CINEMATOGRAPH FILMS (LEVY) (Hansard, 12 April 1960)

§ The Parliamentary Secretary to the Board of Trade (Mr. John Rodgers)
I beg to move, That the Cinematograph Films (Collection of Levy) Regulations, 1960, a draft of which was laid before this House on 16th March, be approved.

§ Mr. Speaker
I understand that it will be for the convenience of the House to discuss this Motion together with the next one on the Order Paper: That the Cinematograph Films (Distribution of Levy) Regulations, 1960, a draft of which was laid before this House on 16th March, be approved.

§ Mr. Rodgers
I am glad that we can discuss these two Regulations together, Sir. They are made under Sections 2 and 3 of the Cinematograph Films Act, 1957, and amend the Cinematograph Films (Collection of Levy) Regulations, 1957, and the Cinematograph Films (Distribution of Levy) Regulations, 1957, respectively. The new Collection Regulations provide that exhibitors showing non-standard films over 16 m.m. in width should pay the levy. This is estimated in a full year to bring some additional £250,000 to the Fund raised on cinema takings in Great Britain for the benefit of British film production.
As a corollary the Distribution Regulations provide that certain British non-standard films of a similar type should be eligible to receive the levy. A film already in prospect, "The Life of Oscar Wilde" to be made in a 70 m.m. version, may, I believe, qualify under this provision. In addition both sets of regulations consolidate the existing regulations on these matters.
Members will recall that at present the levy receives its funds only from the exhibition of the traditional 35 m.m. standard films—to the sum in the year ended October last of £3¾ million. However, as we have all seen over the last five years, the film industry has been successfully experimenting with improved techniques involving the use of firms other than 35 m.m. wide. I refer to techniques such as Cinerama and Todd-AO.
Admittedly the installation of these new techniques involved heavy capital 1159 expenditure for those concerned, and it was considered that in the experimental stage they should not be hampered, as they might have been if exhibitors of these films had then to pay the levy. However, we now think that as far as the levy is concerned the time has come to put the exhibition of these films on a par with the exhibition of standard films.
The conversion of cinemas to these new techniques has now gone almost as far as it seems likely to go. Today in London there are about half-a-dozen cinemas equipped to show these films and in the provinces there are about thirty. Most of the large centres of population which would justify the necessary outlays are therefore now covered. However, if there do remain any cinemas to be converted to these new techniques, the abolition of Entertainments Duty will in future be the material factor governing the venture. The amount of levy exhibitors of non-standard films will be called upon to pay as from 17th April is only about half of the Entertainments Duty they were called upon to pay before 10th April.
In another place particular attention was paid to the position of Cinerama, which is exhibited in only one theatre in this country and which, it is claimed, is a case apart and should be exempted from the levy. It was represented in another place that Cinerama could not expect any benefit from the levy since for technical and economic reasons no Cinerama film is likely to be made in this country, whereas in practice the levy would bear particularly heavily on Cinerama. But scarcity is, I believe, an asset to be prized in the entertainment world, as in other walks of life, and there can be no doubt that Cinerama is a formidable competitor for the general run of exhibitors who have to pay in to the levy.
In having to pay the levy Cinerama is in no different position from other foreign films, it being a principle of the levy that it is paid on the exhibition of all films whatever their origin. Indeed Cinerama is in a privileged position as compared with the general run of exhibitors, in that it is presently exempted from the provisions of the 1160 Quota Acts and is under no obligation to show a prescribed percentage of British films.
Substantial contributions to the levy will be common to all those cinemas in the West End which show non-standard films, whatever the technique used, largely because of the drawing power of these films and the high seat prices. But if a case were to be made for special treatment for these cinemas, what of those in the provinces? Could they not advance a case for special treatment on precisely the opposite grounds, that their shorter runs and lower seat prices, as well as the later date at which these new techniques were installed, mean that they have had less chance of recouping themselves for the costs of installation? The fact is that cinemas which are equipped for these new techniques, whether in the West End or in the provinces, are the largest cinemas, which in present circumstances seem at least as well able as the rest of the trade to bear the standard rate of levy. Indeed it is in fairness to the trade as a whole that we consider these regulations should apply across the board without exception.
It will be seen that the draft collection Regulations lay down that the amount of levy payable may be related either to the Entertainments Duty chargeable or to exemption from Entertainments Duty. Members may therefore ask how these provisions are affected by the abolition of Entertainments Duty. The answer is that for the moment these provisions are not affected. Although the change in Entertainments Duty is to take effect from 10th April, this duty will remain on the Statute Book until it is repealed by the new Finance Act. Clearly, however, new regulations will have to be laid before the Finance Bill becomes law if the position is then to remain unchanged and, as my right hon. Friend said in his Budget speech, this point is already being considered.
The proposals contained in these regulations have been discussed by the Cinematograph Films Council who must, under the terms of the Act of 1957, be consulted by the Board of Trade before regulations are made. These regulations give effect to the Council's recommendations and therefore I hope that the House will give them unqualified support.

§ Mrs. Eirene White (Flint, East)
On our side of the House we would raise no objection to these draft Regulations. As the Parliamentary Secretary has lucidly explained, they are a logical follow-on to the existing arrangements. It has seemed for quite a while to the exhibitors in this country that it was not fair that theatres which are equipped for the showing of non-standard films should entirely escape making their contribution towards the production fund, because the point of the levy is to provide additional funds for the production of British films.
We are all happy to note that, on the whole and in spite of difficulties in the cinema industry, the production of British films has remained remarkably bouyant. I was discussing this with a producer the other day, and he said. "Do not be too optimistic about that. It is the newcomers who are able to get finance. Those of us who have been in the business a long time find it much more difficult to do so". In any case anyone who knows anything about the industry is aware that shortage of product is one thing which affects the outlook of the industry and which has caused a great deal of concern not merely to producers but also to the exhibitors. Therefore, anything that we can do to help the producers of British films in particular is to be commended.
As the Parliamentary Secretary will know, when it was first proposed to bring the non-standard films within the Regulations there was a great deal of protest from the exhibitors who run the theatres where such films are shown. They emphasised the cost of equipping theatres to show such films, and there was a suggestion at one time that they should be allowed to reckon all their seat prices as having a notional maximum of 5s. a seat. They thought that this would enable them to bring in greater revenue and to recoup themselves for their costs of installation.
There was much discussion and they fought a strong rearguard action. I think that the decision taken by the Government, on the advice of the Cinematograph Films Council, is the right one, namely, that it would not be fair to have a notional maximum price, that the basis already effective for the collection of the levy should remain, and that the 1162 higher priced seats, therefore, should pay the additional amount. It is quite a substantial amount, but I think that it is now within their capacity to pay.
I do not wish to make any special point concerning Cinerama, because that was dealt with adequately in another place. Cinerama is admittedly unique, but, as the Parliamentary Secretary has rightly said, it has certain advantages from that. It is a quite strong competitor of other cinemas in the West End, and, therefore, we would not be justified in exempting Cinerama. It already has exemption from the quota, which in itself is also unique. Therefore, it is only right that it should contribute something towards the British film industry, with which it is in direct competition.
I wonder, however, whether the Parliamentary Secretary can tell us the correct computation of what is likely to be received from Cinerama. There was discussion of whether it was £60,000 or £40,000 per annum. Can the hon. Gentleman also say whether the £250,000 which is expected to be collected under these new Regulations will bring the total collected under the levy this year to anything above the £3 million or whether it will be needed to reach that figure? It would be useful to know what calculation has been made.
The only other point I wish to raise is a small technical one concerning the Cinematograph Films (Distribution of Levy) Regulations, which, I understand, we are permitted to discuss at the same time. It concerns the question of an "eligible film". The levy is distributed to films only if they comply with certain conditions of eligibility. In Regulation 14, one sees that an "eligible film" is a film which is registered as a British film and as an exhibitors' quota film under Part III of the Cinematograph Films Act, 1938". I have been informed that difficulties have arisen because the Board of Trade sometimes takes a little while to decide whether a film is eligible to be registered. Certain inquiries may have to be made about whether it complies with the conditions for a British film. But if the film is not registered, but nevertheless is shown, as it can be in certain circumstances, the maker of the film is unable to collect his levy for the period during which the film was exhibited but was not registered as a film in the sense in which it is defined in the Regulations.
1163 In the case of an expensive film which, perhaps, is taking good money, although the period is never long, even in a short period some valuable levy may be lost. It would be useful to know whether this matter, which I know has been discussed by the trade with the Department, has now been sorted out. If not, I very much hope that it will be settled before we have the next set of draft Regulations.
It is, perhaps, unfortunate that we have these consolidating Regulations before us tonight at the very moment when the Chancellor of the Exchequer has abolished Entertainments Duty, for which we are all grateful, which, therefore, has altered the technicalities of the matter and means, as the Parliamentary Secretary has said, that we must have another set of Regulations before the end of July. If this small but important matter which I have raised is not covered, as I do not think it is, in the present Regulations, I hope that it may be dealt within the subsequent Regulations which we are bound to have.
We are happy to think that some further assistance may be given to the production of British films. The theatres which have installed non-standard films are, on the whole, doing very well. "South Pacific", for example, is now well into its second year, if it has not already completed it. Therefore, those who adopted these new techniques and equipment in their theatres were fully justified in doing so.

§ Mr. J. Rodgers
I thank the hon. Lady the Member for Flint, East (Mrs. White) very much for the welcome she has given to the Regulations and I will try to answer the specific points which she has raised. Her first question concerned the amount that may be received from Cinerama. The Board of Trade figure of £40,000 is purely an estimate. The estimate from Cinerama was £"60,000. We may be wrong. The figure is purely an estimate. If we are wrong, the £250,000 equally must be adjusted upwards or downwards. Neither can I be categoric about whether the collection of £250,000 will bring the levy above £3¾ million. It certainly will not fall below that figure. It might well be raised to £4 million in the coming year as a result of this inclusion of further revenues. 1164 Cinerama, incidentally, is not unique in being exempted from quota. All non-standard films also are exempted from the quota Regulations.
The hon. Lady's last question concerning the eligibility of films is a matter in which legal advice is being taken by the British Film Fund Agency. I assure her that the importance of the point is well taken by the Board of Trade and that within the legal possibilities we are sympathetic to her point of view. I will try to do what I can, although I cannot guarantee to give a completely satisfactory answer before any further Regulations are laid before the House.