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New Clause—(Repeal Of Entertainments Duty In Case Of Cinematograph Theatres)

Volume 155: debated on Wednesday 28 June 1922

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  • (1) The present scale of Entertainments Duty as imposed by the Finance (New Duties) Act, 1921, as amended by any subsequent enactment, and so far as it applies to cinematograph theatres, shall be and is hereby repealed, and shall be substituted therefor an ad valorem rate of seven and a-half per cent, of the total sums received on account of admissions to such entertainments.
  • (2) A cinematograph theatre, for the purpose of this Section, shall be deemed to be any premises licensed under the provisions of the Cinematograph Act, 1897, and in which cinematograph films comprise not less than nine-tenths of the total time of each complete programme of entertainment.—(Mr. Newbould.)
  • Brought up, and read the First time.

    I beg to move, "That the Clause be read a Second time."

    I found myself in sympathy with the various Clauses which have been moved in regard to the Entertainments Duty as it affects charities, sports, art exhibitions, and so on, but these matters can be satisfactorily dealt with if those interested in them will have, what I have had on many occasions—an interview with the Customs authorities. They can then discuss how the tax is to be properly and fairly applied. They will find on the part of the Customs officers the utmost sympathy with all these cases, and I feel sure most of them will be met by administration without any alteration in the law. I am sorry that in discussing the effects of the tax in these different respects we have not discussed its effect on the cinematograph industry. The Clause I now move has the effect of changing the present scale, with all its inequalities, into a flat rate. It is the same, in effect, as a Clause standing on the Paper in the name of the hon. Member for the Moseley Division of Birmingham (Mr. Hannon). Although the Clause I now move mentions 7½ per cent. as the flat rate in question, I would be quite prepared if it were in order to substitute for that a flat rate of 12½ per cent. which is mentioned in the Clause of my hon. Friend. It is not strictly in order however to talk of a flat rate of 12½ per cent., because it does in one section of the scale increase the charge.

    When I put down this Clause certain sections of the industry were opposed to the flat rate. Now, all sections of the industry have come together, and all the indoor sections, at any rate, have conveyed to the Chancellor their acceptance of the flat rate of 12½ per cent. The best way I can commend this Clause to the Committee is by endeavouring to anticipate and deal with the arguments which will probably be put forward against it. In fact, I think the Chancellor would agree at once there is only one argument of any substance which can be put forward against it. That is the argument which I anticipate the Chancellor himself will advance; he will say to the Committee, "This will cost the revenue so much money that I cannot afford it." I say to the Chancellor, as I said before, that he cannot afford to refuse this concession. If he does, the revenue derived from the tax will dry up like a wayside pool in a hot summer. It is already drying up. Last year the revenue from the Entertainments Duty from all sources fell by about £1,500,000, and that, in spite of the fact that from many sources the revenue was increased. From football and other outdoor sports the Chancellor of the Exchequer had a record year, but from the indoor side of the entertainment industry his revenue fell by about £1,500,000. It is estimated that some £900,000 of this decrease was attributable to the falling off in the cinema theatres.

    I would like to point out to the Committee that for every pound fall in the revenue derived from the duty, there is a fall of £4 in the takings of the theatres; that is to say, that the tax is roughly 25 per cent. of the gross takings in the case of the cinema theatres. Therefore, if the revenue from the cinema theatres fell, as I estimate it did last year by some £900,000, the takings of those theatres fell by four times that amount. All I can say is this—and the position of the industry to-clay proves it conclusively—that the industry never made that much profit; the industry never in one year made the amount of profit which they lost in takings in that year. The revenue from the cinema industry fell by some £900,000, and the takings must have fallen by some £3,600,000. The revenue is now falling at a much more rapid rate, but supposing it only falls during the course of the current financial year from the cinema theatres by £1,000,000, that means that the takings of those theatres will have fallen by £4,000,000, and after the fall of the previous year of, roughly, £3,600,000, you will have a decrease in your gross takings by cinema theatres of £7,600,000.

    There is only one possible end to that process, and the end is near; the end is in sight. This is the most flagrant case in modern times of over-taxation destroying an industry, and unless the Chancellor of the Exchequer can see his way to give a considerable and substantial concession to the industry, he will in a very short time have destroyed the source of his revenue. It is not a question as to whether the Chancellor of the Exchequer will get from this industry during this year £5,000,000, or £4,000,000, or £3,000,000, or £2,000,000; the question is, Will the industry survive? That is the question which the right hon. Gentleman has to decide to-night, and it is a responsibility which he must take on his own shoulders. This is a valuable industry; this industry is of very great value to the nation; it is a national asset. It is an industry in which at least £40,000,000 is invested. It employs some 120,000 people—musicians, attendants, and electricians. At the present moment these places are closing down at the rate of four a day. [HON. MEMBERS "Hear, hear!"] That is an attitude of mind which I am not surprised to find on that side of the Committee, but it is not shared by the Chancellor of the Exchequer or by the Members of the Government. Throughout the War and since the War, on every occasion of national emergency, the Government has come to the cinema industry for help and assistance. From the Prime Minister downwards, I can produce letters from every member of the Government thanking the industry for the valuable services it has rendered to the Government and the nation. Therefore, though some hon. Members opposite may think that this industry is not a valuable one, I am glad that this obsolete view is not shared by the Government.

    There is another argument that the Chancellor of the Exchequer will probably put forward why he cannot make any concession to this industry. He will say that it is only suffering from the industrial depression from which all other industries are suffering, and that when prosperity comes again that will be quite sufficient, and the cinema industry will probably revive very rapidly. That, unfortunately, is not entirely true. This is a new industry; it is suffering from growing pains, amongst other things; and while industrial depression is naturally affecting it seriously, it is not the whole cause of the difficulty. The fact is, there has been a somewhat lopsided development, due entirely to the War. The improvement and development in the production of films has far outpaced the improvement and development of the buildings in which they are shown. The reason for that is that the centre of film production is in America. During the War there was an enormous development in films in America, and there was also a corresponding improvement in the buildings in which the films were shown. Owing to the difficulty of building, the restrictions on building during the War, and the very high cost of building after the War, there has not been in this country the development in the buildings which is absolutely necessary to keep pace with the development in the films. Before the War, you could secure a film programme to present to your audience, for three or six days, at a cost of about £25, £30, or £40. Your people were quite content with a performance of from an hour to an hour and a half. Now, your films costs, instead of £30 or £40, £200, £300, and £400; and it is not an extravagant price, the value is there. While, before the War, films were produced for £2,000 or £3,000, they now cost £30,000, £40,000, and anything up to £100,000 to produce.

    Where, at one time, the average length —almost the maximum length—of a film was from 2,000 to 3,000 feet, it is now some 5,000 feet. The theatres to-day, in the main, are too small to hold the money to pay the price for the films that they have to show. During the War we survived that difficulty, for the reason that there were a large number of people, not only with the money in their pockets—that is the first essential—but there was another essential, they had time to spare. During the War and for two years after the War—during demobilisation—there were a great many idle people with money to spend. The result was that a number of these places started business at 11 o'clock in the morning, spreading their business over eight, nine, and 10 hours of the day, and during that period passed through their theatres a very large number of people. Now they have to concentrate the business into four to six hours, and the places are not big enough to hold sufficient people, in the hours at which they will attend, to pay for the cost of the films. That is one of the reasons why I say that it is not purely an improvement in the industrial conditions that is going to put this industry on its feet. The industry, in order to get on its feet, must attract capital, must show a sufficiently attractive return to be able to raise a considerable sum of money, in order to enlarge and improve its existing theatres, and, where that is impossible, to scrap the old ones, and build larger and better ones in their place. Until we arrive at that position, there is no real future for the industry. This tax, in its present form, being 25 per cent. of your box-office receipts, before you have paid rent, rates, taxes, wages, or anything else, makes it impossible to attract money, because financiers naturally say that to put money in an industry which has to pay away 25 per cent. of its earnings before it has paid any of its expenses is too highly speculative.

    11.0 P.M.

    There is yet another reason which the Chancellor of the Exchequer will no doubt give as to why he cannot give this industry any relief. He will say that it is not taxed in any different way from any other industry which deals in dutiable articles. I contend that that is not true. Those who sell tobacco or beer, which are dutiable articles, sell a separate article to each individual, and if they do not sell their complete stock this week, they carry it over to the next. We do not do that. We have to sell the same article to the public en masse. We present this article to the public, and it costs us just as much to sell the article to 100 people as it does to sell it to 10,000 people, and if we do not sell it to enough people within the three days for which we hire it, to pay the cost of it, we have no stock to carry over to the next week. It is lost, and lost for ever. That is entirely the difference between the effect of this tax upon our industry, and the effect of a duty on articles like beer and tobacco. While X number of people will pay our costs, X + 1 means 100 per cent. profit on the one, X - 1 means loss. X + 1 means success; X - 1 means failure. For the Chancellor of the Exchequer to take 25 per cent. of the gross takings, whether they are X + 1 or X - 1, makes little difference to him but is of vital importance to the industry.

    I want, as briefly as I can, to point out to the Chancellor what, in my opinion, will be the effect if this tax is retained in its present form, and what will be its effect if he accepts the new Clause. In the first case the Chancellor will seriously damage, if not irretrievably destroy, the industry which is of great value, or it will be given a blow that it will not recover from for many years, and it will throw out of employment many people now employed. It will cause tens of thousands of investors to lose the money they invested before the tax was imposed, and before such Measures as the Daylight Saving Bill came into operation. I believe in daylight saving; it is an excellent thing. I would not oppose it; but I would point out to the Chancellor that it means a vast sum of money to the industry for which I am speaking. It also means that the right hon. Gentleman loses a considerable amount of revenue arising out of dutiable articles, carbons, etc. If the Chancellor makes this concession of a 7½ per cent. flat rate he will first of all destroy the inequalities of the present system, which are obvious to every Member of the House. The duty varies from 16 to 40 per cent. on the lower priced to 11 to 16 per cent. on the higher priced seats. We ask for a flat rate, so that all sorts of indoor entertainments shall be on an equality in this matter. In acceding to this, the Chancellor will destroy the unfairness and injustice of the incidence of the tax. He will encourage the development and expansion of the industry, and employment will be found for a large number of men in the building trade and the allied trades. The decorative, fibrous plaster, wood and stone carving, carpet and tapestry making, upholstery, electric equipment will get an immediate and much needed stimulus if this tax is remitted. I think the Chancellor of the Exchequer will find that it will have an immediate effect upon the volume of unemployment, because some thousands of men will instantly find employment, and the unemployment benefit will consequently be saved to the country. The right hon. Gentleman will also save the investments of the shareholders. Altogether, if he looks carefully at the two sides of the picture, he will have no hesitation in making the concession for which I am asking. The Chancellor of the Exchequer, disguised in a cloak and a mask and armed with a dagger, may slit the gizzard of the unfortunate taxpayer in a dark lane to-night, but to-morrow, when ho appears in a more sober and conventional garb, he will find himself the chief mourner at the funeral of a generous and longsuffering taxpayer. I would ask the Chancellor of the Exchequer to depict this dual role before the film camera, and if he would do this, even if he did not succeed in reviving the fortunes of the industry, he would put a substantial sum into his own private purse and enhance at the same time the amount of revenue he would derive from this duty.

    I do not know whether I can still claim the indulgence accorded to a maiden speech, as I have already taken part on a former occasion in Debate in this House, but, nevertheless, I think I can rely upon the indulgence of the Committee. I sincerely trust that the Committee will reject this Clause. The measure of the weakness of the case of the hon. Member who moved this new Clause may be judged by the length of his speech. I shall be very brief. When any industry or any organisation comes to the Chancellor of the Exchequer and prays for relief, it should at least show that, so far as it is able, it runs its business upon an economic basis. It is because the cinema business does not that I hope the Committee will reject this Clause, because, in the first place, the Exchequer is very hard pressed for money, and secondly, because any relief given to the industry will not benefit the consumer but will only enable that industry to pay grotesque salaries to artistes in a foreign country which will not be spent in our country. I dare say other hon. Members have, like myself, received a communication from the cinema industry —I do not know why they call it an industry—to the effect that hon. Members who do not support this Clause will he subjected to a form of campaign on the screen which can be described as little less than blackmail. I listened with great interest to the arguments of the hon. Member who moved this Clause. He told us that picture palaces had been put up at great cost—far greater cost than in normal times—yes! in competition with the building schemes of the Government for the provision of housing accommodation.

    I withdraw, of course, but it certainly was the impression on my mind that the industry had since the end of the War felt severely the expense of building.

    I said the cost of building was so great that they could not afford to build.

    Well, I leave it to the judgment of the Committee. All I ask is that we, Members of the House of Commons, should not give way before an agitation which is based upon a misapprehension of, and a failure to understand, the character of the people. We all know that the Exchequer is hard up. I listened to the arguments used by the hon. Member and to his picturesque phrases about the pools that will dry up. Some of them might well dry up. Let the Government resist this Clause. I have no doubt that by efficient administration of their own so-called industry the cinema people can make economies which will in no way impair either their receipts or the revenue from this duty.

    I have no interest whatever in any cinema undertaking, although, unfortunately, I once, at the suggestion of a friend, invested a small sum of money in a cinema, and it disappeared. I represent, however, one of the most intelligent constituencies in this country, and in that constituency I discovered a great number of people who were interested in this industry, and I have been, as I am sure have most hon. Members, deeply impressed with the value of the picture-house as an educa- tional institution. Whether hon. Members disagree with everything that is manifest in the modern picture-house or not, it has come to stay in this country as an institution, and the danger at the moment is that the excessive taxation imposed upon the cinema theatre, which is one of the main educational and recreational opportunities of the people in these days, is crushing it out of existence altogether. I took the opportunity, when I became interested in this question, to make inquiries as to the extent to which these picture-houses were menaced by the existence of the tax, and I found a very extraordinary state of things, which I commend to the consideration of the Chancellor of the Exchequer.

    One almost feels ashamed to make further appeals to the right hon. Gentleman. Having asked him for all sorts and conditions of things, one is very reluctant to continue to press further upon his good nature. What one finds, however, is that these picture theatres are steadily being closed down, and the ethical activities associated with them are gradually disappearing, while it is a fact that a very large number of people who were employed in connection with these enterprises are being put out of employment. I have had some examples given to me from the actual balance sheets of these theatres, showing the losses that are being made, and indicating the difficulties under which they operate. One concern, for example, paid £36,300 in tax last year, and made a profit of £100. I recommend my hon. Friend opposite, who severely criticised the anxiety of the people interested in this industry to try to protect themselves, to try to understand the attitude of mind of anyone who is in that position. Again, two theatres paid £12,000 and £10,000 in tax, and lost respectively £7,000 and £5,800. There has been a steadily growing stream of unemployment as a result of the disappearance of these theatres, and I am assured on excellent authority that, unless a substantial concession is made by the Chancellor of the Exchequer, a further number of these houses will disappear. Hon. and right hon. Gentlemen may think that is a good thing, but, properly managed, there is no institution in this country that can do more to stabilise national life, and give people opportunities of seeing something of the greater world outside their own small sphere, of acquiring wider knowledge, and getting in touch with human progress abroad, than the picture theatre, and I am persuaded that it would be a misfortune, in many of the localities where these houses exist, that they should, under the pressure of this tax, be obliged to close their doors. I have had made for me, by the representatives of this industry in six areas in England, a series of investigations showing the losses which are being sustained in connection with these theatres under the pressure of the tax. It is very difficult for the Chancellor of the Exchequer to justify charging the working man 41 per cent. of his entrance fee into one of these picture houses as against the 11 per cent. which is charged to the rich man who can afford to go to a theatre. This afternoon the Solicitor-General, who has shown extraordinary ability in assisting the right hon. Gentleman in dealing with the Finance Bill, said all taxation ought to be fairly distributed having regard to taxable capacity, or words to that effect. Will anyone justify the incidence of a tax which inflicts 41 per cent. upon a person less able to bear it and 11 per cent. on a person who is much more competent?

    The hen. Member and the mover of the Clause have spoken of the ad valorem duty on the higher priced seats in theatres as compared with cinemas. How does that ad valorem duty on cinemas compare with the ad valorem duty on pit seats in the theatre?

    At any rate, I do not think there is much point in the question he has put to me.

    I ask the right hon. Gentleman to assist this industry and deal out to it a measure of fair play, and give it an opportunity of continuing its useful work without being overburdened by this abnormal taxation. I associate myself with the proposer of the Amendment in suggesting to the Chancellor of the Exchequer that if he gives the industry a flat rate of 12½ per cent. all parties will be perfectly satisfied. There may be an immediate loss of between three to four millions of revenue, but he will give further opportunities of expanding these enterprises, and their taxable capacity will be increased. I hope he will consider this very carefully. I have no personal interest in the matter, but I think a great public institution of this nature, which all over the country has been utilised during and since the war for propaganda for educational purposes, should not be placed in the position it occupies now because of this abnormal burden of taxation.

    I am sure the Committee will congratulate the intelligent theatre owners of Birmingham in having secured the advocacy of the hon. Member for the purpose of saving the cinema industry the burden of the Entertainments Duty, but. I think he put one part of his argument in a form which is not quite accurate and not quite fair. He talked of the large amounts paid to the Exchequer by certain theatres, when, in point of fact, they were only making a very small margin of profit, or actually incurring heavy losses. That does not quite represent the facts. It is putting the situation as though the tax were one like the Income Tax, which is a tax upon income, or other taxes which are taxes upon profits. The Entertainments Duty is not a tax of that kind. It is a duty like the beer duty. It is paid by the consumer—if I may so speak of the person who attends the entertainment —so long as the article can be sold at a price which enables the seller of the article to make his ordinary profit and also sell at a price which enables the consumer to pay the full amount of the tax. But when the consumer is in a position in which, through falling wages or decreased salaries, he is no longer willing to spend so much upon the article, then, obviously, the supplier of the entertainment must supply more cheaply, and he may find himself compelled to forego his margin of profit, and even sometimes to endure loss in order to keep in existence the industry to which he belongs. That is precisely the situation which was revealed last night in some of the speeches relating to the Beer Duty, where it was represented that many people to-day were making losses, although they have to pay a very high duty upon the commodity they sell; that is a proper analogy. This duty ought not to he described as a tax upon profits when, indeed, no profits are being enjoyed.

    Let me turn to the proposal which the hon. Member for West Leyton (Mr. Newbould) has made in this Clause, the Clause suggests a fiat rate duty of 12½ per cent. upon the proceeds of each particular theatre, when, in point of fact, the Amendment to which he spoke was one for a flat rate duty of 12½ per cent. He could not put that upon the Paper because it is out of order. While I was perfectly willing to answer an argument that upon 12½ per cent. the Committee must address its mind to the proposal for altering the duty to one of a. flat rate of 7½ per cent.

    Why? The whole of my argument was upon the 12½ per cent. The right hon. Gentleman knows quite well that the 12½ per cent. is out of order on the Paper, but by permission of the Chairman I was allowed to talk on the 12½ per cent.

    The Chairman was tolerant enough to allow my hon. Friend to proceed in that way, but the Committee can only vote for the Clause on the Paper. To alter the Entertainments Duty to a flat rate of 7½ per cent. would be to deprive the Exchequer of, even upon an estimated increased attendance, £5,900,000. If the duty were one of a flat rate imposed at 12½ per cent. the loss to the Exchequer would be £3,700,000. I have no objection at all, in principle, to a flat rate, and if that would relieve the people who supply entertainments of part of their present difficulty I should be very ready to agree to a reasonable flat rate. I put it to those whom I said, that if they could get me by a flat rate as much money as I get now, I should be willing to alter the arrangement by which the duty was imposed. The difficulty is that there are divergencies of interest in the entertainment trade. Theatres, on the one hand, take an entirely different point of view from the cinema owners.

    The hon. Member said that an agreement had been come to, and the agreement, if ever it was made, certainly did not embrace the whole of the theatres, or even most of the im- portant theatres of this country. Immediately after it was announced upon the instigation of my hon. Friend the Member for Moseley (Mr. Hannon) that some such understanding had been arrived at, I received from the Theatrical Managers' Association a communication in which they said that they strenuously objected to a flat rate and desired that the scale should continue. They say:

    "My association, while objecting to entertainment duty in any form and while in discussions on the subject maintaining the view that the amount of the admission should be kept separate from the tax, by resolution at the general meeting on Thursday last reaffirmed their objection to a flat rate being substituted for the scale, and I am desired to inform you of this decision."
    It is plain that the theatres and the cinemas do not see eye to eye on this subject. If I impose a flat rate I shall please the cinema people and I shall disappoint the theatre owners.

    I am afraid this is not a case in which you can talk about what is just. You can only talk about what is expedient, what is least damaging or burdensome to the industries involved. As I have said, having a flat rate of 12½ per cent. would deprive the Exchequer of £3,700,000 revenue. We cannot afford to forego that amount. But my hon. Friend drew a very sad picture of the decline of this industry, and he assured me that in appropriate mourning garb I should be attending its funeral within a short period.

    I would ask the Committee to consider for a moment what is the precise position of this industry. I do not think that it is nearly so bad as my hon. Friend has suggested. What was the expectancy of an industry of this kind? This was a new industry. It has had an amazing mushroom growth. One would expect that an industry which had got a rapid stride at a time when the mass of the people of the country had more money to spend than now would have had a profitable time which would he mitigated to a certain extent when a more normal period arrived. That is exactly what you have. In the period during which this industry has been in existence 3,500 cinemas have been set up in this country. You could not expect that all these would survive in the ordinary course, even in normal times. But I would ask the Committee to remember that not only was this a mushroom growth of a new form of entertainment in this country which must necessarily become depressed to a certain extent as time went on and as the poorer establishments got weeded out, but recollect that they were also 3,500 new centres of entertainment added to all the centres of entertainment which already existed in the country and which had previously supplied the people of the country with all the forms of entertainment which they seemed to require. [HON. MEMBERS: "No!"] After all, supply is generally equal to demand, though sometimes a new supply in itself creates a demand. At any rate, when you recollect that the people of the country only have a certain amount of money to spend upon entertainments, it stands to reason that if you enormously increase the supply of possible entertainments, either the people must have far more money to spend or else all these places of entertainment cannot survive. Accordingly, we should have expected, even though we were in normal times now, that some of these theatres would disappear. In fact, we are in the most depressed times we have ever known. Is it surprising that you should find this particular industry in a state of some embarrassment and difficulty? Is there any industry which is not in a state of embarrassment at the present time? Is there any industry which is not feeling the heavy burden of taxation? Let me make a short reference to a speech by a very distinguished gentleman well known in this House, Lord Ashfield. Chairman of the Provincial Cinematograph Theatres, Ltd. Speaking on 25th April of this year, at the annual meeting of this company, he stated that, whereas in the previous year their profits amounted to £224,000, they had dropped in the current year to £100,000, and he went on to say:
    "When I recollect that many of your theatres are situated in industrial centres. and that the number of unemployed has reached 2,000,000, or 16 per cent. of the workmen of the country, and when I recollect the number who are employed only part-time, I am startled at the moderateness of the decline."

    Will the right hon. Gentleman go on to read the quotation from the same speech about the Entertainments Duty?

    Certainly; I have no difficulty at all about that. Naturally he says that if you get the Entertainments Duty off under depressed conditions, there will be more money for the company. That is obvious. So, also, if you took off the Beer Duty there would be more money for the people who brew beer, and if you took off the Tea Duty more money for the people who import tea. But the fact is that he points out, with regard to this trade, that it has suffered seriously because of this depression through which we are passing, and because people who otherwise would he spending part of their wages upon entertainment are in fact unemployed and have not the money to spend. That is not all. Just as my hon. Friend pointed out that many other considerations have gone to the depression of this industry, namely, increased cost, unsuitable buildings and enormous priced for film hire, so Lord Ashfield points out that these are the large items which in fact have robbed the company of the profits which it would otherwise have. He says this:

    "There is the extravagantly enhanced cost of films. The increase under this head is £84,000."
    In fact this Company, whose whole profit for the previous year had been £224,000, which had dropped to £100,000, had an increased cost between the two years of £84,000 for film hire.

    Surely that is a bagatelle point. Let us keep to the point we are arguing. I do not think there was any change in the Customs Duty between the one year and the other. There are the facts. You had an industry which was of recent growth, finding itself suffer in a time of depression by greatly increased costs and new demands on its resources, and with enormously increased prices for films. What could you expect but depreciated profits, and, indeed, in some cases losses? I do not think the industry is so depressed as the hon. Member would like the Committee to believe. I will conclude by making reference to some indications, I will not say of prosperity, but at least of capacity to carry on, which I find by turning to "The Bioscope," the journal of this industry, for 1st June, 1922. The issue of that week contains announcements of a number of openings of new cinemas and intimations of many similar projects nearing completion. A very optimistic article winds up thus—

    "With easier money and the continual drop in building materials it should not be long before we have at least 5,000 cinemas in operation."
    That is not bad for an industry which is going to its grave and the funeral of which I am expected to attend.

    Did I not understand the right hon. Gentleman a moment previously to say there were too many? He cannot have it both ways.

    My hon. Friend will forgive me for saying that I catch him both ways. I do say that one would expect—especially in a time of depression and in the case of a crippled trade—the number to be on the decrease, but I say it is a very remarkable thing that one of the leading journals of this trade tells us, in point of fact, that they think things are doing well enough to lead them to expect that the number will not only be increased, but will be greatly enhanced.

    If the shareholders have the admiration for my hon. Friend which I have, and if they read his speeches as carefully as I do, they would not be bluffed. On the contrary, the foolish would all be selling out and wise men would be picking up the shares. In the same number of this journal I find announcements relating to almost every leading town in England of new cinemas—magnificent palaces. In Leeds there is the "Wonder Cinema," costing some enormous sum of money—I think £200,000 is invested in it. There are other new cinemas in Manchester, Bolton and other centres. Even Birmingham, the home of decaying cinemas as we are told, is starting a new venture at a cost of £74,000. T believe with my hon. Friend the Member for West Leyton that the industry has been crippled to some extent, like every other industry, by the depression through which we are passing. I believe, like every other industry, there are places in which, by good management and enterprise, new ventures can still succeed. With every desire in the world to meet the embarrassments of this industry and to help it if we can, in the particular circumstances in which we find ourselves there is no greater justification at the present time for giving special relaxation to this industry than there is in the case of any other industry.

    I am sure the speech of the right hon. Gentleman has impressed every Member of the Committee with its adroitness and ability. If his statement were to be taken alone, without having regard to the close relationship of certain other facts which he has not stated, one might come to the conclusion that this was a very prosperous industry with rosy prospects. During the whole of this discussion the right hon. Gentleman has been overflowing with pity for every claim made to him. In fact one must say of his career as Chancellor of the Exchequer, that, so far, his way has been paved with good intentions. I wish to remind him there is a complement to that, which very often leads to a place where there is weeping and gnashing of teeth.

    The right hon. Gentleman went on to point out that, according to one of the trade papers, a number of theatres were being built. He said that 3,500 had been built during the short career of this new industry. That is perfectly true, but this year, alone, 320 have been closed, and 1,200 are living upon credit. An hon. Gentleman waxed very eloquent and sarcastic in regard to this industry paying large salaries to the artists who produced the pictures, but he overlooked the fact that so far as the exhibitor is concerned his relationship is with the middleman, who is termed the renter. Twelve hundred of these cinemas are being kept open by middleman to-day, and unless some speedy relief is given to the industry they will go the way of the 320 to which I have referred and will have to be closed.

    The right hon. Gentleman seemed to assume that the present depression was merely a phase that affected every other industry, and that the cinema industry had everything in common with them and nothing peculiar to itself. Before this industry came into being, other forms of entertainment met the requirements of the community. The cinema has appealed to a section of the community which had neither the opportunity nor the money to attend those forms of entertainments that existed before it came into being. A large number of the people who go to the cinema are women and children. They have now been given the chance of getting away from their sordid surroundings and of obtaining some glimpse of life and travel in other lands. Yet of these cinemas, 320 have already been closed and 1,200 more are only hanging on by the grace of the renters.

    The right hon. Gentleman referred to the Provincial Theatre Company. Be knows, as well as I do, that the Provincial Theatre Company are more than purveyors of pictures; they have hotels and tea rooms. It is a notorious fact that these agencies—in most cases, not in all of them—have been the one means of preventing a total loss throughout the industry. The rest of the theatres are either living upon these ancillaries to the industry or upon credit. It is beyond dispute that the industry is to-day in a most deplorable condition.

    Apart from the position of the cinema people themselves, let us take a wider view. If the cinemas are closed, the women and children, who constitute the great mass of the people who attend them, will be denied this form of recreation. You will be helping to disturb, in a disturbed world, people who are looking for some relief, not only from their drab surroundings, but from the memories of the experiences through which they have passed during the last seven years. Apart from the economic side of the pictures there is the social side. If the right hon. Gentleman thinks that, in the financial stress of the Exchequer, he can, with impunity, close these places of amusement, then the spirit of unrest, which is all too prevalent to-day, will extend to the women, because you cannot expect these people to be contented with their surroundings as they exist to-day. I appeal to the right hon. Gentleman. He said he had sympathy with a flat rate. Will he consider, before the Report stage, the application of a flat rate? Some figure can be arrived at. The right hon. Gentleman gave an assurance to the deputation which saw him that he would be willing to meet them, if possible, on the question of a flat rate. I ask him not to thrust it on one side, but to give it further consideration, because I can assure him that this industry, as it exists to-day, is going towards a crippled condition which will bankrupt hundreds. If he can give some little hopes of a flat rate, I believe he will not only lead those people from destruction, but give them some hope of being able to carry on until better times come. I ask him to invite the Trade to meet his representatives, and I am sure he would not be dissatisfied with the return coming from a flat rate.

    So far in this Debate we have heard nothing at all of the point of view of the public. I am not concerned either with the cinema or with the theatre, and the merits of the one as against the other need not come into the discussion at all. I simply want to ask the Committee a very simple question, whether it is fair that those people who can only attend the kind of entertainment which is provided at a cheap price should have to pay as much as a 40 per cent. tax on admission, while other people —who can afford a different kind of entertainment—should only pay 11 per cent..? Where is the common fairness in a system which requires people in one district to pay on an average 25 per cent in tax—and some pay as much as 41 per cent—while not very far from this House we have an area where the average is 11 per cent.? It seems to me that there is a very important public question involved in this which has nothing whatever to do with the merits or otherwise of the cinema or theatre.

    I am very sorry that the Chancellor of the Exchequer has taken up such an uncompromising position on this question, and has not addressed himself to what I venture to say is the general public aspect of the question. The fact that a flat rate, which has been suggested of 12½ per cent., would leave a deficit of £3,500,000, is not really an argument which ought to be used in support of the present system on which this tax is based. The fact that here is still another tax which is already overloaded, which is already charged on a basis which causes hardship to those who pay for it, is another of those questions which, I hope, will impress on the Government that the present rate of taxation in every direction, especially in the one now under consideration, is more than the public can stand, and the only alternative is to reduce expenditure.

    I want to support the speech of the hon. and gallant Member who spoke last. This is, I think, a question which has suffered considerably in the way it has been brought before this Committee. There is no real difference between the rate of taxation paid by the person who attends the cinema and the rate of taxation paid by the person who enters the pit seats of the theatre.

    Therefore, the question is not a question between one industry and another. We have heard "Industry, Industry, Industry!" the whole time. The question is one between the man who goes to a cheap entertainment and the man who goes to an expensive one.

    That is not the Clause we are discussing. The Clause before the Committee is with regard to the substitution of a flat rate for the present system.

    I quite quite realise that, but I do not think it is unfair to say that, in the minds of the large numbers of the public who go to the cinema rather than to the theatre, this Amendment is identified with that differentiation between the cheap form of entertainment and the expensive forte, and the flat rate proposal before the Committee is designed in essence to equalise the amounts paid.

    Surely the Noble Lord must see, that if you put on a flat rate, each cinema proprietor will be at liberty to charge what he likes, and it will not ensure any equality amongst the various entertainments, or amongst districts, and still less in the same districts, and amongst the various cities.

    I am sorry if I did not understand the point raised. But I do think there is a serious feeling throughout the country on the whole subject, and it does behold this Committee to consider very carefully whether the present taxation is just as between the amusements of the poor and the amusements of the rich.

    Question put, "That the Clause be read a Second time."

    The Committee divided: Ayes, 70; Noes, 158.

    Division No. 187.]


    [12 m.

    Banton, GeorgeHarmsworth, Hon. E. C. (Kent)Poison, Sir Thomas A.
    Barker, G. (Monmouth, Abertillery)Hayday, ArthurRandall, Athelstan
    Barnes, Major H. (Newcastle, E.)Hayward, EvanRichardson, Lt.-Col. Sir P. (Chertsey)
    Bowerman, Rt. Hon. Charles W.Henderson, Lt.-Col. V. L. (Tradeston)Richardson, R. (Houghton-le-Spring)
    Briant, FrankHerbert, Col. Hon. A. (Yeovil)Royce, William Stapleton
    Bromfield, WilliamHolbrook, Sir Arthur RichardSeddon, J. A.
    Bruton, Sir JamesHolmes, J. StanleyStanton, Charles Butt
    Cairns, JohnJames, Lieut.-Colonel Hon. CuthbertSwan, J. E.
    Carter, W (Nottingham, Mansfield)Jodrell, Neville PaulThomson, T. (Middlesbrough, West)
    Churchman, Sir ArthurJohn, William (Rhondda, West)Thorne, G. R. (Wolverhampton, E.)
    Collins, Sir Godfrey (Greenock)Jones, G. W. H. (Stoke Newington)Walsh, Stephen (Lancaster, Ince)
    Curzon, Captain ViscountJones, Morgan (Caerphilly)Walton, J. (York, W. R., Don Valley)
    Davidson, Major-General Sir J. H.Kenworthy, Lieut.-Commander. J. M.Ward, Col. L. (Kingston-upon-Hull)
    Davies, A. (Lancaster, Clitheroe)Kidd, JamesWard-Jackson, Major C. L.
    Davies, Thomas (Cirencester)Kiley, James DanielWatts-Morgan, Lieut.-Col. D.
    Dawson, Sir PhilipLawson, John JamesWhite, Charles F. (Derby, Western)
    Doyle, N. GrattanLort-Williams, J.White, Col G. D. (Southport)
    Edwards, C. (Monmouth, Bedwellty)McNeill, Ronald (Kent, Canterbury)Wignall, James
    Entwistle, Major C. F.Mallalieu, Frederick WilliamWilliams, Penry (Middlesbrough, E.)
    Finney, SamuelManville, EdwardYoung, Sir Frederick W. (Swindon)
    Foot, IsaacMoore-Brabazon, Lieut.-Col. J. T. C.
    Faxcroft, Captain Charles TalbotMyers, Thomas


    Goulding, Rt. Hon. Sir Edward A.Naylor, Thomas EllisMr. Hannan and Lieut.-Colonel Nall.
    Gretton, Colonel JohnNewbould, Alfred Ernest
    Grilles, W. G. HowardNewman, Sir R. H. S. D. L. (Exeter


    Agg-Gardner, Sir James TynteGoff, Sir R. ParkRemer, J. R.
    Amery, Rt. Hon. Leopold C. M. S.Green, Joseph F. (Leicester, W.)Roberts, Rt. Hon. G. H. (Norwich)
    Armitage, RobertGreene, Lt.-Col. Sir W. (Hack'y, N.)Roberts, Samuel (Hereford, Hereford)
    Armstrong, Henry BruceGreenwood, Rt. Hon. Sir HamarRobinson, S. (Brecon and Radnor)
    Baird, Sir John LawrenceGreenwood, William (Stockport)Rose, Frank H.
    Baldwin, Rt. Hon. StanleyGreig. Colonel Sir James WilliamRoundell, Colonel R. F.
    Banbury, Rt. Hon. Sir Frederick G.Guest, Capt. Rt. Hon. Frederick E.Royds, Lieut.-Colonel Edmund
    Barker, Major Robert H.Hacking, Captain Douglas H.Sanders, Colonel Sir Robert Arthur
    Barlow, Sir MontagueHarmsworth, C. B. (Bedford, Luton)Sessoon, Sir Phillip Albert Gustave D.
    Barnston, Major HarryHennessy. Major J. R. G.Scott, A. M. (Glasgow, Bridgeton)
    Beckett, Hun. Sir GervaseHerbert, Dennis (Hertford, Watford)Scott, Sir Leslie (Liverp'l, Exchange)
    Bantinck, Lord Henry Cavendish-Hinds, JohnSeely, Major-General Rt. Hon. John
    Bigland, AlfredHope, J. D. (Berwick & Haddington)Shaw, Hon. Alex, (Kilmarnock)
    Birchall, J. DearmanHopkins, John W. W.Shortt, Rt. Hon. E. (N'castle-on-T.)
    Bird, Sir William B. M. (Chichester)Horne, Sir R. S. (Glasgow, Hillhead)Smith, Sir Allan M. (Croydon, South)
    Borwick, Major G. O.Hunter, General Sir A. (Lancaster)Smith, Sir Harold (Warrington)
    Boscawen, Rt. Hon. Sir A. Griffith-Inskip, Thomas Walker H.Stanley, Major Hon. G. (Preston)
    Bowyer, Captain G. W. E.Jackson, Lieut.-Colonel Hon. F. S.Starkey, Captain John Ralph
    Breese, Major Charles E.Jephcott, A. R.Steel, Major S. Strang
    Bridgeman, Rt. Hon. William CliveJohnstone, JosephStephenson, Lieut.-Colonel H. K.
    Broad, Thomas TuckerJones, J. T. (Carmarthen, Llanelly)Sturrock, J. Leng
    Brown, Brig.-Gen. Clifton (Newbury)Kellaway, Rt. Hon. Fredk. GeorgeSugden, W. H.
    Buckley, Lieut.-Colonel A.King, Captain Henry DouglasSutherland, Sir William
    Bull, Rt. Hon. Sir William JamesLane-Fox, G. R.Sykes, Sir Charles (Huddersfield)
    Burdon, Colonel RowlandLewis, T. A. (Glam., Pontypridd)Terrell, George (Wilts, Chippenham)
    Campion, Lieut.-Colonel W. R.Lindsay, William ArthurThomas, Sir Robert J. (Wrexham)
    Carr, W. TheodoreLorden, John WilliamThomson, F. C. (Aberdeen, South)
    Cecil, Rt. Hon. Sir Evelyn (Aston)Mackinder, Sir H. J. (Camlachie)Thomson, Sir W. Mitchell- (Maryhill)
    Chamberlain, N. (Birm., Ladywood)McLaren, Hon. H. D. (Leicester)Townley, Maximilian G
    Churchill, Rt. Hon. Winston S.McLaren, Robert (Lanark, Northern)Tryon, Major George Clement
    Clay, Lieut.-Colonel H. H. SpenderMarks, Sir George CroydonTurton, Edmund Russborough
    Clough, Sir RobertMarriott, John Arthur RansomeWallace, J
    Coats, Sir StuartMason, RobertWalters, Rt. Hon. Sir John Tudor
    Colvin, Brig.-General Richard BealeMildmay, Colonel Rt. Hon. F. B.Ward, William Dudley (Soughampton)
    Cory, Sir. J. H. (Cardiff, South)Mitchell, Sir William LaneWaring, Major Walter
    Courthope, Lieut.-Col. George L.Mond, Rt. Hon. Sir Alfred MoritzWarner, Sir T. Courtenay T.
    Davidson, J. C. C. (Hemel Hempstead)Montagu, Rt. Hon. E. S.Watson, Captain John Bertrand
    Davies, David (Montgomery)Moreing, Captain Algernon H.Weston, Colonel John Wakefield
    Davies, Sir William H. (Bristol, S.)Morrison, HughWheler, Col Grenville C. H.
    Davison, Sir W. H. (Kensington, S.)Morrison-Bell, Major A. C.Williams, C. (Tavistock)
    Ednam, ViscountMunro, Rt. Hon. RobertWills, Lt.-Col, Sir Gilbert Alan H.
    Edwards, Major J. (Aberavon)Murchison, C. K.Wilson, Col. M. J. (Richmond)
    Edwards, Hugh (Glam., Neath)Murray, Rt. Hon. C. D. (Edinburgh)Windsor, Viscount
    Evans, ErnestMurray, John (Leeds, West)Wise, Frederick
    Eyres-Monsell, Com. Bolton M.Neal, ArthurWolmer, Viscount
    Falcon, Captain MichaelNicholson, Brig.-Gen. J. (Westminster)Wood, Hon. Edward F. L. (Ripon)
    Falle, Major Sir Bertram GodfrayNicholson, Reginald (Doncaster)Wood, Sir H. K. (Woolwish, West)
    Fisher, Rt. Hon. Herbert A. L.Pease, Rt. Hon. Herbert PikeWood, Major Sir S. Hill (High Peak)
    FitzRoy, Captain Hon. Edward A.Perkins, Walter FrankWorthington-Evans, Rt. Hon. Sir L.
    Fraser, Major Sir KeithPollock, Rt. Hon. Sir Ernest MurrayYounger, Sir George
    Ganzoni, Sir JohnPretyman, Rt. Hon. Ernest G.
    George, Rt. Hon. David LloydPurchase, H. G.


    Gibbs, Colonel George AbrahamRae, Sir Henry N.Colonel Leslie Wilson and Mr. McCurdy.
    Gilmour, Lieut.-Colonel Sir JohnRaw, Lieutenant-Colonel Dr. N.