New Clause. — (Reduction of Entertainments Duty.)

Part of Orders of the Day — Finance Bill – in the House of Commons at 12:00 am on 22nd June 1953.

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Photo of Mr John Taylor Mr John Taylor , West Lothian 12:00 am, 22nd June 1953

I was impressed by the final words of the hon. Member for Caithness and Sutherland (Sir D. Robertson) and I hope that the Chancellor will be touched by what was a strong point. The hon. Gentleman put the case for the small cinemas in his own constituency, and in my constituency in the Lowlands of Scotland the position is similar. There are about 20 cinemas and every one of them serves a small town or community and in each of them there is a financial crisis.

Like other hon. Members who have spoken in this debate, I was a little suspicious last year, when we were considering on the Finance Bill a similar new Clause, of the official propaganda in favour of some tax adjustment for cinema seats. I took the trouble to go into the matter rather carefully with the late Member for Dundee, East, Mr. Tom Cook, who was particularly interested in the matter last year. I was impressed by the data he had collected about the state of the small cinemas in Scotland and since then I have taken the trouble to interview the cinema managers and owners in my own constituency. I found them co-operative in giving me details of their accounts and their financial conditions.

Like the hon. Member for Caithness and Sutherland, I shall not take up the time of the Committee with the sheaf of instances I have here, but will put the present position of a small cinema in a village. The figures I am giving are the most recent that I have been able to obtain and they are for the three weeks of last month. In the first week the gross takings were £108 10s. 4d. The tax on that sum was £26, leaving net takings of £82 10s. 4d. In the second week the gross takings were £78 10s. 5d., the tax was £17 7s. 6d. and the net takings were, therefore, £61 2s. 11d. In the third week, there was a gross of £98 14s. 6d., a tax of £23 6s. 8d. and a net of £75 7s. 10d.

The irreducible, unavoidable weekly overhead charges for this cinema are £56 plus the film percentage rents which are normally at least one-third of the net takings. These overheads are constant and recurring and include such things as staff wages, cleaning, and so on. They do not include any reward for the owner of the cinema. It will be seen that the aggregates for those three weeks were gross takings of £285 15s. 3d., less tax of £66 14s. 2d., and net takings of £219 1s. 1d. less irreducible overheads of £168, which leaves £51 1s. 1d. Out of that the film rentals of approximately £73 have to be paid.

So the three weeks' loss of that one small village cinema is about £20. I cannot think of many other industries where tax has to be paid irrespective of a trading loss, and a fairly substantial one at that. As has been said, that state of affairs cannot go on. If, weary with this uneven battle, cinemas of this type close down, the Chancellor will get no taxes at all. Somebody has to cut the losses of the small cinemas in the small communities of this country—either the Chancellor or the industry. If the Chancellor leaves it to the industry, the Exchequer will be the greater loser because it will lose all the revenue from each cinema instead of retaining a portion of it.

It is obvious that there is no solution to this problem for the small cinema owner in an increase in the price of each seat. That is not a practical proposition for the small cinema owner. Already, in my constituency at least, instead of what the hon. Member for Cheadle (Mr. Shepherd) said about there being no aggregate reduction in the numbers of the cinema going public, the local picture-goers are spending as much as they are able to spend on this item of entertainment. The Board of Trade figures have made it clear that receipts are falling at the present time.

It must be remembered that in the small town or in the large village where there is a cinema the habit of cinema going is a family affair. It does not represent the expenditure of an individual but is an item in the family budget. It is usually a weekly visit though in some cases it is twice a week and there are some cinemas in my constituency which change their programmes three times a week. In a mining community where the geographical outlook is rather drab, where there is little to be seen on the skyline but pit bings, where there is very little colour and excitement in the lives of the inhabitants, the habit of going to the cinema is the one bright spot for the children and wives, even for the men, in the week's programme. If the prices are increased, those visits will be decreased. Those which are biweekly will become weekly and those which are weekly will probably become fortnightly.

Apart from that factor, if a cinema in those areas increases its prices it also increases its taxation. To obtain one extra 1d. per cinema seat, many cinemas in this category would have to increase each seat price by 3d. or so, such is the craziness of the existing system of cinema taxation. So, to increase prices, would not solve the problem but would only make it more acute and more people would stay away from the cinema. Neither I nor any other hon. Member who has spoken so far in this debate can see any salvation for the small cinema other than a degree of tax remission such as is proposed in this new Clause.

7.30 p.m.

I wish to mention the special problem of the small cinema in small towns and villages where the local welfare hall is licensed to show films. Welfare halls are, quite rightly, exempt from the cinema tax. Therefore, they can charge less per seat for comparable types of film. The local cinema owner, where there is another privately-owned cinema in the same community—who has to pay the full tax—has to fix his prices in competition with the welfare hall. It is unthinkable—no one would suggest it I hope— that we should levy a tax on welfare institutions for the showing of entertainment. There is an especially strong case in communities of that kind, where there exist side by side a one-man cinema and the welfare hall showing comparable films, for special examination of the problem of some tax remission for the private owner.

Generally, the case has been fully made out that there is no real logic in the continuation of this tax. It may be that the small cinema is regarded by the Exchequer as expendable. But, if that is the conclusion reached—they are going the right way to make it expended—they will be making a very grave mistake because this is a harmless, in many ways beneficial, and potentially much more beneficial entertainment of millions of ordinary common people of our land.