SELECTIVE EMPLOYMENT PAYMENTS (Hansard, 20 November 1970)

§ The Minister of State, Department of Employment (Mr. Paul Bryan)
I beg to move, That the Selective Employment Payments Variation Order 1970, a draft of which was laid before this House on 2nd November, be approved. The purpose of this Order is to add play production to the list of activities under Section 2 of the Selective Employment Payments Act, 1966, which are eligible for refund of selective employment tax.
The then Chancellor of the Exchequer, the right hon. Member for Stechford (Mr. Roy Jenkins), announced in his Budget statement on 14th April that refund of S.E.T. would be extended to the production and staging of plays but not to the managing of theatres. 1671 The late Mr. Iain Macleod welcomed this statement in his reply.
The relevant part of the Order adds to the list of activities eligible for the refund of S.E.T.: … so much of the activities falling under subsection (2) of minimum list heading 881 as consists of the production of any play or ballet performance in any theatre or similar place. the principal or only use of which is for the presentation of plays or ballets or in a school or other similar educational institution in connection with the educational activities of that school or that institution. I will explain some of the key words.
The word production is intended to include all the activities integral to the translation of the script into life before an audience. It includes therefore not only acting but also the work of lighting technicians, make-up staff, designers, wardrobe staff and so on. The activity of play production will be taken to begin when rehearsals start and will continue throughout the run of the play.
Definition of the world "play" is that of the Theatres Act, 1968. It is: … any dramatic piece, whether involving the improvisation or not, which is given wholly or in part by one or more persons actually present and performing and in which the whole or a major proportion of what is done by the person or persons performing, whether by way of speech, singing or action, involves the playing of a role; and (b) any ballet given wholly or in part by one or more persons actually present and performing". This is a comprehensive definition and it is intended to be so. It is likely to include opera, musicals, revue, pantomime, ballet and music halls as well as straight plays.
And now I refer to the words: "theatre or similar place". This Order is intended to give parity of treatment between the live theatre and the film production industry which was admitted to eligibliity in 1969. It is not intended as a concession to the entertainment industry as a whole. For this reason the Order restricts eligible activity to that performed in a theatre or in a school or similar institution.
A number of theatrical companies fulfil a valuable and imaginative rôle in bringing the live theatre to schools and these companies will be eligible for refund under the Order.
In the Budget statement the then Chancellor was at pains to draw a distinction 1672 between the activity of producing plays which would attract refund of Selective Employment Tax and that of managing theatres which would continue to bear that Tax.
Then the distinction was questioned as being artificial. The distinction between theatre management of play production is indeed by no means as clear as it first seemed. Some theatre managements at least are actively engaged in play production in that they provide production staff—for example, lighting, wardrobe and stage staff—who are, for the purpose of this Order engaged in the eligible activity of play production. Subject to the other conditions laid down in Selective Employment Payments Act these managements will qualify for refund.
Further anomalies will of course arise between, for example, theatre managements who engage in play production and those who do not. However anomalies will arise wherever the line is drawn and whilst the Government are prepared to proceed with the concession of the theatres announced by the previous administration they are not in view of their undertaking to abolish the tax, prepared to embark on further amendments to the scope of the law. The cost of this concession will be approximately £½ million per year. The Order is not and cannot be retrospective.
Finally Mr. Speaker, may I take this opportunity to thank the representatives of the theatre interests, particularly the Arts Council and the Theatres Advisory Council for their help and advice in framing of the Order.

§ Mr. Hugh Jenkins (Putney)
I am grateful to my hon. Friend the Member for Heywood and Royton (Mr. Barnett) for inviting me to welcome the Order, which I do very warmly. I recall leading a deputation of theatre people to see my right hon. Friend the Member for Birmingham, Stechford (Mr. Roy Jenkins) in the early part of this year. I further recall congratulating my right hon. Friend when, in his Budget Statement on 14th April, he announced the removal of this tax. I think that it is also in order for me to congratulate the Minister of State on fulfilling the pledge given by my right hon. Friend.
1673 It is now 20th November. It is a long time since 14th April, as a number of theatrical managers have written reminding me. It has taken some time to work out the wording of the Order. I shall have to tell the managers who have written to me that to try to make the Order retrospective, as they have suggested, would only delay it further, if indeed it would be administratively practicable to do so.
What the Order seeks to do is what my right hon. Friend said would happen. I echo what the Minister of State said about the way in which the officials concerned in his Department have consulted many theatrical people and bodies, notably the Theatres Advisory council, with a view to finding the right words which, as all hon. Members know, is sometimes more difficult than it seems.
In this case I think that the right words have been found. It now depends on how the words in the Order are interpreted. I am persuaded that this interpretation will be a liberal one. It is important that it should be liberal, because the question whether S.E.T. will be paid will depend on the number of people who are excludable in any establishment. Therefore, a liberal interpretation is necessary to ensure that, wherever it is possible to exclude an establishment—rightly possible and intentionally possible under the Order—that establishment will be excluded.
There will be difficult marginal cases of interpretation. I hope that we can be assured that it is intended to administer the Order with a view to bringing as much relief as possible to managements, which are finding the going very hard, particularly outside London. This will be the key to the matter.
We cannot overnight turn every theatre into a supported one. Supported theatres are already relieved of the tax. The commercial theatre must be kept viable so that London productions can be seen in other parts of the country. The Order will help to bring that about. It will make practicable a tour which might not otherwise go out. It will make it easier to keep theatres going as theatres outside London and to keep bingo at bay.
Before I sit down may I say that the Order demonstrates—in fact, I think that I probably may not say this. I was going 1674 to say that the Order demonstrates the superiority of this tax over another tax. However, I do not believe that I am allowed to mention another tax, so I must be regarded as not having mentioned it. The alternative form of tax is one which applies right across the board and admits of no distinction of definition such as is provided for by the Order.
I hope that the Government will learn from the Order and will not carry out the undertaking given by the Minister of State that there will be no more Orders like this. I hope that the hon. Gentleman will be so delighted with the skill with which the Order has been drawn up that he will be tempted to go further into the matter and will not be taken along paths which other less enlightened countries have followed and impose a dreaded sales tax on the population as a whole.
I welcome the Order. I congratulate the Government on following the lines laid down by my right hon. Friend the Member for Stechford. I hope that the benefits of this action will soon be felt in theatres throughout the country and will result in more and bigger productions. We want to facilitate the employment of more people so that shows can be seen which employ more than two or three people, so that we can see bigger productions without the restriction of employment brought about by S.E.T., and so that the people may continue to enjoy, what is still widely appreciated throughout the country, a real live show.

§ Mr. Joel Barnett (Heywood and Royton)
I welcome the Order. I pay tribute to my hon. Friend the Member for Putney (Mr. Hugh Jenkins) for the work he has done in enabling the Order to appear before the House and securing this exemption for theatres. My hon. Friend deserves our warm congratulations on his work in ensuring that we have this Order, which I and the Opposition generally welcome.
As the Minister of State said, my right hon. Friend the Member for Birmingham, Stechford (Mr. Roy Jenkins), when he was Chancellor of the Exchequer, promised this action. The Minister clarified most of the points I had in mind. But in paragraph 2 of the Order, reference is 1675 made not to just a similar place but to a place where the principal or only use is for the presentation of plays". I am not sure what this covers and whether it would cover something like a cabaret show—not that I am necessarily concerned with places such as The Talk of the Town and whether they would be covered by the Order. I imagine that they would contrive to make it pay anyway. But one wonders whether it is intended that those places should be so covered.
Can the Minister tell us whether there is any significance in the fact that the Government thought it necessary to bring the Order in on 7th December? If the tax is to be abolished in April, shall we say, I would have thought it unnecessary to bring in an Order of this description now. Are we to assume that S.E.T. is not to be abolished, either in April or the foreseeable future, other than perhaps by the replacement of that tax by another tax, which we cannot discuss today, but perhaps a general employment tax?
Apart from that, I welcome the Order, which confirms what my right hon. Friend the former Chancellor said. I hope the House will approve it.

§ Mr. Bryan
I join the hon. Member for Heywood and Royton (Mr. Barnett) in congratulating the hon. Member for Putney (Mr. Hugh Jenkins) on the part which he has played in advancing towards this situation. On the one matter which the hon. Member for Putney raised, he is right in assuming that retrospection is impossible under the Act.
Turning to the point raised by the hon. Member for Heywood and Royton, I do not think I can go further in explaining the Order. The tone of my speech has indicated that we mean this to come out as a liberal measure and be interpreted as such. It is difficult for me to nominate theatres and near-theatres and say whether they would be included.
There have been only two speeches from the Opposition. On the one hand they were almost asking why the Order was so late, and on the other hand we were almost asked why it was here at 1676 all. Perhaps the hon. Gentlemen can talk to each other about this and decide.
If I started talking about a date for the possible abolition of this tax, I should be quickly brought to order. I am glad that the Opposition welcome the Order, as we certainly do.