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Entertainments Duty

Volume 526: debated on Tuesday 6 April 1954

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I am aware of the need for some modification of the Entertainments Duty. Most of the revenue from this duty comes from the cinemas, which account for some £37 million out of a total, of £44 million a year. The maintenance of this revenue depends on the ability of the cinemas to provide the public with the standard of comfort and service which they have come to expect; this is the more important now that they have to compete with television.

Remembering the undertaking which I gave during the debates on the 1953 Finance Bill, I have examined very carefully the statistics showing trends in admissions and takings over the past few years; and I have been impressed by the difficulties which many cinemas have recently been experiencing as a result of increasing costs which are not matched by increasing receipts. Right hon. and hon. Members on both sides of the House have drawn my attention to cases of this kind in their constituencies.

I have accordingly decided to make some reduction in the Entertainments Duty on admissions to cinemas. The cinema exhibitors have represented to me that, in order to maintain their cinemas in good order and to keep pace with technical developments, they need to be relieved of duty to the extent of £7 million a year. I do not think it necessary to go as far as this, and in any case, I could not afford to do so.

The changes which I propose to make will cost the Exchequer about £3½ million in a full year. They will mean reductions in duty ranging from ½d. to 1½ per admission and will result in some improvement in the form of the scale. Full details of the new scale will be given in the White Paper.

There is no reason why cinema proprietors should not use this relief to reduce admission prices, where they can afford to do so. But I recognise that the industry in general will need the money, both to enable exhibitors to maintain the amenities of their cinemas and the attractions of their programmes, and to assist the revenues of producers. It is on these things that the prosperity of both the producing and exhibiting sides of the industry, and of the men and women employed in it, depend.

I have also been keeping a careful watch on other entertainments, particularly sports, as I undertook to do in the debates on the Finance Bill last year. I find that there has been some further deterioration, and I have decided that a measure of relief is called for. These other entertainments, mainly sports and the living theatre, already pay/lower rates of duty than cinemas; but I consider that relief to the extent of ½d. per admission is justified in present circumstances.

I am therefore reducing both the first and second scales of Entertainments Duty at a cost of £450,000 in a full year. This should help to put the finances of the football clubs, particularly the smaller ones, on a sounder footing. The total cost of those changes will therefore amount to about £4 million in a full year. They will operate from 30th May and the cost in the present financial year will be £3½million.