The Acting Profession: Unemployment Benefit (Hansard, 26 March 1996)

§ The Minister of State, Department of Social Security (Lord Mackay of Ardbrecknish)
My Lords, following two cases before the special commissioners in 1993, the Inland Revenue treats the majority of actors as self-employed for tax purposes. We have been considering this and have consulted widely on the implications of aligning the treatment of actors for national insurance purposes. We will be making an announcement as soon as possible.

The Viscount of Falkland
My Lords, I thank the Minister for that reply. Will he agree that our acting profession is held in the highest regard throughout the world? Will he further agree that, in order to achieve that high regard, it has been necessary to have a large pool of actors—and young actors—which can be achieved only through the (I agree) anomalous situation whereby self-employed actors pay a higher rate of national insurance contribution in return for the right to claim a non-means tested benefit, namely, unemployment benefit? If the provision were in any way removed, would there not be fewer young actors in particular? They lead a very hard-working life and are often extremely poor. Although obviously they have talent, otherwise they would not be thought of in the first place, they need experience. Above all, they need availability. Would not that availability be greatly affected?

§ Lord Mackay of Ardbrecknish
My Lords, despite the successes last evening on the other side of the Atlantic by the British film and acting industry and various actors and actresses, one has to look at the whole question of the self-employed and how they are treated, both by the Inland Revenue and by the national 1574 insurance contributions system. There is little doubt that the principle of ensuring that people are treated in the same way when it comes to taxation and national insurance is important. That is why we are having to look carefully at whether this particular small group should be given an exemption from what I believe is the correct principle of uniformity of treatment.

§ Lord Rix
My Lords, will the Minister confirm that at a meeting in June 1994 between officials from the Department of Social Security, the British Actors' Equity Association and the Theatres National Committee, which represents managers, it was agreed at a discussion on national insurance class 1 contributions that no further action would be taken by the Government until a further discussion had taken place between those officials and the Equity-TNC working party? Can the Minister assure the House that that meeting will take place—it has not happened to date—before any final decision is taken?

§ Lord Mackay of Ardbrecknish
My Lords, my honourable friend the Minister responsible for these matters, Mr. Oliver Heald, has just written to the General Secretary of the British Actors' Equity Association, inviting him to come and meet him to discuss the subject. Indeed, we have had wide-ranging consultations. The problem has arisen because two actors took their case to the commissioners, with the backing of Equity, and won it; namely, that they ought to be considered as self-employed because of the tax advantages. They should have realised at the time that other self-employed people did not have the additional advantage of being treated as employed people when it came to paying national insurance contributions. We have to recall that uniformity of treatment is an important principle with regard to the Revenue and the Contributions Agency.

§ Lord Jenkins of Putney
My Lords, is the noble Lord aware that the principle has been tested and tried over the years? From time to time the Inland Revenue has taken the view that actors should be on pay-as-you-earn and it has been decided against them. Is not the reason that from some points of view the contract of the actors is a contract of employment; but from other points of view it is a contract for services? It is not a privileged position but it is a special position. I am sure that when the matter is looked into, the noble Lord in discussion with Equity will come to the conclusion that there is very good reason for maintaining the situation because of the precarious conditions in the acting profession.

§ Lord Mackay of Ardbrecknish
My Lords, one of the difficulties is that many other people are self-employed, including people in the arts and, for example, subcontractors in the building industry. They are considered to be self-employed and are not given the option of being considered as self-employed from the Revenue's point of view and at the same time allowed to pay national insurance class 1 contributions, which permits them to claim unemployment benefit. One has to be very careful before making exceptions and getting away from the principle of the Revenue and the 1575 Contributions Agency treating people on the same basis. That is why we are in serious consultation on this issue with those in the acting profession.
As I said, the situation has been brought about as a result of two actors taking their case to the commissioners, when they were considered to be pay-as-you-earn employees and therefore eligible for national insurance class 1 contributions and eligible for unemployment benefit. They claimed that they were self-employed and won. I am afraid that what follows from that is that self-employed national insurance stamps must be paid. We have to ask ourselves whether it is correct to continue with that uniform policy or whether we should breach it in this particularly narrow case.

§ Lord Marsh
My Lords, is it not a fact that at any given moment in time something like one in four of all Equity members are unemployed in excess of a year? A very high proportion of them at the outside have the occasional walk-on part, with no possibility of making a living wage. In those circumstances, would not most people consider the ideal solution to be that they should look for a different profession and not that they should be subsidised by the state?

§ Lord Mackay of Ardbrecknish
My Lords, I am not sure that I can agree or disagree with the noble Lord's figure of one in four. At the latest count 14,000 unemployed people gave their occupation as actors, entertainers, stage managers, producers and directors. In fact only about 3,000 of them were eligible for unemployment benefit. The rest were on income support and the like. The point made by the noble Lord, Lord Marsh, is quite correct. Those of us who have had a previous career with constituents will know that many people who are starting off in a self-employed career would very much like to have the option of being considered class 1 national insurance contributors and getting unemployment benefit.

§ Baroness Turner of Camden
My Lords, despite what the noble Lord, Lord Marsh, said, does the Minister agree that there is a case for listening very seriously to what those Members of your Lordships' House who have experience of the acting profession had to say this afternoon about the position of young actors? As has been said, many of them can expect to see a great deal of unemployment in the early years of their career. Will the Minister accept that there is no reason why such actors should not be allowed to continue to pay class 1 contributions?—otherwise, they have to be supported through means-tested benefits and the saving to the taxpayer cannot be all that much.

§ Lord Mackay of Ardbrecknish
My Lords, if the case had not been brought and they had continued to be considered as employed people—as indeed some of them are because of the kind of contracts that they have and they are paying PAYE and class 1 contributions—there would be no argument about the matter. It is because the profession decided that it wished to have the tax advantages of the self-employed that the problem has arisen for it and for the Government. The noble 1576 Baroness cannot just brush aside the point made by the noble Lord, Lord Marsh, about other young people starting off on a self-employed career in any other business, where they too may have periods of unemployment and might like the option of having, so to speak, an each-way bet.

§ Lord St. John of Bletso
My Lords, whatever the unemployment rate in the acting profession, do the Government have any plans to promote the film industry, which gives much needed extra jobs to the acting profession?

§ Lord Mackay of Ardbrecknish
My Lords, that is a little wide of the Question. Perhaps the noble Lord will look at the Order Paper for Thursday, when I believe that my noble friend Lord Inglewood is to answer a Question on that issue.

The Viscount of Falkland
My Lords, I thank the noble Lord for answering the Question. I agree with an enormous amount of what he said and in particular about the case of the two actors who went to the special commissioners. Having been a theatrical agent in a former existence, may I tell the noble Lord that actors do not always do what is best for themselves? That, obviously, is one of the examples. Will the noble Lord confirm that he will not let that fact colour the decisions of his department?

§ Lord Mackay of Ardbrecknish
My Lords, I shall not let even the fact that the noble Lord was once a theatrical agent colour the decisions of my department. It is a difficult problem and we understand the argument of the acting profession. Equally, we are very sure that having a uniform set of rules between the Revenue and the Contributions Agency is an important principle. As so often in government, we shall have to arrive at a decision between two conflicting principles.