HC Deb 23 February 1938 vol 332 cc460-83

8.41 p.m.

Captain Wallace

I beg to move, in page 14, line 36, at the beginning, to insert: (1) Subject to the following provisions of this Section the Board of Trade, after consulting the Cinematograph Films Council and considering its advice in the matter, may, not later than the end of June, nineteen hundred and thirty-nine, lay before Parliament the draft of an order altering either or both of the proportions prescribed by Part II of the First Schedule to this Act for the year beginning with the first day of October, nineteen hundred and thirtynine; and if before the end of July, nineteen hundred and thirty-nine, each House of Parliament has resolved that the order be made, the Board shall forthwith make the order in terms of the draft and the order shall come into operation upon the making thereof. (2) Subject to the provisions of the next following Sub-section.

This Amendment gives effect to a promise made by my right hon. Friend in Standing Committee that we would make provision in the Bill to enable the Cinematograph Films Council to revise, in the Spring of 1939, that is, during the currency of the first exhibitors' quota year under the new Act, the level of the exhibitors' quota for the second exhibitors' quota year. The Amendment provides that the Board of Trade, on the advice of the Cinematograph Films Council, can, if my right hon. Friend thinks fit, lay before Parliament not later than the end of June, 1939, the draft of an Order altering the quota on either long films or short films, or both, for the exhibitors' quota year beginning 1st October, 1939. The House will appreciate that, while the present Bill brings into force a renters' quota year, which starts on the 1st April, the exhibitors' quota year, as in the case of the 1927 Act, is six months behind it, and, therefore, a revision of the exhibitors' quota for the second year, if undertaken during the first half of next year will enable the President of the Board of Trade, if the Cinematograph Films Council so recommend, and he thinks fit, to lay before Parliament a draft Order altering this quota.

We accepted this provision in order to give some encouragement, or, as some people would say, some needed encouragement to British film producers. We feel that during the discussions on this Measure and the negotiations which proceeded it there has grown up a certain atmosphere of uncertainty which has quite definitely retarded the production of films in this country. It is for that reason, as well as on account of the more onerous conditions laid upon the renters by the cost test, that we felt obliged not, as might have been expected, to maintain or increase the exhibitors' quota during the first period of the new Act but actually to reduce it. It was felt on all sides that with this period of a full year's working of the Act so far as the renters' quota was concerned, the Cinematograph Films Council will be in possession of a great deal of information which at present the Board of Trade lacks. We shall have a clear idea a year hence of the course of British production, and I hope the British film producers will feel that the insertion of this Amendment in the Bill will give them hope that, if they show themselves capable of "delivering the goods," the Films Council will take this into consideration and may make recommendations for increasing the exhibitors' quota at the end of one year. It is entirely without prejudice to the subsequent statutory reviews laid down in other parts of the Bill.

8.45 p.m.

Mr. T. Williams

While we are all very anxious to help the producers we found it extremely difficult during the Committee stage to help one side of the industry without adversely affecting the other. The Committee were fairly unanimous that an early review would tend not only to provide the Board of Trade with the appropriate information which would guide them in dealing with the quotas, but also tend to give encouragement to producers, because of their knowledge that production would determine very largely the decision taken by the Board of Trade for the second year. The Amendment is a definite inspiration and encouragement and I hope that it will bring confidence to producers, so that the 8,000 unfortunate persons who have been disengaged for a long period may be drawn back into employment as quickly as possible.

Amendment agreed to.

8.46 p.m.

Vice-Admiral Taylor

I beg to move, in page 14, line 36, after the second "the," to insert, "quota committee of the."

This Clause deals with the power of the Board of Trade to alter quotas by Order, and the object of my Amendment is to constitute a special quota committee from the Advisory Council, from the non-representative members of the council, as may be selected by the council, for the purpose of advising the Board with regard to the provisions of this Section, and dealing with the alteration of the quota. We have heard arguments in favour of a Films Council, with 21 members, 11 of whom shall be members who have no pecuniary interest in any branch of the cinematograph film industry, one of whom is the chairman, with 10 other members all of whom are directly interested in the film industry. This body of 21 is to advise the President of the Board of Trade on matters connected not only with the Act but also with the industry as a whole. When we come to consider the advice to be given to the President of the Board of Trade on the specific question of the alteration of the quota percentages, both as regards renters and exhibitors, it is essential that we should have a small committee from that Advisory Council, and that the members of that committee should be members who are not trade representatives.

The members of that committee should, first of all, have no particular case to oppose and, I say it without any disrespect, no particular axe to grind. The committee would hear the evidence of all those who are directly interested in the industry, and as a result of that evidence come to their decision on the matter. It is of some importance that, if possible, there should be unanimous reports upon this question of the quota. It should be as unbiassed and as fair as possible. If you have 21 members settling this question, of whom 10 are directly interested in the subject under discussion, the producers', the exhibitors' and the renters' representatives, all viewing the matter from entirely different aspects and each of them naturally intent, and quite rightly so, on obtaining some advantage for their own particular section of the industry, then, however fair and honest they may be, it is not in the least likely that that condition will lead to a unanimous decision on the quota percentage question. I think that in practically every case a committee composed of those members would present a majority and a minority report. That is a very undesirable thing and must generally lead to a compromise.

It is infinitely better to have a small committee without trade representotives on it and to get a unanimous report. It is unfair to have trade representatives on such a committee. I think the House will agree with me, on principle, that on any committee of inquiry of this sort there should not be members who are to be judges in their own case. That is not fair to them, and on this particular question there is no necessity for it. In saying this, I do not desire in the slightest degree to cast any aspersion on the integrity or honesty of purpose of any single representative of the trade and those directly interested in the film industry who have sat for the last 10 years on the Advisory Council under the present Act; far from it. We had in Committee the evidence of the hon. Member for East Dorset (Mr. Hall-Caine), who has been a member of that Advisory Council during the whole period of 10 years. He paid a very high tribute to the trade members on that Advisory Council, and I am sure the House will accept that tribute without qualification; I most certainly do.

But in his speech to the Committee the hon. Member for East Dorset, whilst pointing out that the trade members had been of the highest possible character and had carried out their duties with strict impartiality, stated that it had been difficult on some occasions and almost embarrassing to them to vote on certain points. He went on to say that trade members are in an invidious position on any committee and that they should sit in a purely advisory capacity and should not be asked to vote. He was not condemning those members but pointing out that if they are on this committee they are being placed in an impossible position. That opinion, coming as it does from an hon. Member who has had 10 years' experience, is the strongest possible argument which I can produce in favour of my Amendment. I hope the Amendment will commend itself to the President of the Board of Trade, and I ask the House confidently to accept it.

8.55 p.m.

Sir A. Baillie

I beg to second the Amendment.

In the earlier stages of the Bill I had some leaning towards a commission such as was proposed by hon. Members opposite rather than an advisory committee, but on balance I thought the committee was the better proposal. But I feel that a committee of 20 will be a very cumbrous affair and a body which will not be hable to give unanimous advice to the President of the Board of Trade. I think if the lay members of the committee could form a sub-committee among themselves and consider the pros and cons of any proposal, they will be more likely to give the best possible advice to the President as regards this question than would be the case if the whole committee had to give an opinion. In that case I am afraid there would be always a majority and a minority report. That, I am sure, is not the wish of the President of the Board of Trade. For those reasons I am prepared to support the Amendment.

8.56 p.m.

The Solicitor-General

I cannot invite the House to encourage the Amendment. Many of the observations of the hon. and gallant Member for South Paddington (Vice-Admiral Taylor) and the hon. Member for Tonbridge (Sir A. Baillie) are criticisms of the construction of the Films Council.

Vice-Admiral Taylor

I am not criticising the Films Council but I suggest that in the construction of the Advisory Council it would be much better to have a sub-committee to go into the particular question of the alteration of quota percentages, and that it should be formed of the non-trade representatives of the council.

The Solicitor-General

I did not misunderstand the hon. and gallant Member. His was a criticism of the type of council which Parliament has decided to set up, and in regard to this particular matter this is one of the most important functions they have to perform. They have the right to give advice to the President of the Board of Trade who will bring before Parliament an Order, the effect of which will be to repeal or alter the Schedule to the Bill. I cannot conceive of a more important function for this Advisory Council, and to say that this function should be entrusted to a committee of the council seems to me to be paying scant respect to the duty they are being asked to perform. But the matter does not end there, because the Amendment is that the quota committee is to be selected by the council, so that Parliament will ultimately have to rely on the advice of people who have been selected by the council which is to be set up.

Vice-Admiral Taylor

I really cannot follow the Solicitor-General. The members of the council are to be appointed by the Board of Trade, but the Board of Trade does not say that such and such members must decide this or that matter, and that so-and-so are not permitted to do this and that. They are there to carry out the duties of the council, I should like to ask the Solicitor-General whether he is in favour of people being judges of their own case?

The Solicitor-General

The last observation of the hon. and gallant Member emphasises what I said at first, that he is criticising the construction of the council, he is objecting to the council which consists in part of people who are interested in the trade. I understand his point on that matter. I am endeavouring to point out that here you have a council of 20 members, and the Amendment proposes that in the exercise of one of their most important functions they shall be reduced to four, and that the choice of these four shall be made by the council itself. That is derogating from the advantage which the President of the Board of Trade may expect to have from the advice of the council and from the advantage which Parliament may also expect to have from their advice on the matter. The point of view of the Government on the constitution of the council has been stated so often that even if it were relevant on this Amendment it would not be necessary to repeat it, but we feel that the presence of members of the trade upon the council will in itself be valuable in enabling the council to give advice to the President of the Board of Trade. The Amendment is certainly not asked for by the trade and would result in the advice the President receives being much less valuable than advice from the council which is contemplated in the Bill.

Vice-Admiral Taylor

I hope the Solicitor-General will answer my specific question about the advisability of members of the trade being judges in their own case. I should also like to ask him whether he attaches any weight to the opinion expressed by the hon. Member for East Dorset (Mr. Hall-Caine) who, from his experience of 10 years on the Advisory Committee, said that on occasions it was very embarrassing for these members to vote.

Mr. Deputy-Speaker

I have allowed the hon. and gallant Member to interrupt three or four times, but he must not make another speech.

Vice-Admiral Taylor

I was only putting those two questions to the Solicitor-General and asking him to deal with them.

The Solicitor-General

I do not desire to burke any point, but the criticism of the hon. and gallant Member of the council is not relevant on this Clause at all. Having decided upon a council which is to embody members of the trade it seems to me that to delegate to a portion of that council the main function of the council is a reflection on the capacity of the council to discharge the functions for which it has been set up. There are representative and non-representative members on the council, each balancing the other, and the chairman has a casting vote, and the knowledge of those engaged in the trade may in some circumstances be of vital importance to enable the council to make up their mind.

9.5 p.m.

Mr. Lawson

The hon. and gallant Member is at least consistent in that he supported the proposal to appoint a commission with wide powers. I do not know whether he went into the Lobby in support of it. As it is, the Films Council itself is weak enough. It would be absurd for the Board of Trade to discuss such an important matter as the altering of the quota with a sub-committee of the Films Council. I think the effect of this Clause would be neutralised if the Board were to consider the opinion of a mere subcommittee.

9.6 p.m.

Mr. Mander

I cannot help thinking that the Solicitor-General is right in the argument that he has made. One of the most important decisions that will have to be taken under the Bill when it becomes an Act cannot be entrusted to a sub-committee. Much as we might like to have a different procedure, if this procedure is to work properly we must rely upon the whole Films Council. As the Government have made it moderately clear that they intend to rely upon the independent members, we may take it that if there is any difference of opinion on the council as to what the quota should be, they will have regard to the views expressed by those members.

Amendment negatived.

9.7 p.m.

Captain Wallace

I beg to move, in page 15, line 37, to leave out "Provided that," and to insert "(3)."

I think the House will find it convenient to consider together this Amendment, the Amendment in page 15, line 40 —leave out "said Schedule," and insert "First Schedule to this Act"—and the three Amendments at the top of page 907 of the Order Paper—in page 16, line 6, leave out "twenty-five," and insert "thirty"; in line 7, leave out "five," and insert "seven-and-a-half"; in line 8, leave out "fifteen," and insert "twenty." This group of Amendments, like practically all the Amendments which I have moved to-night, fulfils one of the many promises which we gave on the Committee stage. These Amendments give effect to the undertaking that the maximum level to which the exhibitors' quota on both long and short films may be raised on the periodical revisions required by the Board should be increased from the present figure of 20 per cent. for long films and 15 per cent. for short films to 30 per cent. for long films and 20 per cent. for short films. In addition, they also raise the lower limit below which the exhibitors' quota on short films cannot be decreased from the figure of 5 per cent., where it now stands, to 7½ per cent. During the proceedings in the Committee, we raised the initial quota from 5 per cent. to 7½ per cent. and therefore, we think there can be no conceivable reason for enabling it to be revised below that initial quota. I hope the House will accept this group of Amendments.

Amendment agreed to.

Further Amendment made: In page 15, line 40, leave out "said Schedule," and insert "First Schedule to this Act."— [Captain Wallace.]

9.10 p.m.

Sir A. Baillie

I beg to move, in page 15, line 41, to leave out "less than twenty per cent. or more than thirty per cent.," and to insert: In respect of the period set out in paragraph (a) of this Sub-section less than twenty per cent or more than thirty per cent.; In respect of the period set out in paragraph (b) of this Sub-section, less than twenty-five per cent. or more than thirty-five per cent.; In respect of the period set out in paragraph (c) of this Sub-section, less than thirty per cent. or more than forty-five per cent.

This Amendment, while introducing a somewhat new principle in the fixing of quota percentages, deals primarily with the renters' quota. There have been several references to renters in the discussions to-day, but I think it is as well to ask, who is a renter? I heard such a person referred to this afternoon as being a wholesaler, but I have always thought of the renter as being a middleman. I think it is generally felt that middlemen make decent profits, and in the discussions on the Coal Bill a short time ago, I heard it said that they make too much profit; but I suggest that in the film industry, the middleman is the person who takes the least risk, and he also happens to be primarily an importer of foreign goods, in that out of every 100 films shown on British screens, 80 are foreign and only 20 are British. Under this Bill as it stands, that meagre 20 per cent. is to be reduced to 15 per cent. during the first year of the operation of the Bill.

The Amendment deals with the renters. It has never been pretended that the renters' quota was anything but a tax on the renter of foreign films for the profits which he derives from showing those films in this country. Those profits amount to no less than £9,000,000 a year. I would remind the House that the greater part of the money which goes to the renter of foreign films comes out of the pockets of the wage earners of this country. A large number of the renters of foreign films are virtually nothing more than subsidiary companies of foreign producers. As a result of that, and as a result of a loophole in the Income Tax law, which I have often pointed out to the Government, roughly £9,000,000 go abroad every year as profits from exhibition, without having contributed one farthing to the British Exchequer. I am informed that if this Bill is passed as it is, that amount may very well be increased to £10,000,000.

As far as the renters' quota is concerned, it is merely a matter of political expediency as to how much one taxes the renter for the privilege of using the British market. I suggest to my right hon. and gallant Friend that if the renters' quota were put up to 50 per cent., the renter would still find it worth his while to fulfil it. I have made these remarks merely to show what is the feeling behind this Amendment. The object of the Amendment is twofold. In the first place, it is designed to give greater confidence to film producers by providing an assurance that in the second and third reviews provided for in the Bill, the producer will have an increasingly favourable quota. As the Bill stands the Films Council, from a basis of 15 per cent., can review upwards after the first year and at the three prescribed periods. But it need not necessarily review upwards, and I suggest that as the quota to-day is 20 per cent., and as it is now proposed to start off at the lower figure of 15 per cent., at least some definite assurance should be given by this House that, as the years go on, the quota will mount up and not stand still.

The second object of the Amendment is to enable the Government to give permissive power for the quotas to be raised to higher levels than those which are provided for at present in the Schedules so that if, after several years have passed, the circumstances justify them in doing so, the Council will be able to take more courageous steps than those contemplated at present by the Board of Trade. I have a definite fear that many hon. Members, and possibly even my right hon. and gallant Friend as well, have a certain bias against British pictures. [HON. MEMBERS: "No."] That impression has certainly been conveyed both in the Committee and in the House.

Captain Wallace

I must repudiate emphatically on behalf of my right hon. Friend the President of the Board of Trade and myself, any suggestion of that kind. I defy the hon. Gentleman to find anything in the records of the Committee or of the House which would give that impression.

Sir A. Baillie

I apologise to my right hon. and gallant Friend for having brought him into it, but we all know, in point of fact, that British pictures have been given a very bad reputation in one way and another. However, I do not propose to pursue that point now, although I may refer to it at a later stage if we discuss the question of exhibitors' quotas. In order to give the background of the situation in which the film industry finds itself to-day, I may be allowed to mention some statistics comparing the position to-day with that of 1929, the year after the present Act came into operation. The number of sound studios in 1929 was only 19, and by 1936 that number had risen to 70. In 1929, the amount of money involved in the picture business was about £500,000. To-day the amount of money which has been spent on film studios alone is £4,500,000. I would once again remind hon. Members that during the 10 years of the operation of the present Act some 10,000 skilled technicians have been turned off, and that to-day 8,000 of those are not employed. I do not mind, should there be any lack of confidence in the capability of the British producer to satisfy the exhibitors' quota, but I would ask the House to accept the Amendment which "steps up" the renters' quota over the period covered by this Measure, because in that way at least the renter will be able to ensure that some of the unused capacity of the British film studios will be used and some of those 8,000 technicians taken into employment again.

9.20 p.m.

Mr. Mander

I beg to second the Amendment.

On an earlier Amendment I gave some reasons for the belief that there is ample capacity in the studios of this country for producing a much greater output of British films. The main thing required is incentive. The Government are endeavouring in this Bill to provide incentive. If it is proposed to use machinery for that purpose, it might as well be used thoroughly. There is no good doing this in a half-hearted manner. Some people may call this Protection, but it is a misuse of words to suggest that there is an analogy between these proposals and what we ordinarily speak of as Protection as opposed to Free Trade. One might as well say that a person who wears clothes is a Protectionist. It seems to me that, to obtain results, it is necessary to proceed in this matter whole-heartedly, particularly if you believe, as I do, that the capacity exists in the country. The Amendment increases the quota at different periods, towards the point suggested by the Moyne Committee, and we must bear in mind the recommendations made by that committee after careful study. They looked for a quota of 50 per cent. towards the end of the period. The Amendment proposes to achieve that by stages. It does not endeavour to legislate from the beginning, but enables the Films Council to review the possibilities of the situation from time to time. I feel that if we adopt an Amendment of this kind we shall do something effective for the encouragement of British films and of employment in the industry

9.23 p.m.

Captain Wallace

The House will realise, as has been very clearly explained by my hon. Friends, that this Amendment and the following Amendment on the Paper, which it may be convenient to consider at the same time, aim at increasing gradually, during each revision period, the upper limits within which renters' and exhibitors' quotas can be varied. I appreciate the laudible desire of my hon. Friends who have sponsored the Amendment, but the House must have some regard to the general question of how far the British film industry should be protected, even if we use that word in the sense suggested by the hon. Member who seconded the Amendment. The film industry is, after all, the servant of the public, and the public, if they prefer to see American films, are entitled to see them. The only legitimate object of a Measure such as this is to rectify the position into which the British film industry got—largely as a result of the cessation of production during the War when our competitors on the other side of the Atlantic were able to get ahead of us—and to give the industry a chance of competing on fair terms with its rivals.

As my right hon. Friend the President of the Board of Trade said in Committee, if in the future circumstances arose which would justify a renters' and exhibitors' quota in excess of the levels now proposed, the situation would have changed to a fundamental extent, and in those circumstances it would be only right and proper to come to Parliament again and ask for fresh legislation. It may be added that if the position of the production industry at some future date during the currency of this Act is such that the Films Council, having taken into account the views of all its members, should come to my right hon. Friend and recommend with anything like unanimity that a higher renters' and exhibitors' quota than 30 per cent. on long films was justifiable, the question whether the situation had so changed that further legislation was required would obviously arise. I think the House should appreciate the Government's position, particularly in view of the fact that my right hon. Friend the Minister of Health has withdrawn the earlier Amendment upon which we set some store because he thought the exhibitors might be prejudicially affected.

The House should realise in these circumstances that the Amendment moved by my hon. Friend the Member for Ton-bridge (Sir A. Baillie) envisages a renters' quota as high as 45 per cent. and an exhibitors' quota which might rise to the same level. The actual evidence given before the Moyne Committee nearly two years ago, when the industry was in a more flourishing condition than it is now, was to the effect that an ultimate quota for renters of 35 per cent. and an ultimate quota for exhibitors of 33⅓ per cent. were desirable. It has been suggested also on numerous occasions that the ultimate aim which we should set ourselves in this quota question should be the reduction or abolition of the renters' quota altogether; and whilst a renters' quota is regarded as necessary in the early years until British production is able to make all the British films required, when that day arrives—and everybody in all parts of the House hopes it may arrive soon— and the market is no longer dependent on foreign films, it is suggested that in those circumstances the renters' quota might be reduced. The Amendment would, of course, make any proposal of that kind impossible, because, instead of allowing the renters' quota to be diminished during the 10 years' currency of the Act, these Amendments provide that any review should increase that quota by stages.

If the Films Council, after hearing the trade interests, can make anything like a unanimous recommendation in favour of a higher exhibitors' quota at any revision stage, I think it will be obvious to anybody who follows the proceedings that the President of the Board of Trade will be only too delighted to lay the necessary order before this House, and therefore there is no reason at all to assume that the maximum levels to which the quotas can be raised could not be realised in practice, if in the opinion of this body, on whose opinion and on whose work we set so much store, it should be done. We do not think in those circumstances it is right to put the possible revision of the quota so high, and I must ask the House to reject the Amendment.

Sir A. Baillie

On a point of Order. May I ask a question? The hon. and gallant Gentleman in replying to this Amendment on the renters' quota also made a reply on the situation affecting the exhibitors' quota. I raise the question because I want to make some remarks on the exhibitors' quota, where the principle involved is very different indeed from the principle involved in the renters' quota.

Mr. Deputy-Speaker

I think it would be in order, as the right hon. and gallant Gentleman on the Front Bench was in order; but I understand from Mr. Speaker that the hon. Baronet's second Amendment would fall on the rejection of the first one.

9.31 p.m.

Vice-Admiral Taylor

My right hon. Friend has said that we should have some regard to the general question of how far the British film industry should be protected. I quite agree. The object of this Bill is to give protection to the British film industry, and as the American film industry now controls at least 75 per cent. of the film industry in this country, there is ample room for the protection of the British film industry. In this Bill it is our desire to build up a British film industry in order that it may compete on somewhat fairer terms than it does at present with the American films, and we are doing it through the renters' quota. There is to-day no difficulty whatever in fulfilling a renters' quota of 20 or 25 per cent., or more. Everything is available here for turning out sufficient films, and the finance has to be found by the renter, so the difficulty of finance does not come into this question.

So far as the exhibitor is concerned, the greater the percentage in the renters' quota the greater choice of British films has the exhibitor got; it is all to his advantage, not to his disadvantage. But unless an Amendment on these lines is accepted the British producers in this country will have no assurance whatever that the renters' quota during the whole of the 10 years will be advanced even 1 per cent. above the level at which it stands to-day, which is 20 per cent. At any time during that period of 10 years the Board of Trade can reduce the quota to 20 per cent. That is not much encouragement to the producer. He is never certain what is going to happen. If one examines Part I of the First Schedule, which is undoubtedly concerned with this matter, it will be seen that the renters' quota rises by increments until, in 1947, it stands at 30 per cent., and if one looks at that Schedule without fully understanding the whole Bill, one is liable to think that such increases will necessarily take place, that the producer is assured that year by year, or for a period of years, his quota percentage will go up, and that he will have the encouragement to increase his production. But that is not so. Under this Clause it will be possible for the Board of Trade to alter the figures in the Schedule at any of the three review periods, and to alter the renters' quota down again to 20 per cent., if they wish to do so. The Board of Trade surely cannot be oblivious of the fact that that power which they possess under the Clause may easily result in their being subjected to continual pressure of the most undesirable kind.

The foreign renter looks upon his quota obligation—that is, the British films that he has to take under the quota—as a tax upon him for the privilege of showing American films in this country. His interest is not in disposing of British films; his interest is in disposing of American films. He has to have British films because they are imposed upon him by law, but he has no incentive whatever to acquire a larger number of British films, and so far as encouragement to the British industry is concerned, the higher we can make this percentage and thus force the renter to acquire British films, the better it will be for the British film industry. It is obvious that he looks upon his quota obligation as a direct tax upon him, and his whole aim and object will be to keep the percentage as low as possible, so that he will use every means at his disposal, when these reviews come up, to induce the Board of Trade to reduce that percentage quota which he has to fulfil. He must do that; and under this Clause it is possible for the Board of Trade to reduce the renters' quota back again at any time to the level at which it stands to-day.

I think that is a very bad thing for British production. We are endeavouring to build up the British film industry by means of this renters' quota, and surely there should be provision in this Bill to ensure to the producer a steady rise in the renters' quota. He ought to be certain that by the increments laid down in the Schduele he will have an increase in his production, but by this Clause it stands in the power of the Board of Trade to reduce it. If the Amendment is accepted, as it ought to be, at any rate the producer will be assured that at each review there will be an increase in this quota. I would point out that the Moyne Committee maintained that there was no reason why, if the British film production developed satisfactorily, quotas of at least 50 per cent. should not be imposed. Then why all this temerity on the part of the Board of Trade? Surely we should agree in this House that permissive powers at least should be given to raise the renters' quota to 45 per cent. after six years of the working of the Act, if circumstances justify it. This is only permissive. Why should we be afraid to give the President of the Board of Trade permissive powers to raise it, if circumstances allow such a thing to be done and the trade is capable of fulfilling it?

With regard to the exhibitors' quota, on which I do not know whether I am permitted to speak, it is rather more important perhaps than the renters' quota. The exhibitors' quota starts under the Bill at 12½ per cent., but at present it is 20 per cent. What a retrograde step! We go back from 20 to 12½ per cent. as a start, and it has been 20 per cent. for the last two years, during which time the industry has been equipped so that it is capable of producing far more films than will fill a 20 per cent. or greater quota. Yet we have this retrograde step. My point is that, by having an exhibitors' quota at so low a figure as 12½ per cent.—and the renters' quota is 15 per cent.—all British films made over and above those required for that quota will be made to compete in a saturated market. The exhibitors' quota can always and easily be filled from the renters, and there is no protection whatever for the voluntarily made British film. It is the voluntary film that we ought to encourage, but it gets no protection at all. The renters' quota is always greater than the exhibitors' quota.

In these conditions it is not likely that you can anticipate that films in any large numbers will be made over and above the number required to fulfil the renters' quota, if the Bill passes as it stands. Of course, some will be made. The big producers who have a large circuit in which to show them, will continue to make them, but the ordinary producer will not, and very few voluntary films will be made. The risk will be too great; the competition with the renters' quota films will be too unfair. People will not risk their money in making numbers of expensive films for which there is such a ridiculously unprotected market, and the result will be that when the first review takes place in two years' time the exhibitors will claim that insufficient films have been made. The Board of Trade will then decide that it is best for everyone that the exhibitors' quota shall remain at 15 per cent. for the next two years. That is the danger of having this low 12½ per cent. quota. You at once reduce the production of British films, and it is on the production of British films in this country that the quota for the following years is to be decided. By starting at such a low level, you give no encouragement to the producing industry in this country. They will not put their money into the production of voluntary films, the films will not be made, and automatically you will reduce, over this whole period of 10 years, the number of British films which will be made. It will be very damaging to the industry. Even as in the case of the renters' quota, if a rise is given at one review by this Clause, it may be lowered again at the next.

Again, there is no certainty about this matter. Under this Clause they may go right back again to their low limit. There will be continual uncertainty, and there will be log-rolling and lobbying to have the quota raised. On the other hand, if the Amendment is accepted it will give reasonable security to the producers that there will be some rise in the quota over the next 10 years. It will also give an assurance to the exhibitors. The figures in the Schedule could be slightly lower if the circumstances required it. Finally, at the third review the Board of Trade could impose quotas reasonably approximating the limits thought possible by the Moyne Committee. I would beg my right hon. Friend not to be so timid in this matter, but to put more trust in the capability of the film industry in this country to produce the films. The industry has everything necessary to do it, and there is no reason why it should not prosper, as other industries have done, if it is only given a chance.

9.47 p.m.

Mr. T. Williams

I think, perhaps, that, from the point of view of political discretion, I ought to have kept out of this family quarrel and allowed hon. Members supporting the National Government to fight it out among themselves.

Mr. Mander

I hope the hon. Member is not including me in that observation.

Mr. Williams

As the hon. Member is only an occasional supporter of the National Government I exclude him. I am not sure that a substantial case can be made out for the Amendment because, if the confidence exuding from the hon. Member who moved it and the hon. and gallant Member for South Paddington (Vice-Admiral Taylor) is fully justified with regard to the production of films, there ought to be no worry or concern on their part. If the Cinematograph Films Council are satisfied that during the first period after which a review will take place the producer can supply the maximum permissible in the Schedule, there is nothing to prevent a recommendation to the Board of Trade to allow the renter's and exhibitor's quotas to be lifted to the maximum. Therefore, it is merely a question of what the producers can do and what they will do. If they can and will do what the Mover and Seconder suggest they can do, I have no doubt that the House will always be willing to respond to a call of that description. The experience of the last 10 years shows us that the producers thought they had a shielded market, money was available in many quarters, and, as I read in one document sent to me this morning, money was flowing into the industry like water running down a hill, and it was being lost almost as rapidly as it was finding its way into production. The net result is that this year the President of the Board of Trade has had to recognise, not the potential capacity for production, but the actual productive capacity as he knows it to be. What is the actual production at the present moment? The Mover of the Amendment told us that less than 10 per cent. of the total studio capacity was in use. Why is that?

Sir A. Baillie

Because of this Bill.

Mr. Williams

If that observation is strictly in accordance with the facts, the President of the Board of Trade has fixed the quotas on the present production. I want to know whether the producers have acted because of the Bill, or whether the President of the Board of Trade has acted because of the producers?

Captain A. Evans

The hon Member has told us that the present quota in the Bill has been fixed by the President of the Board of Trade because of the production under the Act, but surely the hon. Gentleman will remember that in 1936, under the Act, the quota required was 20 per cent. but, in fact, the British producers produced no less than 27½ per cent. If the statement of the hon. Gentleman is correct, I do not understand why it has been necessary for the President of the Board of Trade to reduce that quota to 12½ per cent.

Mr. Williams

The answer is very simple. The President of the Board of Trade would not have dared to reduce the renters' or exhibitors' quotas unless it had some definite relation to the present day output of films.

Sir A. Baillie

Is it not a fact that the President of the Board of Trade and other speakers have pointed out that the main reason for reducing the quota was the onerous condition he thought it was putting upon the foreign renter?

Mr. Williams

I do not think the right hon. Gentleman was so gentle in his treatment of the foreign renter as the hon. Member has suggested. The legislation has been based on the best calculation that he could make. Every Member must know now that when the quota was 10 per cent. the producers provided 14.7 per cent., and when it was 20 per cent. they provided 27½ per cent. There is a clear indication that there was no disinclination on the part of the exhibitors to exhibit British films if they were worth showing. Why, therefore, has the output fallen so rapidly? It has been said many times, and it perhaps needs to be said again, that so much of the money has gone to the financiers and so little has gone into the production of films, that the output of films now is less than 50 per cent. of what it was. The result is that there are 8,000 out of 10,000 would-be employés in the industry unemployed. If a false sense of security is to be provided for the industry again is it not conceivable that there will be another long period of financial diarrhoea and that the finance provided will go into the pockets, not of the producers, but of those who are willing to take advantage of every opportunity that comes their way.

I am just an anxious as, and probably more anxious than, the Mover of the Amendment to see British film production on a sound basis in which it is making to capacity and providing a maximum quantity of good films of entertainment value. I want to see these employés reengaged as quickly as possible, but it is no use creating a false sense of security, no use going up into the sky and coming down with a heavy wallop, as was the case during the last 10-year period. If the producers will take advantage of that part of the Measure, it is open to them to produce as many good films of real entertainment value as they can up to a maximum of a 30 per cent. quota, that will be the best indication to the Cinematograph Films Council, on which the producers have their representation; and if they can make out a good case to the Council that they are entitled to the maximum quota permissible under Clause 15, then, instead of waiting for the end of the 10-year period, they ought to get it at an earlier date. If they can exceed what is the maximum permissible under Clause 15 far earlier than the end of the 10-year period, Parliament ought then to be ready to help the producers, seeing that the producers are helping themselves by producing really decent pictures and placing the industry on a solid foundation instead of building castles in the air as they have been doing.

9.56 p.m.

Captain A. Evans

I rise to support the two hon. and gallant Members in the proposals they have made, and after listening to my hon. and gallant Friend the Member for South Paddington (Vice-Admiral Taylor) I feel sure that it will be a great encouragement to admirers of British films to know that the fighting spirit of the British Navy has permeated the British film industry and is on the "quota deck." If I understood the reply of my right hon. Friend aright I think he was rather afraid to accept the Amendment on account of the interests of exhibitors. Perhaps he would be interested to know the views of the late President of the Cinematograph Exhibitors' Association, a gentleman named T. H. Fligelstone, who comes from Cardiff. He gave evidence before the Moyne Committee and said: The exhibiting section of the cinematograph industry has very little, if anything, to complain of in the films produced by the British renting companies. The films produced to-day by the British companies are standing on their feet. I doubt whether the President of an important association like that, speaking in his official capacity, would venture to express such a view unless he were confident that he had the unanimous support of his members, or at least that it represented the views of the majority. Again, we have only to examine very casually a list of British films produced in recent years to satisfy ourselves that his statement was more than correct. No doubt hon. Members who are also film fans have had an opportunity of seeing such films as "I was a Spy," "The Scarlet Pimpernel," "Sanders of the River," "The Private Life of Henry VIII," "Catherine the Great," "The Thirty-nine Steps," and a very fine film indeed which I believe was called "Educated Evans." I am satisfied that such films would not have been possible but for the protection and encouragement which the industry derived from the original Act.

The hon. Member for Don Valley (Mr. T. Williams) said he did not understand why the production of British films had fallen off in the later years, but thought it a sufficient reason for reducing the present quota from 20 to 12½ per cent. I wonder whether he has considered the uncertainty which must have existed in the minds of producers when they realised that the legislation under which they had built up their industry was shortly coming to an end, and that they had no knowledge of what would happen in the future, and what plan would be approved by Parliament further to protect and advance the industry. What have the producers been able to do in the past? The Act laid down that in 1930 the quota should be 10 per cent., and British producers were able to produce 14½ per cent. In 1931 the same quota existed and 16.7 per cent. of films were produced. In 1932 the quota was advanced to 12½ per cent., but the producers were able to go up to a figure of 22 per cent. and the production figure steadily increased until it reached in 1936 the figure of 27.9 per cent.

What is it that my hon. and gallant Friend is inviting my right hon. Friend to do? He is inviting him to fix a minimum permissive quota below which the quota cannot be reduced, but above which it can be raised at the discretion of my right hon. Friend. Let us examine the position of producers under this Bill. They have to obtain finance, a point which has been touched upon by practically every speaker, but what encouragement is it for a British producer to make plans ahead—and films have to be planned not only months ahead, but sometimes years ahead—if he realises that by the time his plans come to fruition there is a possibility of my right hon. Friend reducing the quota, so that instead of having a market of, I will say for the sake of argument, 25 to 30 per cent. available, the market has been reduced to 12½ or 15 per cent.? I understand the real purpose of the Bill is to encourage the production of British pictures, and I feel that a British producer has a right to ask the Government to give him some security of tenure, and I feel that on reflection my right hon. Friend and the Board of Trade will agree with the views which have been expressed.

10.3 p.m.

Major-General Sir Alfred Knox

I had not, like some of my hon. Friends, the advantage of being a member of the Committee which considered this Bill, but as I have two very large studios in my constituency, and a large number of my constituents are now out of work owing to a lack of proper protection for the British film-producing industry, I should like to say a few words. I was under the impression that this was a Bill to protect the British film industry. I have listened to a good part of the Debate, and I am still inquiring where protection really comes in. The Government are reducing the compulsory quota for British films which was thought good 10 long years ago; in other words, they are going to allow more American films to come in here. I should have thought the plain and simple, and perhaps the most honest, way to get protection for British production was to put an import duty on the foreign product, and, if you like, to take that revenue and subsidise British film's of proved quality. Then you could get the British film industry on its legs, so that it could compete with foreign importation. But the National Government, in its wisdom, has decided against that course, and goes in for this procedure, which is really too complicated for one who is not immersed in the commercial transactions which this Bill involves.

I want to make this plea for the workers in the industry. They have gone into what is really a blind-alley trade. They are highly technical men who have brought themselves to a high state of efficiency, and they have been carrying on in the hope of getting good employment. I am surprised that the hon. Gentleman who spoke from the Front Opposition Bench seemed to lay such little stress upon the employment of these people. We hoped from a speaker on the front Labour benches to hear more about people who are out of a job. I hope that my hon. Friend will push this Amendment to a Division, when I shall support him in the Lobby.

Amendment negatived.

Further Amendments made:

In page 16, line 6, leave out "twenty-five," and insert "thirty."

In line 7, leave out "five," and insert "seven and a-half."

In line 8, leave out "fifteen," and insert "twenty."—[Captain Wallace.]