On payments for admission to entertainments held on or after the third day of September, nineteen hundred and forty-seven entertainment duty within the meaning of the Finance (New Duties) Act, 1916, shall be charged, in the case of entertainments chargeable at reduced rates by virtue of Subsection (3) of Section one of the Finance Act, 1935 (that is to say, where all the performers whose words or actions constitute the entertainment are actually present and performing, and the entertainment consists solely of one or more of the following items, namely, a stage play, a ballet, whether a stage play or not, a performance of music, whether vocal or instru- mental, a lecture, a recitation, a music hall or other variety entertainment, a circus or a travelling show), as if for the rates set out in Part I of the Fifth Schedule to the Finance Act, 1943, there were substituted the rates set out in the Fifth Schedule to the Finance Act, 1939.—[Sir A. Herbert.]
I beg to move, "That the Clause be read a Second time."
I must say that I am very sorry to appear as a poor understudy for the hon. Member for Nuneaton (Mr. Bowles), whose new Clauses I am sure would have provided a most interesting discussion. In moving this new Clause, which stands in the names of many hon. Members in all parts of the House, I must at once, according to the rules, declare my interest in this matter, because, if it were agreed to, it might be that, next September—one never knows—it might benefit me financially, not as a manager, but as a humble playwright. The effect of the new Clause is to reduce the rate of Entertainment Duty to the rate which existed before the war. In 1939, it was roughly about half the present rate, because it was just about doubled during the war. The Chancellor of the Exchequer the other day kindly gave me some figures. I had asked him a Question—I am afraid it was rather ambiguous—as to the yield of the Entertainment Duty on the living stage for the last financial year, and the right hon. Gentleman gave me the answer of £5,500,000, which is about 10 per cent. of the total yield of Entertainment Duty on all amusements, including horse racing, dog racing and all the rest; but I am not clear whether that figure includes those kinds of entertainments which are mentioned in the new Clause, such as ballet, a lecture, a recitation, music hall or other variety entertainment. If there was any ambiguity, it was my fault; but, so far as the living stage is concerned, from what the Chancellor has said, the revenue is surprisingly small. So far as the living stage is concerned, this new Clause involves, I reckon, a sum of about £2,750,000, but I do not call that a loss of revenue, because I call the duty robbery. I would like to visualise for the Committee what these figures really show. The sum of £5,500,000 is taken by the State after the public pays £18 million, and, after the State has taken that amount, the managers are left with about £13,750,000. That shows the proportion.
Might I deal briefly with the history and the nature and the operation of this duty? It was first introduced by the Finance (New Duties) Act, 1916. In the original Bill, there was also proposed a similar tax on railway tickets. One can imagine what an outcry there was—and I can imagine what it would be now—against the imposition of a purchase tax on railway tickets and the tax was almost immediately abandoned. This is interesting, because, after all, a bus or a railway carriage is very similar to a theatre; they both cost just as much to run whether they are full or half full. However, that tax was abandoned and the Entertainment Duty was retained. At that time, the rate was about 7 or 8 per cent. In 1939, the rate was about 20 per cent., and that is the rate to which I am suggesting it should return. I am not saying today that it should be abolished though I should like to: I am making the most modest suggestion that it should be halved.
This is a bad duty and always has been, owing to its nature. First, it is bad because it is a tax upon receipts, not upon what goes into the bank, but upon what goes into the till. Any tax upon receipts is questionable, but a tax on receipts upon what is the most speculative of all human activities must be bad in itself. The production of plays, concerts, recitations, variety shows, is not like selling a packet of matches or a bottle of whisky, something for which the demand is certain and about which there is very little difficulty today. Here no man can command success, and when he does achieve success, a hundred causes over which he has no control may take it away. I remember many managerial post-mortems in the past, at which we agreed that nothing is good for the theatre. Bad weather is bad for the theatre, and very good weather is bad for the theatre. When the sun is shining people want to play tennis, and, when it is wet and cold, they would rather stay at home and read a book. Again, before a holiday, they are saving their money for their holiday, and, after their holiday, they have no money left. In times of national mourning, they do not feel like going to the theatre; in times of national rejoicing, the Government puts on State processions, parades, and firework shows free of Entertainment Duty, or an industrial exhibition. Indeed, we used to decide that there are only two good days for the theatre in the whole year. One is Christmas Day and the other is Good Friday, and on both of those days the theatres are closed.
There are other factors to take into account. The tenor may develop laryngitis, or the baritone may fall under a bus, or an actress may go off and have a baby. In my last show it happened that both leading ladies after three months, went off—bless them—to increase the population. There are other hazards over which the producers have no possible control, and yet this is the industry on which the Government decide to levy a tax upon receipts.
It is, perhaps, more instructive still to regard the duty as a Purchase Tax upon the original price of tickets, and, regarded in that way it is far more formidable. On a seat costing 4s. 6d., the duty is 1s. 4d., leaving 3s. 2d. to the manager—a tax of 42 per cent On a seat costing 10s. 6d., the duty is 3s., leaving 7s. 6d., and that is a Purchase Tax of 41 per cent. On a 16s. stall, which a manager is most reluctant to ask the duty is 45. 8d., the manager keeps 11s. 4d. and the tax is 41 per cent. There are many good reasons why we should not impose either a receipts tax of 30 per cent. or a Purchase Tax of 40 per cent. upon theatres or music. One is the nature of the commodity. There is no Purchase Tax on books, nor is there any on newspapers; because, although all books and all newspapers are not equally or wholly enlightening, on the whole, and by and large, as the sailors say, they are part of the area of enlightenment, they are part of the foods of the mind. Therefore, no civilised Government should impose Purchase Tax upon them.
The same applies to the theatre, concerts, and, it we are to be logical, to the cinema. However, the cinema is a very different problem. In the cinema one can produce the same play four times a day and seven days a week, whereas the theatre can produce the same play only eight or, at the most, nine times a week, and it has only six days against seven days. Therefore, I am not bothering much about the cinema now. I am concerned with living entertainment, about which a distinction has already been made by Parliament in 1935. Let me add this, although I suppose I need scarcely remind the Chancellor of this fact. We have here an exportable product. I do not know what the British theatre and British actors have earned in dollars during the last few years but the amount must be very considerable. A year or two from now it may be very difficult to sell a British motor car, but we shall still be able—at least, I hope so—to sell British plays and books. But we cannot export British plays unless they are based upon a healthy and prosperous home industry. Nobody would have thought of bringing over here the famous play "Oklahoma" unless it had had a very long and successful run in New York.
Another reason why we should not levy a sort of Purchase Tax upon this commodity is that Purchase Tax is normally levied on the wholesaler and is based upon the cost of manufacture. This is a tax on the retailer and is based on the sales price. Also, I understand Purchase Tax is intended to discourage expenditure, and I hope the right hon. Gentleman, whose Government have provided £65,000 (is it?) for the Arts Council, will not say that he wishes to discourage people from going to the theatre or to concerts. So far as theory is concerned, then, it is a bad tax—a tax of 30 per cent. upon receipts, in a speculative industry, and, looked at in the other way, it is a Purchase Tax of 40 per cent. upon one of the areas of enlightenment and mental refreshment.
Now may I say a few words of illustration about the operation of this tax? Many managers are very "cagey" about their plays. They do not like to show their wounds. But I am authorised to give a few figures about Mr. C. B. Cochran's last production but one, which was seen by many Members of this House, including Mr. Speaker and the Serjeant at Arms, neither of whom, apparently, considered the author should be committed for con- tempt, although it dealt with the proceedings of this House. It was a light musical play, but it had a sort of "message;" it paid respect to our institutions, and particularly to this place. [An HON. MEMBER: "Who was the author?"] I have been humbly trying to avoid bringing that up. He is one of the hon. Members for Oxford University. That play went on tour for ten weeks and played to packed houses everywhere it went. It gave a great deal of pleasure and, although I say it myself, I think some little inspiration to many large audiences. During those ten weeks the public paid £39,000 to see the play. Of that, the management handed over £11,000 to the State. [An HON. MEMBER: "Hear, hear."] Yes, but at the end of that ten weeks' successful tour, not merely had the manager made no profit, but he had lost money. Does the hon. Member still say, "Hear, hear?" The cost of production of that play was about £12,000. If the manager had been allowed to keep in his pocket £11,000—I am suggesting in my Amendment that he should keep only £5,000—he would, at least, have been able to pay off something of his production costs.
Not at all. I am saying that if one entertains people in five provincial capitals for ten weeks, it is a curious thing if one comes back to London with no profit at all, having handed over to the State the sum of £11,000. That seems to be a fairly simple proposition. However, we came back to London. There we "went very big" indeed, in July. The play went just as big as "Oklahoma" has done. Seats were booked up for months, and for 15 solid weeks the public paid £5,800 a week to see this play. Of that sum, the State took £1,700, leaving £4,100. The running costs weekly were £3,000. The cost of production was £11,000 or £12,000, and a simple calculation will show that the manager had to work for 11 or 12 weeks before he got back the cost of production and could begin to make a profit. Is that not an astonishing way of doing business? We carried on, with all the hazards, including those of leading ladies having babies and tenors having laryngitis, and eventually after 31 weeks of successful entertainment the play came off. During all those months the public had paid £154,000, of which the State took £45,000 and the management lost, I learn today, £4,000. Is there anybody in the world who would like to carry on a business on those terms?
I could mention a few more examples. I have read that great shows like "Oklahoma" at Drury Lane can afford it. I hope so; but that remains to be seen. Let me tell the Committee what happened not so long ago to another play by a very celebrated British author at Drury Lane. There was a loss of £38,000, and the State took £25,000. Does that make sense? True, the loss was so great that not even the remission of tax would have prevented a loss, but, while I agree that Income Tax and Surtax should be charged on people's profits, this wretched tax should not be imposed upon people who are losing money.
I am sorry to interrupt the hon. Member again, but I am anxious to understand his argument. Is his argument this, that if this tax were wholly or partially remitted, it would then be possible for theatre companies to increase their prices?
If the public pays £12,000, which is not paid to the State but is left in the bank, the theatre has something to play with. In reply to the question, the objective, the hope of the entertainment world is to reduce prices. Let me give an example. In the old days, the price of a stall for a straight non-musical play was 12s. '6d., from which the State took 2s. and the management took 10s. 6d. The top price now is 13s. 6d., of which the State takes 3s. 10d. and the management takes the rest. In other words, the public pays a shilling more and the management gets tenpence less. If my new Clause were accepted—or, better still, if the duty were abolished altogether—prices would go down, and there would be adjustments which would benefit both the public and the managements. Not the State, I quite agree. I am suggesting that the State should take less money. That is quite a simple thing. I will develop the argument in a minute. The object is not to increase prices. The managements hope to reduce prices. If prices were lower more people would buy more tickets. I should have thought that that was a perfectly simple proposition.
If I may give one more example of the way in which this business is being conducted, let me quote this one. This is about a gentleman who does not wish his name to be mentioned publicly. But I got the information, lest I had the figures wrongly, in a letter from a chartered accountant about the yearly earnings of this particular man, who is a very good man in the theatre—not a playboy who bounces in to make money, but a good man of the theatre, a respected manager. During the year ended 31st May, 1947, he paid out in salaries to artists £89,000; he paid to the State, Entertainment Duty of £68,000; he made a loss of £17,000. I hope that what I am driving at it will now be clear to hon. Members.
The point is that people cannot possibly run business on those terms. They do go on. How do they go on? They seek more and more the line of least resistance. They tend more and more to bring over established successes from New York—most of them very good, but not all of them so good as all that. Less and less are they ready—I do not blame them —to take the risk of producing new British plays. So we have people like Mr. Priestley knocking at the door year after year with plays, interesting plays which are not certain of success, to be sure, but which ought to be produced.
I am glad, indeed, to see my hon. Friend the Member far Eton and Slough (Mr. Benn Levy) here, because he is a very respected member of the dramatic world, a very fine playwright. I am sorry he has not put down his name in support of my new Clause. I think I know the reason he has in mind for not supporting me. He is in favour of the non-profit-making arrangements set up under the Finance Act last year. I say nothing against him, or against those arrangements. But I very much doubt their working. I wonder whether these arrangements are going to lead to much creation—to creative activities in the theatre. I am rather afraid that the non- profit-making people are very likely to go to the non-copyright, non-royalty-earning plays like those of Shakespeare and Congreve, and to opera, and that sort of thing. Certainly, those arrangements are doing good, because it will be quite impossible to produce more opera if we have to pay Entertainment Tax. But, I wonder, are they ever going to produce anything to stand up to "Oklahoma" and those other big American musical plays, for example? It is rather important that we should stand up to them. Big Ben "cost £12,000 to produce. There is another play whose name I will not mention—I do not want to advertise —that cost £15,000, because prices of everything have gone up. I wonder what non-profit-making person is going to put money on that sort of thing, especially if he is told that, while there is no profit or interest for him, the management are going to get no more than £25 a week?
The curious thing about this non-profit making business is, that there is nothing about non-wage-earning or non-royalty-earning or non-salary-earning. Authors, actors, composers, and the bands may all go on earning what they like and making their own contracts. It is only the producer, who, very often, is the creative impulse of the whole thing, who is not allowed to make more than £25 a week. But whether these arrangements are good or bad, there is no compulsion on anybody to be a non-profit making person; and as it is the policy of the Government to nationalise this and that, but to make what is left as prosperous and as enterprising as possible, surely it is not the intention of the Government -to drive what is called the commercial manager out of business altogether? Or is it?
I shall very soon hear somebody say, I know, "It is all rents: it is all a question of rents." If it is a question of the rents that are charged for theatres, then I hope the Government will do something about it. But the Government are doing nothing about it, and nobody, so far as I know, is proposing to do anything about it. The President of the Board of Trade has refused to appoint a working party to go into the theatrical industry. The hon. Member for Ashford (Mr. E. P. Smith) invited it, and I am not sure that it is not a good idea. But I think that there is a great deal of exaggeration of this question of rents. First, if I accuse the Government of taking £1,700 out of the till every week of a theatre, it is really no answer to say that that is right because the man who owns a theatre has taken £500 out of the till. The man who provides the theatre has a right to something. He has taken a risk; he has provided something; he has some obligations. Whereas the State has done nothing and provided nothing and has no obligations.
I agree it is not right to have an Entertainment Duty—especially the Duty as it is—simply because high rents are charged. But I think there is an exaggeration about these rents. I have been looking into the matter. I am told that the number of the rapacious rentals that are charged can be counted on the finger of one hand. Certainly, as I know, the lessee who is on "sharing terms," as they call it, has obligations. He has in some cases got to provide staff for the whole theatre, the house staff, the box-office staff, the stage door people Or, in other cases, he has got to pay his ground rent, local rates and water rates and insurance, which may run into £2,000 a year. Indeed, the cost of the upkeep and maintenance of a large theatre may be something like £15,000 a year. If that is the case it is not surprising if high charges are made for the use of theatres, especially as the owners have got to take the risk of the theatre being left empty on their hands, and I think, as things are going, that before long there will be a great many theatres left empty on the owners' hands. However, my main point is this. If there is anything wrong about that it is for the Government to deal with it. In the meantime, there is my new Clause, which deals not with rent, but with Entertainment Duty.
Then there will be people who will say, "This is merely another indirect tax. It is not really a thing that should bother managements. It is a thing for individuals themselves." One answer to that is: Why should the individual have to pay tax of 40 per cent. in respect of a theatre, going to a play, going to Harringay as if it were a bottle of whisky? I will not say a bet, because the Chancellor of the Exchequer has not had the courage
to tackle the bookmakers yet. Why should music and plays be obliged to pay such a tax? And it is not true that the tax can always be passed on. I have a letter here from the owner of the Vaudeville Theatre. I will not weary the Committee with the whole of it, but the writer says that the theatres are charging substantially less in effect now than 10 years ago, simply because the limit has been reached of what the public will pay. He says:
Our capacity after deduction of tax is £241 as against £265 in 1937.
In other words, part of the deduction now falls on the producer and not on the public; presumably, because the public will not pay more for going to the theatre —and who can blame them? The managers want to bring prices down. Let me repeat the example which the hon. Member for Norwich (Mr. J. Paton) dragged out of me somewhat prematurely. Prewar stalls for a non-musical play, top price, 12s. 6d., 2s. to the State and 10s. 6d. to the manager; now, 13s. 6d., with 3s. 10d. tax and 9s. 8d. to the manager. That is 1s. more for the public and 10d. less for the manager. Can anybody defend that?
Although I have dealt chiefly with the theatre, about which I know most, all this applies to music and concerts. I am told that people who run orchestral concerts—they do not make them pay—cover their expenses by means of recitals when they bring the distinguished foreigners over. By what they gain on the swings in that way they manage to keep orchestral concerts going. A very recent example of musical enterprise is that great British Music Festival at Harringay, run jointly, I believe, by the Greyhound Racing Association and Mr. Jack Hylton, a distinguished member of the Labour Party. I met Sir Malcolm Sargent just now, and he told me that that show is better than anything he has seen in Hollywood or New York, or anywhere in America. He says it is a magnificent thing: all the best music by all the best people, from all over the world, for 1s. 6d. to 9s. What is the State doing about that? Charging a tax of 40 per cent. upon every ticket. That is private enterprise, not a non-profit making society. Base private enterprise people are producing that great show, and the State does nothing to encourage them, but charges this savage tax. We can stand up to the Americans, whether it is in music or the theatre, if we get a fair deal from the State.
I apologise for being so long. Let me say a few words about the new Clause before it is time for me to close. I hope these arguments will fortify hon. Members opposite to vote for this new Clause. During the war the duty was roughly doubled. The tax deducted on a 7s. 6d. ticket was 1s. 1d. in 1939, and it is now 25. 2d. During the war, of course, everything was easy; one could fill any theatre or concert hall with almost anything, when there were so many soldiers on leave; and then, for about a year, there were the gratuities to draw on. But all that has gone. Also, of course, during the war other forms of competitive entertainment were either curtailed or cancelled—greyhound racing, and all the rest of it. But now all the competitors have come back; money is not so plentiful, despite the efforts of the Chancellor of the Exchequer; competition is very fierce; and the cost of everything has gone up. Wages have gone up by 70 per cent.; insurance, lighting, and all the rest have also gone up. To give an example, a manager told me the other day that, to produce a very little play with one set and a few actors now costs him three times as much as it did to produce a similar play six years ago. Theatres have to be re-equipped, and new wage demands are coming along. In short, there is a very good case for going back at least to the prewar duty; though, personally, I should like to see it abolished.
There are two major musical mysteries in history. One is the old question, what song the sirens sang. The other is: Who wrote and who composed the song in the Chancellor's heart? I daresay that with his natural and necessary caution he went to some non-copyright making author, and perhaps to some Austrian composer. I should like to think that he went to a British author and a British composer; something produced by some modern man of British enterprise. I should like to think that the song in his heart was a song with which I had something to do:
I want to see the people happy.
I am sure that in the last analysis that is the song in his heart. I wish, indeed, that he or some member of the Treasury had been attached to poor Mr. Cochran
on the very day that the preparation of that particular show began, and had watched all the troubles and difficulties from first to last. I wonder whether at the end of those proceedings he would have said: "Now this is an industry which ought to bear a special tax of 40 per cent"?
I am very glad to find so many hon. Members opposite, and from other parties, supporting this Clause. I know hon. Members opposite say that they represent the workers by hand and brain, a claim which is not always enthusiastically supported on this side of the Committee. They also say—and I think it is right—that they not only want to draw the people up in the material sense, but they wish to lead them into brighter and newer fields of leisure and enlightenment. I believe that is true: and here they have a chance to do something. It is a very proud and stirring thing for anybody associated with music or the theatre to stand aside when the people go out and to see their happy faces—if the show is successful—and to hear them say that for two or three hours they have been taken out of themselves, refreshed and relaxed, and have forgotten their troubles, politics, and all the rest of it. But when they have all gone it is a very sad thing for the manager to look at the figures, even when the whole place has been packed, and to realise that the whole of that elaborate and most difficult edifice may be founded financially on a quicksand, not because of anything inherent in the structure, but because it is being undermined by the State—which, God knows, wants to see the people happy as well as we do—simply because the State, in its folly, I think, has thought fit to impose a tax of 40 per cent. upon those who cater for the happiness and enlightenment and spirit of the people.
I rise to support the new Clause which has been moved by my hon. Friend the junior Burgess for Oxford University (Sir A. Herbert), and which is supported by 30 other hon. Members of this Committee. I also must declare, as he did, that I have an interest in this matter. But, strange to say, I am not an opponent of Entertainment Duty, because I believe that in these distressful times, when vast sums of public money have to be raised by hook or by crook—and more often by crook than by hook—it is essentially a fair duty in principle. I do not quarrel with the fact; I quarrel with the degree; and I quarrel too, with the incidence.
If we take the theatres throughout the whole country we find that the average rate of duty is 28 per cent. of the gross takings. contend that is an enormous proportion. But, if we come to the West End of London, we find that percentage rises steeply to about 34 per cent., in some cases, of the gross takings. Now that, I submit, is an almost prohibitive portion of the gross takings for the Government to mulct. We ought to remember that in this matter of Entertainment Duty, the Government are really the worst type of rentier de luxe. They do absolutely nothing of any value for the commercial theatre. They toil not, neither do they spin, Yet Solomon in all his glory never enjoyed such a rake-off.
This new Clause, like all the best causes in the world, is probably doomed to failure beforehand; its fate is probably a hopeless one. Well, I am a realist. This new Clause seeks to replace the 1943 rate Of duty by the 1939 rate of duty. It is worth reminding the Committee of the fantastic difference between these two basic rates. If we take 1939, we find, leaving out the 3d. seats, if any, that the duty was a halfpenny for a seat costing 1s. 2½d. or less, 2d. for a seat not exceeding is. 10d., but if the seat exceeded 1s. 10d., 2d. for the first 1s. 10d., and 1d. for every 5d. or part of 5d. over 1s. 10d. There are Members of the Committee who are quick and accurate arithmeticians; but, for the benefit of those who are not, I will give an example of what the duty produced, taking as our unit a stall at 16s. On that, the duty in 1939 was 2s. 6d., thereby leaving the management 13s. 6d. Under the 1943 Finance Act, the Entertainment Duty was raised even more savagely and less defensibly than the recent increase in the Tobacco Duty. It worked out like this. Leaving out all 3d. seats, it was a halfpenny on the 11½d. seats, if any, up to 1s. 4d. on a 3s. 2d. seat, that is to say, 1s. 4d. on the first 3s. 2d., and 2½d. for every 6½d. or part of 6½d. over 3s. 2d.
Going back to our unit of a stall at 16s., only 11s. 4d. accrued in 1943 to the management. I have noticed that the Chancellor of the Exchequer has closely followed my calculations, and will appre- ciate that the management are approximately 17 per cent. less well off, taking the 16s. stall as the unit. Here I must remind the Committee that all theatrical costs have increased enormously. Rents have already been mentioned, and I will not go further into that matter, except to say that in a great many cases they have risen indefensibly, and the profit rentalist is round the neck of the production management like the old man of the sea round the neck of Sinbad the Sailor. The salaries of players, stage-hands and the front of the house staff have all increased, although I make no complaint of that. The cost of dresses, costumes, the making and painting of scenery, furnishings and hangings, required for every production, however simple, have all mounted. One thing which has not risen proportionately is the rate of the fees paid to the dramatist, and this has some bearing on the problem, because it is the dramatist who makes the money. It is not the actors or the actresses whom people come to see, nor is it the producers, the management or the landlord —the play is the thing. It is the dramatist, who makes the money, and therefore it is the dramatist who indirectly pays the duty. Since 1939, I estimate that I have earned enough for the Treasury in the shape of Entertainment Duty to pay the salary of the Chancellor of the Exchequer for more than the next to years. That is a solemn, and, indeed, an awful thought; and it is something which might well deter any would-be dramatist from writing for the theatre. In my case, however, it is tempered by the hope that a portion at least of my earnings may eventually go towards the stabling of a fiscal horse wearing my own colours—blue and not red.
If this or some similar relief cannot be granted, I would ask whether the Chancellor of the Exchequer desires to see the commercial theatre go out of existence. If he does, his policy is perfectly comprehensible; indeed, it seems designed to that end. Last year, non-profit-making companies were freed from the obligation to pay Entertainment Duty, provided their entertainment was partly educational, which includes all entertainment—since even bad entertainment is partly educational; it shows you how not to do it. It is severely educational in that respect. An enormous number of non- profit-making companies have subsequently sprung up. I know that the right hon. Gentleman and his hon. Friends point to this exemption as a measure of great enlightenment carried out by the Socialist Government, but I would point out that, although it was technically carried out by the Socialist Government, it was devised and was lying ready to be brought in by the Coalition Government when my right hon. Friend the Member for the Scottish Universities (Sir J. Anderson), was the right hon. Gentleman's predecessor. And, if someone at the Treasury had not forgotten all about it, the thing would have been in operation six months before his Budget of 1946. Most of these non-profit-making companies are run unexceptionably, but some are supposed—and I would put it no higher—to pay exorbitant rents, or to make utterly extravagant contracts with artists and others, because they had this huge rebate of public money with which to play.
The Board of Customs and Excise take the greatest possible pains—and rightly so —to ensure that those concerned with the management of non-profit-making companies do not make any secret profits, and that the profits, if any, are ploughed back into the venture, which was the object of the League of Dramatists when they prevailed upon the-then Chancellor of the Exchequer to exempt genuine non-profit making companies from the Entertainment Duty. The-Board of Customs and Excise have no, power to supervise contracts or expenditure. I have interviewed them, in company with my hon. Friend and opponent the Member for Eton and Slough (Mr. Benn Levy), with regard to alleged abuses, and that is what they have told us. Non-profit-making companies are therefore in an extraordinarily favourable position compared with the purely commercial managements. Speaking as a dramatist, I would far rather have a play of mine produced by a nonprofit-making company, than by a commercial management, not because I should receive more royalties, because my trade union—although we are legally free to do so if we choose—has come to a gentleman's agreement with the nonprofit making companies that they shall not be charged more than we should have received from a commercial management. But because, with that wonderful 28 per cent. to 34 per cent. in hand, a nonprofit-making company has a greater chance of standing up to the common vicissitudes of the theatre. Expenses are ipso facto a lighter risk; and there is every chance that a play will run longer and keep the author's pot boiling for a greater period of time.
We must question whether that is quite fair to the commercial managements. Can they, in fact, compete at the present rate of duty? I rather doubt it. The inevitable slump in the theatre has set in. Not unnaturally an economic fear has seized upon the entertainment-going public, just as it has seized upon the right hon. Gentleman. If the right hon. Gentleman searches his own heart, he will find there not only a song, but a fear. The additional Tobacco Duty has hit the theatre almost as severely as the tobacconist. If we take a middle-class family—and I know the Government, with the exception of the right hon. and learned Attorney-General and the Minister of Fuel and Power, have become extremely solicitous about the middle-classes—if we take a middle-class family, let us suppose the husband smokes 10 packets of 20 cigarettes per week—not an exorbitant quantity—and that his wife smokes five. There is 15s. a week extra going out of that household's budget. Fifteen shillings will buy a couple of seats at the theatre every week, so that the theatre is definitely suffering as a result of the increased tobacco tax. After all, tobacco and the theatre are both anodynes, which help us to escape a little from the sordid realities of life. Of the two anodynes, I think the little cylindrical roll of sweet weed is backed to win every time. The late Sir James Barrie once said—
I submit, with great respect, that I am entitled to point out that the increase in the Tobacco Duty is having an adverse effect on the theatre and is an additional reason for reducing Entertainment Duty on theatre seats. I suggest, with all seriousness, to the Chancellor, that unless he wishes to see the commercial theatre disappear he should endeavour to meet us in this way, by accepting this Clause or something similar. I hopes— I am sure that the right hon. Gentleman will say that my optimism is incorrigible; but, if optimism is not incorrigible, it cannot be optimism—I hope that the Chancellor, who, I believe, is not a personal devotee of the theatre, may see his way to accept something in the nature of this proposed Clause, because by taking such action he will give encouragement to a long-suffering and precarious profession which has been the favourite milch cow of himself and his predecessors and which, unquestionably, deserves a fallow period for rest and recruitment.
This time last year the hon. Member for Oxford University (Sir A. Herbert), the hon. Member for Ashford (Mr. E. P. Smith) and myself embarked on a comparable controversy, and I hope the Committee will be patient with what, in effect, is a repeat performance this year. I would like very much to have found myself in agreement with my two colleagues but I should like it much more if they had been able to find themselves in agreement with me. Although I have no doubt at all that they believe that this new Clause is in the interests of the theatre, I am persuaded that it is exactly on those grounds that the Committee ought to reject it, namely that it is, in fact, against the interests of the theatre. That may appear paradoxical since it is a Clause for the reduction of Entertainment Duty, but I will try to show as briefly and lucidly as I can why I believe it to be the fact.
As the hon. Member for Ashford has just said, the theatre is in a precarious economic position. It nearly always is, and it very certainly is now. The two major factors which present themselves are: (a) the Entertainment Duty; (b) rents. I would like to say a word or two about rents, because they really are relevant to the Entertainment Duty. It is no good the hon. Member for Oxford University just "pooh-poohing" them and saying that there is a great deal of exaggerated talk about rents. There is some exaggeration, but not much. I know a theatre which before the war charged a rent of £90 a week and recently asked for a rent of £450 a week. That is a rather big increase. An in- crease of that kind is not accounted for by any increase in costs. Let nobody pretend that it is. I quoted last year another case of a theatre which before the war was glad to get £150 to £175 a week which, was then charging a percentage of 50 per cent., which meant that they were receiving some £900 a week. That difference is not accounted for by an increase in costs. The increased rents are due to the fact that theatres are a commodity in a free market. Their price rises when there is a shortage of theatres. It rises when business is good. It rises to the point where the owners can just be persuaded to gamble on being able to pay the rent, although they know that the margin is immeasurably reduced. This is not morally to censure theatre owners. It is inevitable that that is what must happen under the present system. For my part, I hope the Chancellor will see fit to introduce a Rent Restriction Bill some time, to apply to theatres. If that is difficult, I am sorry it has not been found possible at least to accede to the request of the hon. Member for Ashford that a working party should be instituted to investigate the whole matter. I hope my right hon. Friend will consider both these suggestions. The reason why rents are relevant to the Entertainment Duty is this. It is not that two wrongs make a right. But if there are two plugholes in a bath it is no use stopping up one without stopping up the other. If you reduce your Entertainment Duty the producing manager has more money to spend. If the landlord asks for more he will receive more, so that from the theatre's point of view there may be very little to be gained.
But even if this were not true, what is to be said for the new Clause? The first thing to be said for it is that it is out of date. A few years ago the junior Burgess for Oxford University would have had a perfect ironclad case in saying that the Entertainment Duty should be reduced. But not since last year. For what happened last year? The Chancellor produced a Clause in the Finance Bill which completely and wholly exempted managers from that tax if they chose. There is now no obligation on any manager to pay any Entertainment Duty at all. [An HON. MEMBER: "On what terms? "] I will come to that in a moment. The junior Burgess for Oxford University asks merely for a reduction of the Entertain- ment Duty to the prewar level. But in fact nobody need pay anything. There is one condition attached. Anyone who wants to be exempted from paying the tax has simply to undertake to plough the profits back into the theatre. But that is precisely what everybody who is interested in the theatre,' and who loves it, wants to happen. We want people to plough profits back into the theatre. We want to build up a large financial reserve with which the theatre can finance and support itself. If we take steps which will remove the incentive from managers to take advantage of this opportunity, all we shall do is once more to drive all the capital out of the theatre and remove all the incentives given by the Chancellor of the Exchequer to those who are prepared to keep their reserves inside it.
Supposing I were rash enough to put on a big musical play costing £12,000 or £15,000 how am I going to get that money; and is it or is it not true that the manager, even if he has the reputation and long service of Mr. Cochran, is limited to £25 a week?
As to the first question—how could the hon. Gentleman raise the money?—that is a point about which I want to say a brief word later because it is, I think, one of the difficulties of the non profit making scheme. But apparently it is not an insuperable difficulty, because there have already in fact been established 40, 50 or 60 non-profit making companies, so it has been possible to do it. I would, however, like the Chancellor of the Exchequer to look into that and see what expedients there might be for further financing these companies. Secondly, the hon. Gentleman said that Mr. Cochran made a loss on a very successful show. In other words, he had to go to his bankers, or to himself if he was his own banker, and say, "Look, if I do tremendously well, I shall make a loss. Will you finance me?" Apparently, such are the engaging manners of Mr. Cochran that they said, "Yes." Surely, therefore, he could succeed as well in raising money where the return is limited as when the loss is almost inevitable? Great opportunities have been offered to any manager who loves the theatre and Mr. Cochran is certainly one of them—I have for him much personal affection and ad- miration—but this is a. scheme ideally suited to him. I cannot understand why he did not take advantage of it. If he had, instead of losing £4,000 he would have had £45,000 in the bank. It is true that the £45,000 would have had to be devoted in putting, on other plays, but that is precisely what Mr. Cochran likes doing, and what we want him to do. Where the difficulty arises, I honestly do not understand.
I have spoken rather longer than I meant to, but I feel that the arguments are overwhelmingly against this Clause because what the Chancellor said in his last Budget—whether he knows it or not —to the managers was in effect, "Here you are, here is a preferential tax on all managers who are unwilling to keep their profits in the business." I want quite frankly to keep that preferential tax. It did not arise from any doctrinaire notion that profit-making is wicked in itself. If it had, the right hon. Member for North Leeds (Mr. Peake) and the right hon. Member for the Scottish Universities (Sir J. Anderson) who originally drafted last year's Clause, would certainly not have drafted it on the grounds that they were against the making of profits. They drafted it on the grounds that it was in the interest of the theatre. I ask the Committee—because the theatre really is an important thing—to believe that the interests of the theatre are being served by making it a condition of tax exemption that profits shall remain inside the theatre.
I would like to support this Clause precisely because I have not an interest in the theatre in the technical sense, although I have a great interest in it in the cultural sense. The hon. Member for Eton and Slough (Mr. Levy) based his opposition to this Clause on two arguments. The first was his objection to a bath which had two plug holes. It is very odd for a bath to have two plug holes, but if it had, he said that it would be waste of time only to stop up one. If his argument had rested there, it would have been an argument for the new Clause rather than against it. If it were merely true that the theatre was suffering under two staggering blows—one a bad system of rents, and the other a bad system of Entertainment Duty—the fact that the rent problem still remains to be dealt with, and could be dealt with along the lines suggested by the hon. Member for Ashford (Mr. E. P. Smith) would not be an argument against also dealing with the problem of Entertainment Duty. We are not concerned at the moment with arguing about the rental system in the theatre. In itself that system is not an argument against the reduction of the Entertainment Duty as proposed in this new Clause.
I thought that I had made myself clear. My argument was that, if we reduce the Entertainment Duty, let us not do it on the grounds that we are necessarily benefiting the theatre, because in point of fact we are probably only benefiting the landlord.
I thought I made it clear that I did not pretend that I had yet come to the gravamen of the hon. Member's argument. I was going on to the remainder of his argument. His other point was about the non-profit making theatre. It is possible, as he argues, for the dramatic industry to escape all necessity of paying Entertainment Duty simply by making use of those facilities which have already been put at its disposal. I personally have no interest in whether theatre managers are prosperous or not, but I have a personal interest in the theatre and that the theatre should go on. It is from that point of view that I approach this problem. I do not mind under what system it goes on. The question we have to face in dealing with the Entertainment Duty is not whether the non-profits system as a whole is a bad system which ought to be condemned, which I do not think anyone would maintain—and I certainly would not—but whether it is now possible to do without the commercial theatre altogether.
The junior Burgess for Oxford University (Sir A. Herbert) has raised a point that certain kinds of plays which would be highly desirable in the public interest should be produced, but are not likely to be produced under the system as it is at present—the non-profit-making system—and the hon. Member for Eton and Slough to some extent agreed with that. He said that there were 40 companies on a non-profit-making basis in existence who were prepared to produce plays, but he was not quite sure what plays they were prepared to produce, and he was inclined to admit there were certain plays which it was desirable should be produced which they would not produce. He proposed that the Chancellor of the Exchequer should look into that matter to see if he could not revise the basis of nonprofit-making companies so that they would undertake these larger activities. I am not concerned with whether this should be revised, but if it is revised we have a new situation. As things are now, these shows will not be put on and the British theatre will be likely to be deprived of these shows to its very great impoverishment. When the situation has changed, he will no doubt consider it again. At present, I maintain that even according to the arguments of the hon. Member for Eton and Slough the case for something in the nature of this new Clause has been very strongly made out.
I defend this new Clause on two grounds: first, on the ground of the interests of British art and, second, on the ground of the interests of British finance. I know that in this curious age in which we live no term of abuse is considered more wounding than to call a man a highbrow. If somebody says he wants to build a power station, the people who object are called highbrows, and the objectors indignantly deny that they are highbrows, which is considered a most insulting thing to be called. I am not one of those who consider that it is disgraceful to be interested in the preservation of British art and the British drama. When Wordsworth said he spoke the language Shakespeare spake, he did not think it altogether a disgraceful thing to do, and I do not think it is altogether a disgraceful thing that British art and drama should survive. At any rate, as indeed my hon. Friend argued, whether it be disgraceful or not it is a fact that there are these curious urges springing up in people's souls which makes some people have artistic temperaments and want to be dramatists or actors, and even want to be producers, and they will go on acting and writing plays in any event. What is far less certain is whether they will go on writing and acting plays in this country. The policy at present being pursued by His Majesty's Government towards both drama and literature is only too likely to drive all artists and dramatists out of this country so that they will give their talents and make their money in other countries, and that seems to me to be a wholly disastrous thing.
Secondly, from the point of view of British finance, I support this new Clause because, as has indeed been shown, all the arguments about a corner in British drama and so on are comparatively irrelevant. They would be extemely pertinent if we were discussing the welfare of British drama, but from the point of view of this new Clause, namely, finance, they are comparatively irrelevant because drama is by its nature in competition, not as between theatre and theatre, or as between one dramatist and another dramatist, but between the theatre itself and all other forms of entertainment and, indeed, all other activities. Therefore, the arguments about the amount the Treasury have received as a result of this higher Entertainment Duty in the past have no very great bearing on this new Clause, which is concerned with what it is likely to receive in the future. Past receipts are likely to be an extremely small guide to what is to come, because as my hon. Friend, too, said, the future of the theatre is unpredictable and nobody can tell for certain what will happen. There is, however, every sign and probability that at any rate the immediate future of the theatre of this country is likely to be a great deal less prosperous from the economic point of view than the past.
Its past has been prosperous for two quite accidental reasons; it has been partly because of the circumstances of the war—people coming home on leave tend to favour going to the theatre—and partly because, as the Chancellor has so often told us, we have been in a situation where we have had too much money chasing too few goods, and people have gone to the theatre just as they have read books and carried on various other activities because it was one of the comparatively few things they could do. In most other forms of entertainment, the more people indulge in them the more is consumed, but you do not consume any more actresses or any more dogs if you go to more theatres or more dog racing, and, therefore, these are industries or activities which flourish particularly in a time of shortage of goods.
One of two things is likely to happen in future: things will either get worse or they will get better. Or, as my hon. Friend has said, they might stay as they are. I think they will either get worse or get better, but whichever happens it is likely to be to the disadvantage of the theatre. If things get worse people will stop going to the theatre because they will not be able to afford it, and if things get better they will stop going to the theatre because they will be able to afford other things which will then be more plentiful. There is, therefore, every reason to think that the theatre in the future—in the near future at any rate—is in for a difficult time. Whatever the prospects, therefore, we are faced with the difficult question of whether the British theatre will survive. It is, surely, in the national interest that it should survive, and if £3½ million be the sum which the Chancellor receives as a result of the higher Entertainment Duty in the past year, it is far from certain that he would receive less than that sum by accepting this new Clause. In point of fact, it is extremely probable that with the present high rate of Entertainment Duty theatres will be playing to empty houses during the coming year, whereas with the lower tax, as proposed in this new Clause, they would be able to play to full houses, so that the Treasury would receive more money by accepting the new Clause than by rejecting it.
I feel at a little disadvantage in speaking at this stage of the Debate, because three out of the four previous speakers are playwrights, though I do not think the hon. Gentleman who has just spoken has yet produced his first play. If all the playwrights had been unanimous, it would have been easier for me to reach a decision but the fact that my hon. Friend the Member for Eton and Slough (Mr. Benn Levy) considers—and gave good reasons for so considering—that the acceptance of this new Clause would be against the interest of the theatre which we all desire to forward makes my position a little difficult. In reply to the hon. Member for Devizes (Mr. Hollis) I say without any hesitation that of course we must all desire that British art and drama should survive and flourish, whether it be highbrow, lowbrow or middlebrow—and all types of production are known. To begin with the hon. Gentleman the Junior Burgess for Oxford University (Sir A. Herbert), who moved the new Clause. I was trying to puzzle out, as he proceeded, one or two arithmetical problems. I had been working on his article in "The Sunday Times," and I rather gather he now says that the figures are different.
I had been looking at that article and trying to puzzle out some of the arithmetic of the economics of the theatre. I may perhaps be allowed to make one or two observations on that in a minute, but at the moment I do not quite agree with his arithmetic about the present rates which he is proposing to alter. I have tried to work it out with the aid of my advisers and, under the Finance Act, 1943, which is the relevant Act for this purpose, the present rates of Entertainment Duty represent about one-twenty-fourth of the admission price for is. seats, about one-fifth of the price for a 2s. 6d. seat and about one-quarter of the price for seats above 2s. 6d. I think that is correct and if so, it does not sound quite so formidable as he suggested. No doubt he can make a case—whether it is a good case or not we will discuss in a moment—for reducing those figures, but they do sound a little less formidable than the figures which he put to the Committee.
I think my figures are correct, too. Perhaps the difference arises according to how one makes the estimate. I have worked out—and I think it is a fair way of approaching it—the proportion which the tax levied bears to the price of the seat.
I gave the figures that have been worked out and from them it can be seen that there is a substantial margin in favour of the living theatre as compared, for example, with the cinema. That was the intention—and the quite proper intention—of those who claimed this reduction. I would not for one moment depart from that, although I must admit that sometimes I am subject to severe pressure from those with a special interest in the cinema, and who tell me that the Entertainment Duty in regard to the cinema is too high. If I continue to resist them I must not do too much to widen the gap, which is deliberately created between the living stage and the canned performance—as I think it has been described earlier this afternoon —which comes from the cinema.
With regard to the figures in the article which the hon. Member for Oxford University wrote in the "Sunday Times," it appears that the manager—I will not quote all the figures, though I have them here—got £1,100 towards recouping the production of his costs of £11,000 on this performance, and it also appears that after the expiration of the first 11 weeks, during which this shown ran, the manager made a profit of £1,100 a week. I think now that I am citing the figures as quoted in the "Sunday Times." I want to get the facts right, because it appeared from the hon. Gentleman's remarks that nobody was making anything at all from this performance.
There was a ten-weeks tour, during which £11,000 was paid to the State, but no profit was made. The cost of production was about £12,000. The running costs, weekly, were round about £3,000 The total amount paid by the public for 15 weeks in London averaged £5,800 a week, and the sum paid to the State weekly was about £1,700, leaving £4,100 to the manager. That sum for 11 or 12 weeks, was not a profit but was gradually recouping the manager for the costs of 'Abduction. There were 22 weeks in all in which he just got his money back, and just when there was a chance of making some money the production had to stop.
I gather from the hon. Member, and also from the "Sunday Times" article, that the manager did make a reasonable profit in the second half of the period. I understood from the junior Burgess for Oxford University that he was speaking of a period when the show was running in London after being on tour. I understand that in the latter part of the period the manager was doing quite well and was making a considerable profit.
I am merely trying to follow the junior Burgess for Oxford University both in the article in the "Sunday Times," and in the speech to which we have listened today. However, it is of sufficient interest for us to be able to pursue the matter perhaps in a quiet hour later on. I want to understand the thing. I am not trying to evade or contradict it. I have had these figures studied by my advisers, in the light of what the hon. Gentleman the junior Burgess for Oxford University had asked, but I am inclined to say that on the figures given, the manager did not lose money; on the contrary, he made a moderate number of hundreds of pounds a week on this particular performance.
I am sorry to interrupt the right hon. Gentleman again, for he has been very accommodating. There is a difference between making a profit and getting back capital costs. The sum of £1,100, which was coming in, was not profit, for there was a sum of £12,000 over the period which the play ran for the cost of production. Once that was met, there were two or three weeks when a profit was made, and then the profit began to descend until there was a slight loss. But all the weeks about which the right hon. Gentleman is talking there was not a profit being made, but the gradual recovery of money to replace that spent on the cost of production. I hope I have made my meaning clear.
For all that, a profit was made and if this play had gone on for a few weeks longer a much larger profit would have been made. I only wish that it had gone on a bit longer, and I might have been able to accept the invitation which the junior Burgess for Oxford University extended to me. I do not want to labour the point, but it does not look as though the manager lost money. An author gets royalties on these artistic productions which is quite right and his due, but what I am wondering is, supposing we were to accept the new Clause in these terms, who would benefit by the distribution? My hon. Friend the Member for Eton and Slough spoke very forcibly about the great increase in rents. Supposing we were to accept this new Clause, I wonder whether the rents would be raised still higher as they do not come under the Rent Restrictions Act. In that case the author would not benefit, though, as was said by the hon. Member for Ashford (Mr. E. P. Smith) it is he who, after all, is responsible for the whole thing. I agree with him in that. It is not at all clear that the public would get any benefit either. The hon. Member for Devizes said it was hoped if these new scales were adopted that prices might be reduced, but I do not know whether that is so. The whole argument of the hon. Member for Devizes was for a reduction in prices in order that more people should witness British drama, Shakespeare or whatever it may be. There is no assurance that prices would be reduced and the benefit of such a new Clause passed on to a wider field. If prices are not reduced, there can be no question of direct benefit to the public.
I was consulting with my right hon. Friend the Minister of Health, who is the Minister who would have to consider bringing into operation the suggestion of my hon. Friend the Member for Eton and Slough for the extension of the Rent Restrictions Act to the theatre. We thought perhaps that the Lord Chamberlain was involved in that, but since he is unable to answer for those matters in either House of Parliament except for censorship, it seemed to us that the Minister of Health, who is the Minister responsible for rent restrictions on business premises from the legal point of view, would be concerned with theatre premises, as they could be termed "business premises" within the meaning of that reference. There is no rent restriction at the present. I gather from my hon. Friend the Parliamentary Secretary to the Board of Trade that his Department would be responsible for the Rent Restrictions Act being applied to the theatre. The hon. Member for Eton and Slough wanted the Rent Restrictions Act applied to the theatre and a working party set up to examine the various points connected with the theatre, including the relative possibilities of the non-profit-making concern as against what are called the commercial companies. That is all by the way, but it is not entirely irrelevant because it has a bearing on what the effect would be if I accepted this new Clause. Whether it would benefit the playwrights and the public is something which is debatable.
Coming to the actual revenue from the theatre, it is common to be told that if taxation is reduced we shall be more than recouped for the loss of revenue by the additional income because of greater patronage. We have all put that argument from time to time. I see no reason to doubt that the estimate given to me is correct—namely, that if I accepted this new Clause I should lose nearly £3 million a year. Quite frankly, I do not feel that that is reasonable at this time. We are at an early stage in the new Clauses and the Schedules are to follow. I must not say in advance anything which would be in Order on other tax reductions. Quite a lot of people want taxes reduced, as is not uncommon at this time of the passage of the Finance Bill, and there may be one or two points in which I may be able to oblige later on, but I do not think I can take off nearly £3 million extra here, particularly in view of the doubtful consequences which the acceptance of this new Clause would produce.
On the other hand, I hope I am as keen as anybody on seeing British drama thrive and flourish. I am very anxious that we should do all we can to give assistance to the British living theatre in the years ahead, and although I cannot accept this new Clause now, I am quite sincere when I say that I should like to go into these figures more closely. I find perplexities and ambiguities about all these calculations. If it were an easier time and I found it possible to distribute some more revenue by way of tax reduction, I am sure that the living theatre would stand high on the list, provided that we could be sure of the consequences of making such a reduction What I should like to do would be to haw a discussion between now and next year between the hon. Gentleman himself, my hon. Friend the Member for Eton and Slough, who has great knowledge of the matter, and others, including the hon. Gentleman the Member for Ashford if he cared to join in. I should like as to constitute ourselves an unofficial working party, to consider what steps should be taken within the fiscal field—I must not trespass on the field of other Departments —to sustain and assist the British living theatre in the years to come. Of course, if an official working party could be appointed, perhaps they would do the work for us. I should be very happy to take part in an inquiry of the kind I have described, but I do not feel that I can accept this new Clause this afternoon.
I thank the right hon. Gentleman for the manner if not for the substance of his reply. May I tell him briefly what would be the effect of this new Clause—a point about which I am perfectly, clear? First, we should have a better theatre. We should have managers who were more ready to take risks and produce British shows and less prone to scour the by-ways of New York where they obtain plays which are not always good. Anyway, they would be encouraged to help British art. Second, although I have no authority to speak for the managers, I have spoken to a number and they have all said that they would certainly bring prices down somewhat, although not always, perhaps, to the whole extent of the duty because then they might be as badly off as before. They might, however, reduce the 16s. seats to 14s., the 12S. 6d. ones to 10s. 6d. and so on. I know that they will do their best simply because it would help them to sell more seats and the public has now reached its limit.
Those are the two effects which I foresee. I have never before wished any particular harm to the Member for Eton and Slough (Mr. Levy), but I am bound to say that if he has as much influence as he appears to have with the Chancellor of the Exchequer with what I consider to be his wrong-headed ideas, I hope I may arrange for a discussion between the hon. Member and his horrible, profit-making, commercial manager—who is now paying him, I hope, very heavy royalties for his excellent play at Wyndham's Theatre. I should like the Chancellor of the Exchequer to come too. There is no reason why a man like Mr. Cochran, who has served the theatre for fifty years, should be limited to £25 a week. That is a condition of the non-profiteering racket. It is in many ways a racket, and that is one reason why Mr. Cochran and people like him are against it. One of the conditions, I understand, is that the manager is allowed not more than £25 a week. It is not merely a question of ploughing money back into the business. The real managers have been doing that all their lives and long before the hon. Member came here.
However, I do not want to embark upon a protracted quarrel about that. The simple point here is that on the one side there is the non-profit-making business and, on the other, the old-fashioned commercial managers who still prefer to go on conducting their businesses as they have done for years past. There is no law compelling them to go into this non-profit-making affair, so for goodness sake let us say that we shall help them all we can. We are then told by the hon. Member for Eton and Slough, and by the Chancellor echoing him, that all that you would do then would be to assist the horrid landlords. I tried to make it clear that if the State takes £1,700 out of the till and the man who owns the theatre £500, though that may be excessive here and there, it is not necessarily so; because the State is providing nothing and risking nothing, but the landlord is at least providing the theatre and maintaining it; and it may cost some £15,000 a year to maintain a large theatre.
For these reasons, although the tone of the Chancellor's reply was sympathetic, I find its substance most disappointing. It amounts to saying, "Because there is a small ill here we will continue a major ill over there, and will do nothing whatever to rectify it." However, the right hon. Gentleman has promised to do what he can. I must say that I am disappointed and can only contrast his attitude to the managers with his attitude to the bookmakers, who, he said, were elusive people who would be difficult to tax. This tax is collected and calculated passively and sheepishly by the managers and handed over. The State has no work whatever to do. Law-abiding man though I am, I must say that if I had any influence with them I should be strongly tempted to advise them to say to the State, "You come and collect the tax. We will take you to the courts and claim that we are just as 'educational' as the show being put on across the road by the non-profit-making people and can see what the answer is." I am bound to say that in spite of the Chancellor's blandishments I shall take this new Clause to a Division.
Before my hon. Friend takes this new Clause to a Division perhaps I might express what must be a purely personal opinion on this matter because I think it is one which does not involve arty division on party lines. We have heard the case very fully argued. The playwrights themselves disagreed about the merits of a remission of the Entertainment Duty on the living stage. The hon. Member for Eton and Slough (Mr. Levy) feared that all the benefit of a remission might go to the landlords. My own view is that that would not happen, and that any remission of taxation on the living stage is bound automatically to be divided between the management, the public and the employees of the theatres. [HON. MEMBERS: "No."] If that is not the case, then of course there is no argument at any time for a reduction in the tax upon any commodity. It will always be argued that if a tax is taken off a certain article, such as a motor-car the benefit will not go to the public or to the management but to the landlord. That would be a good argument against any reduction in taxation.
The hon. Member for Eton and Slough also referred to the fact that by becoming a non-profit-making society any manager could avoid the payment of Entertainment Duty, but if he will refer to the Section produced in the Finance Act last year which re-enacted the old exemptions with some slight differences, he will observe that only a limited class of living stage performances are covered by the exemption. For example, the music-hall does not come within the definiton of Section 8 (1) of that Act. One of the reasons why the rate of Entertainment Duty on the living theatre should be reduced at the present time is that a great racket has grown up round the exemptions granted to the non-profit-making societies. Nonprofit-making societies can pay their actors, their actresses and their managers any salary scale they please.
No. Impossible, the right hon. Gentleman is mistaken on that last point. It is at the discretion of the Customs and Excise, and their discretion is extremely acute. There are cases, I believe, where they have in fact withdrawn their exemption on the grounds that actors, actresses and managers have been receiving more than normal. As to the right hon. Gentleman's first point that the Section last year did not cover all kinds of entertainments, I quite agree. I suppose he was referring to the phrase about it being "partly educational." That is of course an uncommonly silly phrase. Nobody can decide what is or what is not partly educational, but in practice the common sense of the Customs and Excise has been such that they have not tried to discriminate as to what is or is not partly educational, and I hope they will not.
A racket was gum mg up when I was concerned at the Treasury some two years ago because the advantages of being a society of a non-profit making character were becoming so very great. The rate of duty, as the hon. Member for Oxford University (Sir A. Herbert) told us, averages about 40 per cent. on the price of the ticket clear of the Duty. There is, therefore, an enormous advantage and a burden of tax to be avoided if one becomes a non-profit making society. I am authoritatively told and it is borne out by what has been said by the hon. Member for Ashford (Mr. E. P. Smith) that very large numbers of non-profit-making societies are being formed at the present time and the sole purpose of so doing is to enable Entertainment Duty at this very high rate to be avoided and managers, actresses and, if you like, authors as well, to be remunerated at higher rates than they would otherwise be.
The hon. Member may deny that, but my information is to the contrary. That is one of the reasons why I say that this peak rate of duty imposed in 1943 should now be reduced. Many other forms of tax have been reduced. This Entertainment Duty on the living stage stands at the highest rate at which it stood during the war. For that simple reason, if for no other, if the hon. Member for Oxford University decides to go to a Division, I shall support him in the Lobby. This duty might well be reduced. I think it should be reduced, and if it were to be reduced, in my opinion many good things would follow.
As I signed this new Clause, though my name does not seem to be on the Order Paper, I would like to say that I very much regret that it is being carried to.a Division. It seems to me that the Chancellor of the Exchequer made a very conciliatory answer. The question of the non-profit making theatre is more or less irrelevant. The issue is whether or not it is a desirable thing for the profit-making theatre to have a remission. I believe the arguments of the hon. Member for Eton and Slough (Mr. Levy) to be theoretically entirely unsound. If we are dealing with private enterprise—nobody has suggested that the theatre should not remain private enterprise—we must deal with it as an entity and believe that it would play the game. I believe that it is not going to play the game as much as it ought to As to the remarks made by an hon. Member about "one man, one theatre," I believe that to have 20 theatres in the same hands is a very dangerous thing.
I have been greatly impressed by a book by Mr. Aldous Huxley, "Science, Liberty and Peace." That book makes the point that we are living in a world in which, as a result of scientific and technological advances, more and more power is being placed in the hands of fewer and fewer people. That is directly
relevant to this issue. I hope that the Chancellor of the Exchequer in thinking this matter over will not be frightened of widening the gap between the films and the theatre. I am an ardent lover of the films, but it is a most dangerous development for the films to overshadow the theatre as they are tending to do today. I hope that whatever arguments weigh with the Chancellor, the argument of widening that gap will not weigh with him. I would say to the hon. Member for Oxford University (Sir A. Herbert) that even if he carries this to a Division, I am sure he will recognise that hon. Members on this side of the Committee are just as ardently anxious for the cause of the living theatre as hon. Members on the other side.
|Division No. 255.||AYES.||6.19 p.m|
|Assheton, Rt. Hon. R||Hinchingbrooke, Viscount||Nicholson, G.|
|Baldwin, A. E.||Hogg, Hon. Q.||Nutting, Anthony|
|Beechman, N A||Hollis, M. C.||Orr-Ewing, I. L.|
|Bennett, Sir P||Holmes, Sir J. Stanley (Harwich)||Peake, Rt. Hon. O|
|Birch, Nigel||Howard, Hon. A||Peto, Brig. C. H. M.|
|Boyd-Carpenter, J. A.||Hurd, A.||Pitman, I. J.|
|Braithwaite, Lt.-Comdr. J. G.||Hutchison, Lt.-Com. Clark (E'b'gh, W.)||Poole, O. B- S. (Oswestry)|
|Bromley-Davenpott, Lt.-Col. W||Hutchison, Col, J. R. (Glasgow. C.)||Ramsay, Maj. S.|
|Brown, W. J. (Rugby)||Jeffreys, General Sir G.||Rayner, Brig. R.|
|Buchan-Hepburn, P G. T||Joynson-Hicks, Hon. L. W||Reed, Sir S. (Aylesbury)|
|Byers, Frank||Keeling, E. H.||Roberts, Emrys (Merioneth)|
|Carson, E.||Lambert, Hon G.||Roberts, W. (Cumberland, N.)|
|Challen, C.||Law, Rt. Hon. R. K.||Robinson, Wing-Comdr. Roland|
|Clarke, Col. R. S.||Legge-Bourke, Maj. E. A. H.||Ropner, Col. L.|
|Clifton-Brown, Lt.-Col. G||Lennox-Boyd, A. T.||Salter, Rt. Hon. Sir J. A.|
|Conant, Maj. R. J. E.||Lindsay, M. (Solihull)||Shepherd, W. S. (Bucklow)|
|Crookshank, Capt. Rt. Hon H. F. C.||Linstead, H. N.||Spearman, A. C. M.|
|Crosthwaite-Eyre, Col. O E||Lipson, D. L.||Stanley, Rt. Hon. O|
|Crowder, Capt. John E.||Low, Brig. A. R. W||Stewart, J. Henderson (Fife, E.)|
|Cuthbert, W. N.||Lyttelton, Rt. Hon. O||Stuart, Rt. Hon. J (Moray)|
|Darling, Sir W. Y||Macdonald, Sir P. (I. of Wight)||Studholme, H. G.|
|Davies, Clement (Montgomery)||Mackeson, Brig. H. R||Taylor, C. S. (Eastbourne)|
|Digby, S. W.||Maclay, Hon. J. S.||Thornton-Kemsley, C. N.|
|Donner, Sqn.-Ldr, P. W.||Macmillan, Rt. Hon. Harold (Bromley)||Thorp, Lt.-Col. R A. F|
|Drewe, C||Macpherson, N. (Dumfries)||Touche, G. C.|
|Eccles, D. M.||Maitland, Comdr J. W.||Wadsworth, G|
|Elliot, Rt. Hon. Walter||Marples, A. E||Wakefield, Sir W. W|
|Fraser, H. C. P (Stone)||Marshall, D. (Bodmin)||Walker-Smith, D.|
|Fraser, Sir I (Lonsdale)||Mellor, Sir J.||While, J. B. (Canterbury)|
|Gage, C.||Morris, Hopkin (Carmarthen)||Williams, Gerald (Tonbrldge)|
|George, Maj. Rt. Hn. G. Lloyd (P'ke)||Morrison, Maj. J. G (Salisbury)||Willoughby de Eresby, Lord|
|Gridley, Sir A.||Morrison, Rt. Hon. W S. (C'nc'ster)|
|Hare, Hon. J. H. (Woodbridge)||Mott-Radclyffe, Maj. C E||TELLERS FOR THE AYES:|
|Harvey, Air-Cmdre. A V||Neven-Spence, Sir B||Sir Allen Herbert and|
|Mr. K. P. Smith.|
|Adams, Richard (Balham)||Bacon, Miss A.||Sevan, Rt. Hon. A. (Ebbw Vale)|
|Allen, A. C. (Bosworth)||Balfour, A.||Binns, J|
|Allighan, Garry||Barnes, Rt. Hon. A.[...]||Blackburn, A. R|
|Alpass, J. H.||Barstow, P. G.||Blenkinsop, A.|
|Attewell, H. C.||Battley, J. R.||Blyton, W. R.|
|Austin, H. Lewis||Bechervaise, A. E||Bottomley, A. G|
|Awbery, S. S.||Benson, G||Bowles, F. G. (Nuneaton)|
|Ayles, W H||Berry, H||Braddock, Mrs. E. M. (L'pl. Exch'ge)|
|Ayrton Gould, Mrs. B||Beswick, F||Braddock, T (Mitcham)|
|Brook, D (Halifax)||Harbison, Mist M||Pryde, D. J.|
|Brooks, T. J. (Rothwell)||Holman, P.||Pursey, Cmdr. H|
|Brown, George (Helper)||Holmes, H. E. (Hemsworth)||Ranger, J.|
|Brown, T. J. (Ince)||House, G||Rees-Williams, D. R.|
|Bruoe, Maj. D. W. T||Hoy, J.||Reeves, J.|
|Burden, T. W||Hudson, J. H. (Ealing, W.)||Reid, T. (Swindon)|
|Burke, W. A.||Hughes, Hector (Aberdeen, N.)||Richards, R.|
|Butler, H. W. (Hackney, S.)||Hughes, H. D. (Wolverhampton, W.)||Robens, A.|
|Champion, A. J.||Isaacs, Rt. Hon. G. A.||Rogers, G. H. R|
|Chater, D.||Jay, D. P. T.||Royle, C.|
|Chetwynd, G. R.||Jeger, G. (Winchester)||Sargood, R.|
|Cluse, W. S.||Jeger, Dr. S. W. (St. Pancras, S.E.)||Scollan, T.|
|Cocks, F. S.||Jones, Elwyn (Plaistow)||Shawoross, C. N. (Widnes)|
|Coldrick, W.||Key, C. W.||Shurmer, P.|
|Collindridge, F.||Kinley, J.||Silverman, S. S. (Nelson)|
|Collins, V. J.||Lang, G.||Simmons, C. J.|
|Colman, Miss G. M.||Lee, F (Hulme)||Skeffington, A. M.|
|Comyns, Dr. L.||Lee, Miss J. (Cannock)||Smith, C. (Colchester)|
|Cooper, Wing-Comdr. G.||Leslie, J. R||Snow, Capt. J. W|
|Corlett, Dr. J.||Levy, B. W||Soskice, Maj. Sir F.|
|Cove W. G.||Lewis, A. W. j (Upton)||Sparks, J. A.|
|Crossman, R. H. S.||Lewis, J. (Bolton)||Stamford, W.|
|Daggar, G.||Lipton, Lt.-Col. M.||Stewart, Michael (Fulham, E)|
|Daines, P.||Longden, F||Summerskill, Dr. Edith|
|Dalton, Rt. Hon. H.||Lyne, A. W||Sylvester, G. O.|
|Davies, Edward (Burslem)||McAdam, W.||Taylor, H B. (Mansfield)|
|Davies, Ernest (Enfield)||McEntee, V La T||Taylor, R. J. (Morpeth)|
|Davies, Hadyn (St. Pancras, S.W.)||McGhee, H. G||Thorneyoroft, Harry (Clayton)|
|Davies, R. J. (Westhoughton)||Mack, J. D.||Thurtle, Ernest|
|Dobble, W.||McKay, J. (Wallsend)||Tolley, L|
|Dodds, N. N||Macpherson, T. (Romford)||Turner-Samuels, M.|
|Driberg, T. E. N.||Mainwaring, W. H.||Vernon, Maj. W. F|
|Dumpleton, C. W.||Mallalieu, J. P. W.||Viant, S. P.|
|Dye, S.||Manning, Mrs. L. (Epping)||Walkden, E.|
|Ede, Rt. Hon. J. C||Marshall, F. (Brightside)||Wallace, G. D. (Chislehurst)|
|Edelman, M.||Martin, J. H.||Wallace, H. W. (Walthamstow, E.)|
|Edwards, N. (Caerphilly)||Mathers, G.||Warbey, W. N.|
|Edwards, W. J (Whiteckapel)||Mayhew, C. P.||Weitzman, D.|
|Ewart, R.||Middleton, Mrs. L.||Wells, P. L. (Faversham)|
|Fernyhough, E.||Mikardo, Ian||Wells, W. T. (Walsall)|
|Field, Captain W. J.||Millington, Wing-Comdr E. R||West, D. G.|
|Follick, M.||Mitchison, G R||White, H (Derbyshire, N.E.)|
|Foot, M. M.||Moody, A. S.||Whiteley, Rt. Hon. W.|
|Forman, J. C||Morgan, Dr. H. B.||Wilcock, Group-Capt. C. A. B|
|Ganley, Mrs. C. S.||Morley, R.||Wilkins, W. A.|
|Glanville, J. E. (Consett)||Morris, P. (Swansea, W.)||Willey, F. T (Sunderland)|
|Goodrich, H. E.||Mort, D. L.||Willey, O. G. (Cleveland)|
|Greenwood, Rt. Hon. A. (Wakefield)||Moyle, A.||Williams, D. J. (Neath)|
|Greenwood, A. W. J. (Haywood)||Neal, H. (Clayoross)||Williams, J. (Kelvingrove)|
|Grenfell, D. R.||Nichol, Mrs. M. E. (Bradford, N.)||Williams, W. R. (Heston)|
|Grierson, E.||Nicholls, H, R. (Stratford)||Willis, E.|
|Griffiths, D. (Rother Valley)||Noel-Buxton, Lady||Wills, Mrs. E. A.|
|Gunter, R. J.||Orbach, M.||Wise, Major F. J|
|Guy, W. H.||Palmer, A. M. F.||Woodburn, A|
|Haire, John E. (Wycombe)||Parkin, B. T.||Woods, G. S.|
|Hale, Leslie||Paton, J. (Norwich)||Yates, V. F.|
|Hall, W. G.||Pearson, A.||Zilliacus, K.|
|Hamilton, Lieut-Col. R.||Peart, Thomas F.|
|Hardy, E. A||Platts-Mills, J. F. F.||TELLERS FOR THE NOES:|
|Harrison, J.||Porter, E. (Warrington)||Mr. Joseph Henderson and|
|Haworth, J||Proctor, W. T||Mr. Hannan.|