HC Deb 20 December 1944 vol 406 cc1816-50

12.37 p.m.

The Parliamentary Secretary to the Board of Trade (Captain Waterhouse)

I beg to move, That the Cinematograph Films (Labour Costs Amendment) Order, 1944, proposed to be made by the Board of Trade under Section 36 of the Cinematograph Films Act, 1938, a copy of a draft of which Order was presented on 12th December, be made. This and the following Order on the Paper are intended to amend the Cinematograph Films Act of 1938. That Act itself amended the first Cinematograph Films Act of 1927. In that original Act certain quotas were laid down for both renters and exhibitors. In the first of the years governed by that Act, in 1929, the renters' quota was 7½ per cent., and that quota, under the Act, increased by stages until, for renters, it was 20 per cent. in 1938. The exhibitors' quota in 1929 was 5 per cent., and there again, by a series of increments, it rose to 20 per cent. in 1938. Unfortunately, even in those days, it was not found possible to produce sufficient British films to fill the quota. Consequently, the Act of 1938 had to reduce the quota for the following year from the 20 per cent. of the old Act to 15 per cent., and it laid down for the renters an increasing scale until 1947, when it was hoped that the quota for long films would be fulfillable at 30 per cent. and for short films at 25 per cent. Similarly, the exhibitors' quota of 12½ per cent. in 1938 for long and short films alike was to increase, by 1947, to 25 and 22½ per cent. respectively. Unhappily, however, the war intervening, it has not been possible to fulfil the expectation of the second Act and, therefore, in 1941 an amending Order was made under which the renters' quota for long films for 1942, 1943, and 1944 was to be 20 per cent. and for short films 15 per cent. For exhibitors, who necessarily have to have a smaller quota than renters in order to allow for a reasonable surplus of films in the hands of the renters, the figures were 15 per cent. for each of the years for long films and 12½ per cent. for short films.

Sir Alfred Beit (St. Pancras, South-East)

Would my right hon. and gallant Friend mind repeating the difference between the two quotas? It is quite impossible to hear.

Captain Waterhouse

Under the Order, the renters' quota for long films would be 20 per cent. and for short films 15 per cent. and those for exhibitors 15 and 12½ per cent. respectively.

Sir A. Beit

I would ask my right hon. Friend why there should be that difference between them.

Captain Waterhouse

Obviously, the exhibitors want to have some choice, and if there were precisely the same number of films in the hands of the renters as were needed to fill the exhibitors' quota, the exhibitors, whether they liked it or not, would have to take all of them. One likes a choice of commodities, and likewise it is good to have a choice of films in the hands of the renters.

Unhappily it has not proved possible to produce enough long films to meet even the reduced quota of 1941. On the other hand, the position with regard to short films—and I will deal with them first—has been a good deal easier. In regard to them, the Ministry of Information have gone into production on a considerable scale. They have produced short documentary films, descriptive films, of considerable interest and value, and they have helped a great deal in the fulfilment of the short film quota. In addition, the import of short films from America has fallen materially, and as there has been a rather larger number of British films it has made it easier to fulfil the quota. The present Order does not touch the short film position at all; it deals only with long films.

At the present moment, as I have said, it has not proved possible to produce sufficient long films fully to fill the present reduced quotas. On the exhibitors' side last year there were no less than 940 defaulters and it has not been possible to prosecute them for their failure to fulfil the quota because under Section 7 (1) of the Act it is a defence for any exhibitor to prove that his default is due to circumstances beyond his control. Clearly, the exhibitor can have no control over the films in the hands of the renter, and much less over what is produced by the producer. Therefore, there has been no means under the existing Act, and no wish on our part, to prosecute him. As far as we can see, we hope that we are in the slump at the moment and that from this date there may be some increase in the number of long films. Therefore, under this little Order, we are holding the present quota for next year and, thereafter, we are having small increments to 22½ and 25 per cent., respectively, above the 20 per cent. minimum laid down in the Act. During the same period the exhibitor's minima are raised from the present 15 per cent. to 17½ and 20 per cent. respectively.

Clearly the Board of Trade would have preferred not to have had to come to the House with this Order. Had we known that there were enough films available to make a new Order unnecessary, such knowledge would have been agreeable to us as well as to the House. As I have pointed out, such a course is impracticable, and it is a good deal better that we should bring our present figures more into conformity with the films that we have to distribute.

May I advise the House of certain Amendments in the Order dealing with quotas? A little time ago the House set up a committee of scrutiny and a similar committee was set up in another place. These committees went through the two Orders with officials of the Board of Trade as a result of which three small drafting amendments were suggested. The original Orders were accordingly withdrawn yesterday and fresh Orders placed in the Vote Office. The draft amendments are as follow. In the second line of the first paragraph "(2) (b) of Section 15" has been altered to "(2) (c) of Section 15," which was an error in the first Order. In the Section 1, the words "which specified renters quotas" have been inserted after "Principal Act". This merely makes the Order more understandable to the lay mind. The Schedule has been subdivided into two parts in place of two Schedules. There is now one Schedule, of which part 1 deals with renters and part 2 deals with exhibitors instead of two separate Schedules.

The second of these Orders deals with the labour cost test and affects renters only. The object of the labour cost test was to have some check on the quality of the British films produced. The original object underlying the whole of the legislation was to get made in this country films worthy of our industry, which, when exported, would enhance British prestige abroad. In order to promote that production, it was clearly desirable that a market should be secured for such films at home in the first place. It was therefore laid down that no long films should rank for quota that had not got a labour cost of at least £1 per foot, and no long film should cost in total less than £7,500. That was in order to ensure that no really cheap films should rank for quota, but it was also the wish of the Government of the day to encourage the production of much better films. Therefore, the system of double and treble quotas was introduced. Under that any film which had a labour cost of more than £3 per foot would rank as being 2 feet for every 1 foot for the calculation of the quota. Similarly, better films still with a labour cost of £5 per foot would rank as being worth 3 feet for every foot of its actual length. During the war labour costs, salaries and other expenses in the production of films have increased, as everything else has. The £1, £3 and £5, therefore, mean in terms of labour, artists and materials, substantially less than when the Act was passed in 1938. We therefore ask the House to approve these figures being brought more into line with present costs by an increase in each case of 50 per cent. That is to say, the £1 labour cost minimum will become 30s., the £3 will become £4 10s. and the £5 for the quota will become £7 10s.

If the House approves these Orders a further Order will be laid before it in the near future dealing with what is called the monetary quota. That quota is a means given to renters for fulfilling their quota, not by footage but by cost. It is obvious that, having made these alterations owing to changed costs of films, the Regulations under the monetary quota should be brought into line. Therefore, early next year an amendment of the Regulations will be laid before the House, and I hope will have its approval. I trust that I have explained this matter as clearly as the House thinks is necessary. It is a complicated one, but I hope that the House will approve both these Orders.

12.53 p.m.

Mr. Ellis Smith (Stoke)

Unfortunately the atmosphere that has been created does not lend itself to bringing the best out of the Debate on these Orders. I do not complain of that, except that the House and the country will not only have to be concerned with what is going on in many parts of the world, but will have to be concerned with what is going on at home if Britain is to become the country that some of us are hoping it will be after this war. We are now considering an important question. It is one to which the House needs to direct its attention, and I desire to make a few observations in order to stimulate further interest in the question. These Orders mark a further stage in the encouragement of Birtish films. They are introduced under the Cinematograph Films Act of 1938, which places a big responsibility upon the Board of Trade. In my view, however, they have not fulfilled that responsibility to the extent that they should have done. Before we allow these Orders to pass we should receive more explanations than we have received and assurances in regard to the future operations of the Orders.

The film industry is now a vast industry. In the main, it serves the community for entertainment, but it also has educational value, and the potentialities of the film industry from an educational point of view cannot be measured. These Orders prove that the war has narrowed our approach to the consideration of this industry and that we are still looking at it through the perspective drawn for us by 1940 conditions, such as the requisition of studio space and the difficult questions of labour in which we have been involved. I understand that the Order fixes the quota until 1948, which means another four years. Frankly, I do not like that, and I hope we are not going back to the 1939 standard. This country has made a mighty contribution in the world battle for freedom, and we have no right to look upon our problems through the perspective that 1939 draws for us. We are hoping that Britain will become more active and greater than ever, and therefore we are not satisfied to approach this question of an important industry which the quotas are catering for in that way.

I consider—and my view has been confirmed by the Parliamentary Secretary's speech—that the Board of Trade are too pessimistic about the future prospects of the British film industry. No one can deny that the market is there. There is more goodwill now for this country throughout the world than there has ever been in our history. Therefore, we ought to cater for that goodwill by the manufacture of more British films. I suppose that the chief handicap for the Board of Trade will be the monopoly ownership of films upon which a report has been prepared, which I shall refer to later. The next handicap, especially at present, is the lack of production capacity and the supply of technicians. Under these Orders, what is to be the Board's policy on the points I have mentioned particularly in regard to production capacity and technicians? In my view, too much is being taken out of the industry. With more of the takings ploughed back into the industry it could be made more efficient to cater for the needs of the people than it has been up to the present. It is the Board's duty to see that more capital is put into the industry. If that were done we could increase our production capacity to a very great extent.

The industry in its modern form is relatively young, employing relatively young men. The result is that it has relatively suffered more as the result of its key technicians being taken into the Armed Forces than any other industry. Has not the time arrived when, seeing that we are receiving huge reinforcements from the United States and other countries, key technicians should be released so that they can be preparing to embark upon a large scale expansion in the film industry immediately on the termination of hostilities? This mechanised war has made our young men more technically minded than ever in the past, and after the war there will be potentially more technicians at the service of the country than ever in the past. Therefore, the release of some key technicians now would be a good contribution to full employment and to catering for the people's needs.

Even before the war we had technicians and producers who compared favourably, I understand, with those of any other country in the world. Many of them were in the forefront in the film industry of the world. As a result of the developments that have taken place, particularly during the war, many Government Departments want films. I hope that this tendency will be increased after the war. The Minister of Education will also be requiring films. The film is of great educational value, and we have not used it in the schools yet to the proper extent. The achievements shown in the White Paper on Britain's War Effort might also be made into a film. In view of that, may I ask whether the percentages in these orders are adequate to meet our needs?

It might be said that the studios available are fully occupied and that we cannot increase our output. Then, to what extent can we increase our studio capacity without affecting our war effort? If hon. Members turn to this report, they will get an answer to this question. We see there that eleven of the pre-war studios are not being used at all. Surely the time has arrived when technicians should be released, or men employed who were technicians and who have been released because of being maimed or otherwise invalided. We ought to be using more studios than we are using at the present time.

Captain Waterhouse

When the hon. Member says that studios are not being used at all, no doubt he means for the production of films. They are used for other purposes.

Mr. Smith

I do not want any misunderstanding. I thought I had made that quite clear. That was the point I had intended to make. It is a very important point because, under these Orders, we should be enabled to cater for our needs to a greater extent if the studios were being used.

Wing-Commander James (Wellingborough)

I would point out to the hon. Member that without the increase of personnel, the studio space could not be occupied.

Mr. Smith

I thought that these questions, upon which I have briefly touched, were linked together. If my hon. and gallant Friend is just emphasising or underlining what I am saying, I am very thankful for his support. Before we pass from these Orders, we are entitled to know what is being done about the need to increase studio capacity and about the need for the release of technicians, in order that they may be employed in those studios. I ask those questions for many reasons and because, in my view—although, unfortunately, most people do not seem to realise it yet—this country will be involved in a big battle, as soon as hostilities terminate, in regard to our export trade. Films can be very effective overseas canvassers. Seeing that we have such limited capacity, compared with some other countries, and that we shall be involved in that big export battle, we ought to be manufacturing as many films as we possibly can, so as to send them out to do work, that individuals did in the old days.

Too many films cater for emotions in the people that should not be stimulated to the extent that they have been for many years. Let me emphasise that Hollywood life is not a natural life. The world could not be run on Hollywood's conception of life. I am no kill-joy; far from it, but it is all a matter of degree. I am concerned with the effect upon the lives of our young people of too many films coming from Hollywood, especially on Saturday afternoons when you can see thousands of young children, from working class areas in particular, going to matinees and seeing films which they ought not to see. They ought to be seeing films of an educational character, or films bringing the best out of life rather than films which cater for the emotions. In my view, box office receipts should not come first, either with the film industry or with the Board of Trade. The Board of Trade has a very serious responsibility to see that there is a great improvement in this respect.

I believe that the films should more accurately reflect the real life of the British people and British ideas. They should be made up to suit our tastes, and to assist in the maintenance or the improvement of our own standards. During the war there has been what amounts to a standstill agreement in regard to the output of films. Can we be given an assurance that it is intended as a result of these Orders to produce more films that will reflect British ideas and tastes? During the war some excellent documentary, films have been produced and some excellent short films. I have in mind "Power in the Highland" for one. I purposely listened to as many people as I possibly could while I was watching that film. The educational value of that film was a great lesson to me. Another film was on the building of the pre-fabricated ports. All people who have seen that film are bound to have derived a great amount of satisfaction from it. No matter how well the story may have been printed in books, or how good the photographs shown in the newspapers, the film proved that printing cannot be compared to the screen.

Then it was our privilege to see in Westminster Hall the films that dealt with Canadian civil aviation, Russian foreign policy and one or two others. I want to ask the Parliamentary Secretary if it is the intention of the Board, under these Orders, to have more films of this character and to have more films of industries of our country, like mining, cotton and pottery. As I have said, we shall be involved in a big export trade battle, and in industries that cater for trades, like cotton and pottery, a few films made in the language of other countries, or made in our own language and then adjusted to suit the language of other countries, could be sent to many parts of the world, where they would have a very good effect. In the occupied countries, German films were shown for many years. I understand that the effect of those films has been greater than many of us have realised. Are we now not under an obligation to provide a quota of British films in order to remove that damage done by the German films while they were in countries like France and Belgium? I saw a film a few weeks ago entitled "A Song to Remember." That film is a credit to all who have had anything to do with its production. There are great lessons from it and great character is brought out in it. I would like to see that kind of film encouraged more in our country, provided that we can have some assurance with regard to the points I have raised, we shall facilitate the passage of these Orders.

I have to add a few words in conclusion. This report was issued in July of this year. The first thing I ought to say is that there was then serving on the Committee Mr. Philip Guedalla. We all regret that he has passed away since the report was published. I understand from friends of mine that he was a very public-spirited mart and his death is very regrettable. As we are giving brief consideration to a number of issues raised in this report, perhaps we ought to place on record that we appreciate the work that he has done. I know that it would be out of order to discuss this report in general, but there are a few points made in it which are relevant, when we are considering the passage of these Orders. It is upon those points that I want to conclude. The chairman of the Committee directed a letter to the President of the Board of Trade, and I would like to draw the attention of the House to the following extract: The Council have carefully considered the report of the Committee and unanimously accept its broad conclusions. They adopted the report and transmitted it to the Board of Trade for urgent consideration. That was five months ago. We are entitled to know to-day what the Board are doing with regard to this matter. The letter continues: I am glad to say that this resolution was passed unanimously, 15 of a possible maximum of 20 members of the Council being present. The report deals with serious tendencies in the monopoly of the cinematograph film industry. Before we part with the Orders, we would like some assurance that the Board of Trade are dealing with the issues raised in the report, in order that the British film industry can make a great contribution to the needs of our country, to the maintenance of the good will which now exists towards us throughout the world, and to increasing the educational value that can be derived from films.

1.12 p.m.

Earl Winterton (Horsham and Worthing)

I apologise for rising so soon after my colleague on this Bench but, as it will be seen, I am in some dissonance with him, although he, as usual, put his points with the utmost fairness. I have a comparatively large holding in the film industry, and I am a director in a number of principal companies which have been referred to in this report. My hon. Friend has very properly dealt with some aspects of the report which are in Order and he has steered clear of others. Let me say that I speak without consultation with my colleagues in the industry. I represent only my own point of view. I am not a believer in a Member coming down to this House and saying: "I speak on behalf of those associated with me." I believe that the Member should speak for himself.

I want to say in a public manner and with some authority that the industry, and especially the interests with which I am connected, would welcome at the earliest possible opportunity the fullest possible discussion of the report to which my hon. Friend referred. We cannot discuss it now, The Parliamentary Secretary knows that in some respects the whole of the report would not be in Order. Since Mr. Rank, with whom I am proud to be associated, has been inferentially criticised in this report, I maintain that it is only fair that there should be a discussion in this House on the report. Those who take a view different from that of the report would be able to put their point of view. That is the only thing I have to say in opposition to my hon. Friend except that as he spoke of monopoly we, who take a different view, believe that, if we had a discussion, we could show that monopoly of the kind to which he referred does not, in fact, exist.

I would like to support his request that information should be given to the House on the matters which he put forward. I hope that when we have an opportunity of discussing the report the discussion will take the form of a Motion on which we can discuss this nascent industry in all its branches—production, distribution and exhibition. It is high time there was such a discussion in this House. We, in the industry, believe that there will be opportunities after the war on the lines laid down by my hon. Friend, of getting a very considerable export of British films. The success which one or two British films have recently met with, and the unsatisfied demand by the public to see them, would make one think that that is so. Perhaps I might mention one or two other matters referred to by my hon. Friend. As to the exhibition of a type of film on a more moral level, in the first place, as my hon. Friend and the Parliamentary Secretary are aware—I think the Minister will confirm what I am going to say—there is to-day a pretty good voluntary censorship of films in this country, with the classification into two or three different enumerations.

If instead of a voluntary censorship there was a censorship, say under this House, it would lead to endless trouble and a certain amount of, shall I say, undesirable political controversy. There would be questions asked of the Minister why such and such a film had been permitted. I think the House was wise originally to agree, I think unanimously, to a voluntary censorship. You cannot really—I must put this frankly—improve the type of public demand, that is you cannot get the public to ask for a type of film which is better from a moral or elevating point of view—if it be charged against the industry, which I do not concede, that there is too low a level—without an improvement in public taste. That is much more an educational matter than anything else, and the history of the industry, as everyone connected with it knows, is strewn with the corpses, the casualties, of the people who have endeavoured to produce something which in their opinion was infinitely better to see than anything anyone else had produced, but which people refused to see. It is not a question, as some people seem to think, of a conspiracy on the part of companies or owners of cinemas to prevent them being shown. It is because they have not a box office value.

It is important to deal with this matter in a way which I hope would avoid political controversy. I see no reason why there should be any. Some films must obviously be produced under Government auspices, others by private enterprise. The best way to improve taste is therefore to show films to schools and educational establishments in the first place. If we did that I think the opportunity in the future would be great. I view with alarm films of an educational nature which come to this country from America. I do not think it is particularly good to have a man expounding something in an American accent which the children do not understand instead of in Cockney or South Country or some other accent, which they do. That is very important, because it reassures the child and makes it feel, "That is a background I understand." Without consultation with the industry I can say that I know they are anxious to do everything possible to encourage the production of such films. I think my hon. Friend can confirm that.

My hon. Friend made one most useful suggestion, which I would like to support, that is, there should be a quota of British films in occupied countries. That is of enormous importance, and I would like most strongly to support that. I hope my hon. Friend will bring it to the notice of the powers that be. I apologise for the rather desultory nature of these remarks. I can say, as one with very considerable interests in the industry, that we welcome in this House the fullest possible discussion of this matter. We hope we shall have a full Debate on the whole film industry, and let us see, if that be done, whether we cannot, in the spirit of the speeches which my hon. Friend and I have just made, reach something like a common conclusion, so that this great industry may be of benefit to the country and be a valuable part of our export trade.

1.20 p.m.

Wing-Commander James (Wellingborough)

The noble Lord has disclosed a personal interest in the film industry. I must also disclose a very negligibly small one. My interest is really one in order to try and do what I can to help the industry. I thought the hon. Member for Stoke (Mr. Smith) made a most admirable speech. My interruption was to seek to underline a remark he made. In fact, until he came to his concluding paragraph I found nothing with which I was not in almost complete agreement. As to his concluding paragraph, I take a rather middle course between his views and the views expressed by the noble Lord who followed him, The Board of Trade cannot yet have pronounced upon the Palache Report since it is still under review by the industry itself.

Earl Winterton

I did not make that point. I did not say that the Board should report. I said there should be an opportunity for the House to discuss the matter. This House is, after all, the grand inquest of the nation.

Wing-Commander James

I said I was taking a middle course. I was still referring to the hon. Member for Stoke. I agree with the noble Lord on that point also. I believe that when this House comes to discuss the report, as I hope it will, it will be found that there is a perfectly good middle way which I think would probably suggest itself to the Board also. I am confident that this House will very gladly pass these two little Orders. They are a very small step but a welcome step. It should be remembered in fairness to the British industry that twice in the lifetime of this young industry Hollywood has received an immense adventitious advantage. In 1914, and again in 1939, the British industry was virtually reduced to a standstill at moments of particularly important technical progress and expansion. That has given Hollywood an unfair advantage twice within a short time. I do not think the British industry is being unreasonable in seeking Government help to overtake at least the arrears. In 1948 there will be a new Act. It will be out of Order to refer to that, and I will not do so in any way, but until 1948 I think the public and the industry are entitled to ask the Board of Trade to try and improve the position for us vis-à-vis overseas interests, particularly having regard to the enormously greater extent to which we are still mobilised compared with them.

Earl Winterton

The hon. and gallant Member does not know that there are now certain arrangements by which there should be a much better chance in future for British films to be shown in the Dominions and Colonies.

Wing-Commander James

I was coming to that. Both the hon. Member for Stoke and the Minister referred to quotas. On that point I think the Board of Trade have shown very marked leniency. It is quite true that exhibitors were under some difficulty in including sufficient British films to satisfy requirements but I think they have magnified those difficulties considerably. I hope the Board will not be quite so kind to defaulters in the next period.

I am bound to say that I think that in the last two or three years the Board have taken a very live and helpful interest in the British film industry. The Parliamentary Secretary and the right hon. Gentleman the President are both keenly alive to the importance of the film, but when we were preoccupied with other things there were cases when British interests were substantially overlooked—I put it no higher than that. There is a further justification for these Orders that there has been for many years, and particularly during the war, marked discrimination against British films, particularly in America, and although excuses are made in the technical Press which sound very plausible, they do not ring true to people who know the selling methods of Hollywood. I do not suggest for one moment that Hollywood is a fair sample of American industry. This is a very young industry, it is perhaps a little lacking in traditions as yet. I believe that in America and in this country this industry will settle down during the next decade into a sound, great and creditable industry.

I think it would be in Order to show how important it is that the 1948 Film Bill should be fair and reciprocal. I believe that under great difficulties, great shortage of personnel and supplies and the other usual wartime obstacles, the industry here is making a very real effort to put its house in order. I think that is shown in many parts of the Palache Report. I welcome the searchlight on the industry. I do not think the industry will in fact emerge too badly from the scrutiny to which it is being subjected. We do not want cover for monopolies, nor do I believe that the House would give that. What we do want cover for is genuine British production, particularly by the small people.

The hon. Member for Stoke referred to the documentary producers in this country. There we have a great tradition. In certain types of film France leads the world, in certain types America has hitherto led the world. In certain types we have always led the world, that is in the documentary. That is particularly the kind of film for the small producer, the small company, the small man. That is the industry we need to foster as the basis for an expanding British film industry—the Ministry of Information type of film. The public demand for that sort of film is bound to grow. The quota and future increased quotas should secure guarantees re an expanded world market for the skill of the British film producer. I welcome these two little Orders for what they are, and for the promise that they portend.

1.28 p.m.

Mr. E. P. Smith (Ashford)

I will not follow my hon. and gallant Friend the Member for Wellingborough (Wing-Commander James) but I wish to make a protest against the Quota Amendment Order. My objection to this Order is that it confirms a curtailment of production in the British film industry for the years 1945–6, 1946–7, and 1947–8 terminating on 31st March, 1948. These reductions have, of course, been necessary during the war, and will still be necessary for some time in the future, but I contend it is against public policy for these reductions to be extended, willy nilly, to the years 1946–7, 1947–8. Under the 1938 Act, the renters quota in 1945, had the Act been operating normally, would have been 27½ per cent. That is reduced to 20 per cent. In 1946–7 it would have been 30 per cent. That is reduced to 22½ per cent. In 1947–8 it would have been 30 per cent. That is reduced to 25 per cent. These percentages may not seem very much when we look at them on paper or hear them quoted to us. Actually when the number of cinemas in the country and the amount of footage involved are considered, they will be seen to be really very large percentages. At this stage of the war I do not see the necessity for such a drastic extension. I understand that the cinema industry, representing among other interests, of course, the British producers, met the Board of Trade, and agreed upon these quota reductions.

It must be borne in mind that these reductions, at the cost of British producers, have benefited American and other film producers very considerably. It must be borne in mind, too, that the British producing industry is closely interlocked with the distributing and exhibiting sides of the industry. Thus, the British producing industry is not solely interested in producing British films: it is also interested in distributing and exhibiting American and other films as well as British. It is not wholly to its disadvantage to have a continuance of curtailment of British films, because what it loses on the British swings it makes up on the American roundabouts. It is well to bear this aspect of the problem in mind. But from the point of view of giving employment to British workers, of increasing British home output for home consumption as well as for export, and putting across the British way of life, every curtailment is to be deplored.

What is the real reason why the industry cannot produce sufficient films to carry out the intentions of the maxima in the 1938 Act? The main one is shortage of floor space. It is the Government who are responsible for that shortage, because they have commandeered a great many studios for storage of various kinds and also for production of war materials. Well and good—or perhaps I might say, well and bad. But we should do wrong in assuming that the Government, if they tried seriously, could not make other arrangements for storage in 1946–7 and 1947–8, without encroaching upon an important industry to this tremendous extent. I understand that the position in 1943 was that there were 900 defaults on a basis of between 4,000 and 5,000 cinemas—when the curtailed quota was at the same figure as is proposed for 1945–6—that is to say, the minimum 20 per cent.—and that only 50 per cent. of the required 150 long films could be produced. That is a ridiculous position. It is contended, and quite properly, that to lift the quota percentage to the maximum figure would lead to a still more ridiculous position. But I fail to see why, if one has to be ridiculous anyhow, one should not go the whole hog, and be a little more ridiculous still.

What should we be doing if we allowed the quota figures for 1946–7 and 1947–8 to remain the maxima under the Act—namely, 30 per cent. for each year? We should be performing an act of faith. We are constantly being asked to perform acts of faith in this House. We should be performing an act of faith in the great and prosperous development of a great industry. We should be opening a gate, instead of, under this Order, shutting a door. How can we say, at this stage of the war, what the conditions in the industry will be in 1947 and 1948? It is absolutely impossible to forecast with anything like approximate accuracy. If we cannot pretend to do even that, I think it is better to leave well alone, and allow the 1930 Act to operate. Nobody is penalised by it. If the renters and exhibitors cannot supply their quota, they are not penalised, provided it is commercially impossible for them to do so.

We want full employment for our people, and the film industry is a huge employer of persons in every class of the community. Not only that, but it is, as the Noble Lord pointed out, an ambassador. It exhibits—sometimes badly, I admit, sometimes well, and sometimes very well indeed—the British way of life. I do not think we dare neglect what chances we have of putting the British case over to the world in general—and not only to the world in general, but to the British people at home here. These chances may come, and this Order deliberately shuts the door on them. I would like to remind the House that we should have had the finest film industry in the world if we had not been fighting the Germans during the years 1914–18. That gave our American cousins a free field. I am not in any way complaining of that, but it happens to be a fact. They sent us their films, and they took our money in exchange, and they built up a tremendous industry in their own country. They built up huge reserves of capital; they were able to endow film scientific research; and our own film industry was in the doldrums until the passing of the Cinematograph Films Act, 1938. That Act has been immensely beneficial, and I do not want to see it whittled down by a fraction of one per cent. for a moment longer than is absolutely necessary.

I am afraid the truth is that the Board of Trade have got so used to controlling this, that, and the other, that they just cannot refrain. They are rather like a dram drinker, who is not content to secure the supply of liquor that he wants from day to day or from week to week, but seeks to obtain the largest possible supply for the longest possible period. I am a teetotaller in the matter of controls. I quite agree that it is useful to have a few about the house, for medicinal purposes, but I do not go beyond that. To extend this Order until 31st March, 1936, should have been quite sufficient; to extend it until 31st March, 1948, is almost ridiculous. I would like to draw attention to the question—because it affects the matter in some way—of the dollar-sterling exchange. If we cannot get our film quota up, we shall be exporting hundreds of thousands of pounds sterling to the United States. I know what the answer of my right hon. and gallant Friend will be. He will say "No, we shall not be exporting them; they will be passed to sterling balances, as at present, which are blocked," May I explain how this money will be exported, because I think it has a considerable bearing on the whole position? It will be spent here, in this country, on acquiring the rights of British film subjects. That is how these balances are being used to-day. It is almost a racket. But when the subjects so acquired come to be made, they will be made in America. The value of a film, economically speaking, acrues to that country which makes the film, and not to the country which is the abode of the author or the owner of the rights. That country certainly benefits to an infinitesimal extent—to the extent, in fact, to which it is interested in the estate of the author or the owner, but no more. The economic value of the film is the expenditure incurred in the making of the film, and not in the acquiring of the subject.

I have shown how the exigencies of the war have made the predecessor of this Order—the Order which is now in force—very much of a farce, because production has been driven down well below the statutory minimum. But in this period which ends in 1948, which we hope will see peace reigning again in the world, there may well be as swift an acceleration in the industry as there has been a slowing down. This Order, which I maintain serves no useful purpose at all, puts the hall mark of depression on the industry until 31st March, 1948. In my view, it would be better to leave the Act of 1938 where it is. It was never designed, I admit, to meet the emergencies of war; but it has safeguards, and no one has been penalised. This Order is at the moment, I am sorry to say, a piece of honest but misguided legal pedantry, trying, but failing, to relate the 1938 Act to the realities of to-day. That is the present position. But I maintain that in a couple of years this Order may well have become a menace.

1.43 p.m.

Lady Apsley (Bristol, Central)

I am glad to be able to associate myself with what my hon. Friend the Member for Ashford (Mr. E. P. Smith) has said. I am sure we are all very satisfied that this Debate on the new quotas should have brought out a very great deal of information regarding the difficulties of showing good films, not only in this country but overseas, at the present time. I speak as a member of the Council which my right hon. Friend set up for the film industry, and on which I represent the British public. On that Council we all appreciate the difficulties, not only in respect of the lack of technicians, but particularly in respect of the lack of studio space, which my noble Friend referred to in his short but excellent speech. That is really the crux of the matter to-day. Those outstanding documentary films produced by the Ministry of Information and referred to by my hon. Friend, as we all know, have been produced under very great difficulties, and a great many of the smaller producers, who have done such excellent work in the past, are only waiting for an opportunity to put their most excellent wares before the public and before the overseas market.

I would add my few words to what has been said about the value of that overseas market. My right hon. and gallant Friend referred to the prestige that those films are gaining for this country overseas. Nothing that we can do should be left undone to help in every way possible to send more and better films overseas. I question if the Board of Trade is doing sufficient to help both as regards documentaries and the longer, more expensive, types which are now beginning to be made. I refer particularly to the new film "Henry V," and I hope hon. Members will go to that film in order to see what can be done under very great difficulties in this country at the present time. I say "in this country," advisedly, for through lack of official assistance, such a film had largely to be made and screened outside this country. It is rather disastrous that we now have the irony of Henry V's Battle of Agincourt being represented by, I believe, the Eire Army. I am sure they did not charge at Agincourt with their lances in the upright position, and I think there are many other small details which some of us might criticise, but, by and large, that film is really a magnificent example of "British prestige," such as my hon. Friend referred to, and I hope the film will go throughout the world to show what we are thinking, what we are doing and what we like in the cinema world.

I give one other small example to show how important this is. Many years ago I was out in the back-blocks of Australia and was invited to witness some films to be shown in the open air to the local neighbourhood. Everybody gathered from far and near, including some 1,500 black aboriginals, many of whom were seeing a film for the first time. I watched their reactions. Unfortunately, the films shown were mostly very bad American films, and I felt extreme shame at that time for the prestige of this country. Luckily, there was one British film, a short documentary at the end showing the launching of a ship, which just saved the situation. That sort of situation should never be allowed to recur, and I heartily endorse what was said by the hon. Member for Stoke (Mr. Ellis Smith) that we must not go back to the 1939 standard of British films, because something vital to the prestige of our people is at stake. We used to think that trade followed the flag, but I feel that, in future, it may follow the film, and, therefore, British films must not lag behind.

1.49 p.m.

Dr. Russell Thomas (Southampton)

I want to take up a remark made by the Noble Lord the Member for Horsham (Earl Winterton). I am sorry my Noble Friend is not in his place, but nothing I am going to say I am sure will in any way offend him. He said, I believe, that public taste sets the standard and that the industry cannot affect public taste. I believe I am correct in thus stating his view, but perhaps any hon. Member will correct me if I am wrong in this respect. The Noble Lord suggested, when considering the remarks of the hon. Member for Stoke (Mr. Ellis Smith), that public taste could be influenced in the sense that rehearsals could be given to school children and so on and that, possibly, good public taste could be built up in that way. I do not altogether agree with my Noble Friend. I think, perhaps, that it is true that if the industry were to put on a particular type of film, then, indeed, the public would not go to see it, and that they would say: "We are not accustomed to seeing this; we do not like it and we will not go to see it." But I hope the industry will carefully consider the suggestion that it can, bit by bit, guide the public taste by elevating the films here and there, bit by bit, so that, gradually, and almost unconsciously, the public taste would improve.

The hon. Lady who has just spoken mentioned the great British film "Henry V," recently produced. The hon. Lady said it was a great example of British film art. I think she is right in this respect. It is an example of the spectacular kind, but it is more than that. It is an attempt—although, personally, I do not necessarily agree with it in all respects and I do not accept it as the type of film that I would prefer to see myself—it is an attempt to get the British people to appreciate the great poet and playwright William Shakespeare of world renowned fame. Gradually, I think the industry can lead away from the spectacular effects to really genuine "Shakespeare" with just the background against which we are accustomed to see his plays. The Battle of Agincourt is displayed at length. We all know that Shakespeare dismisses the Battle of Agincourt in one line, and does not describe it at all. He suggested that, now the battle is on, let us await the result. I do not remember the exact line.

Viscount Hinchingbrooke (Dorset, Southern)

May I correct my hon. Friend? Surely, the whole of Act IV is concerned with the Battle of Agincourt?

Dr. Thomas

If my hon. Friend will look it up, he will see that I am right.

Mr. Deputy-Speaker (Mr. Charles Williams)

I am not quite sure how the Battle of Agincourt comes in on this Order. If the hon. Gentleman will kindly explain to me, I shall be very much obliged.

Dr. Thomas: I was following up the hon. Lady and the Noble Lord, who said that you cannot, as it were, fix the public taste, and, from that, I developed my argument and I am trying to show that the public taste can be affected. The Battle of Agincourt is spectacularly displayed in this particular film, although, I believe, someone has said, the best actor was the horse. I do think that the industry could guide the public taste in this matter, and I could apply that argument to many other examples, but, in view of your suggestion, Mr. Deputy-Speaker, I will not follow it, although I had "Anthony and Cleopatra" in mind as another excellent play which could be put on in a very excellent way, and in which the battle of Actium, which is not reproduced in the play, could be represented by model battleships in a toy bath. By that means, Shakespeare could be gradually brought home to our people. This would affect the public taste, and it is so essential to do that.

So few of our people know or understand Shakespeare at all. They know very little about him; they have only just heard of him. If you consider the number of seats available in the theatres of our country, and if they were filled every day for Shakespearean plays alone, it would then only affect about five per cent. of the people, but the cinemas are filled with millions of people every day. We must consider these matters very carefully, because it is useless having Education Bills and so on unless we can improve the public taste in regard to entertainment—a good test.

I pass on to the Orders themselves. It has been necessary for my hon. Friend to come to this House to fix a quota in the way he has suggested. Obviously, the film industry has fallen behind during the war. Obviously, it must have done so during the early years of the war, when our fate was uncertain and when, indeed, we could not possibly have considered following these matters up; we could not then go on with the production of films. But I do think that that time is past and has been past for a year or more. I think that last year, and the year before, we should have been considering the preparation of our industry for the future, and some of the reasons for this view have already been stated. They were clearly put forward by the hon. Member for Stoke, in the very excellent speech with which he opened the Debate and which was in more or less complete agreement with what I have in mind, I do not remember before agreeing to such an extent with my hon. Friend.

I think that this production should now be increased and that the Board of Trade should get the industry together and every effort should be made to put it on a sound progressive basis. I consider that this is a fundamental part of our whole endeavour at this juncture of the war, and that it is bound up with our future, our prosperity and our prestige, and should be regarded as an integral part of the war effort at this stage of the conflict. I think it is unfortunate that the Orders are fixed as far ahead as the year 1948. Why then is it so important to see that the film industry is put on a sound basis from now onwards? It should have been considered before, and the Board of Trade have appeared neglectful in my opinion. The first reason is that, in view of our world trade, nothing could be so valuable to our salesmen as the exportation of British films throughout the countries with whom we shall have to trade when the war is over. Trade films should be made, and should advertise British goods and show British methods of manufacture, including all the processes of manufacture and so on. It would he an excellent thing to bring the film industry in to help in the future prosperity of our country. Hon. Members, I am sure, can think of many ways in which films could be utilised for pushing forward British trade and British business. This policy would, therefore, result in increased employment at home and increased prosperity in the industries which the films would advertise. It is essential that we should look upon films in the light of their being part of our efforts and endeavours from now on—one of the weapons, as it were, of our future advance in the world.

The next reason is because films will be excellent things from the point of view of our prestige, which the hon. Member for Stoke himself mentioned as a matter of importance. I will not use the word "propaganda." I have never liked the word "propaganda," which always suggests to me deception and the leading of a man along a path which he does not know he is going and along which he would not go if he were not deceived. But they can be used from the point of view of prestige. It is essential, now that our Colonial Empire is to have the benefits of the Colonial Development Act and will be progressing slowly along the path of constitutional government, for us to show them the greatness of our own country and the great elements which make up the British character and the advantage and generosity of our own rule. Suitable films could be shown in the backward Colonies in order to teach them that at least our code of life is highly desirable and should be emulated. We should use them in the liberated countries. We are liberating countries but we are not ready with our films.

What an opportunity to show the liberated countries what we in this country have done against the German menace and how we stood alone for a long time, showing them, if possible, episodes from the Battle of Britain. We could show them the war story of our common people during the blitz, and even build it up into a story of the family who went through this nightmare night after night, when the siren sounded at 9 o'clock for 88 nights or thereabout, the warning lasting into the early hours of the morning. We could show how they lost their homes and how they stuck to their posts with that grim tenacity which is so much a part of our character. What an opportunity has been lost and how we could have impressed those countries by showing Great Britain standing like a rock in a stricken world displaying those qualities which other races should seek to emulate.

Mr. Deputy-Speaker

We can hardly on this occasion go into all the various battles of the war. I would ask the hon. Member to relate his remarks to the Orders we are discussing, rather than to the general subject of the war.

Dr. Thomas

I thought that, following the general Debate and the opening speech of the hon. Member, I was in Order possibly in going into a little more detail than I might have done if I had not been led astray by the hon. Member for Stoke.

Mr. Ellis Smith

I did not lead the hon. Member astray.

Dr. Thomas

I hope that the hon. Member will not take that remark amiss, because he spoke so well. These are the uses to which we can put our films. These are the great advantages which may be effected if the Board of Trade now summoned a conference of the film industry seeing whether studios used for other purposes could be got back into their proper use and seeing whether technicians can be trained and key men released from the Army in order to forward this good work, which is one of our great and valuable assets and which we should utilise to the utmost in our future endeavours. It is unfortunate that these Orders have been fixed for 1948. It is pushing it a little too far forward and shows a lack of initiative on the part of the right hon. and gallant Gentleman and his Department. My concluding remarks are a plea to the right hon. and gallant Gentleman to do all he can to forward the success of this industry, not only from the point of view of the industry itself, but from the point of view of a healthy trade and the glory of our own country.

2.6 p.m.

Sir Alfred Beit (St. Pancras, South-East)

I imagine that there are a number of hon. Members in the Chamber now, who have come here to listen to certain other subjects which are to be debated. I see the hon. and learned Member for North Hammersmith (Mr. Pritt) who, I imagine, is here to listen to the Debate on the Church of England Measure.

Mr. Pritt (Hammersmith, North)

Will the hon. Member stay for it, too?

Sir A. Beit

In spite of that, we should not dismiss too rapidly the very important Orders which are before us and which will tie up the future of the British film industry for rather a greater number of years than most hon. Members who have spoken so far would desire. We have had, for the most part, some very clear speeches, especially those from hon. Members who are associated with the film industry, but in spite of their experiences there are certain complexities and obscurities about the British film industry, with which I am not myself in any way connected, which are very difficult to understand. For instance, on the one hand, we had the spectacle before the war of vast new studios being erected and great capital projects being promoted for the production of films and yet, on the other hand, in 1938, the President of the Board of Trade had to come to this House to say that this very rapidly expanding industry was not able to keep up to the quotas previously laid down and that those quotas would have to be reduced.

Again, on the one hand, we have seen certain individuals leaping to fame, wealth and prominence as a result of their association with this industry and yet it seems impossible to-day that more than one-fifth, if indeed that amount, of the films shown throughout the country could have been of British origin. If you open country or provincial newspapers, as I do frequently, week after week and read the advertisements of films to be shown in any town in the succeeding week, it is impossible to believe that anything like 20 per cent. of the films which are being shown in those towns are of British origin. If I may speak in terms of the pre-war period, it is, in spite of the protection given by the quota and the device known to the producers as the quota "quickey," which caused a number of rather undesirable films to be made, impossible to take advantage of the protection, which, we have been told by the right hon. and gallant Gentleman, will subsequently be somewhat modified.

One really important reason which has only just been touched upon for the absence of a sufficient number of quality British films is the lack of opportunity in overseas markets. We were told by my hon. and gallant Friend the Member for Wellingborough (Wing-Commander James) that there was positive discrimination in the United States against British films, and, from what I have been able to ascertain, I think he is right. I believe that certain very important films, those which have enjoyed the greatest success in this country, have not been shown at all in the United States or have been relegated, as we used to relegate French films in London, to some small cinema where there was no opportunity for the great masses of the public to see the film.

It is not only in the United States that this applies. I have just returned from a visit to South Africa, and there I found a most deplorable absence of British films, not only of feature films but of the shorts or documentaries about which a certain amount has been said this afternoon. There seemed to be some evidence that a number of short films, including those shown as being of official origin, like Ministry of Information films, were brought over but subsequently not used. When you take into account the fact that we are not able to get an adequate overseas market for the films we make, and further bear in mind—and I think I am right in what I am going to say—that practically the entire American film industry was exempted from the call-up when the United States entered the war, and was able, therefore, to carry on very much as before, it is not difficult perhaps to see why we have not been able to satisfy what I am sure is the growing demand for British films. It is very disappointing, nevertheless, that, in spite of these difficulties, we should have to fact up to the fact that for the next five years something of the order of 25 per cent. is the most to which we can aspire.

I join most heartily with the hon. Member for Stoke (Mr. Ellis Smith), who urged the need for greater floor space and that more technicians should be released. We cannot go as far the the United States in exempting our entire industry, but surely the time has come when we should enable the industry to manufacture that kind of film which would enable it, in terms of ordinary and normal competition, to place on the market enough footage to be able not only to fulfil the quota regulations but to increase them. The quota provides the amount of production, and I hope that my right hon. and gallant Friend will find it possible for the industry to proceed in the right direction to the position it should occupy.

2.13 p.m.

Major Procter (Accrington)

As one who has had some experience in the making of films and who is still interested, I should like to set out one or two reflections which have occurred to me as a result of reading these two Orders we are discussing to-day. Unquestionably, on the technical side we are equal to the Americans in production, script writers, actors; we are equal in anything that Hollywood produces. Many people have tried in this country to make a success of British films. Many have failed and large sums of money have been lost. Why is this? We have the finest landscape scenery in the world. We have that peculiar quality of voice which makes English sound like a flute as against the American steam whistle. There is no raucous sound in the voices of British actors, and their technique is second to none. Indeed, many of the greatest stars in American pictures have received their entire artistic training in this country. Therefore it is not for the want of apparatus, technicians or actors that the film industry lags behind the American, and for its protection requires a very large increased quota. Let us face up to facts and state quite frankly that the British film industry for many years has had a very raw deal from the American film producers, the American theatres, the American distributors and indeed from the whole of the American film industry. All these have dealt very harshly with the film products made in this country.

The failure of British films, as I have said before, is not due to their lack of artistic perfection; it is due to the fact that the American companies are doing their very best to make it impossible for the English film to be a competitor to the American production. To illustrate this point let me show the House exactly what happens on the financial side to a film that is made in this country and a comparable film made in America. To produce a first-class picture in America it costs about £150,000—I mean a good average film, because you can spend anything you like on a picture up to £1,000,000. Owing to the large area and the increased number of cinemas in America, that picture grosses £400,000 before ever it leaves America. The distributors take from the producers for the cost of distribution one-third of the gross revenue, so that if the film grosses in America £400,000, £133,000 is paid for distribution. Deduct the cost of production, £150,000, and before the film leaves America for further financial ventures there is a nett profit to the American producer of approximately £117,000. It is then sent to this country and nets a further profit of £60,000.

Now if that same picture is made in this country, with the same actors and the same sets, so that it is identical in every respect with the American picture, what happens then? Let us look at this British made picture. Being the same picture it will cost £150,000 to make. The gross receipts in England will be approximately £90,000. Deduct distribution charges and the net receipts will be £60,000, whereas the American picture makes £117,000 before it leaves America. An English film costing £150,000 to make loses £90,000 before it leaves these shores. If the British film is exported to America it will do well to make £10,000 in gross receipts. Excluding the small return from Empire markets, the loss on a first class British film is about £75,000 to £80,000. Why is there such a small return on British films in the United States? It is because British films are refused circuit runs; they are shown in the back-street cinemas of America. I know one British film which was judged in America as being the second-best picture in the world for that year. Great care was expended upon it when it was produced; it left these shores with a loss of over £90,000 although it was one of the best produced in this country. When it arrived in America it was only allowed to be shown in the smaller theatres. Its grossing in America was £10,000. The loss on that British picture regarded as the second-best produced picture in the world for that year resulted in a loss of many thousands of pounds to those who made it. With few exceptions that is the fate of first class British films in America.

Mr. E. P. Smith

May I ask the name of that film?

Major Procter

"Love from a Stranger." The root and core of the failure of British pictures is the fact that the American film executives see to it that the British picture gets no chance at all in America. That is the problem to which the Board of Trade should address its mind. It seems ridiculous, when we are exporting millions of pounds every year for American films, when we give American-made pictures the run of the largest circuits, that we hesitate to compel the Americans to make films here. If they want to show their films in the British market, let them use some of the money which otherwise we would export to America, to make films in British studios. That is the solution to this quota problem. We carried out this when American money was frozen. American producers, in order to utilise this frozen money somehow, made pictures over here, and gave employment to our studio technicians and our actors.

Furthermore, in this country we permit our cinemas to be taken over by the American producers. It is the same in Australia and throughout the whole of the British Empire. The film has an educative influence and we have English goods to sell, but in the British Empire and the world the American goods get the best advertisement, the American culture is shown to everybody. By means of the cinema, the American influence is felt everywhere—even our English girls, due to American films, have come to think that American soldiers are nearly all Clark Gables or Rudolph Valentinos. Because we have not grasped the nettle firmly, and have not made up our minds to carry out a firm policy that will put the British film industry on its feet, we are losing millions a year besides loss of prestige. The Board of Trade should stand up to the American producers and say: "If you want to use the British market, then you must come over here, use your capital, give employment to our people, and make pictures on this side of the Atlantic, which show the British way of life." Only in this way will we save the millions we export every year and help to build up an industry which is all powerful in the fields of culture, trade and international relations.

2.25 p.m.

Captain Waterhouse

The discussion this afternoon has been rather wider than might have been expected on the somewhat narrow Orders which we are considering, but I certainly make no complaint at all about that; I think the discussion has been useful, and points have been raised in it which I shall be very happy to have considered. My hon. and gallant Friend the Member for Accrington (Major Procter) finished with an appeal which I think everyone in the House will feel to be a sound one, that we should encourage Americans to make films here as far as possible, but in so doing let us not for one moment neglect the desirability of encouraging British subjects and British actors to make films here too, in order that we may make here—as has been stressed so much by various speakers in the Debate—films which reproduce abroad our British atmosphere and our British way of life.

The Noble Lady the Member for Central Bristol (Lady Apsley) spoke of the film "Henry V," and gave the impression that it had been made in Ireland. I should like at once to correct that. The film was made almost entirely at the Denham Studios in London. The principal scenes made in Ireland were the Agincourt scenes. Unhappily, as my Noble Friend the Member for Horsham (Earl Winterton) will regret as much as I do, there are not very many heavy-weight hunters in condition in England just now, and it was necessary to go over there where, I understand, horses were loaned from the Irish Constabulary.

Mr. Pritt

In Southern or Northern Ireland?

Captain Waterhouse

In Southern Ireland, and the charge was filmed there.

My hon. Friend the Member for Southampton (Dr. Thomas), who is no longer in his place, made a very fullblooded attack on the Board of Trade over this matter, I thought. He said we were neglectful, that we had not taken any steps, that we were not ready, what an opportunity we had lost, and that we have shown a lack of initiative. He went on to say that this was at a time when we were standing alone in the world. I think possibly, if we had taken his advice, we might have been unable to continue to stand at all, for I think the House will agree with me that, desirable as films are, for the last three or four years it has been infinitely more desirable to have fighters even than films.

My hon. Friend the Member for Stoke (Mr. Ellis Smith) opened this Debate with a most interesting and well-informed speech. Two of his main points were technicians and studio space—what could we do about releasing technicians? I can assure him that the Board of Trade are alive to the importance of this, but, of course, the film industry, though an important industry, is only one of many and this question of the return of technicians to their old job is one of the most vexed and difficult that the Board of Trade have to handle. In consultation with the Ministry of Labour we are taking what steps we can, but the House will recollect the general approval accorded to the Government's demobilisation plans, and hon. Members will realise the danger of taking specialists out in any but very small numbers. On studio space, it is perfectly true that a comparatively large proportion of studios are now taken up for storage and other purposes, but there again the position of the cinema industry is not materially different from that of other industries. Something over 100,000,000 square feet of space have been taken over for storage purposes, and obviously, studios are particularly suitable for some forms of storage.

The Board of Trade are not neglectful of their duties. They are in constant touch with the Departments utilising these studios and I can promise the House that at the earliest moment the national interest allows we will see that they are released. My hon. Friend referred to the export value of films and, there, I completely agree with him. I fully realise the potential value of export films from this country and the negative value of the import of films to this country from America. As the Palache Report states, the American industry, before the war, were earning about 135,000,000 dollars for America by the export of their films. They sent here, in the years between 1939–43, films to the value, respectively, of 39,000,000 dollars, 43,000,000 dollars, 48,000,000 dollars, 70,000,000 dollars and 88,000,000 dollars. Import on such a scale must be a matter of concern for the Board of Trade, and I can assure the House that we are urgently pursuing ways and means, at this moment, of trying to encourage the production of films in this country. The House will realise that that is not possible on a large scale now, but as soon as those conditions have passed we will do what we can to help those in the industry who are anxious to produce here.

Sir A. Beit

Could my right hon. and gallant Friend tell us whether we are obliged to find dollars now for the import of these films from the United States, or are we to await the end of the war?

Major Procter

Could my right hon. and gallant Friend tell us why it is that whereas British producers have to pay Income Tax and E.P.T. on their profits, the Americans escape these taxes?

Captain Waterhouse

Were I to reply to that question, I am sure that I should be going far beyond the scope of this Order, which has nothing to do with the relative systems of taxation of the United States and Great Britain. The question put by my hon. Friend the Member for South-East St. Pancras (Sir A. Beit) was not quite so far afield, and in reply to it I can say that at present payments are being made by this country to the United States for all films rented here. In the early days of the war an embargo was put on, but that was released in part in 1942 and at present full payment is being made. We are paying for what we get. My Noble Friend the Member for Horsham and Worthing (Earl Winterton) urged that at not too distant a date the Palache Report should be discussed in this House. My hon. Friend the Member for Stoke made a similar request. On that, quite clearly, I can say nothing, but I appreciate their reasons and no doubt in due course such a Debate may be valuable. But they will recollect that my right hon. Friend the President, in answer to a question recently, said that the trade were being consulted on this Report, and that it was not possible to make a Government statement until we had had the benefit of their views.

Earl Winterton

Perhaps I did not make myself clear. I know, of course, the reason why it is not possible to discuss the report now, but in view of the importance of this matter to the industry and a great interest which is taken in it—as has been evidenced by the many speeches we have had to-day—is it not time that the Government gave us a day to discuss the industry in full? Will my right hon. and gallant Friend bring that point to the attention of the powers that be?

Captain Waterhouse

I will certainly bring it to the attention of my right hon. Friend the Patronage Secretary, but on the other hand I think the House will agree that it would be an advantage to Members for us first to be in possession of the views of the industry on this extremely interesting and well thought out report.

Wing-Commander James

I appreciate my right hon. and gallant Friend's argument, but would it not help the House in being patient if he could give us an assurance that in the meantime nothing will be allowed to occur further to prejudice the position of the British film industry in the field of production and distribution?

Captain Waterhouse

I do not think any such assurance is necessary. I am not quite sure what my hon. and gallant Friend means by the field of production, but as regards the field of distribution, as he knows, my right hon. Friend the President is already in possession of an assurance from two major groups of the industry, A. B. C. and Mr. Rank's group, that they will not further increase their holdings of cinemas.

Wing-Commander James

Does that apply to foreign interests? That is the point I have in mind.

Captain Waterhouse

It certainly does not; it applies only to the groups I have mentioned. Any other action outside those assurances would certainly come to the Board of Trade, and if we had powers I know that my right hon. Friend would not for a moment hesitate to intervene where necessary. Earlier, my hon. and gallant Friend asked that we should not be quite so kind to defaulters, to those unable to fulfil their quota. There, I must draw a clear distinction between those who are unable and those who are unwilling to fulfil their quotas. If it is impossible to get British films then it would be most inequitable and fruitless to bring prosecutions, because inability due to causes outside the control of the exhibitor is a complete defence for failing to comply with the quota. There are only two remedies which we have—first, to increase the number of British films produced or, second, to decrease the quota which we are demanding.

On this point my hon. Friend the Member for Ashford (Mr. E. P. Smith) rather feared that we were confirming a curtailment. It is true that we were acknowledging a condition of shortage, but I do not think it is accurate to say that we were confirming a curtailment. We must clearly recognise the facts. My hon. Friend said that had we asked for a quota of 30 per cent. it would have been a simple act of faith. Well, I do not think it would have done us much good, any more than the ostrich does itself good by putting its head in the sand and imagining that it is in a rabbit hole. The ostrich is, none the less, in a vulnerable position and the Board of Trade would have been even less able to fulfil my hon. Friend's desire to prosecute defaulters. What we hope to do is so to fix the quota, and so increase the number of films being made, that it will be possible to expect renters and exhibitors to fulfil their quota and, therefore, to prosecute those who will not.

Mr. E. P. Smith

Is my right hon. and gallant Friend suggesting that if these quotas are fixed at the end of this year they will be able to be fulfilled?

Captain Waterhouse

I am afraid that our hope for next year is only a hope. For the two following years it is not only a hope but an expectation based on careful investigation, and not only on faith. Whether that hope will be fulfilled I cannot say. However, I hope that I have dealt with most of the points which have been put to me; if I have not I will certainly communicate with any hon. Member afterwards. I hope I may have satisfied the House that in asking for these quotas to be reduced we are not in any way adopting a defeatist attitude. We are not defeatists about British films. Very far from it. We intend to make British films go. I agree with what has been said, namely, that it was largely due to the last war that our present position has arisen. It was then that we were hamstrung, and the United States were able to get ahead and lay the foundations of their industry. We hope and believe that after this war, with our increased knowledge, with the great experience that we have of documentary films, we will once more be able to get the British film industry on its feet. Meanwhile, I ask the House to give its consent to the reduced quota for which we are asking.

Question put, and agreed to.

Resolved: That the Cinematograph Films (Labour Costs Amendment) Order, 1944, proposed to be made by the Board of Trade under Section 36 of the Cinematograph Films Act, 1938, a copy of a draft of which Order was presented on 12th December, be made.

Resolved: That the Cinematograph Films (Quota Amendment) Order, 1944, proposed to be made by the Board of Trade under Section 15 of the Cinematograph Films Act, 1938, a copy of a draft of which Order was presented on 19th December, be made."—[Captain Waterhouse.]