HC Deb 14 November 1974 vol 881 cc578-9
15. Mrs. Renée Short

asked the Chancellor of the Exchequer if he will reduce taxation on the theatre industry.

Dr. Gilbert

My right hon. Friend has received representations for relief and his decision will be announced in due course.

Mrs. Short

Will my hon. Friend bear in mind the fact that theatre managements have about reached the point of no return in terms of increasing seat prices? Is he aware that rising costs arc closing theatres and creating a great deal of unemployment? Will he consider the zero rating of the performing arts and the removal of VAT?

Dr. Gilbert

My hon. Friend's concern in these matters is well known. Part of the difficulty is that, unless we managed to get round the definition problems, any relief from VAT would produce uncovenanted benefits for the commercial theatre and nudie shows of the kind one sees in Soho—[Laughter.] I am not sure, Mr. Speaker, whether I was involving you or myself in that—rather than giving the assistance where it is most needed, to the type of theatre aided by Arts Council grants.

Mr. David Howell

Aside from the theatre-going habits of the Financial Secretary, what is the EEC view about VAT exemption on the live arts and on the theatre? I believe that a regulation is being considered or that a proposal is being put forward by the EEC Parliament.

Dr. Gilbert

The hon. Member is almost correct. In the context of VAT harmonisation, the EEC Commission has made proposals for exempting individual performers from VAT. But I am informed that in practice the proposal will not assist the commercial theatre.

Mr. Strauss

Will my hon. Friend bear in mind, when he speaks in terms of helping theatrical enterprises aided by the Arts Council, that the commercial theatre plays a very important part in the drama world and that it is just as important to remember its serious difficulties at the moment as it is those of enterprises supported by the Arts Council?

Dr. Gilbert

I take my right hon. Friend's point. He will appreciate that one of the difficulties of relieving discretionary expenditure of VAT is that it is not easy to know where to draw the line, because relief can be extended indefinitely into sport, entertainment and all sorts of leisure activities.