§ 7.16 p.m.
§ Lord WINTERBOTTOM rose to move, That the draft Cinematograph Films (Limit of Levy) Order 1975, laid before the House on 13th October, be approved. The noble Lord said: My Lords, with the agreement of the House, I propose that both these draft Regulations—the Cinematograph Films (Limits of Levy) Order and the Cinematograph Films (Collection of Levy) (Amendment No. 4) Regulations—be considered together because they both stem from the rise in the level of prices, which some of us have noticed, and not from any change in policy. The first Order amends Section 2(3)(b) of the Cinematograph Films Act 1957. This Act provided for the imposition of a levy on exhibitors of cinematograph films and for the British Film Fund Agency to distribute the bulk of the proceeds to the makers of British films. The levy is collected on cinema admissions and is payable in respect of all cinema performances, except for cinemas whose takings are small.
§ The purpose of the levy is to encourage the production of British films by providing a significant bonus to the makers of successful films, without putting too heavy a burden on those who pay it. Parliament therefore provided that the estimated yield of the levy in any levy year should not be less than £2 million or more than £5 million. It may seem unusual to refer, as the Act does, to the estimated yield rather than the actual yield, but it is necessary for the Department to estimate the yield of the levy before the rate can be fixed. Once the rate is fixed the yield depends on the number of cinema admissions and on the seat prices, and these are not, of course, known in advance, so it is only possible to refer to the estimated yield. The upper limit of £5 million was specified in 1957 and its equivalent today is about £13 million It is therefore reasonable to increase the maximum limit to a more realistic level. This needs to be done now because at its present rate of one-ninth of the amount by which admission price exceeds 7½p, and taking account of the rising price of cinema seats, the levy is expected to yield £6 598 million next year. This is outside the prescribed limits of between £2 million and £5 million, and would require the rate of levy to be reduced, even though £6 million is well within the original limits in real terms.
§ In my view, any increases in the general level of prices over the next two years will be covered by an increase from £5 million to £7 million, and it would, in any case, be inadvisable to look further ahead because the whole question of the future of the film industry is currently being examined by a Working Party set up by my right honourable friend the Prime Minister. The increase to £7 million is, of course, an upper limit and does not imply that the rate of levy will be increased to yield that amount. I can assure the House that there arc at present no plans to increase the rate of levy.
§ The second Regulation deals with the levy exemption limit and with children's entertainments. First, it amends the Cinematograph Films (Collection of Levy) Regulations 1968, by raising the limit of weekly cinema takings at or below which a cinema is exempted from payment of levy, from £500 to £700. The present limit was set in 1971, and its equivalent today is approximately £850. An increase to £700 is not, I think, unreasonable. Secondly, it will specifically exclude children's entertainments from payment of levy. Up to now levy has not been paid on these entertainments because the prices of admissions have been below the 7½p (or 1s. 6d. in old money) above which levy becomes payable. Prices of admission have risen during the past year to 10p and are likely to rise further to 15p, but many children's entertainments are, unfortunately, already liable to pay levy. This was never the intention, and the draft Regulation will provide formal exemption. The Cinematograph Films Council has been consulted in accordance with the parent legislation, and the Council are content that all the proposed changes should be made. I therefore commend them to the House. I beg to move.
§ Moved, That the draft Cinematograph Films (Limit of Levy) Order 1975, laid before the House on 13th October, be approved.—(Lord Winterbottom.)
§ On Question, Motion agreed to.