HC Deb 15 April 1958 vol 586 cc68-70

The Committee will recall that a number of changes were made in the duty on entertainments by my predecessor last year. A duty of £1 per licence was imposed on television, which had become a strong competitor with other entertainments. The duty on the cinema was reduced, while the theatre and sports, which for a long time had paid appreciably lower rates of duty than the cinema, were freed from duty altogether.

It was not to be expected that the changes in public demand for entertainment which had been taking place would suddenly come to an end. But the movement during the past year has been on a scale which makes it necessary to consider whether some further adjustment in the duty is called for. Attendances at cinemas, which had been declining for some years, have in the last financial year fallen much more sharply. The industry have represented to me with vigour, both in a memorandum and at a meeting with my hon. and learned Friend the Financial Secretary, that in these circumstances the Entertainments Duty on cinemas should be abolished. Even hon. Members of this House have not been altogether silent.

I have considered carefully all that has been said. I must say frankly that it can not possibly be an object of Government policy to keep open the doors of every cinema in the country, regardless of the tastes and habits of the public. If people prefer to occupy more of their leisure time in other forms of entertainment and less in film-going, some reduction in the number of cinemas seems inevitable. However, I am satisfied that the present level of the duty is, in the changed circumstances, now too high and should be substantially reduced.

The present rate of duty is 50 per cent. of the amount by which the total admission price exceeds 11d. I propose to reduce it to 33⅓ per cent. of the amount by which the total admission price exceeds 1s. 6d. The combined effect of reducing the rate and raising the starting point of the duty will be to reduce the average level of the duty by rather more than one-half. I also propose to simplify the arrangements for collecting the duty in a way which should both assist the trade and save work in the Customs and Excise Department.

This is a substantial relief, which should be of real assistance to the industry. It should be of particular help to the smaller cinemas, many of them in small towns, where the closing of what may be the only cinema can be a serious loss. I believe that there is still a keen demand for good cinema entertainment, even if audiences are smaller and more discriminating than in the past.

In reaching this decision. I have had fully in mind the difficulty which the fall in box office takings has caused to the industry as a whole—producers as well as exhibitors. I believe that we need to sustain a vigorous British film production industry. British producers will, of course, obtain a share of the reduction in duty under the ordinary contractual arrangements for renting films. This change should help them to continue to improve standards and to take full advantage of the openings for an improvement of earnings from film production which, I believe, the future will bring.

In addition to the benefit which the producers will derive from the reduction in duty, there is also an arrangement, as the Committee is aware, under which a levy based on cinema admissions is collected from the exhibitors and paid into a fund for the support of British film production. The question of the future yield of the levy is under review by my right hon. Friend the President of the Board of Trade and I have consulted with him in order to satisfy myself that the proposed reduction in duty will provide room for any change he may consider necessary. My proposal, which will operate from 4th May, will cost £13 million this year and 14½ million in a full year.

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