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Entertainmlnts Duty

Volume 486: debated on Tuesday 10 April 1951

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Let me begin with entertainments. I do not think it unreasonable to look to expenditure on entertainment for some modest contribution to the heavy cost of defence. The duty, which brings in some £44 million a year, has not been altered for some time. Indeed, the tax on cinema receipts, which accounts for over four-fifths of the whole Entertainments Duty, has not been raised for eight years. There is, to be sure, much criticism of this tax, even at its present level, in the trade. But then it is usual for the trades concerned to criticise any tax which they collect for the Exchequer.

Moreover, much of this criticism is directed not to the level of the duty, which is paid by the customers, but to the share of the box office receipts which the industry retains; the criticism, in other words, is not that the public are paying too much, but that the industry is getting too little. Last year we made some changes in the tax as a result of which we lost a small amount of revenue, but some £2½ million extra was secured by the industry, shared about equally between the exhibitors and producers. This seems to me to point the way we should go, with this modification—that whereas last year more than the whole of the increased prices which consumers paid went to the industry, this year the need for revenue being what it is, the Exchequer must have its fair share.

I do not think there is any very great danger that a small increase in the tax will affect attendances at cinemas. Total gross box office receipts for 1950 were somewhat above 1949 and attendances and receipts are running this year at about the same level as last.

I propose therefore slightly to raise the rate of duty on cinema seats, from 5th August. The increase will be 1d. on seats from 6d. to 9d., 2d. on the main prices, that is, from 10d. to 2s. 10d., and above 2s. 10d. the duty will increase in appropriate steps up to 5d. on the top price of 11s. 7d., which will then become 12s. These proposals will bring in about £10 million in a full year, and £6 million in 1951–52.

I am prepared, however, to safeguard the position of the industry by forgoing for their benefit the proceeds of ½d. per admission, which will amount to about £1½ million in the first year and £2½ million in a full year. This will mean that in two years £5 million will have been added to the net revenue of the industry through adjustments of duty in their favour. This will be made effective by an arrangement of the same kind as was made last year, provided that on this occasion the larger part of the Exchequer remission goes to the producers. Negotiations will therefore be undertaken by the Treasury and the Board of Trade with the industry as soon as possible, and if an agreement satisfying the condition I have laid down is made, the necessary adjustments in the Schedule will then follow.

The increases in the duty will apply to the other entertainments now charged under the full scale, such as horseracing, greyhounds and speedways, but I do not propose to alter the taxes on entertainments paying at the lower rates, such as theatres, football and cricket.

Ten million in a full year and £6 million this year, less what we give back to the industry.