§ 2.39 p.m.
§ THE MINISTER WITHOUT PORTFOLIO (THE EARL OF DUNDEE)My Lords, the first of these two statutory instruments, which is concerned with the collection of levy, arises principally out of the abolition of entertainments duty in the Finance Bill. It is generally agreed, I think, that the producers as well as the exhibitors ought to share in the benefits of that abolition. Accordingly, it is proposed that the levy should be increased from one-tenth to one-ninth, but at the same time some modifications in favour of the exhibitors are proposed. First, there have always been some exhibitors who have been exempt from entertainments duty, and the existing regulations exempt these exhibitors also from payment of levy. But they do so in language which would result in those exhibitors becoming liable for levy now that the entertainments duty is being abolished. That anomaly is corrected by the amended Regulation 3 (2) (a) of the first instrument, and also in the Schedule. It is further proposed that the exemption limit shall be increased from £150 a week to £250. At the same time we have agreed to a request put forward by the exhibitors that in calculating the amount of takings for the purpose of exemption the receipts from charitable entertainments and children's entertainments shall be disregarded.
Then, in order to protect any exhibitor who might in exceptional circumstances actually suffer loss from these changes, it is provided in subsection (4) of the new Regulation 3 that the amount payable in levy shall not exceed the amount which would formerly have been payable in entertainments duty and the old levy combined. The intention of these changes, of course, is to ensure that the additional levy for the benefit of producers shall be paid mainly by the larger exhibitors who can afford to pay it and not by the smaller exhibitors whose financial difficulties are usually more acute. The result of the various modifications which we propose is that although the levy is increased from one-tenth to one-ninth it is estimated that the additional amount of levy available for distribution among the producers will only amount to £100,000.
124 The other instrument, which deals with the distribution of levy, gives effect to one or two undertakings made during the passage of the Cinematograph Films Act of this year. Your Lordships will remember that newsreels were brought in for the first time, but we promised that they would only receive the levy at the basic rate of their rental without the benefit of the two-and-a-half times multiplier; this is now provided for in paragraph 1 of this Statutory Instrument. Then we also promised that a newsreel which was classified as British on the understanding that over a period of three months it contained a certain proportion of British material, and failed to fulfil that undertaking, should cease to be qualified for receipt of levy and that is given effect to in paragraph (3) at the bottom of the first page of these amending Regulations. The only other change which we make in these Regulations is that we have met a request from the British Films Fund Agency that their balances of money may be invested in Treasury Bills instead of being left on deposit at the banks, so that they will get the benefit of the higher interest which is payable from Treasury Bills compared with the very meagre interest which is paid by banks to their clients on deposit.
We have consulted the Cinematograph Films Council about all these changes, and the Council has agreed to them. When they were approved last night in another place I notice that of the only two non-Government speakers who said anything, one remarked that this was the only thing the Board of Trade have ever done which had been received with unanimous approval by the film industry, and the other speaker remarked that the unanimity of the trade was so astonishing that it left her speechless. While I am not entitled to assume that your Lordships will be equally uncritical or equally speechless, I hope I may now move that these Regulations be approved.
§ Moved, That the Draft Cinematograph Films (Collection of Levy) (Amendment) Regulations, 1960, be approved.—(The Earl of Dundee.)
§ LORD LUCAS OF CHILWORTHMy Lords, might I ask the noble Earl if he would help me? I find myself in some difficulty. I thought I had read the Regulations on the collection of levy 125 very carefully, but I can see no reference in it to the increase in the amount from one-tenth to one-ninth. Could he tell me precisely where it is?
§ THE EARL OF DUNDEEIt is less than half-way down the first page, paragraph 3 (1):
Subject to the provisions of this Regulation, the levy shall be computed by reference to the payments received by the person liable to pay the levy for admission to entertainments taking place during any period mentioned in Regulation 2 of these Regulations at any theatre and, in respect of each such payment, at the rate of one-ninth …I am sorry these lines are not numbered. It is on the first page of the Collection of Levy Regulations. The amount used to be one-tenth.
§ LORD LUCAS OF CHILWORTHI am sorry, but I have another print. This slays "payment, at the Irate of 10 per cent."
§ THE EARL OF DUNDEEThese are the Regulations I am moving.
§ LORD LUCAS OF CHILWORTHAnd these are the Regulations I have. Have there been two editions? This is the print I got from the Printed Paper Office. It is 1960.
§ THE EARL OF DUNDEEThey are all 1960.
§ LORD LUCAS OF CHILWORTHMy copy (says "Made…" then the date is blank. "Coming into Operation 17th April, 1960".
§ THE EARL OF DUNDEEI think perhaps the noble Lord has got hold of the old. Regulations, which I moved on the 5th April this year.
§ LORD LUCAS OF CHILWORTHThese are the only copies available in the Printed Paper Office.
§ LORD ARCHIBALDMy Lords may I say that I have just been at this moment to the Printed Paper Office to find out whether they have a copy of the draft Regulations which are relevant to the speech the noble Earl has made, but I can only get the old Regulations to which my noble friend Lord Lucas of Chilworth is referring.
§ THE EARL OF DUNDEEMy Lords, I am not responsible for the Printed Paper Office, but these are the amended 126 Regulations which I am moving. It seems to me that the noble Lord has a copy of the old Regulations which I remember moving on April 5 last, and not the new ones which I am now moving. If they are not available, I am sorry; but I did not know that they were not.
§ LORD LUCAS OF CHILWORTHWell, I am certain that I am not going to delay the proceedings by asking that we adjourn this debate so that the Printed Paper Office can be properly instructed. But I think it is very remiss, to put it no higher, that the appropriate Government Department cannot see that the proper documents are in the Printed Paper Office for the benefit of Members of your Lordships' House. I have been trying to follow the noble Earl's speech with my draft and I have not been able to do so. However, I listened to it most attentively, and I am not going to delay the approval of the Regulations.
Having some knowledge of the discussions that have gone on with the film industry, speaking for myself, and I think for other noble Lords, including the noble Lord, Lord Archibald, who holds a prominent position in the film industry and can comment for himself, I do not think we shall wish to delay these Regulations. There is only one point about which I want to ask the Minister. He said that these Regulations arise from the abolition of the entertainments duty. Before the noble Earl was such a prominent member of the Government Front Bench, from this side of your Lordships' House I raised a question in the debate in 1957 on the Bill which later became an Act and which set up the British Film Fund Agency. My question was as to who was going to pay for the collection of this levy, and was it going to be a charge on the fund. I wanted to know why the cinema industry was going to be charged by Customs and Excise for the cost of collecting this levy when, on behalf of Customs and Excise, the British film industry collected the entertainments tax for nothing. All I was told by the Government spokesman was "After all, it is only going to be a trivial amount."
I remember asking the Government spokesman how much it was going to be, and the first Government spokesman said that it was going to be less than one-half of one per cent. on the anticipated 127 revenue of £3¾ million. By a quick mental calculation I made that something in the region of £18,000. The noble Lord, Lord Mancroft, who then occupied a similar position to that of the noble Earl, later on said, "There is going to be no mystery about it. On my humble reckoning, the sum is about £10,000 to £15,000." In the first report of the British Film Fund Agency I see that the amount for collecting this Fund was £34,100—another example of the inability of Her Majesty's Government to forecast what it costs to collect taxes.
What I want to ask the noble Earl is this: if it cost £34,100 for Customs and Excise to collect this levy when at the same time they collected the entertainments duty, now that there is no entertainments duty, what is the estimate of the noble Earl of what it is going to cost in future to collect this money? It is a charge on the Fund and I think we should know something about it.
I was going to make a suggestion to him—I do not know whether it is a good one; it may be a good one from one point of view and a bad one from another. Before we set up the British Film Fund Agency, this levy was operated on a voluntary basis by the industry itself. My information is that in those days it cost about £20,000 to collect. Now there is a statutory body and a statutory levy. If I were to suggest to the noble Earl that if the Government at some time thought it wise to revert to its being a voluntary levy it might cost less to collect, I have the unhappy suspicion that his answer to me would be, "Yes; but when it is a voluntary levy there is no enforcement of payment. The advantage of having a statutory levy is that everybody has to pay, because payment can be enforced." So I am not going to press the point of turning it over once again to the industry. But I should like him to tell the House—I gave him notice that I was going to ask this question, so perhaps he has come armed with the information—what is the approximate estimate of the cost in the future. I ask that because next year, or when the British Film Fund Agency produce another annual report and statement of accounts, I do not want to see the costs go up. Because they have only to collect this levy and they will not be able to 128 offset any of their costs against collecting entertainments duty. That is all I have to say. I wish the industry well. I think perhaps the Fund may be a little bigger in the future. Broadly, I believe it has been received well by the industry and by every well wisher of the industry.
LORD SALTOUNMy Lords, the only thing I wanted to say was that 23 or 24 years ago your Lordships were often put in great difficulties because Departments laid Orders in blank on the Table and noble Lords who were interested in them could never draw them to ascertain what was in the Order. It was an abuse which was most strongly protested against, and I had hoped that it had been cured by now. I am sorry to see that it has been creeping back, and I hope that the noble Earl will make such representations as will prevent its happening again, so that when Orders are to be approved by your Lordships they should be made available to your Lordships from the Printed Paper Office.
§ 2.59 p.m.
§ LORD ARCHIBALDMy Lords, as the noble Lord, Lord Lucas of Chilworth, has said, I do not want to delay the approval of these Regulations. I must say that the absence of the correct draft Regulations put me in no difficulty—
§ THE EARL OF DUNDEEMy Lords, if I may just interrupt the noble Lord, immediately this point was raised my noble friend beside me went to the Printed Paper Office to see what was the matter, and he has come back with a copy of the amended Regulations which I am now moving. So they are there. I do not know by what misunderstanding some of your Lordships have an out-of-date copy instead of the amended Regulations which are on the Order Paper. But they are in the Printed Paper Office; I gat this one some minutes ago from the Printed Paper Office.
§ LORD LUCAS OF CHILWORTHMy Lords, did the noble Earl's colleague find out at what time they were there? I had two copies yesterday afternoon and another one to-day at a quarter to one, and those were for April, 1960. So they must have realised their mistake and substituted the right ones for the wrong ones.
§ THE EARL OF DUNDEEMy Lords, I will inquire at what time they were in the Printed Paper Office, but they were certainly there at the moment when the noble Lord made his protest.
§ LORD ARCHIBALDMy Lords, I do not want to labour the point, but when I heard the noble Earl speaking I could not relate the points he was making to the numbers of the paragraphs in the draft that I had had from the Printed Paper Office, and I went back to that Office and asked that a search be made for the draft on which the noble Earl was speaking. It was not available then —which was not more than two minutes before his noble friend found them there; so the mystery, I suggest, is still unsolved.
§ THE EARL OF DUNDEEMy Lords, we seem to be reducing the period during which the crime took place to narrow limits.
§ LORD ARCHIBALDI must confess, that I had no difficulty in following the noble Earl, because naturally I was familiar with the proposals which were contained in the draft Order which I had been unable to obtain; and I followed the matter, therefore, from pre-knowledge and not through having the advantage of the printed sheet. In an industry like the cinema industry, where there are naturally very divergent interests as between, so to speak, producer, wholesaler and retailer, it is very difficult to get complete unanimity with regard to proposals of this character; and I should like to pay a tribute to the Board of Trade, and particularly to the officials concerned, for the ingenuity which they have shown in producing Regulations which are not opposed (and I will not put it higher than that) by any section of the industry but which, on the whole, are accepted, if not corn-mended, by all sections of the industry. I believe, therefore, that it would be true to say that not only has the Cinematograph Films Council given its blessing but that, by and large, the industry is also in agreement with these Regulations. I am, naturally, still anxious to hear the reply to the question of my noble friend Lord Lucas of Chilworth, but I hope that Her Majesty's Government will not take too seriously his suggestion of reverting from statutory to voluntary levy.
§ THE EARL OF DUNDEEMy Lords, I have just been informed that these Orders which I am now moving were published on June 21. With regard to what might be called "The Mystery of the Printed Paper Office" and the question of why they were not there and, so to speak, "who done it?", I will do my best to examine the question and let both noble Lords know.
§ THE EARL OF DUNDEENo, the Orders were published on June 21—quite a long time ago.
§ LORD MORRISON OF LAMBETHMy Lords, when the noble Earl has made inquiries and obtained the information, will he let the House know about it? Because this is not a matter that should be treated lightly. My noble friend Lord Lucas of Chilworth thinks it right (and my noble friend Lord Archibald has concurred) to let this Regulation go through; but it is a very serious matter if a Regulation is before the House and if noble Lords have asked for the text of that particular amending Regulation and have been given the wrong one; because the House does not know what it is doing. This is rather a mockery of the responsible conduct of Parliamentary affairs. I think there is a responsibility on the Government to find out what happened and for the noble Earl to make a public statement to-morrow, or on some other day, on what occurred.
§ THE EARL OF DUNDEEMy Lords, I entirely agree with the noble Lord, but I am at a disadvantage because the only pieces of information I have are, first, that the Orders were published on June 21, and, second, that. I found them in the Printed Paper Office about a quarter of an hour ago when clearly they were there. But I will certainly find out what has gone wrong and let the House know.
I am grateful to the noble Lord, Lord Lucas of Chilworth, for giving me notice that he intended to ask about the cost of collection. He is quite right in saying that the original estimate of the cost, which I believe was one-half of 1 per cent.—which he worked out at £18,000 —was an under-estimate. In the last year for which we have a published figure 131 the cost was £34,000, which is about 0.92 per cent. But the noble Lord is not quite correct about the cost under the voluntary levy. The figure of £20,000 which he referred to under the old voluntary levy represented the cost of administration, not collection. At that time the Customs collected the tax freely, at a cost to the public and not to the film industry. That is not so now. Under the 1957 Act the cost of collection is borne by the Fund and not by the taxpayer.
The Board of Trade have considered whether collection could be made more cheaply from the distributors, but they reached the conclusion that there was no point in contemplating a change in the law; and for a number of reasons they considered that there would be grave difficulties in collecting levies from distributors of films, so that it will continue to be done by the Customs. As the noble Lord rightly said, since we cannot now divide it up between entertainments duty and levy, the amount applicable to the collection of levy will be considerably more than £34,000. It is very difficult to give an estimate of the cost of collecting the levy in a full year when entertainments duty is abolished. The Customs can make only a tentative estimate, and they have suggested a figure of a little over £50,000; but that must be treated with considerable reserve as it is only a provisional estimate. I should have expected it would be something in that region, because when we consider that they collected both taxes—the levy and the entertainments duty—it seems clear that there must have been a very considerable saving in the amount applicable.
§ LORD LUCAS OF CHILWORTHMy Lords, would the noble Earl be kind enough to explain to the House why it should cost £34,000 when entertainments duty also is collected and that when we take off the cost of collecting the entertainments duty the figures should jump to £50,000? Surely they will employ less. Has the British film industry to subsidise the Customs and Excise in duties outside the collection of this levy? That is what it sounds like to me. I should have thought it would not cost any more, because it would take less trouble and less expense, with less staff.
§ LORD ARCHIBALDMy Lords, may I ask whether the noble Earl has taken into account the much smaller number of exhibitors from whom the levy will have to be collected, in view of the raising of the exemption limit for levy from £150 to £250?
§ THE EARL OF DUNDEEMy Lords, that illustrates the great difficulty the Customs and Excise are under in making any estimate at all. They did not want to make an estimate, but after the noble Lord had given me notice that he was to raise this matter I have got from them the best figure I could; and I was asked to make clear that it was a very provisional figure which must be treated with great reserve, for reasons such as the noble Lord, Lord Archibald has mentioned. It is obvious, however, that the figure of £34,000 was not the whole cost, but that part of the cost of collecting the two taxes in one go which was allocated to the levy. The cost of collecting the levy and entertainments duty together must have been more than £34,000. That figure was what the Customs considered was a fair proportion of their work to allocate to the collection of the levy. Now that they do not have to collect any entertainments duty they still have to have a fairly large amount of correspondence with people who used to pay both levy and entertainments duty, and that will be about as expensive as sending out one notice to collect both.
§ On Question, Motion agreed to.