HC Deb 07 June 1967 vol 747 cc1143-8

Question proposed, That the Clause stand part of the Bill.

Sir Edward Boyle (Birmingham, Hands worth)

I hope that the Committee will forgive me if I say something about this Clause which arises directly out of a new Clause which I sought leave to introduce during the proceedings of last year's Finance Act. When I heard the Chancellor's Budget statement in April, I could not help feeling that I was perhaps one of the few Members who could reasonably say that they got something out of the Budget. On Report stage of last year's Act, I moved a new Clause whose object was, under certain circumscribed conditions, to free from liability to tax an outright sale by an author assigning copyright in an existing work.

On that occasion, the Financial Secretary made a not altogether unsympathetic reply. He pointed out the difficulties of the new Clause, talked about the difficulty of giving to a particular category of artist a special advantage we do not give to others, and went on to say: It seems … that there is a closer analogy in the case of the scientific inventor who produces an invention and obtains patent rights. … He has certain tax conditions which are more helpful than those which are available for writers and other creative artists. I think there are spread provisions over a period of about six years. … it seems that if we were to look further into the field and were prepared to swallow the principle of treating copyright as an income-producing asset one should perhaps look at the analogy of the treatment of patent rights." —[OFFICIAL REPORT, 12th July, 1966; Vol. 731. c. 1247.] I think that that is exactly the suggestion that the Chancellor has carried out in this Clause.

In Clause 17, there is relief in cases where copyright is sold after ten years or more, and in these cases Except where the copyright or interest is assigned or granted for a period of less than six years, the amount of the payment shall for income tax purposes be treated as becoming receivable in six instalments at yearly intervals… Many people had hoped that the Chancellor would be able to go a little further than this but none the less it would be churlish of me not to recognise that the Government have done something to respond to the suggestion I made to the House on Report stage of last year's Act, and which was supported by the hon. Member for Manchester, Cheetham (Mr. Harold Lever), who is now a junior Minister at the Department of Economic Affairs.

I notice that the Government, I think rightly, have not adopted the proposal I made that this provision should apply only to those over 50 years of age. I thought that the hon. and learned Gentleman was on rather strong ground last year in criticising that aspect of my Clause. I notice that the Chancellor has kept the ten-year limitation even though the hon. and learned Gentleman seemed critical of it last year.

None the less, I would like to say that I think that this is the first time for a long time that the House of Commons has done something for authors. We are putting authors of whatever works in something of the same position as the scientist who has made an invention and acquires patent rights. I have an interest to declare here as one connected with publishing. I believe we often forget the difficulty of authors in our present-day society.

In particular, I recall the excellent point made last year by my right hon. Friend the Member for Enfield, West (Mr. Iain Macleod). One can think of authors who have suddenly caught the popular mood with one work which has been highly successful but have not reached the same heights of popular appeal again. My right hon. Friend quoted the good example of "Journey's End", and one can think of others in opera and other art forms. It can happen that an author can strike a particular success with one single work.

A concession such as the Government are now making is only what is due to authors. I hope that on a future occasion we can extend the principle to a longer period, both for scientists and inventors and for authors. I hope that the Committee will forgive me for delaying it a few moments on this subject but it is one on which it is right to comment. I hope that we will be able to come back to this again in a later year and make a still more generous provision for those affected by the Clause.

Mr. A. H. Macdonald (Chislehurst)

Subsection (6) of the Clause refers to the position that will arise when … the profession or vocation is permanently discontinued (otherwise than on death) … Could my hon. and learned Friend explain how it is to be determined when the profession is permanently discontinued? Without wearying the Committee with many examples, I would remind it of the case of E. M. Forster, a distinguished literary figure. I believe that I am right in saying that his novels were written several years ago, although he continues to hold a very high place in literature. Would it be argued that his professional activity as an author was discontinued some time ago? How is it to be determined that professional activity is finally and permanently discontinued?

I ask this because the flow of inspiration of an author or any other artist is not something that can be turned on or off like a tap. It flows almost, one might think, by chance and it is not always easy to say that the flow of inspiration is finally and permanently dried up. How is it to be determined when it has come to an end? Indeed, why is this provision necessary at all? Why do we have to have it if literary or musical activity has come to an end?

Sir Harmar Nicholls

I want to place on record the special claim under the Clause that the theatre, particularly the musical theatre, has. The examples given so far have been those of the author or the scientist, but this country has to recognise the growing importance of the place of the theatre in the world.

The entertainment industry is big, probably one of the biggest industries. Television round the world means that the supply of musicals and plays to feed it will be a great source of income to those who can provide the material. I see no reason why this country should not become the centre of this kind of inventive thought in the theatre, particularly in musicals.

I want to draw the attention of the Committee especially to this aspect because it seems to be overlooked now. All the examples given have been of authors and scientists. But the composer who gives thought to musicals and the straight playwright have a greater problem than authors in many ways. If one writes a book, but cannot impress the publishers to print it, one can get it printed oneself and risk whether it will have any appeal once on the market. It is not cheap to do that, but it may be within the range of people who generally write books. However, a composer of a musical play cannot do that. He cannot think of putting on a musical play without thinking in terms of £30,000, £40,000 or £50,000 in order to dress it, pay the musicians and get the rehearsals under way.

When we consider the justice of the Clause we should keep in mind the necessity to encourage the people who write plays and compose music and who have to produce much of the work before getting the producers or the impressarios to put them on. On the rare occasions that they do catch the eye and interest of an impressario and where they are a success, they deserve having it spread over a good many years before handing over some of the results of their work in taxes to the Treasury.

I think that, from now on, when we are thinking in terms of inventors and composers we have to keep in mind the people who write musical plays and make theatrical productions, not because it is good entertainment and pleases people, but because it is going to be big business. I foresee the time when the income which will come to this country for encouraging these people will be a bigger foreign currency earner than motor cars or anything else. Television entertainment goes round the rest of the world. Material for this medium is needed 12 and 13 hours a day and the people producing it will be great foreign currency earners. This is capable of being as big a foreign currency earner for the country which gets into the lead as Los Angeles was for America in the days when films were on the up and up. Los Angeles was, and still is, a great source of income to America, and there is every reason to believe that we can become the equivalent of Los Angeles in the producing of plays and musicals which can earn money which will make future Chancellors very happy.

Mr. MacDermot

I thank the right hon. Member for Birmingham, Handsworth (Sir E. Boyle) for his generous remarks welcoming the Clause. The authors and other artists who would benefit should be greatly indebted to the right hon. Gentleman who, as he said, raised this matter first on Report last year. It is not necessary to seek to explain the Clause, because it has been clearly summarised by the right hon. Gentleman. He made clear, when moving the Clause last year, that what he and the Society of Authors were primarily prepared to meet was the case of the less well off artist who may have a few copyrights to sell and perhaps, in the closing years of his life, wanted to realise a capital sum which, though not very large, if taxed in a single year would be reduced out of all proportion, making it not worth while trying to raise the sum. That was the case that it was designed to meet and these proposals are primarily designed to assist persons in that category.

As the right hon. Gentleman has said, we have not tried to limit it to the author who is over 50 years of age. That would produce its own problems. We were persuaded that this should be available on the disposal of copright after a 10-year period. We talk about it mainly in terms of authors, and it is primarily authors who will benefit, but, as the hon. Member for Peterborough (Sir Harmar Nicholls) has pointed out, there are other creative artists who produce work in which they have copyright and who will benefit.

My hon. Friend the Member for Chislehurst (Mr. Macdonald) asked questions about subsection (6). The first question was how and when it would be determined whether or not an artist had discontinued his professional activities. The only answer I can give is that that is a question of fact which he will have to establish with the Income Tax inspector, because on discontinuance he would cease to be taxable as a person acting in the course of his profession. In the event of dispute the matter would be determined on appeal in the ordinary way.

My hon. Friend's next question was why was it necessary to make any provision of this kind. The reason is that if one does not, then there is the difficulty that, having ceased to carry on the profession of authorship, unless some special provision were made there would be no means of levying the proper tax on the instalments which had been deferred under these spreading provisions. Accordingly, this subsection provides that in such a case the outstanding instalments are to be taken into account as if they had been receivable on the last occasion before discontinuance on which an instalment became due, unless the author elects to have his tax liabilities adjusted as if the assignment of the copyright had been for a period equal to that between the date when the first instalment came in hand and the date of the discontinuance; in other words, to narrow the spread up to the time when he discontinues carrying on his profession.

Question put and agreed to.

Clause ordered to stand part of the Bill.