative. In equity, it seems to me, that these should be open to reassessment to take account of the fact that the latter entertainments will, under this Bill, be no longer dutiable, and in these circumstances they fall within a period which can be rightly said to be in a period in which the duty was no longer operative.

By cutting out the words which it is proposed to delete in the original subsection, it seems to me that the Commissioners are being denied the opportunity of reassessing these lump sum payments or payments for season tickets. That view seems to be fortified by the provisions of subsection (7) and would appear to nullify the effect of subsection (9), which entitles an individual who has paid a charge which is no longer dutiable to obtain repayment of the amount. To omit the latter part of the words of the subsection: in respect of which entertainments duty is payable ' seems to me to render the purpose of the original Section quite nonsensical because it would make the latter part read in the following terms: that duty shall be charged on such an amount as appears to the Commissioners to represent the right of admission to entertainments; whereas previously it was to entertainments in respect of which entertainments duty is payable ". That surely is the only purpose, the only right in equity, to make any charge for Entertainments Duty at all, not merely upon entertainments but only upon entertainments where these are dutiable. In these circumstances, it seems wrong to me to omit these particular words from the original subsection and indeed, to nullify the purpose which was in mind.

Unless I can be assured that there is some means by which this difficulty can be overcome and the right thing will be done by those concerned in such payments, I feel that this Amendment is the only way of meeting the difficulty, by expunging this particular subsection and relying upon the existing state of the law.

The Financial Secretary to the Treasury (Mr. J. Enoch Powell)

I have a great deal of sympathy with the hon. Member for Walthamstow, West (Mr. Redhead), because at an earlier stage of the Bill I myself trod most of the mental mazes which he has been following through. There is, however, a very simple reason why this subsection is extremely desirable, if not absolutely necessary. As he rather guessed, it is almost of a drafting nature.

When Entertainments Duty was first introduced in 1916 by the Act to which the hon. Gentleman referred, it was necessary to make provision for the cases where lump sum payments covered entertainments before the inception of the new duty as well as entertainments afterwards, and it was to that distinction that both the phrases which the subsection will delete were directed. Now, however, as a result of the changes which this Clause is making, a new and quite unintended distinction will be imported by the same words, with the result that possibly, though not certainly, certain lump sum payments might be taken altogether out of the existing procedure for dealing with and apportioning lump sum payments. I can assure the hon. Gentleman and the Committee however, that the result of this Clause cannot be that an entertainment which would otherwise not attract Entertainments Duty from 5th May onwards will do so. It is merely to ensure that the lump sum provisions, as they exist, continue to operate in the fair and natural manner.

Mr. Redhead

May I ask the Financial Secretary for one assurance? Is it perfectly clear, then, that re-assessment of those lump sum payments already assessed and charged to duty, and the duty paid, will be permissible, will be undertaken, and that any charge that might otherwise have arisen can be refunded to the individual who paid the original charge?

Mr. Powell

I understand that there is no conflict with the provisions of subsection (9).

Mr. Glenvil Hall

Before we part with this Amendment—and I assume that my hon. Friend presently, in the light of the explanation, will ask permission to withdraw it—could the Financial Secretary give us an illustration of what he has in mind which makes these words desirable? He indicated that there might be occasions when these were essential in order that the tax should not bite on some particular transaction or lump sum.

Mr. Powell

I am much obliged to the right hon. Gentleman for his helpful invitation. Really one cannot be sure that this is essential, for it might well be that the courts, in interpreting the law after this Clause was passed without this subsection, would give to the provision in the 1916 Act the effect which we all clearly believe that it should have. Nevertheless, it could well be that the transitional provisions of the 1916 Act, which were meant merely to deal with cases where payments were made in respect of entertainments before the inception, were interpreted as referring to lump sums before and after the changes in duty, with a result that the operation of the 1953 Finance Act, which works upon the 1916 Act for the purpose of allocating these lump sums, would be put out of gear. It is a danger and not a certainty, but I think it is worth the while of the Committee to make provision against it.

Mr. Redhead

I am grateful for the assurance of the Financial Secretary, and I have some sympathy with the intricacies in which he found himself involved. I am sure he will forgive me when I say that perhaps I was able to put him into some little dilemma about this, simply by reason of the fact that it was my past experience to make many of these assessments under the old provision, and I was anxious that Customs and Excise should not do anything in future not covered by legal authority. As far as I understand, they are already undertaking those reassessments.

With that assurance, however, I beg to ask leave to withdraw the Amendment.

Amendment, by leave, withdrawn.

7.15 p.m.

Mr. Rankin

I beg to move, in page 2, line 22, at the end to insert: (6) The entertainments duty chargeable in respect of any entertainment shall be reduced by the appropriate percentage shown in the Schedule (Reduction of entertainments duty in respect of small weekly takings at cinematograph theatres) to this Act, subject to such marginal relief as is shown in that Schedule, if the Commissioners of Customs and Excise on an application made in such manner as they may direct are satisfied that—

  1. (a) the entertainment is given on premises licensed under the provisions of the Cinematograph Act, 1909, and consists wholly or mainly of a cinematograph show; and
  2. (b) the total amount of payments for admission to similar entertainments received on those premises during the week next but one preceding the week in which the entertainment is given did not exceed three hundred and fifty pounds.

The Deputy-Chairman

I think it will be for the convenience of the Committee if we also discuss the following Amendments.

In page 2, line 32, to leave out "Subsection (6)" and insert "Subsections (6) and (7)"; In line 40, at the end to insert: (9) Where the Commissioners of Customs and Excise, on an application made in such manner as they may direct, are satisfied that in any week beginning on a Sunday on or after the fourth day of August, nineteen hundred and fifty-seven, the total amount of payments for admission received at any one cinematograph theatre (being payments to which this section applies) did not exceed three hundred and fifty pounds, then the entertainments duty chargeable in respect of those payments shall be as follows—

  1. (a) where the total amount of payments for admission received in any week does not exceed one hundred and fifty pounds, entertainments duty shall not be chargeable;
  2. (b) where the total amount of payments for admission received in any week exceeds one hundred and fifty pounds but does not exceed three hundred pounds, the entertainments duty chargeable on any payment for admission shall he equal to one-half of the amount (if any) by which the amount of the payment excluding the amount of the duty, exceeds eleven pence."
In line 40, at the end to insert: (9) Entertainments duty shall not be chargeable in respect of any entertainment if the Commissioners of Customs and Excise on an application made in such manner as they may direct are satisfied that—
  1. (a) the entertainment consists wholly or mainly of one or more cinematograph shows; and
  2. (b) the entertainment is given in a cinematograph theatre, the takings at which (excluding the amount of any duty) did not exceed in the relevant year an average of one hundred and fifty pounds per week.
(10) For the purposes of this section the relevant year means the year ending on such date preceding the date of the entertainment as the Commissioners of Customs and Excise may generally or in the case of any particular cinematograph theatre direct.

Also, the proposed new Schedule in the name of the right hon. Gentleman the Member for Huyton (Mr. H. Wilson):


1. The appropriate percentage referred to in subsection (6) of section one of this Act, is as follows:—

Where the total amount referred to in that subsection—

Exceeded And did not exceed Appropriate percentage
Nil £100 60
£100 £150 50
£150 £200 40
£200 £250 20
£250 £300 10
£300 £350 5

2. The marginal relief referred to in that subsection is as follows:—

Where any total amount referred to in that subsection is such that, if this paragraph had not been passed, the duty chargeable by virtue of that subsection and this Schedule would exceed the sum of—

(a) the duty chargeable by virtue of that subsection and this Schedule on part of the payments in question, being a part equivalent to such amount shown in the second column of the last foregoing paragraph as is less than the first-mentioned total amount by a difference not exceeding fifty pounds, and

(b) that difference,

then the duty chargeable shall be that sum and no more.

Mr. Rankin

As you say, Mr. Blackburn, this will afford a general discussion on the position of the small cinemas. As hon. Members on both sides of the Committee will have noted, the Amendments dealing with the small cinemas come not only from this side of the Committee but from the other side as well. We may take it, therefore, that the unanimity which has prevailed so far in the course of this debate will be maintained on this issue, and we hope that on this occasion the result will be more fruitful than it has been up to date.

During the general debate the deteriorating position of the cinemas was continually emphasised. For instance, in 1955 the total admissions were 1,182 million. In 1956 they had fallen to 1,100 million, and it is estimated by Dr. Mark Abrams of Research Services Ltd. that in 1960 they will have fallen to just over 1,000 million. At the same time as that process is taking place on the exhibiting side, the number of television licences, he estimates, will have risen from 6½million to 10 million. So competition from television is becoming more acute. That is one of the contributory reasons for the diminution in the total attendances of the cinemas. It is my view, and the view of many of us, that within that the small cinema is suffering in a more serious way than many of the larger town cinemas.

The hon. Member for Ormskirk (Mr. Glover) described the exhibiting side as a contracting industry, and he referred to the remarks of Mr. John Davis, speaking at the annual conference of the Cinematograph Exhibitors' Association at Gleneagles a fortnight ago. He did not say, however—and this should be noted in fairness—that the remarks made by Mr. Davis, pointing out that rationalisation is necessary, are not representative of the views of the cinema exhibitors, and were not the views expressed by their conference. It was emphasised there—and I quote here from the resolution the conference passed—that: At this stage, however, they must immediately correct a false impression which may have been created by a single statement in the Press and over the B.B.C. to the effect that entertainments tax relief was not the solution to many of the cinema industry's problems. The General Council once again reiterates the desperate need of exhibitors, especially small ones, for further tax relief and will continue to press for Amendments to the Finance Bill covering in particular the rebate scheme to give immediate and additional relief to small exhibitors. It is important to note, therefore, that the views expressed by Mr. Davis and Mr. Barclay, however worthy they may be of examination, are not the considered views of the Cinematograph Exhibitors' Association, which supports the Amendment and the claim that it carries that particular consideration should be given to the small exhibitor.

If we believe in competition, it should not be unfair, and the cinema industry in competing with television should be left with sufficient in its pocket to enable it to introduce the new techniques into the cinema halls that will enable them to attract a bigger audience to view their films.

As I have pointed out before, some of these new aids in cinema-showing are very costly. The installation of Cinerama costs £62,000. Obviously, if the Chancellor is taking away as much as he is now doing by way of taxation, he is not leaving the industry with the surplus that will enable it to introduce the new aids to compete fairly with television. This position presses with exceptional severity on the small exhibitor.

The Chancellor has said that we are helping the small man, and that is true. Way back in 1948 Sir Stafford Cripps introduced the rural area scheme. It was introduced because it was recognised nearly ten years ago that unless special aid was given to the rural cinema there was the danger that it would go out of business. To keep them in business something had to be done, and Sir Stafford Cripps introduced the rural aid scheme for that purpose.

We welcome the fact that the present Chancellor has extended the scheme from the basis of a population of 2,000 to a population of 3,000—again, to help the small exhibitor and to keep him going. We want the right hon. Gentleman, however, to go a stage further. We want him to raise the density ratio from 640 to 960 per square mile. At the same time, we want him to remove the restriction on seating capacity in the rural area scheme under which the population must not exceed 3,000.

The right hon. Gentleman has shown his anxiety to help in the rural areas. Having admitted the need to help in those areas, there can be no argument against introducing a rebate scheme whereby the drawings of the exhibitor are taxed at a certain rate or rebated by a fixed sum. There can be nothing against helping the urban areas if we admit the need to aid the rural areas, because the problem in the towns is, in its own way, just as difficult.

In the urban areas, the small cinema may be competing with one of the big circuit cinemas, or it may be facing a big independent cinema. Therefore, its need for aid is just as great as that of the cinemas which are getting help in the rural areas.

I want to give an example, for which purpose I have referred to the Returns of the Board of Trade. I was seeking to get an idea of what is meant by small cinema ". It is something which has never been defined. We all have our own ideas, but I admit that "small cinema" is difficult to define. The Board of Trade Journal tells us that in the United Kingdom there are 142 cinemas which seat up to 250 people and 850 cinemas seating from 250–500 people. With the figures which have been supplied, I calculate that the average weekly drawings in the cinemas which seat up to 250 people are £70 and that in the cinemas seating 250–500 people the average weekly drawings are £150.

I wondered how that £150 was expended. Entertainments Duty collects £25 of it and film hire £45. I agree that the remaining items were a rough guess, but I reckon that about £40 would be needed to meet the wages for a cinema of that size, that rent and rates would account for something like £20 and that for cleaning and maintenance about £15 would be necessary. Leaving aside the levy, these items amount to a total expenditure during the week of £145, leaving £5 for the proprietor.

Mr. Mitchison

What about the levy?

Mr. Rankin

As the statutory levy is not yet in operation, I did not take it into account. I should imagine that when it comes to be operated the amount of the levy for that cinema would be at least £2, so that its costs, therefore, would be in the region of £147 as against its gross takings, according to the Board of Trade Returns, of £150.

That helps to establish the case, which is generally admitted on both sides of the Committee, that if we accept the claim for helping the small cinema in the rural area, it follows almost logically that we must do something for the cinemas in the urban areas, which are facing equal difficulties.

In this series of Amendments, therefore, we present the Chancellor with a number of ways in which this help can be given. He cannot say that we are not showing him how it can be done. I agree that we are presented sometimes with a dilemma when, for example, we put down an Amendment which, although it is in order, is not workable. Unfortunately, when we get a good Amendment that is workable it is not in order. That is the dilemma we have to face, and it is one which we are asking the hon. Gentleman and his right hon. Friend to resolve now. 7.30 p.m.

I am sure that when he looks at the small cinemas he will not put forward the miserable argument about it requiring a few hundred thousand pounds or even a million. Surely not. He has trotted out that £2 million so often today that I feel that the notes must be burning his fingers and he will not be wanting to handle them any more. Therefore, let not the hon. Gentleman come along and say that this will cost a million pounds. What is a million pounds? We let more than that go up in cloud at Christmas Island last week and the Government never said a word about it, but that may not be a very apposite illustration, and therefore I depart from it.

One of the first ways we suggest is by taking the gross drawings and then the tax being rebated by a fixed sum so that up to £125 the rebate would be £22 10s. and then, as the takings went up to the maximum of £350 under the Amendment, the rebate would come down to £2 10s. The alternative to that is the one proposed in the new Schedule, in which the Entertainments Duty would be reduced by 60 per cent. on small weekly takings up to £100 and then by a diminishing percentage down to 5 per cent. on £350 gross.

Then, we give the hon. Gentleman a third way out by taking the sum which I have mentioned, which covers quite a large number of cinemas, of average gross weekly takings of £150, and exempting them altogether from the incidence of tax. That is quite simple, and the hon. Gentleman cannot say that there is some difficult arithmetical operation to undertake there. He just takes the average gross takings of £150 and then exempts all these cinemas from the incidence of the tax.

There is a fourth way, which I am merely going to mention, because the hon. Member for Bournemouth, West (Mr. J. Eden) will be hoping to say a word about it, and it is like the one we put forward; so that with agreement in front of him, agreement behind him, agreement to right of him, and perhaps some agreement later on to the left of him, I hope that the hon. Gentleman will depart from the bad example followed by his right hon. Friend and agree to accept one or other of these four Amendments.

Mr. John Eden (Bournemouth, West)

I do not suppose that the hon. Member for Govan (Mr. Rankin), or, indeed, any other hon. or right hon. Gentleman in this Committee, would like to give the Chancellor the impression that we do not appreciate that he has already given a certain amount of financial relief to the cinema industry, but I want to pursue roughly the same line of argument which has been introduced for the hon. Member for Govan.

I feel that while the Chancellor has given some concessions and some help to this industry, they could have been directed more effectively to that section of the industry which most needs the help. It is very difficult, as the hon. Member for Govan said, to define exactly what we mean by a small cinema. Various attempts have been made, including references to gross weekly takings and the seating capacity of the cinema. We sought to embellish that a little bit in some other way by bringing in even the siting of a particular cinema.

I am thinking chiefly of the cinemas in small towns, or even of those on the outskirts of large towns. Cinemas on the outskirts of large towns are perhaps in a more curious position than those in small towns, for those on the outskirts of large towns have to some extent a local patronage, but also have the tremendous competition of the big circuit cinemas in the centre of those large towns. This competition has a harmful effect on the smaller cinemas on the outskirts of large towns by virtue of the fact that a big cinema will take a particular film and give it a good long run.

While it is running in the centre of the town, many people, no doubt, from the outskirts would be tempted to go into the centre of the town to see it. Therefore, it leaves the small cinema on the outskirts with the choice of either taking a second-class film, or of taking on a film which has already had the best business squeezed out of it by the bigger cinemas.

Therefore, these smaller cinemas are in very difficult circumstances today. Not only do they merit our consideration, if only because they have been long established, but they have strong local ties and have people centred in their own more localised communities rather than encouraging them always to go into the centre of the town to seek their entertainment.

In the smaller towns, a slightly different position arises, because some of the cinemas in the smaller towns are in areas which do not have any other form of entertainment, in the way, for example, of horse racing, dog racing or anything like that. Therefore, the local community depends to a very great extent upon the cinema in the very small towns for its major form of entertainment.

I have some figures which show how serious has been the effect of Entertainments Duty on small cinemas. I do not propose to quote them all, but I have here the annual figures, all in tabulated form, of seven cinemas in the North and North-East. They show that two have been trading at a loss, and one of them at a fairly substantial loss. One, which is averaged—it is actually the second best of the seven, so that I am not giving my hon. Friend the Financial Secretary the worst side of the picture—shows some quite interesting results.

This cinema has a seating capacity of 678 people, and in 1956–57 the gross drawings were just over £19,000. Entertainments Duty and the levy together came to just over £7,000. The running costs, including the rent of films, is estimated at just under £11,000, making a total of initial outgoings of £18,000, and leaving a profit on the films of just over £1,000. The actual profits on sales of ice cream, sweets and all the rest, about which we have heard so much, not only already in this debate, but also last year, when this subject was also covered during the Committee stage of the Finance Bill in June, the profits from the sales of these other forms of entertainment, if one may call them that—ice cream, and so forth —was £760.

Against that profit of just under £2,000 has to be placed the costs of administration. Taken on a very simple basis of £1 a seat, this is £678. There is also depreciation of equipment, charged at the very low rate of 2 per cent. That reduces the profit from just under £2,000 to just over £1,000.

Mr. Powell

What did my hon. Friend say was the turnover?

Mr. Eden

The turnover was £19,000. I am trying to put the matter into round figures. The net profit on the turnover of £19,000 works out at just under £1,000. With the tax concession already given by my right hon. Friend another £850 will be given to this cinema. That is quite a generous gesture, and I do not want for a moment to fail to recognise that fact, but we must also consider the fact that small cinemas will have to face increasing costs during the coming year.

One of those is likely to be an increase in the levy. I do not know how much that will increase, or what will, in fact, happen, but there may be an increase of as much as 50 per cent., which would cause considerable trouble to this cinema. It will certainly be almost bound to face increases in running costs of all kinds, including wages and salaries, and it is also likely to have to face a reduction in the number of admissions. It is difficult to estimate what that reduction will be, but in the case of this cinema it was thought that admissions might decline by as much as 5 per cent. in the coming year.

Those three factors would account for virtually the whole of the tax concession already given by my right hon. Friend, so that the net profit, with a bit of luck, will remain the same as it was last year. This certainly will not encourage the proprietor or owner of the cinema—especially in view of the falling off in the number of admissions—to try to develop its amenities or improve its furnishings and equipment.

The seven cinemas about which I have been talking have made between them a total profit of £2,579. Entertainments Duty from the same cinemas will amount to £29,942. It seems to me that these figures are very much out of proportion. If we have to place such a high demand upon these cinemas I do not understand why we cannot direct what little assistance we are giving to those types of cinemas which most need assistance.

I do not suppose, any more than any other hon. Member, that the help already given will prevent some cinemas from closing. Those cinemas which were about to close will unfortunately continue to close. It may be that there is a fundamental difference of approach in this respect between my right hon. Friends on the Front Bench and all the other hon. and right hon. Members in the House.

namely, that the members of the Government do not have a particularly great concern for the smaller cinema, as such, and are thinking rather of the cinema industry as a whole. It may well be that their views are to some extent clouded or dimmed by the success of the bigger circuits.

If that is not so, I hope that my hon. Friend will say quite clearly that he appreciates the difficulties of the smaller cinemas and is not anxious that they should be forced into liquidation in this way. I am certain that it cannot be anybody's wish that individuals or businesses should be completely taxed out of existence, even though it is essential to impose taxation of some kind or another.

7.45 p.m.

My Amendment suggests a way in which the smaller cinemas could be helped. As the hon. Member for Govan said, it is not very different from the other Amendments which we are now discussing. It is an attempt to try to persuade my right hon. Friend that where the gross weekly takings of a cinema in any one week are not above £150 the cinema should be exempted from Entertainments Duty altogether for that week, and that where the takings are between £150 and £300 the cinema should be required to pay 25 per cent. rather than the full 50 per cent. I recognise that that may not be the ideal way of helping the smaller cinemas. I therefore suggest that if my hon. Friend has any other suggestions he should not hesitate to put them forward. I should be only too glad to hear them, and I would gladly not move my Amendment if he would put a similar one in its place.

We have already had a fairly lengthy general discussion upon the subject of the smaller cinema, and I am certain that my hon. Friend will be well aware of the general feeling in the Committee. It is possible that I approach the matter from a slightly different angle from that of the hon. Member for Govan. I regard what my right hon. Friend has already done for the cinematograph industry as a token of his good faith. I therefore ask my hon. Friend to ask his right hon. Friend to examine very closely the question whether there is any way in which smaller cinemas can be helped, so as to keep in business those cinemas which, in past years, have been providing entertainment where no other form of entertainment exists and which now, through no fault of their own, are finding it extremely difficult to carry on. Is there any method by which he can help them to keep their heads above water a little longer? I hope that he will put forward some suggestions designed to that end.

Mr. Glenvil Hall

I do not know what reply we shall receive from the Financial Secretary, although I can probably make a fairly accurate guess. He will listen to a certain amount of this debate and will then rise in his place and turn the whole thing down. That will be a pity, because time and again during the debates we have had in past years, both upon the live theatre and also the cinema, we have had replies of that kind—and in the end the Chancellor of the day has had to come forward and accept what has been suggested to him over and over again.

Before this matter goes too far. I would like to feel—although I say this without much hope—that at long last we have a Financial Secretary who realises how serious the situation is and will accept without too much demur one or other of the alternatives put before him. The situation is a very simple one. One of the difficulties about the British cinema industry is that there are not enough cinemas to take the products of the producers. They had not a sufficiently wide market to pay the cost of the films they made. As the result, we had to turn to a levy to help them. Cinema producers in America have not that trouble, or had not until television came. They had a sufficiently wide market to take the products of Hollywood and make a profit for the producers.

Here, we started with too small a cinema public, and year by year and month by month—I almost said week by week—we are making it smaller by taxation, particularly of the small cinemas. Only the large circuits are able to carry on reasonably well, and sometimes they have to rely upon ice cream to make ends meet. My hon. Friend the Member for Govan (Mr. Rankin) gave us figures to show that small cinemas have either no margin, or only a very tiny margin after they have paid all the costs incidental to the showing of a film. It seems absurd that on an occasion like the present we should not take the opportunity to help the small cinema proprietor.

I very well remember the Finance Bill debates in 1948, when a certain amount of relief was given to the smaller cinemas by Sir Stafford Cripps. That was given for the reasons which have been adduced, and for other reasons. We have to remember the circumstances of that time. The cost of things was much less than it is now, including the cost of repairs and of running a cinema. What was done then was with the consent of hon. Members in all parts of the Committee. Surely, if we are to be logical, we can do the same today in the light of the changed conditions, which are very much worse than in 1948.

I hope that the Financial Secretary will accept one or other of the alternatives put forward, or will advance a solution of his own. We would gladly accept it if it were reasonable, and would help the small cinemas, especially in the rural and semirural areas. Unless something is done it will soon be too late, because of the march of television. All our elaborate plans to help production will then go by the board, because there will not be the cinemas to take the films which are being made at great expense and with the help of the levy which the House of Commons granted to the producers not long ago.

Mr. William Shepherd (Cheadle)

I intervene in the debate for only a few minutes, because I have an engagement and shall have to leave the Chamber very shortly. Most hon. Members will share the view that many small cinema owners have a difficult time, but we should be making an error if we assumed that there are not many instances of large cinemas finding it difficult to exist, and of small cinema-owners who are making quite good profits. Therefore, the situation is not quite as simple as between large and small cinemas as some hon. Members would have us believe.

I will take up what was said by the right hon. Member for Colne Valley (Mr. Glenvil Hall). I do not think that our task is to expand the number of retail outlets for films. I regard the number of cinemas as excessive today, and however generous we are in terms of remission of taxation we shall not prevent a substantial number of cinemas from going out of existence in the next two or three years. I might go further and say that the general health of the industry might be improved by such a process.

The circumstances which made it possible for a large number of cinemas to exist no longer obtain. One of the most important of the new circumstances is the rising standard of living in this country today. A man who was content before the war to go to a cinema for 6d. or 9d. because he could not afford anything better wants to go to a bigger cinema today, get a decent seat and see a very good film.

Coupled with that is the fact that there is much more discrimination. People flock to see a good film or stay at home to watch television if the films are indifferent. The small cinema, particularly in large towns, is facing innumerable bars and cannot show expensive films. Before the war the existence of bars did not prevent these people from earning a livelihood because many people were unable to afford entertainment at a higher price. The higher standard today makes commercial continuance difficult for many small cinemas. Nevertheless, something ought to be done to help the small cinema to continue. There are many instances where, although the cinema is not a commercial proposition, its continued existence is desirable as an amenity.

I am sorry that an idea that I tried to put forward five years ago never obtained acceptance. I know everyone feels that his children are the bonniest, but I still believe that the idea I tried to sell to the industry is the best one. The objection I have to most of the suggestions that have been made is that it is wrong to fix an arbitrary limit below which cinemas shall pay no tax. My idea is rather like the D scheme we had in connection with Purchase Tax, and is not a bad way of tackling it.

The idea which I strongly support would be open to none of the objections which I see in some other suggestions. Everybody would have a rebate of taxation on takings up to a certain amount. This means that the small cinema with the small takings would necessarily benefit and it would not mean so much benefit to the larger cinema exhibitors who, on the whole, show quite considerable results in their annual balance sheets.

Mrs. White

The hon. Member knows very well that the whole of the taxation in this case is levied on the person who buys the ticket and not on the cinema proprietor. How can we give a rebate to a person who never pays the tax?

Mr. Shepherd

All we do is to say that the customer pays the tax to the cinema proprietor up to about £150 gross takings per week. The proprietor does not pay any taxation uon it. Then we graduate the tax from the £150 mark so that it is a little higher than it is at the present time. That scheme would materially assist the person whose takings are small, and it would be higher, although less than is now proposed, on the proprietors who have more substantial takings. That seems by far the best way of tackling this problem. With the maintenance of the existing level of taxation we can give most to those who are most seriously in need and less to those who do not seem so desperately in need of assistance. There has been a demand for ideas. I therefore throw that idea into the pool again in the hope that it can swim better this year than it has done previously.

8.0 p.m.

Mr. Donald Chapman (Birmingham, Northfield)

The hon. Member for Cheadle (Mr. Shepherd) was not too certain about his statement on the desirability of some of the smaller cinemas continuing. He should reflect that it may be true that economic forces have pushed them out, but what we are objecting to is the hand of the Chancellor of the Exchequer giving them the death blow, not economic forces. That is the grumble of many of us who have raised the question of small cinemas from year to year.

I want to give the Financial Secretary some very simple calculations of a small cinema in my constituency which would fall within these Amendments and benefit substantially from the relief the Amendments propose. It is a cinema which provides entertainment for about 3,000 patrons a week, which is a very useful thing in a city like Birmingham. It means that people who cannot travel for half an hour to the centre of the city have a cinema close at hand. Old-age pensioners and others on small incomes who cannot afford to have a television set have its nearest equivalent close at hand. Those things are important in a suburb, and it is useful that this cinema can provide entertainment for 3,000 a week.

For the week ending 20th April—a typical week, chosen at random in order to calculate the gross and net takings before and after the new proposals of the Chancellor—the gross takings were £236 of which £71 was paid in Entertainments Duty. On the basis of figures which are standard for the cinema, the proprietor knows what his weekly outgoings are, and he found that the loss on that week was £18. That illustrates what I was trying to say to the hon. Member for Cheadle. It is all very well to say that cinemas which have small takings are going out of existence, but it is rather scandalous that the loss which can make a cinema go out of existence is incurred because of £71 paid in Entertainments Duty in a week.

Then came the proposal of the Chancellor and the net effect was this. The tax was reduced by £24, leaving the proprietor still paying £47 a week. On the new calculation the takings rose by £24 less tax, but the charge for film hire went up a little because film hire is paid for on the basis of the proportion of money retained by the exhibitor. As he retained a little more he had to pay a little more for film hire. The net effect on that week was that, instead of making a loss of £18, he made a loss of £7, but he still had to pay £47 in Entertainments Duty, even under the new proposals.

I put it to the Financial Secretary that it is no good saying that the proposals in the Finance Bill will help small exhibitors to a significant degree. They have been running at a loss of £10 to £20 per week, and they will be lucky if their losses are £5 to £10 a week or if they break even. When they have had a toll of losses over the last ten years on the scale which these cinemas have suffered they need, not to break even, but to make a few pounds profit a week in order to begin paying their way over a period. Most of them have neglected their fabrics and not renewed seats or equipment for a long time. They cannot go on like that.

For many of these small cinemas this is the parting of the ways they are either to begin making a profit or to go out of existence. The proposals do not help them. When under the new proposals a man has to pay £47 a week in tax and makes a net loss in the end it means that his cinema must go out of existence. I submit that if we could have a sliding scale of relief such as is suggested by which that man would pay only 50 per cent. of the £47 in tax, that would mean life to the cinemas, whereas the present proposals mean their death.

Mr. Powell

It may perhaps be convenient to the Committee if I intervene briefly at this stage. A number of hon. Members who have spoken so far have referred to the difficulty of defining what is meant by a small cinema. It might be useful to get that point into perspective. Taking turnover as a criterion, as it is used in all three of the Amendments we are considering together, a turnover of up to £350 a week brings within the ambit of the definition nearly 2,000 of the 4,000 or so cinemas in the country. A weekly turnover of £300 brings in 1,600. So, when we are talking about the kind of cinemas these Amendments would reach we are, in fact, talking about nearly half the total cinemas of the country.

It is really the smaller half of the cinemas in the country—with one exception, that we must look at separately when discussing the rural cinemas in connection with later Amendments—it is the smaller half of the cinema population as a whole, with the rural cinemas taken out, with which we are dealing in considering these Amendments.

Mr. Mitchison

Can the hon. Gentleman give the corresponding figure for cinemas with takings of £150 a week?

Mr. Powell

I cannot give that offhand, but I shall see if I can get the figure for the hon. and learned Member.

Mr. Mitchison

I am much obliged to the hon. Gentleman, as that matter is mentioned in two of the Amendments.

Mr. Powell

The Amendments, taken as a group, cover in one way or another cinemas with takings of £300 or £350 a week, so we are dealing with a very large minority.

Mr. Robert Mathew (Honiton)

In view of the figures my hon. Friend has given to the Committee, I wonder whether he would say what definition he would regard as valid for a small cinema? There have been repeated discussions on the size of cinemas when we have discussed previous Finance Bills. Would my hon. Friend say what he regards as the weekly receipts of the small cinema for the purposes of these Amendments?

Mr. Powell

I do not deny that cinemas of this order and range of seating correspond to what people have in mind when they talk about the small cinema. I am only reminding the Committee that when we are dealing with the small cinema as defined in these Amendments we are dealing with a very large slice of the total cinema population.

Mr. Glenvil Hall

What the hon. Gentleman is saying only points the moral and underlines what has been said up to now. It shows what a large minority of the cinemas are in this predicament.

Mr. Powell

So far, we have established that we are talking about a large minority, not a small minority, of the cinemas. Is there any evidence that this large minority we are categorising as the small cinemas are, in fact, doing worse as a class than the industry as a whole? It is difficult to find evidence of that.

If, for example, we take the increase in gross receipts over the years 1950–55, the years for which statistics are available, we find that the increase in gross receipts of cinemas below 750 seats, which roughly corresponds to cinemas with a weekly turnover of up to £350, has been appreciably more than the receipts of cinemas above 750 seats. On that criterion—the movement of gross receipts over the six-year period since 1950—there is no evidence that this smaller half of the cinema world is doing specially badly.

I was interested to notice that the case which my hon. Friend the Member for Bournemouth, West (Mr. J. Eden) happened to cite was of a cinema which would be outside the ambit of these Amendments altogether, thus illustrating that when one picks a case of hardship it happens to relate to a cinema which would fall outside, I should imagine, almost any definition of a small cinema.

As my hon. Friend the Member for Cheadle (Mr. Shepherd) said, it is misleading to take mere turnover as an index of prosperity or otherwise. There are, of course, a great many other factors which come into play, and it would be wrong to regard the amount of the weekly turnover as the criterion for deciding whether there was special hardship or whether special fiscal help was called for.

I know that a number of these cinemas are in sole and individual ownership. Probably when we talk generally about the small cinema it is that type of case which we have in mind. On the other hand, a great many of them are in multiple ownership, so that the net receipts for the week are, for effective purposes, aggregated; and quite a number are not independent at all, but are in the ownership of the large combines.

I felt that my hon. Friend the Member for Cheadle was right in being critical of this division of the cinema industry with a view to whether hardship was felt and whether help was needed. Many hon. Members who have spoken so far have referred, I think always with approval, to the fact that this Clause simplifies and rationalises the Entertainments Duty scale. The effect of that rationalization—it is an incidental effect, but, I think, still an important one—has been to give proportionately more relief, as my right hon. Friend pointed out just now, to the smaller than to the larger cinemas.

Approximately a quarter of the Entertainments Duty payable by the cinemas of under 750 seats has been remitted, as against 15 per cent. of that payable on admission to cinemas with over 2,000 seats. The mere process of rationalising the scale of Entertainments Duty has, in fact, fallen out to the advantage of the smaller cinemas and has given them a relatively greater increase in net receipts.

If we were to go further than that by any method which is here suggested or, I think, any method which could be imagined, and deliberately tilt the taxation provisions in relation to this defined class of cinema, then we should undo a great many of the advantages which I think we all feel we have gained from the rationalisation of the duty scale, because we should once again reach a position in which the cinema proprietor at certain points in raising his prices was incurring a disproportionately high duty upon his extra takings.

Mr. Chapman

Why not?

Mr. Powell

I think it has been agreed to be an undesirable feature of an Entertainments Duty scale, and we should be reintroducing it.

Mr. Chapman

If it preserves the existence of small cinemas, we shall not find any of their owners objecting to a little complication. Rationalisation is not a god in itself.

Mr. Powell

This is a kind of complication to which a great deal of objection has been taken, and we should be opening the way to all sorts of distortions. There would be a very great tendency for cinemas to restrain their growth and expansion within these limits of weekly takings or, indeed, to endeavour to get within these limits and so gain the advantages of any concession which might be attached to this category.

Summing up, although I recognise fully the special position and value of the cinema we mean when we talk about the small cinema, especially the small suburban cinema, I cannot suggest to the Committee that the case has been made out that this large minority of the cinema population is in any special need which would justify the deliberate introduction of a favourable rate of duty upon the range suggested.

8.15 p.m.

Mr. Mitchison

I personally regard that as an unsatisfactory answer, because I cannot feel that the Financial Secretary has allowed his heart to run away with him sufficiently. It does not often do so. He recognised, at the end of his remarks, that there was a special problem about this type of cinema. It is not the same type as that to which the rural relief relates. The type of cinema which we all have in mind, and the type which the Financial Secretary had in mind, however defined, is the cinema in the suburb or in the small town—

Mr. Powell

I recognised that it had a special value.

Mr. Mitchison

A special value. Let me take the hon. Member's own words. We mean the same thing.

Let me give him one very simple instance from my own constituency. Outside Kettering there are three small towns. They all have a population, one side or the other, of about 5,000. They do not qualify for rural relief. From time to time they have had small cinemas, and, without going into detail, it is sufficient to say that the difficulties of a small cinema in such a place are quite obvious. These small cinemas have to compete against the cinemas in the neighbouring large town, just as the suburban cinema in Birmingham or wherever it may be has to compete with the big cinemas in the centre of the town.

I do not regard this as a problem only of the cinema industry. This is a tax on people who go to entertainments, and I and hon. Members who have spoken have regarded this as a problem of the small community of the type which has been mentioned and of the people in it. The case for trying to do something about it is that it is not a good thing to centralise this or any other form of entertainment and to oblige people to spend time and increased bus fares in travelling outside their own community in order to get entertainment in the centre.

As I see it, this is not a question whether we foster or do not foster the cinema in that type of community. The question at the moment is whether it is a proper subject for this taxation. There are, of course, two days of dealing with it. One is by attempting to relieve it on some scale and the other is, within certain limits, to give it exemption. We on this side of the Committee have put down two Amendments. The first of them applies the earlier method—that is to say, it attempts to give a scaled relief and it provides for marginal relief. It is in a rather crude form, but it is still marginal relief. It is broadly similar to, though I hope on one point slightly more workable than, an Amendment which was discussed last year on the Finance Bill.

The difficulty about that Amendment —and I hand it to the Financial Secretary quite frankly—is this. The duty is, after all, paid by the patron. It may be collected by the cinema proprietor; this duty has got to involve some settling of accounts afterwards, not between the patron and the Revenue but between the cinema proprietor and the Revenue.

Therefore, it would be highly advisable if we could do it by some reduction in the price of the ticket, which means a tolerably simple round figure, or by some total exemption.

I agree with the Financial Secretary's comment that there is much to be said for trying to deal with marginal relief in some form or another, but he must remember that in matters of this sort his own hon. Friends, and, still more, the Opposition, have not access to the technical advice which is available to him. No doubt, the "Director of Intricate Obscurity" in the Treasury has been fully occupied this year with provisions about overseas trading corporations. When he has quite finished with them he might perhaps be able to devote some of his attention to this question.

I do not believe that it is beyond the wit of the Treasury to deal with it if it is minded to do so. I do not say one can get a perfect scheme, but if one really wanted to give help to this kind of cinema I believe that it could be done. I associate myself with what the hon. Member for Bournemouth, West (Mr. J. Eden) said, that if one does not like these Amendments but one agrees in principle, then one should try to see what the resources of the Government in these matters can produce. We have done our best.

I want to make one or two further comments. One of the three Amendments which has been least mentioned is the one providing for total exemption at the £150 weekly takings level. It has been made to relate to the average weekly takings for some complete year, and it is left to the Commissioners to fix the exact year. This is, therefore, an elastic provision. It is open to quite obvious objections, particularly that there is a very sharp line, but it seems to me to be an Amendment which would be workable.

The next question is: do we really want it to work? I think that the case made with sincerity, sympathy and knowledge by the hon. Member for Cheadle (Mr. Shepherd)—he is not here and I hope he will not mind the compliments; he made the same sort of speech last year—deserves consideration and an answer. I think if it were solely a question of the cinema trade there would be a great deal to be said for the proposition that these small cinemas are not viable economic units.

The hon. Gentleman, however, himself recognised, as did the Financial Secretary, that it is not really a question of the cinema industry at all. It is a question of doing something for this type of small community. If that is so, one has to look at it rather differently. He came to that conclusion himself, and in spite of what he said about the character of the economic unit, he came down quite definitely with the suggestion that something ought to be done.

I am not going into the merits of that suggestion. We all like our own little puppies so much that we had a litter of them on this side of the Committee this time, just to show that we could do it if we tried. I agree at once that the hon. Gentleman would be able to do it better. That is the substantial point.

I want to put a philosophic question to the Financial Secretary, who is at all times interested in the philosophy of the Tory Party. We were told by the Chancellor of the Exchequer that this was a Tory Budget. I have always understood that the Tory Party professed great devotion to a property-owning democracy, and I would point out to him that the small cinema proprietors, supposedly coming into the picture, are rather typical inhabitants of a property-owning democracy, and from their point of view there is a great deal to be said for giving them a little bit of help.

If we do not give them a little bit of help, I believe that we shall have in the cinema industry what is already happening in my own constituency in a very different industry, the boot and shoe industry, something which a certain gentleman, if I may mention his name in this Committee, once said might happen in quite a lot of cases. His name was Karl Marx. Perhaps I had better not say too much about him for fear of shocking somebody, but he said that there was a danger of the property-owning democracy becoming a property-owning oligarchy.

My charge against the party opposite is that though it expresses deep devotion to a property-owning democracy, when it comes to the scratch I find that it really supports a property-owning oligarchy. I am afraid that in the case of these cinemas, these poor little property-owning democrats—and there are quite a lot of them, as the Financial Secretary's figures show us—will be crushed out by the property-owning oligarchs who, in this and other parts of this Tory Budget, will do rather better than the small man.

I am sure that it is very shocking to be contentious on the first Clause of the Finance Bill, but the hon. Gentleman—and he and I have often met before—will understand me when I say that I could believe much more in the philosophy of a property-owning Tory democracy in this instance if he were able to say. "This is not an insuperable difficulty; we see the social point and we will do what we can not to kill these people by taxation." That is the point.

We had example after example of people who on the £150 weekly takings level, at any rate, were just going out of existence and would not go out of existence if the tax were taken off. There are in all these communities some members of the community who can well afford the time and the money to go into a large cinema in a neighbouring town. There are many others who cannot afford the time or the money, and it is for those last people that the small cinema of this type caters. I suggest that in this case we ought to do our social duty to those patrons.

8.30 p.m.

Mr. Hayman

I wish to reinforce the plea just made by my hon and learned Friend the Member for Kettering (Mr. Mitchison) to the Financial Secretary to reconsider what he has already said. The hon. Gentleman has, I think, misunderstood the intention of the Amendment tabled by my right hon. and hon. Friends. We are referring to the cinema whose takings do not on average exceed £150 a week. The Chancellor earlier today said that he had made a concession in tax of 25 per cent. to the small cinemas. But 25 per cent. of the 33⅓ per cent. which they were already paying brings the tax back to exactly 25 per cent. of the takings. Therefore, the cinema taking £150 a week is paying under this Finance Bill £37 10s. a week. After all, one quarter of the takings of a cinema of that size, no matter what the size of the building may be, depends on the number of its patrons, and its income depends on the number of its patrons.

I can assure the Financial Secretary that, as far as inquiries made by my hon. Friends and myself have gone, they seem to show that the net profit averages around 2½ per cent., so that 25 per cent. goes in tax even when these remissions have been made and only 2½ per cent. remains as a margin on which these small cinemas have to maintain their existence. I hope that this figure, or something like it, will be accepted even though it may not be entirely logical, because in my county of Cornwall cinemas are closing down not only in the very small communities of, say, 3,000, 4,000 or 5,000, but in the other towns.

Cornwall is a holiday county. We are glad to have hon. and right hon. Members and their constituents come to Cornwall on holiday, but we do not always have sunshine in Cornwall. On wet days, such as those we experienced last summer, the cinemas provide an amenity for the visitors. That is something to be taken into account. It can make quite a difference as well as being of value to the people in the community. I am quite sure that if the Amendment is rejected and if something of the kind is not put in its place these cinemas are doomed.

Mr. Hirst

In many ways my hon. Friend the Financial Secretary is a bit of a genius, especially for making a terribly complicated subject simple, but, if I may say so, he is also a genius for making a perfectly simple proposition extraordinarily difficult, and that is what he did in answer to the speech made by the hon. Member for Northfield (Mr. Chapman). The hon. and learned Member for Kettering (Mr. Mitchison) is right in saying that it is a question of whether there is the will to do this. That is the matter at issue and not the words of any Amendment.

We have a fairly simple system of Entertainments Duty and to rebate cinema prices according to the takings is not something that has to be prepared in Greek mythology to be understood. It seems to me to be quite a clear proposition. I do not see why something of that sort should not be considered. Some of us in this House have been talking about it for years, but I think it is fair to put on record, as did my hon. Friend the Member for Bournemouth, West (Mr. J. Eden), that quite a lot has been done in the Budgets of Conservative Governments to this end. Something like £10 million has been surrendered from Entertainments Duty on cinemas.

I do not want to be entirely critical, because this is the third critical speech I have made this afternoon, and I want to put that on record because it is of some distinct value. My hon. Friend the Member for Cheadle (Mr. Shepherd) was quite right—I do not agree with all he said; I never do—when he said that it was not entirely a question of Entertainments Duty as far as the cinema was concerned. This taxation is a very considerable factor, and it is a cumulative factor. When my hon. Friend says that people go to the better cinemas now because they want decent seats, I think he ought to be fairer than he is sometimes to the smaller cinemas and recognise that one of the reasons why the smaller cinemas sometimes have corny seats is the cumulative effect of those cinemas being overtaxed. That must be borne in mind.

I have heard so many speeches from the Treasury Bench to the effect that the tax amounts to only a tiny bit—to so many shillings a week or few pounds a year. It is a false argument. Of course it is only a tiny bit in any one year, but when the tiny bit recurs year after year it tots up. If there had been much fairer treatment to the industry in the last few years instead of it being treated by the Treasury as a milch cow, there would have been better seats for people to sit on at reasonable prices in the smaller cinemas.

It is about time the Government woke up to this and realised the speciousness of that argument which has been advanced annually for the last seven or eight years. I do not know as many languages as my hon. Friend the Financial Secretary, but one could have foretold what he was going to say, except that he put a gloss on what Treasury spokesmen say about this matter.

It is partly our own fault, the fault of Members of all political parties—for we must not be parochial or political about this—that over the years we have not considered the industry with that sufficient and reasonable interest which we candidly think it deserves. We ought to support a new start now. Let us have a policy. We must have a tax policy for this industry. That is what so many of us hoped we should get after the review made of this industry and the promises given to us. That is what one still hopes to get. Only my hon. Friend can squeeze juice out of an orange that has none. I cannot see that there is any reasonable tax policy for this industry. We must have a policy and Government realisation that these people can be helped, as they can if there is the intention to help them. Some of these cinemas must close. That will be so through the ordinary processes of competition, but let them close in the ordinary process of competition and not by reason of the fact that they are also being compelled to bear too much taxation, from which they have suffered for so long.

I reiterate what I have said before in debates upon this subject, that some of the small cinemas are ancillary to larger concerns, are run by individuals who also run other enterprises, and those people have been quite generous sometimes in continuing what is more or less a liability, and they have done so because of all the statements that have been made that something was going to be done to relieve them from the shackles of this over-taxation. It has not been done. Unless something is done to help them the situation will arise in which in the last resort the Government, of whatever political colour, will be forced to eat all the brilliant words which have been uttered from that Dispatch Box in the last few years, and face either a loss of revenue or the necessity to do what ought to be done to achieve the purposes we have in mind.

Dr. Horace King (Southampton, Itchen)

I believe the hon. Gentleman the Member for Shipley (Mr. Hirst) was wrong when he said that the Financial Secretary does not make his own speeches. Those of us who have watched him in debates know that he does and that he is a very close reasoner indeed and a very careful arguer. However, I am afraid that the hon. Member for Shipley was right in charging his hon. Friend with lacking the will to help the small cinemas and with lacking sympathy with them. At any rate, if he has that sympathy—knowing him, I would hope he has—he certainly very brilliantly concealed it in his speech just now.

I said that the Financial Secretary was a fair and cogent arguer. I am sure that he would not want to misguide the Committee, but I must point out that when he said that the small cinemas about which we were talking included 2,000 out of the 4,000, in one amendment, or 1,600 out of the 4,000 in another he was talking about the numbers of cinemas and certainly not about the receipts of the two groups of cinemas from their audiences.

We are not trying to relieve of taxation half the cinema finance of the country. If we used the formula of one Amendment and divided the cinemas into two groups, it would be 2,000 tiny ones on the one hand and 2,000 mighty ones on the other. Consequently, do not let the Financial Secretary seek to persuade us that we are trying to get a concession for half the cinema industry.

I wish to return to the point made by the hon. Member for Cheadle (Mr. Shepherd), who usually makes shrewd comments in our debates. I have watched, as he watches, the gradual trustification of small shops and small enterprises. In last Friday's debate we lamented the disappearance of the small newspaper. I should not like to see the small cinema joining this lamentable procession towards great corporations. The hon. Member seemed to think it was inevitable and worth while. I am sentimentalist enough to say that even if it is inevitable the Treasury ought not to assist the inevitable process by its fiscal methods and that we ought to do anything we can to keep the little man in industry and the little man in the cinema world.

As we plead for more in this debate, it would be ungenerous not to acknowledge what the Chancellor and the Financial Secretary have already done in this Finance Bill. They have helped to save the live theatre as far as taxation can do so, and they have made certain entertainments tax concessions to the cinema which we welcome, but just as we said last year that the live theatre was in danger, it is certainly true that the cinema is also still in danger.

There are a number of reasons for this. Anyone who would argue that taxation is the only reason would be singularly naïve. There are other problems confronting the cinema industry, but the burden of taxation is certainly one of the problems, and that burden must naturally weigh heavier on the smaller cinemas. The larger organisation can he content with small profits from a number of its units scattered all over the country. The small man keeps himself and his family out of whatever profit he makes from his one cinema. The large cinema organisations have their fingers in many other pies, and may even benefit from the money which they are taking out of their pockets as distributors and paying under the new levy to themselves as producers.

I agree with the tribute which the hon. Member for Bournemouth, West (Mr. Eden) paid to the small cinema man, not merely the little man with a cinema in a village or small town, but the little cinema proprietor in towns like my own and Bournemouth. In such places the small independent man is with difficulty continuing his existence along with great trustified cinemas.

8.45 p.m.

This is by no means a party debate. Hon. Members on both sides of the Committee profess to be friends of the little man, and I was glad that my hon. and learned Friend the Member for Kettering (Mr. Mitchison) referred to the fact that the little cinema proprietor, whom we are discussing, is practically the equivalent of the owner-occupier of a house. He runs his business, and his wife sometimes collects the ticket money and members of his family act as part of the staff. It is often a little family unit drawing a now precarious living out of the cinema.

We cannot as a State subsidise the little man, but we can do our best to avoid the destruction of the little man by taxation. As I have mentioned in a number of debates on Finance Bills, the simple fact is that no man will go on acting as an unpaid tax collector for the Treasury. When, as has happened again and again, someone is running a business and could make a profit if it were not for the fact that he has to pay a sum to the State, in tax which he has collected for the State, we have reached a point where an industry cannot continue. The first to give up, obviously, are the little men.

All debates on Entertainments Duty only tinker with the problem. The only honourable solution of the whole question of the entertainments tax is to substitute for it a tax on profits actually made. It is a fundamental absurdity and injustice that a man should make a loss on his business and yet, at the end of the year, have to pay over money to the Treasury out of the loss that he has made. If the Financial Secretary is not interested in the plight of the little man and he does not feel, as many of us feel, that our job is to try to protect him to some extent in the battle of gigantic forces, and even if his object is only to make money, the entertainments tax, as it bears on the cinema and particularly on the little cinema, is still a crushing burden in spite of the concessions in the Finance Bill. In this as in other obnoxious taxes in history we may have to learn the painful lesson that we are killing the goose that lays the golden eggs. I urge the Financial Secretary to give the matter more consideration before the Bill leaves the Committee.

Mrs. White

Once again, we have had a debate of very high quality because hon. Members on both sides of the Committee have tried to follow the issues which underline these detailed Amendments. The anxiety expressed by hon. Members in all parts of the Committee should at long last make some impression upon the Treasury Bench and their financial advisers.

I should like to agree once more in this debate with the hon. Member for Shipley (Mr. Hirst), who expressed disappointment at the result of the review of the Entertainments Duty. My hon. Friend the Member for Itchen (Dr. King) has made the same point. We had the promise last year from the then Chancellor that he would look into the whole question of entertainments tax, and those of us who were particularly interested in the cinema industry hoped that that might mean that he would produce some really fresh ideas.

Unfortunately, the Treasury went some distance and then wearied in well-doing. It simplified the scale of duty, which was all right as far as it went, but it has not fundamentally looked at the whole business of whether there is any sense in continuing the Entertainments Duty in its present form at all.

It is an illogical kind of duty. The original intention was to tax the person who bought the ticket, but it has become a common feeling throughout the industry that it is really a tax on the exhibitor.

It is because of the peculiar form of its incidence that it is extraordinarily difficult to put forward Amendments that would be both in order and would be workable and would give effect to the feeling which has been expressed so widely that we should do something for the man who is especially hard hit.

The Financial Secretary said that the smaller cinema was not doing too badly and that if we looked at the gross takings of those with 750 seats or fewer they had been reasonably buoyant. On the other hand, if he looks at the figures for last year of cinemas which have closed, he will see that the higher proportion was precisely among the smaller cinemas.

The last Board of Trade figures which I have seen suggest that whereas, taking cinemas as a whole, roughly one in 25 closed last year, of those with 500 seats or fewer one in 18 closed, which shows very clearly that some of these smaller cinemas really are feeling the draught very keenly.

For the reasons which have already been most eloquently expressed by many of my hon. Friends, we should look more carefully at what could be done if the will were really there. It is all very well for those who are linked in larger organisations. They can keep going. I think I am right in saying that some of the large cinema proprietors keep cinemas open which are not making a profit and which may even be running at a loss. They may do so, let us give them the credit for it, for reasons of social conscience.

They are not entirely impervious to that occasionally, so let us give them credit where credit is due; but they can afford to do so because they have other interests. They spread their under-

takings. Some of the larger organisations, the Rank Organisation, for instance, make precision tools and all sorts of things. It has a wide financial empire which means that it can, in certain circumstances, keep open cinemas which, on ordinary economic assessment, it might perhaps wish to close.

The man who owns one, two, three or four cinemas has no such resources behind him. He cannot aggregate takings from more profitable cinemas for those which pay less well. It is those people whose cinemas may not always fall into the category of a small number of seats or even of lower takings who are finding it so difficult to remain in business.

Therefore, I come back to the point at which I started, that we are greatly disappointed that in this review of Entertainments Duty, which has become a cinema duty, the Treasury has failed, in our view, to look at the real basic difficulty of the tax. So long as it is kept on its present basis, I think that we are almost bound to have difficulty in dealing with specific groups of cinemas.

I recognise the arguments in detail against some of the Amendments which have been put down, but I feel that there is a real problem. I am not convinced by the argument which the Financial Secretary has put concerning the nature of the problem. I think that he glossed over a number of very real difficulties. The debate we have had today must have left him in no doubt that there is most serious anxiety by hon. Members on both sides of the Committee about the position of those people. It is really a challenge to him and to his ingenuity and good faith in the industry to offer a much better solution than he has so far done.

Question put, That those words be there inserted:—

The Committee divided: Ayes 187, Noes 220.

Division No. 112.] AYES [8.55 p.m.
Ainsley, J. W. Beswick, Frank Brown, Thomas (Ince)
Allaun, Frank (Salford, E.) Blenkinsop, A. Burke, W. A.
Allen, Arthur (Bosworth) Blyton, W. n. Callaghan, L. J.
Allen, Scholefield (Crewe) Boardman, H. Carmichael, J.
Awbery, S. S. Bowden, H. W. (Leicester, S.W.) Champion, A. J.
Racon, Miss Alice Bowen, E. R. (Cardigan) Chapman, W. D.
Balfour, A. Bowles, F. G. Chetwynd, G. R.
Bellenger, Rt. Hon. F. J. Braddock, Mrs. Elizabeth Clunie, J.
Benn, Hn. Wedgwood (Bristol, S.E.) Brockway, A. F. Coldrick, W.
Benson, G. Broughton, Dr. A. D. D. Collick, P. H. (Birkenhead)
Collins, V.J.(Shorectilch & Finsbury) Jeger, George (Coole) Rhodes, H.
Corbet, Mrs. Freda Jenkins, Roy (Stechford) Roberts, Albert (Normanton)
Cove, W. G. Jones, David (The Hartlepools) Roberts, Goronvy (Caernarvon)
Craddook, George (Bradford, S) Jones, J. Idwal (Wrexham) Robinson, Kenneth (St. Pancras, N.)
Cronin, J. D. Kenyon, C. Ross, William
Cullen, Mrs. A. Key, Rt. Hon. C. W. Royle, C.
Darling, George (Hillsborough) King, Dr. H. M. Shinwell, Rt. Hon. E.
Davies,Rt.Hon.Clement (Montgomery) Lawson, G. M. Short, E. W.
Davies, Ernest (Enfield, E.) Lee, Miss Jennie (Cannook) Silverman, Julius (Aston)
Davies, Stephen (Merthyr) Lewis, Arthur Silverman, Sydney (Nelson)
Deer, G. Lipton, Marcus Skeffington, A.M.
Donnelly, D. L, Logan, D. G. Slater, Mrs. H. (Stoke, N.)
Dugdale, Rt. Hn. John (W. Brmwch) Mabon, Dr. J. Dickson Slater, J. (Sedgefield)
Dye, S. MacColl, J. E. Smith, Ellis (Stoke, S.)
Ede, Rt. Hon. J. C. McGhee, H. G. Snow, J. W.
Edwards, Rt. Hon. Ness (Caerphilly) Mclnnes, J. Sorensen, R. W.
Edwards, Robert (Bilston) McKay, John (Wallsend) Soskice, Rt. Hon. Sir Frank
Edwards, W. J, (Stepney) MacPherson, Malcolm (Stirling) Stewart, Michael (Fulham)
Evans, Edward (Lowestoft) Mahon, Simon Stross,Dr.Barnett(Stoke-on-Trent,C.)
Fernyhough, E. Mainwaring, W. H. Summerskill, Rt. Hon. E.
Flenburgh, W. Mallalieu, J. P. W. (Huddersfd, E.) Sylvester, G, O.
Finch, H. J. Mann, Mrs. Jean Taylor, Bernard (Mansfield)
Fletcher, Eric Mason, Roy Taylor, John (West Lothian)
Fraser, Thomas (Hamilton) Mayhew, C. P. Thomas, Iorwerth (Rhondda, W.)
George, Lady MeganLloyd(Car'then) Mellish, R. J. Thomson, George (Dundee, E.)
Gibson, C. W. Messer, Sir F. Timmons, J.
Gooch, E. G. Mitchison, G. R. Tomney, F.
Greenwood, Anthony Monslow, W. Ungoed-Thomas, Sir Lynn
Grenfell, Rt. Hon. D. R. Moody, A. S. Usborne, H. C.
Grey, C. F. Mort, D. L. Viant, S. P.
Griffiths, David (Rother Valley) Moss, R. Watkins, T. E.
Griffiths, Rt. Hon. James (Llanelly) Moyle, A. Wells, Percy (Faversham)
Hale, Leslie Mulley, F. W. Wells, William (Walsall, N.)
Hall, Rt. Hon. Glenvil (Colne Valley) Noel-Baker, Francis (Swindon) West, D. G.
Hamilton, W. W. Noel-Baker, Rt. Hon. P. (Derby, S.) Wheeldon, W. E.
Hannan, W. O'Brien, Sir Thomas White, Mrs. Eirene (E, Flint)
Harrison, J. (Nottingham, N.) Oliver, G. H. White Henry (Derbyshire, N.E.)
Hastings, S. Orbach, M. Wilcock, Group Capt. C.A.B.
Hayman, F. H, Owen, W. J. Wilkins, W. A.
Henderson, Rt. Hon. A. (Rwly Regis) Paget, R. T. Willey, Frederick
Herbison, Miss M. Pating, Rt. Hon. W. (Dearne Valley) Williams, David (Neath)
Hewitson, Capt. M. Palmer, A. M. F. Williams, Rev. Llywelyn (Ab'tillery)
Holmes, Horace Pannell, Charles (Leeds, W.) Williams, Ronald (Wigan)
Holt, A. F. Parkin, B. T. Williams, Rt. Hon. T. (Don Valley)
Houghton, Douglas Pentland, N. Williams, W.T. (Barons Court)
Howell, Charles (Perry Barr) Popplewell, E. Willis, Eustace (Edinburgh, E.)
Howell, Denis (All Saints) Price, J. T. (Westhoughton) Winterbottom, Richard
Hubbard, T. F. Price, Philips (Gloucestershire, W.) Woodburn, Rt. Hon. A.
Hughes, Cledwyn (Anglesey) Probert, A. R. Woof, R. E.
Hunter, A. E. Proctor, W. T. Yates, V. (Ladywood)
Hynd, J. B. (Attercliffe) Pryde, D. J. Zilliacus, K.
Irvine, A. J. (Edge Hill) Redhead, E. C.
Irving, Sydney (Dartford) Reeves, J. TELLERS FOR THE AYES:
Mr. Pearson and Mr. Simmons.
Agnew, Sir Peter Braithwaite, Sir Albert (Harrow, W.) Dodds-Parker, A. D.
Aitken, W. T. Bromley-Davenport, Lt.-Col. W. H. Donaldson, Cmdr. C. E. McA.
Allan, R. A. (Paddington, S.) Brooman-White, R. C. du Cann, E. D. L.
Alport, C. J. M. Browne, J. Nixon (Craigton) Dugdale, Rt. Hn. Sir T. (Richmond)
Amery, Julian (Preston, N.) Bullus, Wing Commander E. E. Duthie, W. S.
Amory, Rt. Hn. Heathcoat(Tiverton) Burden, F. F. A. Eden, J. B. (Bournemouth, West)
Anstruther-Gray, Major Sir William Butcher, Sir Herbert Elliott,R.W.(N'castle upon Tyne.N.)
Arbuthnot, John Butler, Rt.Hn.R.A. (Saffron Walden) Errington, Sir Eric
Ashton, H. Carr, Robert Farey-Jones, F. W.
Atkins, H. E. Cary, Sir Robert Fell, A.
Baldwin, A. E. Chichester-Clark, R. Fisher, Nigel
Barber, Anthony Clarke, Brig. Terence (Portsmth, W.) Fletcher-Cooke, C.
Barlow, Sir John Cole, Norman Fraser, Hon. Hugh (Stone)
Barter, John Conant, Maj. Sir Roger Fraser, Sir lan(M'cmbe & Lonsdale)
Baxter, Sir Beverley Cooke, Robert C. Freeth, Denzil
Beamish, Maj. Tufton Cordeaux, Lt.-Col. J. K. Garner-Evans, E. H.
Bell, Philip (Bolton, E.) Corfield, Capt. F. V. Glover, D.
Bell, Ronald (Bucks, S.) Craddook, Beresford (Spelthorne) Godber, J. B.
Bennett, F. M. (Torquay) Crosthwaite-Eyre, Col. O. E. Gomme-Duncan, Col. Sir Alan
Bevins, J. R. (Toxteth) Crowder, Sir John (Finchley) Goodhart, Philip
Biggs-Davison, J. A. Cunningham, Knox Gough, C. F. H.
Birch, Rt. Hon. Nigel Currie, G. B. H. Gower, H. R.
Bishop, F. P. Dance, J. C. G. Graham, Sir Fergus
Black, C. W. Davidson, Viscountess Green, A.
Body, R. F. D'Avigdor-Goldsmid, Sir Henry Gresham Cooke, R.
Boyle, Sir Edward Deedes, W. F. Grimston, Hon. John (St. Albans)
Braine, B. R. Digby, Simon Wingfleld Grosvenor, Lt.-Col. R. G.
Gurden, Harold McCallum, Major Sir Duncan Robinson, Sir Roland (Blackpool, S.)
Harris, Reader (Heston) Macdonald, Sir Peter Rodgers, John (Sevenoaks)
Harrison, A. B. C. (Maldon) McKibbin, A. J. Ropner, Col. Sir Leonard
Harrison, Col. J. H. (Eye) Mackie, J. H. (Galloway) Schofield, Lt.-Col. W.
Harvey, Air Cdre. A. V. (Macclesfd) McLaughlin, Mrs. P. Scott-Miller, Cmdr. R.
Harvie-Watt, Sir George Maclean, Fitzroy (Lancaster) Shepherd, William
Hay, John Macleod, Rt. Hn. Iain (Enfield, W.) Smithers, Peter (Winchester)
Heath, Rt. Hon. E. R. G. MacLeod, John (Ross & Cromarty) Smyth, Brig, Sir John (Norwood)
Henderson-Stewart, Sir James Macmillan,Rt.Hn.Harold(Bromley) Spearman, Sir Alexander
Hicks-Beach, Maj. W. W. Macmillan, Maurice (Halifax) Speir, R. M.
Hill, Mrs. E. (Wythenshawe) Macpherson, Niall (Dumfries) Spens, Rt. Hn. Sir P. (Kens'gt'n, S.)
Hill, John (S. Norfolk) Maddan, Martin Stanley, Capt. Hon. Richard
Hirst, Geoffrey Maitland, Hon. Patrick (Lanark) Steward, Harold (Stockport, S.)
Hope, Lord John Manningham-Buller, Rt. Hn. Sir R. Steward, Sir William (Woolwich, W.)
Hornby, R. P. Markham, Major Sir Frank Storey, S.
Horsbrugh, Rt. Hon. Dame Florence Marlowe, A. A. H. Stuart, Rt. Hon James (Moray)
Howard, Hon. Greville (St. Ives) Marples, Rt. Hon. A. E. Studholme, Sir Henry
Howard, John (Test) Marshall, Douglas Summers, Sir Spencer
Hudson, W. R. A. (Hull, N.) Mathew, R. Sumner, W. D. M. (Orpington)
Hulbert, Sir Norman Maude, Angus Taylor, Sir Charles (Eastbourne)
Hurd, A. R. Mawby, R. L. Teeling, W.
Hutchison. Sir Ian Clark (E'b'eh w.} Medlicott, Sir Frank Temple, John M.
Hylton-Foster, Rt. Hon. Sir Harry Milligan, Rt. Hon. W. R. Thomas, P. J. M. (Conway)
Irvine, Bryant Godman (Rye) Morrison, John (Salisbury) Thompson, Kenneth (Walton)
Jennings, J. C. (Burton) Nabarro, G. D. N. Thompson, Lt.-Cdr.R.(Croydon, S.)
Johnson, Eric (Blackley) Nairn, D. L. S. Thorneycroft, Rt. Hon, P.
Joseph, Sir Keith Neave, Airey Thornton.Kemsley, C. N.
Joynson-Hicks, Hon. Sir Lancelot Nioholls, Harmar Tiley, A. (Bradford, W.)
Kaberry, D. Nicholson, Godfrey (Farnham) Tilney, John (Wavertree)
Keegan, D. Nicolson, N. (B'n'mth, E. & Chr'ch) Turner, H. F. L.
Kerby, Capt. H. B. Oakshott, H. D. Turton, Rt. Hon. R. H.
Kerr, H. W. O'Neill, Hn. Phelim (Co. Antrim, N.) Vane, W. M. F.
Kershaw, J.A Orr, Capt. L. P. S. Vaughan-Morgan, J. K.
Kimball, M. Page, R. G. Vickers, Miss Joan
Kirk, P. M. Pannell, N. A. (Kirkdale) Vosper, Rt. Hon. D. F.
Lambert, Hon. C. Partridge, E. Wakefield, Edward (Derbyshire, w.)
Lambton, Viscount Pickthorn, K. W. M. Wakefield, Sir Wavell (St. M'lebone)
Langford-Holt, J. A. Pilkington, Capt. R. A. Wall, Major Patrick
Legge-Bourke, Maj. E. A. H. Pitt, Miss E. M. Ward, Rt. Hon. G. R. (Worcester)
Legh, Hon. Peter (Petersfleld) Pott, H. P. Ward, Dame Irene (Tynemouth)
Lindsay, Hon. James (Devon, N.) Powell, J. Enoch Waterhouse, Capt. Rt. Hon. C.
Linstead, Sir H. N. Prior-Palmer, Brig. O. L. Whitelaw, W. S. I.
Llewellyn, D. T. Profumo, J. D. Wills, G. (Bridgwater)
Longden, Gilbert Redmayne, M. Wood, Hon. R.
Lucas, P. B. (Brentford & Chiswick) Remnant, Hon. P. Woollam, John Victor
Lucas-Tooth, Sir Hugh Renton, D. L. M.
McAdden, S. J. Ridsdale, J. E. TELLERS FOR THE NOES:
Mr. Bryan and Mr. Hughes-Young.

Motion made, and Question proposed, That the Clause stand part of the Bill.

Mr. J. P. W. Mallalieu (Huddersfield, East)

Although the debate on the Clause so far has dealt almost exclusively with the cinema, the effect of the Clause is to remove the Entertainments Duty from a whole series of sports. I think that everyone on both sides would want to congratulate the Chancellor on being the first of a long series of holders of his office who has had the courage to take this step.

I was opposed to the Entertainments Duty on sport, partly because the tax itself is a bad one—it is a tax on receipts and not on profits—and because when we tried to amend it we caused all sorts of anomalies and the House of Commons and Members of Parliament were involved in dealing with matters which, generally speaking, were outside their province. On the whole, I think that sport ought to be run by sportsmen. Any idea of a Minister of Sport is anathema. It would be very entertaining to see the Chancellor of the Exchequer being heckled about the new l.b.w. rule, though I do not think that it would be particularly enlightening.

Unfortunately, the Chancellor is proposing to remove this tax at the very time when things are happening in one sport which are sufficiently serious to merit the attention of the House of Commons. There are things alleged to be happening, and indeed there is some evidence which can now be substantiated in football, which are really grave matters.

The Temporary Chairman (Sir Robert Grimston)

Order. I am sorry to interrupt the hon. Gentleman, but I cannot see football mentioned in this Clause. I think he will realise that on the Question. "That the Clause stand part of the Bill," we can only discuss what is in the Clause. He would be out of order if he were to develop any argument on football.

Mr. Mallalieu

I should like to develop the argument about the removal of Entertainments Duty from sport generally, and using football as an illustration of some of the difficulties, and I was going on, if you will allow me, Sir Robert, to ask the Chancellor of the Exchequer whether he is aware of some of the events that have happened in one of the sports from which Entertainments Duty is to he removed, and whether, before he took the decision to remove the tax, he tried to influence the sport concerned to remedy the evils from which it seemed to be suffering. I would have thought that that was in order, and I trust that I am in order on the Question, "That the Clause stand part of the Bill." Otherwise—

The Temporary Chairman

Unless the hon. Member can show that other sports are in the Clause. he cannot pursue that line of argument.

Mr. Mallalieu

Football is surely covered by the part of the Clause which deals with the removal of Entertainments Duty. It is not specifically mentioned by name, but the whole effect of the Clause is to relieve football, boxing, racing and other sports from this onerous duty. This is our last chance, in dealing with this Clause, to raise the question of what is, in fact, happening in these industries which are to benefit from the action of the Chancellor.

Mr. Mitchison

On a point of order. May I submit to you, Sir Robert, that we have to decide whether we vote for or against the Clause. That is what the debate is about. The effect of the Clause is to remove Entertainments Duty on a number of things that were taxed previously, including football, and I would suggest that we should consider on that not only the broad question of the Entertainments Duty on football, but whether, without going into detail, of course, there ought to have been this full withdrawal of Entertainments Duty in relation to football or a more limited provision.

Mr. Sydney Silverman (Nelson and Colne)

Further to that point of order. I am puzzled as to what may or may not be in order in the debate on this Clause. Subsection (1) of the Clause reads: (1) Entertainments duty shall not be chargeable except in respect of entertainments which consist wholly or partly of a cinematograph show or a television show. Football is neither of these, and the whole Clause, according to the marginal note, deals with Entertainments Duty. The object of the Clause, as we have all understood it ever since the Budget Resolutions were introduced, was to make beneficial changes in the exaction of Entertainments Duty in which football benefits by the proposed changes in the law. It seems to me a little difficult to follow the reasoning which would lead to ruling out of the subject of discussion the effect which the proposed changes in the law may have upon football.

The Temporary Chairman

I quite follow the points raised, and the Committee will realise that I am merely seeking to keep the matter within the bounds of order. I think it would be possible on this Clause to discuss Entertainments Duty, but I think that to go very far into discussing the internal affairs of any particular sport would really be stretching what is permissible on the Question, "That the Clause stand part of the Bill" rather further than I would care to let it go. If the hon. Member for Huddersfield, East (Mr. J. P. W. Mallalieu) will proceed, we will see how we get on. I do not wish to hold him up unduly.

Mr. Mallalieu

I will try to keep within the rules, Sir Robert, and not go into any great detail. My point, briefly, is that although, like most hon. Members, I dislike Entertainments Duty and am glad that it has gone, things have become so bad in one sport that I would even consider voting against the Clause in order to retain the duty unless steps are taken to remedy the evils of which I complain.

Those evils all spring from one source. They amount to a whole series of cases of bribery, corruption and tax evasion in the football industry. They spring from the nature of the existing contracts, and before the Chancellor gives up the one direct weapon of influence he has upon this industry, namely, the weapon of the Entertainments Duty, he should make sure that the industry will put right the things which are so obviously wrong.

I should like to put quickly the three points which are wrong. First, there is a maximum wage. Football is the only industry in which a player is not allowed to negotiate a contract whereby he can earn as much as he thinks he is worth. Secondly, the contract itself is a one-sided agreement. The contract between a football player and his club lasts for only twelve months from the point of view of the player, but even although it expires at the end of twelve months its effect remains so far as the employer is concerned, because he can retain the player and refuse permission for him to move to another club unless a very large price is put upon the player's head.

As a result, there has sprung up within the industry a form of slavery in a very real sense—in that a man is tied by a contract to a certain club, even though his contract has expired—and also some vestige of the treatment of human beings as cattle, because a footballer can move from one club to another only if the club wishing to take him pays the price asked. These matters are unsatisfactory in themselves, but the maximum wage factor is leading to tax evasion upon a very large scale.

Football players realise that although, if they are very lucky, their maximum wage agreement will allow them to earn perhaps £1,000 a year—which some people may say is too much, because some say that £1,000 is too much to pay Members of Parliament—they can, by a single appearance at a football ground, increase the gate receipts by £1,000 on one Saturday alone. Men like Stanley Matthews or John Charles would easily make a difference of £1,000 to a gate.

The footballer, seeing that he receives none of this money and seeing, at the same time, entertainers in other lines of business, such as the music halls, films or the theatre, earning in one day what it takes him 52 weeks to earn, tries to get some money under the counter. In recent years, many under-the-counter payments have been made. They have all been concealed and revenue has slipped through the fingers of the Chancellor of the Exchequer. There must be a great loss of revenue on that count alone.

I will not press the subject, Sir Robert, because you have been very gentle with me. I have tried to establish that things are seriously wrong in this industry. I believe that the Chancellor knows of them, and I have a right to ask him, before he parts with his one weapon of influence upon this industry, what steps he is taking to see that the industry is putting its own house in order.

Mr. E. Fletcher

I want to support what my hon. Friend the Member for Huddersfield, East (Mr. J. P. W. Mallalieu), has said. This is probably the last occasion we shall have to ventilate a subject which has attracted a great deal of public attention in recent months. As I understand it, the Chancellor's proposal to release football from the burden of Entertainments Duty—a proposal which we all support—means that about £1 million will be released from the revenue for the benefit of football clubs and the football-viewing public.

9.15 p.m.

Before we part with the Clause, we are entitled to ask the Chancellor his attitude towards this very serious question, which is agitating so many minds. It is notorious that there is seething discontent among football players about the terms of the contracts which they are obliged to sign in order to play football in the Football League. Their maximum wage is regarded as inadequate, the football player is tied to a club for an unreasonable time, he is deprived of his freedom, and he can only obtain transfer in conditions which very often enable the club to which he is contracted to receive a very large sum of money, £10,000, £20,000 or sometimes even £30,000, from which the player derives no benefit at all.

One only has to state the proposition to make it self-evident that there is a degree of injustice and unfairness. Only recently we were discussing, at the instance of the Chancellor himself, restrictive practices. If ever there was a sphere in which restrictive trade practices needed investigation, it is that which the football players have to endure. There is no similar field of entertainment in which artists who are capable of attracting very large audiences suffer such restriction and limitation of their earning ability. It inevitably leads to devices for obtaining other money and to tax evasion. The situation is not satisfactory and produces injustices and discontent. I cannot think that it is good for the football players or for football clubs. We are entitled to know what the Chancellor thinks about it.

The Chancellor's proposal involves the release from the Exchequer of about £1 million to football clubs. I hope that the Chancellor will, before he releases that money, use his power and influence to see conditions imposed which will improve the position of the football players, who do so much to entertain our people. I hope we shall hear what the Chancellor has to say about it.

Mr. Frederick Willey (Sunderland, North)

I hesitate to intervene in this discussion, in the absence of the hon. Member for Sunderland, South (Mr. P. Williams), who, I appreciate, is otherwise engaged this evening. I agree that his efforts tonight will be judged by other referees.

It is clear that hon. Members who have referred to football clubs have in mind the affairs of the Sunderland Football Club. In any case, Roker Park is in my constituency. We heartily endorse what the Chancellor of the Exchequer has done and I assure him that he will always be welcome at Roker Park. We shall be glad to see him there at any time next season, when we hope, we shall do better than we have done this year. May I again remind the Committee that apart from being the greatest shipbuilding town in the world, Sunderland is the only club which has always been in the First Division? Although we maintained that record with difficulty this year, we are very sensitive about some of the things which have been 'said about football in relation to Sunderland.

The first point I would make is a broad point, which applies particularly to football but to other sports, also. I believe that where we have a sport which attracts large crowds of people paying to watch, the clubs enjoying that support should make some contribution generally towards the sport. I should like to know whether the Chancellor has had any discussions with the Football Association about that. If the clubs are getting £1 million relief by way of this tax concession, I hope that he will be able to tell us that he was able to persuade the clubs that they should make some contribution towards the sport generally.

I think that we should encourage this development. We have some support given to cricket and some support to Association football, but far more could be given. I hope that the first thing the Chancellor can tell us—to delay turning to more controversial matters—is that he has got a satisfactory assurance that some of this money is going towards encouraging the playing of the sport generally.

To turn to the more controversial matters, I shall try to keep "on side" and to be very brief. I do not want to deal at all with the merits of the inquiry into the Sunderland Club, but a great deal has been said on both sides of the Committee, and outside, about inquiries of this nature. There is considerable public interest in this type of inquiry. I must say that it is not altogether satisfactory. The result of this inquiry is undoubtedly the cause of very grave reflection on people who have occupied and occupy positions of public esteem. In the case of the players, their livelihood is affected.

I hope that in his discussions the Chancellor has brought home to the Football Association the anxiety we feel about inquiries of this nature and that it would be far fairer to everyone concerned if we could have a more open inquiry and a more independent judgment. I am not casting any reflection on the findings, because I do not know sufficient about the evidence that has been given, but I think it would be much better, when dealing with a great national sport like this, and with those who contribute, both towards the clubs and as players, if there could be a better guarantee that the inquiry would be conducted openly and in an impartial and judicial manner.

I did not altogether agree with my hon. Friend the Member for Huddersfield, East (Mr. J. P. W. Mallalieu) in the points he made. It is hardly a matter for us to express any too dogmatic opinion about it. I do not very much favour the idea that players should be able to get vastly different rates of pay for playing football. That, in itself, would bring difficulties. if we had stars attracting very large salaries as against players in the same team getting less, that might damage the game.

Mr. J. P. W. Mallalieu

It happens in Scotland; there is no maximum there.

Mr. Willey

I can only speak for England, and with such knowledge as I have of English players.

Mr. William Ross (Kilmarnock)

As a Scottish Member, I should apologise for not being able to participate in the debate as the Scottish Grand Committee is due to re-start its deliberations in another five minutes. If my lion. Friend can keep the debate going until four o'clock in the morning, the Scots may be able to participate in the debate on the Finance Bill.

Mr. Willey

I cannot give that assurance, but I must protest about the Scottish Grand Committee. I was at a meeting upstairs—

The Temporary Chairman

Order. With the best will in the world, I do not think that I can let the debate stray to the Scottish Grand Committee.

Mr. Willey

I was about to do no more than to object to the constant interruptions due to that Committee, Sir Robert.

To revert to the question of footballers and contracts of service, I think that the idea that different players should have vastly different rates of pay is wrong. The position would he different in this country from that in Scotland, because of the larger gates and the different financial positions of the clubs. The position of Sunderland F.C., for instance, is vastly different from that of most Scottish clubs.

While I do not think this is necessarily the right solution, we must agree with my hon. Friend that the present position is most unsatisfactory. I will simply refer to Sunderland F.C. Everyone knows that the club has been paying considerable transfer fees. If a player knows that he is worth £30,000 to a club, then, in a capitalist society, he certainly has an idea of his own worth as a footballer. This in itself makes the operation of the system extremely difficult.

Whether he agrees with the form of criticism made tonight, I think that the Chancellor should agree with my hon. Friend when he says that the position in the football world is far from satisfactory. In giving this tax concession the Chancellor has had an opportunity to discuss matters with the Football Association. He has not been able to give us much information so far about these matters, but I hope that he will now not only be able to satisfy us on the first matter but will be able to tell us that he has discussed the second with the Football Association and has had satisfactory assurances that there will be a review and an inquiry into the present financial position in respect of the players.

I trust that we can hope that within the next few months an attempt will be made to provide better conditions for the players and to avoid some of the difficulties which arise under the present arrangements.

Dr. Edith Summerskill (Warrington)

I will be brief in my intervention in view of the fact that you may rule me out of order, Sir Robert. I am speaking not about a sport but about a business, and it might be said that a business would not be included in the Clause.

The business about which I speak is that of prize fighting. Apparently the Chancellor has regarded it as a sport. To my astonishment he proposes to reduce the Entertainments Duty on it, and by doing so he has lost any weapon which he might have used to control this business. I think hon. and right hon. Members will perhaps have more sympathy with me on this occasion than on other occasions when I have spoken about it and when it has been very difficult to be heard in the House. I have been shouted down and jeered at.

The time has come, I think, when the Committee should have sympathy with those of us who feel strongly that unscrupulous promoters and managers are today exploiting young men in the business of prize fighting. One has only to look at the newspapers day after day to see crude pictures of boys fighting in contests which afterwards the experts say were quite unequal. These boys cannot protect themselves because they are surrounded by people who are literally battening upon them. They are often surrounded by relatives who, innocent and ignorant of the hazards to health, encourage them to go on.

How can a boy of 18, 19 or 20 turn on the family and the manager and the sycophants who surround him and say, "I will not do it"? He has been reared under a code to believe that he must be courageous and brave and that if he is told to go in and fight he must. fight irrespective of what happens. There is no one to defend him except this House. I am quoting the experts in this, and it can be proved from our knowledge of boys who have hit the headlines over the last few years. After about fifty professional fights, what is known as the softening-up process gradually sets in.

Gradually it is said of him, "He cannot time his blows". Gradually the boy who has been headline news fades out. He is knocked out after two or three rounds and everybody knows why—because his brain has been damaged. I remind the Chancellor that when a nerve cell is damaged he never recovers. He may not be in the last stage of punch drunkenness, but his temperament and his character have completely changed and have changed for life. He may have been a nice, equable boy, but he becomes irritable, bad tempered and difficult to manage at home. Furthermore, after he has lost the job of a prize fighter he is unable to concentrate and to hold a good job down.

9.30 p.m.

These youths are being exploited by unscrupulous promoters who have no other interest but to make profit. I therefore deplore the fact that the Chancellor has seen fit to include the business of prize fighting among clean and decent sports.

Major Sir Frank Markham (Buckingham)

Many people regard the abominations of prize fighting with displeasure equal to that of the right hon. Lady, but how are we to clean up prize fighting by keeping on this tax which we are all seeking to abolish? That point makes nonsense of the right hon. Lady's argument.

Dr. Summerskill

I have not emphasised the point this year as on previous occasions, but I could answer that question. Already the promoters are saying that they will reduce the price of seats by only a very small amount and that the rest will go into their pockets. In the past, the Chancellor may have had a little power to rectify the position. I am confident that the public is realising that this business is sordid and degrading. The young men themselves are no longer coming forward to play a part in it.

Dr. Barnett Stross (Stoke-on-Trent, Central)

I should like to make a brief reference to the fact that for the first time since 1916 the living theatre is now free from Entertainments Duty, and to say how very pleased I am sure the whole country is that this is so.

I would not have sought to raise this matter but for the fact that there were some hesitancies in the minds of some of our colleagues, and certainly in the minds of people outside who are very knowledgeable about the theatre, that the total remission might possibly move against the non-profit making companies.

In 1956, when I had the honour to move a new Clause relating to the exemption of certain performances from Entertainments Duty, I gave some assurances which affected the minds of some of my colleagues on this side of the Committee, because I quoted a letter when we discussed this matter on 26th June, 1956, sent by Mr. Linnit, who was the Secretary of the Theatres' Entertainments Tax Committee. This will be found in column 326 of the OFFICIAL REPORT of that date.

That letter made a promise, and it was because we felt that that promise would be kept that some of us became reassured and accepted that full remission of the duty for which we were pleading would not adversely affect the non-profit-making companies. I need not quote the letter. for it is on the record.

I have risen only to say that a further letter has come to my hand which makes that assurance doubly sure. That, too, should be on the record. The letter was sent by Mr. T. Chapman Mortimer, who is the Secretary of the Theatrical Manager's Association, addressed to Commander Powell of 31, Palace Street, Westminster, Mr. Mortimer writes to Commander Powell: I enclose for your information and return a memorandum by Messrs. Howard and Wyndham Ltd. showing how they propose to adjust sharing terms for former tax exempt companies such as opera, ballet, etc. There are, of course, other ways of making this kind of adjustment, and different accountants will, no doubt, each select their own method. The only real point is that this memorandum shows how theatres intend at once to adjust sharing terms in fulfilment of the late S. E. Linnit's undertaking. I have sent a copy to the Arts Council. I will not trouble the Committee with the method which is mentioned, but, in effect, it shows how the technique can be used by means of which the non-profit making companies shall not be in any way the worse off as a result of the betterment received through the action of the Chancellor in his Budget in freeing entirely the living theatre from Entertainments Duty.

I wish to refer to a letter dated 16th April, 1957, addressed to Commander Powell from Mr. Stephen Mitchell, of the Lyric Theatre offices. It makes two points. One is that it is not possible that as a result of this concession the prices of theatre seats will be reduced, and it states why this is so. The Committee knows why, because we have debated it.

I would mentioned, in passing, one item in this letter, namely: The existing prices have only been raised by one-third in the last five years, whereas production cost and running costs have risen 300 per cent. That is as may be. Even if that is not exactly correct, we know it is roughly true.

The essential point is the second one. that In respect of non-profit tax companies under the Arts Council, you should receive from Mr. Chapman Mortimer the scale of rentals the large groups of theatres are proposing to charge, showing that no injury will be suffered by such companies through the Chancellor's concession. I make this statement because I am sure the Committee will welcome it. It was promised us a year ago; it affected our minds then, and I am very happy that this reassurance has been given.

My last point relates to authors and playwrights. While the duty was exacted they received a proportion of the net takings, but now the takings are gross. Let us assume that they got 10 per cent. of the next takings. If the percentage remains the same, they will get a little more. A year ago, when we debated this matter, I remember saying that I did not think this would be a very bad thing if it happened. I felt that nobody on either side of the Committee would be averse to authors and dramatists receiving a little more as a result of the changes that have occurred, thanks to the Chancellor's action.

It may be that the owners of the theatres will wish to vary this percentage against the benefit of the author and the dramatist. I sincerely hope that they will not. I think there is ample evidence that authors in the past have not been very highly paid. A production has to be very successful for the author to receive substantial remuneration. It is a tremendous gamble, and it rarely comes off.

If, as a result of what has been done by this fragment of legislation, authors are assured of some small benefit, I sincerely hope that the theatre owners will not change the ratio because the takings are now gross and not net.

Mr. James MacColl (Widnes)

I would add my voice to the voices of my hon: Friends who have expressed appreciation of this concession. I do so mainly for Rugby League football, because I represent a town with a very great reputation in Rugby League football, and with my hon. Friends I have on many occasions pressed for some concession to be made to sport.

First-class Rugby League teams differ from first class Association teams in that the former come in the main from the smaller towns, and so the areas in which they can draw their support are smaller. Therefore, they have been particularly cruelly hit by the Entertainments Duty, and its incidence has been particularly unfair. It is a very good thing indeed we have got rid of this duty, because it has obviated the attempts which have been made to compromise, attempts which, on the whole, have had very unfair results. We had the exemption of cricket and the exemption of amateur sport. I do not think either of those exemptions was really defensible from any basis of logic, and I think they left many Rugby League teams in a very parlous position. That being so, I am very glad indeed the duty is going.

On the other hand, I think that what my hon. Friends have said needs to be borne in mind by the Committee. We are making a very substantial financial concession. The Chancellor, who has resisted very strong pressure put upon him today on behalf of the film industry, is giving major financial assistance to the football industry, whether Association football or Rugby League football. When so great a concession is being made it is not unreasonable for the Committee, before it finally approves the concession, to ask what advantage the people responsible for the industry will take of the concession, and of the improved financial position they will obtain, to make the best possible use of it.

Both sides. as it were, of the industry ought to be considered. The spectators ought to be considered. At most football grounds there is urgent need for very much improved accommodation for the spectators. We are certainly fairly fortunate in Widnes, where we are expanding our covered accommodation, and what accommodation we have is reasonably good, but sometimes when I have attended away matches I have been astonished not only at the uncomfortable but, I am bound to say, what I thought the unsafe accommodation offered to spectators. That is one direction in which we can reasonably look to football, whether Association or Rugby League football, to make a considerable step forward now that it has this advantage.

Another was that mentioned by my hon. Friend the Member for Huddersfield, East (Mr. J. P. W. Mallalieu). We are entitled to look for improved working conditions for those who contribute to the entertainment of so many people. My hon. Friend mentioned the question of the maximum wage. The whole question of transfer rules, particularly in Association football, wants to be examined very carefully indeed. I do not think we ought to regard this as a matter which is beyond our competence to talk about. In the United States of America, which is certainly devoted to the idea of private industry, the Supreme Court has on several occasions looked very carefully at the major American sports to consider whether or not they came within the law of restrictive practices, only to come, as is the way of the Supreme Court, so it seems to an outsider, to diametrically opposite conclusions. That does not alter the fact that it has taken the matter into account.

9.45 p.m.

My hon. Friend the Member for Sunderland, North (Mr. Willey) referred to the question of inquiries. I am not an expert about these things and may be mistaken about what happens now, but when I did know something about these matters a player who appeared before a League or Football Association committee on a disciplinary charge was not entitled to be represented.

The Deputy-Chairman (Sir Gordon Touche)

I hope that the hon. Member will not go too far into that matter. It is rather far from the Question at present before the Committee.

Mr. MacColl

I was aware, Sir Gordon. that I was perhaps getting dangerously away from the immediate repercussions upon the welfare of players of a concession in respect of Entertainments Duty.

Now that the industry has been given this great fiscal concession, it is up to it to recognise that it has a public responsibility and should be aware of itself as a public institution and conduct its affairs in ways which do not contravene the ordinary principles of justice. I imagine that the qualities which go to make a great footballer do not make a great advocate and that it is reasonable to assume that a first-class footballer may not be the best person to present a case and avoid—keeping in order, as it were. Sir Gordon—getting into trouble with the chairman. Those who have deservingly received this considerable concession ought to give this matter their very careful attention.

I warmly welcome the concessions and congratulate the Chancellor upon having made an advance which I am sure will lead to very considerable improvements in both types of football.

Mrs. E. M. Braddock (Liverpool, Exchange)

I rise for a moment or two only because of the intervention of my right hon. Friend the Member for Warrington (Dr. Summerskill). We all very well know her attitude towards boxing. It is also, of course, very well known that I take a point of view entirely opposed to hers. I am in the position of having to congratulate the Chancellor on behalf of the professional boxers for having removed the Entertainments Duty from their sport.

My right hon. Friend sometimes gets things a little mixed up, and I am afraid she has done so in this regard. Perhaps she does not realise that there is an organisation of professional boxers which is an accredited trade union and is affiliated to the Trades Union Congress, and that the professional boxers very much resent the continued attacks made by my right hon. Friend upon the sport and the profession for which they have very great regard.

There is no question of any boxer being forced into the ring by a manager or promoter. It is purely voluntary. It is merely a matter of whether the man wishes to enter into a contest in a very old skill to ascertain whether his ability in his sport and profession will enable him to achieve a world championship.

If we were to take the point of view of my right hon. Friend that anything which creates any sort of danger for anybody should be eliminated, I could suggest very many more sports where there are regularly very many more deaths than there are in boxing. There are very many people in the country who like to watch a boxing promotion. I do. It is only three-line Whips which prevent me going very much more often. The professional boxers themselves are not forced to do anything—

Dr. Summerskill

My hon. Friend makes the point that these young men are free to do as they like. Does she think that a boy of 18, who signs a contract in consequence of being offered some large sum of money, really understands the hazards to health with which he will be confronted?

Mrs. Braddock

I have a much higher opinion of the youth of 18 than has my right hon. Friend. A youth of 18 can be called to the Armed Forces and sent where he does not want to go. The youth who is in training as a boxer and has taken his professional licence is a qualified and experienced boxer and he can decide things for himself. If he has no desire to be a professional boxer he has no need to apply for a professional licence. He can tell his manager that he has no desire to box in any particular sphere. A manager or promoter cannot force him to undertake a contest which he does not want to undertake.

I suggest that my right hon. Friend's efforts are quite unnecessary and that professional boxing will go on in this country and that boys who have a good sporting outlook and who feel that they are competent boxers will continue to engage in, and to attempt to engage in, world championships. I have at the moment in my constituency a contender for the featherweight championship of the world—

The Deputy-Chairman

I think that the hon. Lady is getting rather far away from the Question, "That the Clause stand part of the Bill."

Mrs. Braddock

I was about to say. Sir Gordon, that I know that he is personally very pleased indeed that the Chancellor removed the Entertainments Duty, because it will give him the opportunity to a much larger extent than hitherto of showing his very high ability in the boxing profession. I hope that the removal of the Entertainments Duty—as I have already noticed that it has done—will continue to give opportunities for provincial boxing promotions, that the youth of the country will still continue, in spite of my right hon. Friend the Member for Warrington to desire to have professional boxing contests and that many people will want to watch them.

Sir F. Markham

Is it not a fact that this remission of tax will simply go into the pockets of the promoter and will not enable the sport to become cleaner in any way and that the present abnormalities will continue?

Mrs. Braddock

Is not that so in the case of all the Entertainments Duty that has been removed? Can the hon. and gallant Member mention any sport at all, from which the Entertainments Duty has been removed, where any of the people taking part will have any benefit? Has not that been the criticism in respect of football, cinemas and the live theatre, in which none of the people who participate will receive any benefit from removal of the tax? Is it not a fact that there is to be no reduction in the price of admission to cinemas and theatres? There is no difference, therefore, between boxing and any other sport or entertainment.

Sir F. Markhamrose

The Deputy-Chairman

Mr. Knox Cunningham.

Mr. Knox Cunningham (Antrim, South)

I wish to detain the Committee only long enough to welcome warmly my right hon. Friend's action in taking off this duty. I find myself entirely at one with the hon. Lady the Member for Liverpool, Exchange (Mrs. Braddock). She has very wide experience of the professional side of boxing. She speaks with authority, and I will not trespass upon that subject.

The right hon. Lady the Member for Warrington (Dr. Summerskill), who has spoken before on this subject, has made an extravagent and quite unwarranted attack on the sport of boxing. Boxing is a sport which develops high qualities in the youth of the country. It is a sport which demands courage and skill of a very high quality, great strength of character, and great physical fitness, and it is one which, I believe, should he encouraged for the benefit of our country. I am delighted that the Chancellor has given this encouragement to the sport of boxing, both professional and amateur, and I welcome very warmly this concession.

Mr. J. Dugdale (West Bromwich)

Far be it from me to interfere between two very formidable contestants. I should like for a brief moment to return to the subject of football and to say that I, too, welcome the Chancellor's agreement to the proposals that had been made frequently to him from both sides of the Committee. I am glad that he has at last come to the conclusion that football is just as important as cricket.

I should like to agree also with my hon. Friends who have said how important it is that some of this concession should be passed on not only to the players but to the spectators. I know it is not the Chancellor's duty to tell the clubs to do this, but it seems to me that it would be a good thing if at least they were able to rise to the standard of Italian clubs. I understand that in Italian clubs the spectators have the advantage of sitting down to watch a game. Why should the majority of spectators have to stand up in English clubs? I think that many more amenities might be brought in to improve clubs. I hope that it may be possible to reduce the price of admission and, to do something to improve the pay of the players. I hope, in short, that the money will be passed on by all the clubs as in fact the best clubs will do.

Sir F. Markham

Having been counted out before I could get into the ring, I want to say that I think the Chancellor has done us all a great disservice in removing the tax on professional sport. because it seems that from now onwards we in Parliament will be deprived of this annual inquisition into the iniquities of that stinking cesspool known as British sport.

Many signs of the iniquities of boxing and football have been made apparent to us tonight, and I think that no one in this Committee will differ from me when I say that there are certain phases of bath of those sports which for the average decent-minded Englishman create no sense of pleasure or pride at all. In fact, we can have only the greatest condemnation of certain forms of professionalism in this country.

The Chancellor, in removing this tax, however welcome it may be to the sporting societies, has deprived us as Members of Parliament of this annual inquisition into the iniquities and abnormalities of British sport, and for that reason I deplore the concession he has made.

Mr. Mitchison

Speaking for myself, I have learned much about the murkier sides of many British sports. I have also learned much more about boxing, actual and dialectical, but that is not what I want to say. The entertainments tax concession, as I understand it from the Budget speech, is about equally divided between the cinema industry, which we have been discussing, and, for the moment, the living theatre and sports.

As to the cinema industry concession, I would say only that I agree entirely with my hon. Friend who said just now that the review of that industry does not seem to have been sufficiently comprehensive and far-seeing. I am left with an uncomfortable feeling that the concession, whatever the amount, might well have been made in a slightly different way to take better account of the actual position of the exhibitors in particular.

10.0 p.m.

As to the living theatre and the sports, I can only say this. We on this side have pressed for both these concessions for some time. In the debates on the 1953 Finance Bill, which made a concession to cricket—rather curiously, simply to the one sport and to amateur sports—I find that my right hon. Friend the Leader of the Opposition said: I am sure that the clean and straightforward thing to do is to take tax off all sports. It will cost very little money, and will be extremely popular.… Sooner or later, we shall all have to come to the conclusion that it would be far better to take the tax off sport altogether."—[OFFICIAL REPORT, 19th May, 1953; Vol. 515, c. 2002.] It really has not cost very much money when one looks at the figures, for the cinema industry alone is still paying several times what the concession on sport has cost.

It was good advice from my right hon. Friend the Leader of the Opposition. I regret that it was not taken sooner, but I fully appreciate that the extreme need of right hon. and hon. Gentlemen opposite for a little popularity at the moment may well have led them to make this concession. None the less, I feel sure that it will be welcomed by those who heard those words in 1953, and who have been thinking that they were right ever since. As regards the living theatre, surely we can all unite to say that much good has been done by the removal of the tax at little cost.

Mr. P. Thorneycraft

I thank hon. Members on both sides for their congratulations on the removal of the tax from sport and the living theatre. Their congratulations were echoed in slightly less generous terms by the hon. and learned Member for Kettering (Mr. Mitchison). The discussion shows what trouble one can get into by taking a tax off. It is a lesson upon which Chancellors of the Exchequer ought to ponder.

I will not dwell upon the debate on football or boxing, except to say that I made none of the inquiries to which right hon. and hon. Members have referred. I delved into none of these matters, because I do not think that that is the business of the Chancellor of the Exchequer. I hope that the Committee will not press us, every time a tax is removed, to adopt a sort of governessy attitude, to see how all the money is to be spent and what will happen next. If we do, tax removal will be a miserable business.

The job of a Chancellor is to raise taxes when he must and to reduce them when he can. When he does reduce them, we ought to be thankful and count our blessings and hope that everybody takes the right advantage and spends the money wisely and that everybody will be a little better off.

I dare say that there are things wrong with football or boxing. I do not share the extreme view of the right hon. Lady the Member for Warrington (Dr. Summerskill). I enjoy watching boxing. Those things, however, will not be cured by reimposing the Entertainments Duty— that is certain. So let us be thankful that the duty is removed and let us have the Clause.

Question put and agreed to.

Clause ordered to stand part of the Bill.

Consideration of Clauses 2 to 39 and of new Clauses postponed till after consideration of Schedule 1.—[Mr. P. Thorneycroft.]


Mr. E. Fletcher

I beg to move, in page 35, line 8, after "wholly", to insert "or mainly".

I tabled the Amendment because, on reading Clause 1 and Part 1 of the Schedule, it seemed to me that some explanation was required from the Chancellor of the Exchequer. What we have done is to remove the Entertainments Duty from everything except the cinema. We have removed it from all kinds of sport and from the living theatre and the Entertainments Duty is now confined to the cinema.

Now, we come to exemptions. In the Schedule, we find that the exemptions proposed by the Chancellor fall into two categories, educational entertainments and charitable entertainments. I am not concerned with charitable entertainments, but we are entitled to enlightenment from the Chancellor as to what is meant by "educational entertainments" and what is meant by the suggestion that an entertainment is qualified for exemption if it is wholly educational.

This raises a serious question of principle. If we accept the Schedule as it stands, the Chancellor is apparently suggesting that all ordinary entertainments in the cinema are non-educational. It is a serious matter to suggest to the House of Commons that there is some dichotomy between entertainment of an educational kind and non-educational entertainment. Any cinema goer knows quite well that most cinematograph performances have a good deal of educational content. Certainly, such things as Shakespearian works obviously have a great deal of educational content.

I understand what is in the Chancellor's mind. He intends, as I understand, to exempt certain educational films in the nature of matinée performances for children, Shakespearian performances, and so on, which are of a non-commercial character. In the majority of those cases, the charge for admission is much less than 11d. and, therefore, will not attract tax in any case. The Amendment is put down because in the interests of common sense one must qualify an entertainment not by providing that it is wholly educational or non-educational, but by saying that it is wholly educational or mainly educational. Otherwise, the Chancellor is likely to find himself in the intellectual dilemma of being forced to admit that no cinematograph performance has any educational content unless it can be said to be wholly educational, and it will then qualify for exemption.

I do not want to pursue the matter unduly because I am sure that my hon. Friend the Member for Oldham, West (Mr. Hale) and others will develop it at length. I hope that the Chancellor will recognise the desirability of qualifying the Schedule to the extent of saying that an entertainment qualifies for exemption from Entertainments Duty if its main purpose is educational even though it contains an element of entertainment, also.

Mr. Hale

I think we ought to be grateful to my hon. Friend the Member for Islington, East (Mr. E. Fletcher) on raising what seems to me an extremely important practical point, and the only difference I have with him is that he seemed to speak of it as if it referred only to cinema performances and television performances. Of course, as the Bill now stands, it does, because Entertainments Duty has been abolished from the other sections of the entertainments industry.

But the Financial Secretary to the Treasury himself, in his opening speech in moving the Second Reading of the Bill rather expressly excluded this interpretation. He said that we are redrafting in Schedule 1 our whole conception of it in a more modern and a more useful form as a permanent statement of our views on this aspect of the question. It seems to me almost impossible to imagine anything that is wholly educational, and certainly to imagine a film or theatrical performance that is wholly educational.

If I may take an example from the Government side of the Committee, it may be said that the speeches of the Financial Secretary to the Treasury are wholly educational, and, indeed, he is an example of a man who has very properly risen by his gravity, rather contrary to the normal laws of thermo-dynamics, which are quite in accordance with some eminent Parliamentary rules. He always gives us a thoughtful, constructive and able speech, but the entertainment content is, perhaps, not so high as it is in some other performers from the Front Bench, and this at once raises a very serious problem.

To take a well-known example from theatrical history, the right hon. Gentleman will recall that about 1780 an advertisement appeared in the papers to say that an entertainment would be given at a well-known theatre in which a performer of normal size would, after performing a great number of evolutions, put himself in a water bottle on the stage in the presence of the audience. The theatre was filled, the candles were lit, but the hoaxer failed to turn up for the performance, and the theatre was very nearly destroyed. Such performances, if they had been given, would have had great entertainment value, but no great educational value.

Indeed, on the following night, one recalls, an advertisement appeared in the paper to say that another performer would try to jump down his own throat before the audience. This we have seen metaphorically done in the House of Commons time after time, but it has never been performed on the stage, but I feel that if it had been done the whole of the Royal College of Physicians would have been there to see it done and would have regarded it, from their point of view, as a performance of some interest.

On looking through the history of entertainment this morning to find something which would illustrate this dilemma, I recalled the late Mr. Artemus Ward, a very great performer in his day. It was recorded of him—and, after all, there is something of audience reaction in it, because, after all, education is an acquired taste, like Guinness's stout, and I have never fully acquired either—it was said of Artemus Ward that, at his lectures in the Egyptian Hall, Sir Robert Low, the Conservative Minister, laughed his head off, while Mr. John Bright, who went the next night, although paying due attention, was not observed to laugh at all. There was that difference in the audience reaction.

I turned up Mr. Artemus Ward's introductory letter on his performance which he wrote to the editor of a paper: Sir.—I'm movin along—slowly along—down tords your place. I want you shd rite me a letter, saying how is the show bizniss in your place. My show at present consists of three moral Bares. a Kangaroo (a amoozin little Raskal—t'would make you larf yerself to deth to see the little cuss jump up and squeal). The "three moral bares" appear to be clearly educational, and it may be that the kangaroo was educational in a country which had not got kangaroos, but certainly not in Australia, where they are a fairly common feature of the landscape. He said: I shall hav my hanbills dun at your offiss. Depend upon it. I want you shd git my hanbills up in flamin stile. Also git up a tremenjus excitement in yr. paper 'bowt my onparaleld Show, We must fetch the public sumhow. We must wurk on their feelings. Cum the moral on 'em strong. That is the test. If one conies the moral on them sufficiently strongly it is educational, but is it really wholly educational?

10.15 p.m.

Artemus Ward, with a becoming frankness in the advertisements of his extremely important performance, quotes the American correspondent of a distinguished journal in Yorkshire who, speaking of his powers as an orator, said: It was a grand scene, Mr. Artemus Ward standing on the platform, talking; many of the audience sleeping tranquilly in their seats "— I pause here to look round the Committee with some trepidation unless this fate has also befallen me— others leaving the room and not returning; others crying like a child at some of the jokes —all, all formed a most impressive scene, and showed the powers of this remarkable orator. And when he announced that he would never lecture in that town again, the applause was absolutely deafening. In considering this matter, we would still wonder whether Robert Low's laughter made it entertainment or John Bright's solemnity made it clearly of an educational nature.

Turning to films, I never visit a cinema unless I find myself in a strange town on a wet afternoon with nowhere to shelter, but I have found that when I do and have got settled in my seat and have bought my bag of peanuts the organ appears from the floor and my hopes are frustrated for a time—a procedure which the Chancellor apparently intends to encourage and lengthen.

The piéce de résistance today is the spectacle of Brigitte Bardot in the bath. That is obviously of educational value to physiologists, and, presumably, also to students of detergents, but it is nevertheless clear that the film magnates—the persons who contemplate these matters—regard such spectacles as having some educational value. I should have thought that it would largely depend upon the size of the bath.

At what stage is that educational and what stage is it not? It is a frightfully difficult decision for the noble Lord the Minister of Education to make. I can contemplate the noble Lord, who would be in charge of this matter in normal circumstances, empirically, having great difficulty in evaluating the educational value of "H.M.S. Pinafore" and "Trial by Jury." He has had experience of both spheres, but what a position for a man who only a few weeks ago was standing on the quarterdeck, glancing from the compass to the horizon, surrounded almost entirely by the limitless waste of the waves, to have to decide empirically, and without any guidance from us and without any definition in the Bill, precisely what was educational and what was not—and not only that, but what was wholly educational.

I very much doubt whether there is anything in the nature of a wholly educational film. If I were giving an introductory disquisition it might be a matter of more solemnity; it might, indeed, be of an informative value, but surely the whole object of films of this sort is to attract an audience. We do not have films which consist entirely of statistics.

Mr. Glover

Some consist mostly of vital statistics.

Mr. Hale

Indeed, yes—pulsating with life and youth and romance. I would therefore suggest that the Chancellor is here endeavouring to lay down a test which cannot be applied. Indeed, he is laying down a test which really demands that in order to qualify for exemption a film must attract no audience. We all know what is the B.B.C.'s definition in this matter. It is fairly simple. Bach and Brahms are educational and "Yes, we have no bananas" is purely horticultural. We cannot make a decision of that kind in regard to films. Even in music, when one considers Schubert or somebody similar, one finds that the entertainment value is so obvious that it might not be wholly educational.

I suggest that this modest Amendment, which we have tried to support with cogent reasoning and very temperately. should be accepted, because this will always be a difficult decision to apply. However we face the problem there are bound to be disappointments, whatever decision we come to. Therefore, if a decision has to be made, the Minister who has to decide ought to be given a little flexibility of decision in order to make this Clause practicable at all.

Mr. Powell

The two speeches to which the Committee has just listened constitute a complete and conclusive case why the words "or mainly" should not be inserted. That is true of the whole of the speech of the hon. Member for Islington, East (Mr. E. Fletcher), and of that part of the speech of the hon. Member for Oldham, West (Mr. Hale) which referred to cinema performances—which, of course, alone in future will attract Entertainment Duty.

It is true that most cinema films contain an educational element; and therefore if the words "or mainly" were inserted here, a very wide range of entertainments, provided on a completely commercial basis, and indeed constituting a great part of the field remaining open to Entertainments Duty, would become, or might well become, exempt.

The purpose of the paragraph, which only re-enacts an existing exemption under the law as it was before 5th May, is only to exempt entertainments—and the word qualified is "entertainment and not" film "—the whole of which are purely for educational purposes. That is to say, they are the kind of entertainments to which a class of a school might be taken as part of its instruction and as an integral part of its lessons. It would he quite wrong to widen the scope of this exemption beyond that case. It would open the door of exemption to a wide range of purely commercial entertainments. It will be noticed, however, that, under paragraph 2 of this Schedule entertainments provided by non-profit-making bodies which arc only partly for educational purposes can still get exemption.

The Committee will therefore appreciate that it would defeat our general purpose here if we were to add the words "or mainly".

Amendment negatived

Mr. J. Eden

I beg to move, in page 36, line 2. to leave out "parish" and to insert "district".

The purpose of this Amendment is to help small cinemas in country districts. The subject matter has already been alluded to in connection with an earlier Amendment. I now wish to call specific attention to the needs of cinemas in country areas.

There are a number of ways in which cinemas of this kind are already being helped by the proposals of my right hon. Friend within the limits of a seating capacity of 400, where the population does not exceed 3,000 and is of a density of not more than 640 to the square mile. In page 36, line 3 of the Bill, we find the words: borough, urban district or rural parish ". It occurs to me that there may have been a mistake, or a slip-up in some way, by which "rural district" was left out. I am moving this Amendment in the hope that my right hon. Friend will agree with that point of view and accept that "rural district" should be included for the following reasons.

A rural district is made up of a number of parishes and very often has a fairly thinly-spread population. It may be that the main centre of population is in one particular parish. It is obvious that if that is so the entertainment provided for that population by the cinema will be centred in that parish. It is, however, not solely from that parish that patronage for the cinema is drawn. The customers for that cinema come from neighbouring parishes, or anywhere else in the rural district. Therefore, what I am hoping will be acceptable to my right hon. Friend is my suggestion that the population density should be so extended as to cover the whole of the rural district rather than one particular parish.

If that were done, there would be one or two cases in which a large cinema might benefit as a result. For example, if one were to take an area in the West Riding of Yorkshire one might well there find in one particular parish which is fairly heavily populated and supplied by a large cinema, were the population density spread over the sparsely populated district, that that cinema, as a result of this Amendment, would benefit by this proposed extension. There may be other examples, but I think that the one I have mentioned is the only one where that would happen and that that possibly could be prevented by putting a top limit of £350 gross weekly takings, if that were desired.

My right hon. Friend the Minister of Housing and Local Government, who, last year, was Financial Secretary to the Treasury, when this matter was considered in June last year, referred to the fact that there are very few cinemas in need of this type of consideration because they are more or less catered for by assistance given in other forms. He said that their very scarcity is interesting evidence that the rural areas exemption formula works not at all badly. I am told that if this Amendment had any success it would be likely to benefit about 20 cinemas. That is not a very great number, but it is that number which we are most anxious to try to help. That number of cinemas are probably finding more difficulty than all the others. Earlier, in discussion on Clause 1, we mentioned difficulties faced by cinemas in the outskirts of towns and in small towns, but these cinemas, which feed a country population in rural districts, are in a very difficult position.

I hope that my right hon. Friend will give them sympathetic consideration, because they have for long been established in those areas. They have been supplying the needs for entertainment of the community for a long time now. It seems to me that with the peculiar demands made upon them, particularly in so far as they supply entertainment for a population which often is scattered over a wide area, they are worthy of our consideration. I ask my right hon. Friend very sympathetically to consider this idea as one way of trying to help those cinemas which find themselves placed in difficult positions and which cater for the entertainment of the population in thinly-populated rural districts.

10.30 p.m.

Mr. P. Thorneycroft

We are considering what is called the rural exemption arrangements. May I emphasise that they are designed to give exemption in rural areas? They are for that purpose and for the benefit of the inhabitants of rural areas. The idea was not to help small cinemas or for any other purpose, but it was laid down very clearly by the late Sir Stafford Cripps when he introduced these procedures. The terms are that the cinemas concerned shall have a seating capacity of not more than 400, and shall be rural. Rural means either one person to the acre or not more than 3,000 population.

The Amendment suggests that we substitute a rural district for a parish, and this would not have the effect that my hon. Friend desires. First, it would cut out 200 rural parishes, which would be much resented by many and, secondly, it would mean that a number of small towns which are anything but those intended by my hon. Friend—Amersham, for instance, with over 10,000. and Ecclesfield, with 30,000—would be included. Once we get into those sorts of realms it is manifest that we cannot hold this as a rural exemption.

While I sympathise with the motive which actuates my hon. Friend, and with his desire to extend the scope of this provision, I assure him that this procedure, and most others—because this has been tried in the past—would do some harm and, I think, no good.

Mr. J. Eden

In view of the explanation given by right hon. Friend, my hon. Friend the Member for Blackley (Mr. E. Johnson) and I have considered this matter, and as a result I beg to ask leave to withdraw the Amendment.

Amendment, by leave, withdrawn.

Mrs. White

I beg to move, in page 36, line 9, to leave out "six hundred and forty" and to insert "nine hundred and sixty".

This is another Amendment dealing with this matter of the definition of "rural areas" for exemption from Entertainments Duty. It is all very well for the Chancellor to say that none of the suggestions which are made is suitable to be taken into account, but he himself this year, after his predecessors have stonewalled for many years, has made a fairly substantial concession in so far as he has obviously found it desirable to increase the population figure for any of the districts concerned from 2.000 to 3,000.

Therefore, he must have felt that the conditions which have been defended strenuously by Chancellors of the Exchequer from the time when the exemption was first made in 1948 have not been altogether suitable. Otherwise, he would presumably not have made the change which he has made this year. We cannot, therefore, be entirely convinced by any Chancellor who says that what he says is infallible, because here we have the perfect example of one Chancellor after another saying what the rural exemption is, and now we have the present Chancellor admitting that it was not entirely satisfactory.

Our Amendment is reasonable. Clearly, some adjustment has been desired. What we are suggesting is that, in addition to increasing the total number of persons in the borough, urban district or rural parish, there should be some slight adjustment of rural density. At present, it is one person to the acre. All that we are suggesting is that it should be one and a half persons to the acre. I do not think anybody would say that that was a particularly high density of population.

I asked a Question in the House some weeks ago in reply to which the Chancellor admitted that the concession which he himself has made would not affect even as many as 50 cinemas throughout the country. Therefore, the number of people who will benefit from this small concession is very small indeed.

I will be frank with the Committee and admit that when I endeavoured to ascertain the number who would be affected by the Amendment I could not got any very close calculation. With the resources open to him, the Chancellor may have been able to make a closer calculation. I do not suppose that the number is very large, but I think that, after all that we have said about the desirability of doing something for rural areas, and treating the cinema as a social institution and not merely as a source of revenue, the very slight concession that the Chancellor has made to benefit about 40 cinemas throughout the country is inadequate.

I feel that we should take a little more seriously our professions of concern about the rural areas. There were a number of other Amendments which have not been selected, so I will not mention them, but it is clear that hon. Members in all parts of the Committee do not feel that the Chancellor's very slight concession goes far enough. I feel that, to test the sincerity of the Committee, we ought to press for a very slight extension by increasing the density of the population for the purpose of the definition from 640 to 960 to the square mile.

Mr. Mathew

I rise to make a plea to my right hon. Friend for rural cinemas. While I appreciate the intention of the hon. Lady the Member for Flint, East (Mrs. White), I do not believe that her Amendment is at all realistic or would deal with the very real problem, which is increasing in gravity as the weeks pass.

To suggest that increasing the formula under Section 17 of the Finance Act, 1948, from one person to the acre to one and a half persons to the acre is to play with the problem. If any alteration of that sort is to be made, the least that could have any effect on the problem would be an increase to four persons to the acre. I do not think the Committee can regard the Amendment as a serious contribution towards helping small rural cinemas.

While I am very appreciative of the concessions that have been made by my right hon. Friend, and while I welcome what has been done for cinemas in very small villages, I submit that the concessions are of little practical value to the majority of small cinemas in large villages or small country towns in the West of England. That is certainly true of Devonshire, and I am sure that my hon. Friend the Member for St. Ives (Mr. G. R. Howard) will bear out that the position is similar in Cornwall.

In the West we appreciate the token of good will represented by the small concessions made. but when the matter was discussed during the proceedings on the Finance Act last year hon. Members on both sides were at great pains to point out how serious the position then was. Many cinemas have since closed down, and in our area the position is even graver than it was last year.

My right hon. Friend may say that the entertainments tax reductions will help the industry generally, including small cinemas. But these cinemas in West Country areas are not luxury entertainment houses: they are small cinemas, with necessarily fewer than 400 seats if they are to qualify for exemption, and those are cheap, 1s. seats, and so on. The net result of the concession in tax will be very small. Many of these cinemas have been kept open this year in the hope that something would be done to maintain this amenity, in view of the undertaking to review the whole of the Entertainments Duty, given by the Prime Minister when Chancellor of the Exchequer last year.

The figure of 3,000 for a borough, urban district or parish is quite unrealistic. I have on the Notice Paper an Amendment, which is not being called, suggesting that the figure of 4,500 is much more realistic. In the past, two main reasons have been given for rejecting various suggestions made by hon. Members on both sides. The first was that whatever was suggested would let in too many other areas and areas which were too large.

I suggested last year that the formula should be changed to four to the acre, and my right hon. Friend the Minister of Housing and Local Government, who was then Financial Secretary to the Treasury, gave a list of various towns, starting with Solihull, which would be let in. It is simple to deal with that, and in my Amendment, in page 1763, I proposed putting an overall ceiling. The realistic figure to help those cinemas which are in trouble is about 20,000.

The other excuse given in the past is that this or that area, or the type of cinema in trouble, is not truly rural. If one uses the term in an eighteenth or nineteenth century sense, one has a vision of an old world village, with a pump and an oldest inhabitant, and the one thing it has not got is a cinema. It is quite unrealistic to regard a village in this age as anything quite as small as 2,000 or 3,000 inhabitants. That is no longer the rule, even in more rural parts such as the West. The real problem is to help the small, independent operator with houses of 400 seats or fewer, catering for country dwellers in small towns or large communities. It is not a matter of a cinema on the doorstep for these people, because, where the cinemas have not been extinguished by entertainments tax, cinema goers still have to travel anything from three to seven miles.

Inevitably, these cinemas will be extinguished unless given further relief—probably very soon—and inhabitants will then have to go, not three or four miles, but anything up to 20, or perhaps an average of 14 or 15 miles in my own area. It is late, and I do not wish to detain the Committee longer than is necessary, but these independent operators are providing a much-needed amenity in the countryside, and unless something is done they will be extinguished.

10.45 p.m.

I would like to say one word in answer to those hon. Members who have talked about the rival of television. It is often forgotten that television has not spread through the whole countryside, because electricity has not yet covered all the country. In many places in the West Country there is no electricity and, therefore, no television. If the local cinema goes, all that will be left is the local dance, and visits to other places of entertainment will involve long and expensive rides by bus or car. It will take thirteen-and-a-half years before rural electrification in the West Country has been completed, if the work is carried on at the present rate.

For those reasons, I urge my right hon. Friend to look into the matter once again and try to help the small country cinemas. I am not going to suggest that any particular formula—certainly not that embodied in the Amendment—will meet the case, but this is a very real need and I suggest that the Treasury, in giving these concessions, which are very welcome, has acted on the basis of conditions in 1948 and not 1957.

Mr. M. Philips Price (Gloucestershire, West)

I am sure that we are all grateful to the Chancellor for having gone some way towards meeting the views of those of us who are fighting the battle for the small cinema, but the Amendment will provide further help in removing the anomalies which are bound to exist. I know that there must be a borderline somewhere, but in my constituency, where there are small towns and villages and rural areas, cinemas are very much affected by this tax. There is the little town of Coleford, which just misses by ten the 3,000 figure contained in the Schedule.

I am told by the cinema owner that if he cannot hold out his customers will have to go to the town of Monmouth. which is in the Chancellor's constituency —further up the River Wye. The Chancellor will get the advantage and I will lose it. That is an additional reason why I should support the Amendment. I do not see why Coleford should lose its cinema for the benefit of the Chancellor's constituency. These small cinemas have a very hard struggle. Their costs go up all the time, and the prices of their seats do not go up in proportion. Like all small undertakings. their overheads are, naturally, higher, in proportion to their takings, than those of the larger cinemas.

Although the economic law may, in any case, squeeze out many of these cinemas, we ought to consider the social effect of the small cinema in the little mining or agricultural area. The Amendment will go one step further towards the relief of the position and for that reason, although I should be sorry to deprive the Chancellor of another cinema in Monmouth, I hope that he will consider it sympathetically.

Mr. Simon Wingfield Digby (Dorset. West)

A good case has been expressed this evening for the small cinemas in rural areas. I shall not, at this hour, detain the Committee long, but I should like to point out that there is the danger that the relief given by the Chancellor may not be enough to enable some of these cinemas to survive; and I say that after having looked at the accounts of at least one such cinema. Earlier, my right hon. Friend told us that this was a most remunerative tax, but he must agree that it will not continue to prove so if these small cinemas close down altogether—and I believe that there is a very real danger of that. I hope that my right hon. Friend will not close his mind to having another look at this issue.

I would mention one particular case in my own constituency. The Borough of Lyme Regis has exactly 20 people above the limit of 3,000 which he has set and that does seem to me to present a particularly hard case. Of course, 1 know that hard cases make bad laws, but if these small cinemas are to remain open I appeal to the Chancellor to have another look at what he has done.

Mr. Greville Howard (St. Ives)

I want to make one brief inquiry. Paragraph 5 of the Schedule states: … entertainments given elsewhere than in a building attached to permanent foundations; I should like to ask whether that means that a mobile cinema in, say, the parish hall, will get the appropriate exemption.

Mr. P. Thorneycroft

This is an important matter, because it affects a large range of areas. I think that the hon. Lady the Member for Flintshire, East (Mrs. White) made a fair point when she said that I could not maintain the position that nothing was being done when I was doing something myself. But I am doing about as much as can be done without, at the same time, causing further anomalies and introducing more comparisons as between one district and another.

There is a variety of Amendments, but that of the hon. Lady seeks to put the density up to one and a half persons per acre. That sounds, in itself, an innocent enough approach, leading to some operable solution, but, on reflection, she may see that it would make the situation worse. It has a much wider effect than she imagines.

About 100 cinemas would be affected, and once we start off into the realm of towns of the size of Newport, Isle of Wight, which has 20,000 people, Todmorden, in Yorkshire, with 19,000, St. Austell, in Cornwall, and Matlock, in Derbyshire, with 17,000, then this will cease to be a rural area relief.

Once one gets cinemas in those places exempted, then there will be others which will insist on exemption. A number of smaller towns, because they do not have the luck to be fitted into a sparsely populated area, will not be so exempt, and the pressure next year to include those would prove almost irresistible.

Various other attempts have been made by other hon. Members who have thought of ways which have appealed to them as being of assistance. For instance, it has been suggested that we should put up the population limit, not to 3,000, or 2,000, but to 3,500; others say, even, 4,500. But whether they fix it at one figure or another, they would find a lot of places with ten more than that figure. They would find no end to it. For example, Honiton's figure is 4,614 and that is certainly an unfortunate number in the context of the 4,500 proposal. We are trying to help my hon. Friend in these matters and guard him against these perils. Wherever he fixes the limit he will find difficulties of this character.

I was asked about the mobile cinema, and can confirm that, if it gives its show inside a building it gets the exemption. The position we have taken and the move we have made this year is to put it up from 2,000 to 3,000, which I think is tolerable. I admit that it is open to some of these criticisms. It brings a certain number of new cinemas in, and undoubtedly there will be pressure from those who are just outside to come in. I believe that this is the right decision just at this moment. I would not say that my mind is closed

upon this matter; we must examine it from year to year to see whether the situation has changed. I am satisfied that in the position today it is right to make a concession and that it would be unwise for the hon. Lady to press her Amendment.

Mrs. White

I am quite unrepentant about this. If we can help another 100 cinemas with 400 seats or fewer, I would be very happy to do so. Government supporters who felt that our Amendment did not go far enough may agree that it is better than the present position. I trust that, although they may not feel that it is entirely satisfactory and they would like something much more comprehensive, they will be able to support us, even in our relatively small Amendment.

Question put, That "six 'hundred and forty" stand part of the Schedule: —

The Committee divided: Ayes 199, Noes 163.

Division No. 113.] AYES [10.57 p.m.
Agnew, Sir Peter Davidson, Viscountess Horobin, Sir Ian
Altken, W. T. D'Avigdor-Goldsmid, Sir Henry Horsbrugh, Rt. Hon. Dame Florence
Allan, R. A. (Paddington, S.) Deedes, W. F. Howard, Hon. Creville (St. Ives)
Alport, C. J. M. Digby, Simon Wingfield Howard, John (Test)
Amery, Jullan (Preston, N.) Dodds-Parker, A. D. Hudson, W. R. A. (Hull, N.)
Amory, Rt. Hn. Heathcoat(Tiverton) Donaldson, Cmdr. C. E. McA. Hulbert, Sir Norman
Anstruther-Cray, Major Sir William Doughty, C. J. A. Hurd, A. R.
Arbuthnot, John du Cann, E. D. L. Hyde, Montgomery
Ashton, H. Duthie, W. S. Hylton-Foster, Rt. Hon. Sir Harry
Atkins, H. E. Eden, J. B. (Bournemouth, West) Irvine, Bryant Godman (Rye)
Baldwin, A. E. Elliott,R.W.(N'castle upon Tyne.N.) Jennings, J. C. (Burton)
Barber, Anthony Errington, Sir Eric Joseph, Sir Keith
Barlow, Sir John Fell, A. Joynson-Hicks, Hon. Sir Lancelot
Barter, John Fisher, Nigel Kaberry, D.
Baxter, Sir Beverley Fletcher-Cooke, C. Keegan, D.
Beamish, Maj. Tufton Fraser, Hon. Hugh (Stone) Kerby, Capt. H. B.
Bell, Philip (Bolton, E.) Fraser, Sir Ian (M'cmbe & Lonsdale) Kerr, H. W.
Bennett, F. M. (Torquay) Freeth, Denzil Kershaw, J. A.
Bevins, J. R. (Toxteth) Garner-Evans, E. H. Kimball, M.
Biggs-Davison, J. A. Gibson-Watt, D. Kirk, P. M.
Birch, Rt. Hon. Nigel Glover, D. Lambert, Hon. G.
Bishop, F. P. Godber, J. B. Lambton, Viscount
Black, C. W. Goodhart, Philip Leather, E. H. C.
Body, R. F. Gough, C. F. H. Legge-Bourke, Maj. E. A. H.
Boyle, Sir Edward Gower, H. R. Legh, Hon. Peter (Petersfield)
Braine, B. R. Graham, Sir Fergus Linstead, Sir H. N.
Braithwaite, sir Albert (Harrow, W.) Green, A. Llewellyn, D. T.
Bromley-Davenport, Lt.-Col. W. H. Gresham Cooke, R. Longden, Gilbert
Brooman-White, R. C. Grimston, Hon. John (St. Albans) Lucas, P. B. (Brentford & Chiswick)
Browne, J. Nixon (Craigton) Grosvenor, Lt.-Col. R. G. Lucas-Tooth, Sir Hugh
Bullus, Wing Commander E. E. Gurden, Harold Macdonald, Sir Peter
Burden, F. F. A. Hall, John (Wycombe) McKibbin, A. J.
Butcher, Sir Herbert Harris, Reader (Heston) Mackie, J. H. (Galloway)
Carr, Robert Harrison, A. B. C. (Maldon) Macleod, Rt. Hn. Iain (Enfield, W.)
Chichester-Clark, R. Harrison, Col. J. H. (Eye) MacLeod, John (Ross & Cromarty)
Clarke, Brig. Terence (Portsmth, w.) Harvey, Air Cdre. A. V. (Macclesfd) Macmillan, Rt. Hn. Harold (Bromley)
Conant, Maj. Sir Roger Heath, Rt. Hon. E. R. G. Macmillan, Maurice (Halifax)
Cooke, Robert C. Henderson-Stewart, Sir James Macpherson, Niall (Dumfries)
Cordeaux, Lt.-Col. J. K. Hill, Rt. Hon. Charles (Luton) Maddan, Martin
Corfield, Capt. F. V. Hill, Mrs. E. (Wythenshawe) Maitland, Cdr. J. F. W. (Horncastle)
Craddock, Beresford (Spelthorne) Hill, John(S. Norfolk) Maitland, Hon. Patrick (Lanark)
Crosthwaite-Eyre, Col. O. E. Hirst, Geoffrey Manningham-Buller, Rt. Hn. Sir R.
Cunningham, Knox Hobson, John (Warwick & Leam'gt'n) Markham, Major Sir Frank
Currie, G. B. H. Hope, Lord John Marples, Rt. Hon. A. E.
Dance, J. C. G. Hornby, R. P. Mathew, R.
Maude, Angus Profumo, J. D. Thorneycroft, Rt. Hon. P.
Mawby, R. L. Redmayne, M. Tiley, A. (Bradford, W.)
Milligan, Rt. Hon. W. R. Renton, D. L. M. Tilney, John (Wavertree)
Molson, Rt. Hon. Hugh Ridsdale, J. E. Turner, H. F. L.
Morrison, John (Salisbury) Robinson, Sir Roland (Blackpool, S.) Turton, Rt. Hon. R. H.
Nabarro, G. D. N. Rodgers, John (Sevenoaks) Tweedsmuir, Lady
Nairn, D. L. S. Ropner, Col. Sir Leonard Vane, W. M. F.
Neave, Airey Schofield, Lt.-Col. W. Vaughan-Morgan, J. K.
Nicholson, Godfrey (Farnham) Smithers, Peter (Winchester) Vosper, Rt. Hon. D. F.
Nicolson, N. (B'n'm'th, E. & Chr'ch) Spearman, Sir Alexander Wakefield, Edward (Derbyshire, W.)
Oakshott, H. D. Steward, Harold (Stockport, S.) Wakefield, Sir Wavell (St. M'lebone)
O'Neill, Hn. Phelim (Co. Antrim, N.) Steward, Sir William (Woolwich, W.) Wall, Major Patrick
Orr, Capt. L. P. S. Storey, S. Ward, Rt. Hon. G. R. (Worcester)
Orr-Ewing, Sir Ian (Weston-S-Mare) Stuart, Rt. Hon. James (Moray) Ward, Dame Irene (Tynemouth)
Page, R. G. Studholme, Sir Henry Waterhouse, Capt. Rt. Hon. C.
Pannell, N. A. (Kirkdale) Summers, Sir Spencer Whitelaw, W. S. I.
Partridge, E. Sumner, W. D. M. (Orpington) Wills, G. (Bridgwater)
Plckthorn, K. W. M. Taylor, Sir Charles (Eastbourne) Wood, Hon. R.
Pilkington, Capt. R. A. Teeling, W. Woollam, John Victor
Pitt, Miss E. M. Temple, John M.
Pott, H. P. Thompson, Kenneth (Walton) TELLERS FOR THE AYES:
Powell, J. Enoch Thompson, Lt.-Cdr.R.(Croydon, S.) Mr. Bryan and Mr Hughes-Young.
Prior-Palmer, Brig. O. L.
Ainsley, J. W. Hall, Rt. Hn. Glenvil (Colne Valley) Orbach, M.
Allaun, Frank (Salford, E.) Hamilton, W. w. Owen, W. J.
Allen, Arthur (Bosworth) Hannan, W. Paling, Rt. Hon. w. (Dearne Valley)
Allen, Scholefield (Crewe) Harrison, J. (Nottingham, N.) Palmer, A. M. F.
Awbery, S. S. Hayman, F. H. Pannell, Charles (Leeds, W.)
Bacon, Miss Alice Herbison, Miss M. Pargiter, G. A.
Balfour, A. Hewitson, Capt. M. Parkin, B. T.
Bellenger, Rt. Hon. F. J. Holmes, Horace Pearson, A.
Benn, Hn. Wedgwood (Bristol, S.E.) Holt, A. F. Pentland, N.
Benson, G. Houghton, Douglas Popple well, E.
Beswick, Frank Howell, Charles (Perry Barr) Price, J. T. (Westhoughton)
Blenkinsop, A. Howell, Denis (All Saints) Price, Philips (Gloucestershire, W.)
Blyton, W. R. Hubbard, T. F. Probert, A. R.
Boardman, H. Hughes, Hector (Aberdeen, N.) Proctor, W. T.
Bowden, H. W. (Leicester, S.W.) Hunter, A. E. Redhead, E. C.
Bowen, E. R. (Cardigan) Hynd, J. B. (Attercliffe) Rhodes, H.
Braddock, Mrs. Elizabeth Irvine, A. J. (Edge Hill) Roberts, Goronwy (Caernarvon)
Brockway, A. F. Janner, B. Robinson, Kenneth (St. Pancras, N.)
Broughton, Dr. A. D. D. Jeger, George (Goole) Ross, William
Brown, Thomas (Ince) Jenkins, Roy (Stechford) Short, E. W.
Burke, W. A. Johnson, James (Rugby) Silverman, Julius (Aston)
Callaghan, L. J. Jones, David (The Hartlepools) Skeffington, A. M.
Carmichael, J. Jones, Elwyn (W. Ham, S.) Slater, Mrs. H. (Stoke, N.)
Chetwynd, G. R. Jones, J. Idwal (Wrexham) Slater, J. (Sedgefield)
Clunie, J. Jones, T. W. (Merioneth) Smith, Ellis (Stoke, S.)
Coldrick, W. Kenyon, C. Snow, J. W.
Collick, P. H. (Birkenhead) King, Dr. H. M. Sorensen, R. W.
Collins, V.J.(Shoreditch & Finsbury) Lawson, G. M. Stewart, Michael (Fulham)
Corbet, Mrs. Freda Lee, Miss Jennie (Cannook) Stross,Dr.Barnett(Stoke-on-Trent,C.)
Craddock, George (Bradford, S.) Logan, D. G. Summerskill, Rt. Hon. E.
Cronin, J. D. Mabon, Dr. j, Dickson Sylvester, G. O.
Cullen, Mrs. A. MacColl, J. E. Taylor, Bernard (Mansfield)
Deer, G. MacDermot, Niall Taylor, John (West Lothian)
Donnelly, D. L. McGhee, H. G. Thomas, Iorwerth (Rhondda, W.)
Dugdale, Rt. Hn. John (W. Brmwch) Mclnnes, J. Thomson, George (Dundee, E.)
Dye, S. McKay, John (Wallsend) Timmons, J.
Ede, Rt. Hon. J. C. MacPherson, Malcolm (Stirling) Tomney, F.
Edwards, Robert (Bilston) Mahon, Simon Ungoed-Thomas, Sir Lynn
Edwards, W. J. (Stepney) Mainwaring, W. H. Watkins, T. E.
Evans, Edward (Lowestoft) Mallalieu, J. P. W. (Huddersfd, E.) Weltzman, D.
Fernyhough, E. Mann, Mrs, Jean Wells, William (WalsaN, N.)
Flenburgh, W. Mason, Roy West, D. G.
Finch, H. J. Mayhew, C. P. Wheeldon, W. E.
Fletcher, Eric Mellish, R. J. White, Mrs. Eirene (E. Flint)
Fraser, Thomas (Hamilton) Mitchison, G. R. Willey, Frederick
Gaitskell, Rt. Hon. H. T. N. Monslow, W. Williams, David (Neath)
George, Lady Megan Lloyd (Car'then) Moody, A. S. Williams, Rev. Llywelyn (Ab'tillery)
Gibson, C. W. Mort, D. L. Williams, Ronald (Wigan)
Gooch, E. G. Moyle, A. Willis, Eustace (Edinburgh, E.)
Gordon Walker, Rt. Hon. P. C. Mulley, F. W. Winterbottom, Richard
Greenwood, Anthony Noel-Baker, Franols (Swindon) Woof, R.E.
Grenfell, Rt. Hon. D. R. Noel-Baker, Rt. Hon. P. (Derby, S.) Yates, V. (Ladywood)
Grey, C. F. O'Brien, Sir Thomas Zilliacus, K.
Griffiths, Rt. Hon. James (Llanelly) Oliver, G. H. TELLERS FOR THE NOES:
Hale, Leslie Oram, A. E. Mr. Wilkins and Mr. Simmons

Schedule agreed to.

To report Progress and ask leave to sit again.—[Mr. P. Thorneycroft.]

Committee report Progress; to sit again Tomorrow.



Mr. Geoffrey Wilson discharged from the Select Committee; Mr. Low added. —[Mr. Oakshott.]

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