CINEMATOGRAPH FILMS BILL

HC Deb 21 January 1948 vol 446 cc216-336

Order for Second Reading read.

3.43 P.m.

The President of the Board of Trade (Mr. Harold Wilson)

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

This Bill is presented at a time of very great difficulty and uncertainty in the film world. Its main purpose is to amend, though in general to continue, the provisions of the Cinematograph Films Act of 1938, which laid down the means of protection for the British film industry by means of quotas and which, in the absence of new legislation, would he expiring this year. In a few minutes I hope to re-examine and re-state the need for some continued form of protection for the British industry in our own market and to explain why in this Bill the Government is proposing a change in the form of the quota.

Before I do so, I feel it is right to say—and I am sure the House will agree—that the value and the effectiveness of the quota provisions will to a very large extent be determined by the somewhat fitful and so far unproductive negotiations with the American film producers about the ad valorem import duty imposed on 7th August last and the subsequent embargo by Hollywood on the further shipment of films to Britain. If the present deadlock surrounding this embargo continues, the protection of the British film industry by means of exhibitors' quotas will be quite unnecessary and academic because the absence of new American films from the stock-in-trade of the exhibitors will mean that sooner or later the quota will automatically be nearly 100 per cent. even without any special action by the Board of Trade under Clause 2 of the Bill.

I should be out of Order if I attempted to go again into all the arguments for and against the films duty, which has been fully debated in this House, but it might assist the House if I were to indicate briefly the present position of the negotiations on the embargo as we see it so as to put the Bill in its proper setting. As the House knows, no solution to this embargo problem is in sight. We ourselves stand by the import duty and I do not think I need labour the point that we cannot continue finding dollars to meet the payments due on American film earnings here. We are prepared to make any reasonable arrangement and we have stated that we are prepared to work out a scheme which would allow extra earnings for foreign films to be taken out of the country, to the extent that our British films earn more money overseas. We are not interested merely that British films be "taken" by overseas distributors: we want to see them really effectively shown, and to the extent that they are, and dollars actually earned, we are prepared to propose some modifications of the duty.

But I want to make if quite clear that we cannot contemplate any scheme which, while based on the duty, provides for a lower rate coupled with some blocking of part of the dollars earned. This would only postpone the dollar problem. I am sorry to say that such proposals as we have received from the American industry do not seem to be founded on anything like a real understanding of the position. It is possible that Hollywood is basing its attitude in these embargo negotiations on the hope that with passage of time the needs of our cinemas for new American films will drive the Government to propose to the House that the duty should be dropped, or severely modified. I should be very loath to think that any delay on Hollywood's part in making constructive proposals, or in accepting our own latest proposition for the ending of a deadlock which is inconvenient to us, and very costly to Hollywood, could be based on so slender a foundation.

It is true that if the embargo on the supply of further films continues indefinitely, the effect on box office earnings and on the choice of films open to the public will, of course, be considerable. So far we have barely begun to feel the effects. In general, cinema exhibitors have been able to maintain both their earnings and the choice of films open to the public by the showing of British films, or of Hollywood productions which were already in this country before the import duty was imposed, and also by the reissues of older American films which were good enough to go on attracting cinema-goers even on re-issue. The supply of American films now in the country can- not, of course, be expected for long to attract the film-going public with anything like the same regularity of attendance as a constant succession of new issues would; and, of course, it will take a considerable time for home production to be expanded to anything like the rate necessary to fill the gap.

I think it is only right to add that if no settlement of this embargo is reached and if the British film industry over a period of time answers the Government's call for a big increase in production, then our quota policy will be based on what the industry can then produce in the way of films of the right quality. If no settlement is reached it will certainly mean a serious position for many exhibitors. If this should be the position, and I am sure the House will join with me in looking forward to a quick settlement, I should regard it as my own duty to do everything I could to see that the British films available were allocated as fairly as possible as between the independent cinemas and the circuits. This would also mean—and it is no good blinking the fact—that our present cinema-going habits, with two feature films and the twice-weekly change of programme which is provided at many theatres, could not be continued.

If the choice is between some modified austerity in the cinema and further reductions in food, I am sure that the House and the country will be solidly behind the Government in standing firm in this matter. Confident of that, I am sure I can say to Hollywood that if they believe that they can squeeze us into modifying our attitude on the duty by continuing the embargo, they are backing a loser. I am sure that they would be the first to agree that if the choice is between food and films, we must reserve our dollars for the food.

In facing the position that will arise if the present deadlock is not removed, I should not like to give the impression that we expect the deadlock to continue. Indeed, if we did, we should not regard it as worth while to introduce a Bill which rests on the assumption that some settlement of this problem will be found in the not very distant future. The import duty is an emergency measure, dictated solely by our lack of dollars and not imposed with any thought of conferring protection on the British film industry. Within the limit of our ability to pay for them, the best of Hollywood's films will always be welcome in this country. So, of course, will be the products of Continental studios which we all look forward to seeing maintained at the very high standard they set for themselves and the world in prewar days.

Even given a settlement of the problem associated with the duty and embargo, I feel I should make it clear that the Government do not see overseas producers continuing to enjoy the same proportion of British screen time they have had in the past few years. The expansion of the British film industry which was envisaged when the former Act was passed has not taken place owing to the war and, of course, to the dislocation resulting from the war. Enemy damage to studios, the wartime interruption to both the production and the exhibition of British films, and the deployment of a large part of our industry on war work of one kind or another, have held us back for the best part of 10 years. British films today are occupying only about a fifth of our screen time, considerably less than was contemplated when the 25 per cent. quota was inserted in the previous Act.

If it is true that the quantity of British films has been affected—seriously affected—by the war, there is no doubt that British films have gained a reputation over the whole world for quality, a reputation by no means confined to or even principally gained by the so-called prestige films. Those who, even in the very dark and uncertain days after 1940 took the courageous measures which were necessary for rebuilding the industry, and creating its new reputation for quality, have played a part in the industry out of all relation to the dollars which their products have earned—or saved—and out of all relation to box office takings. I am sure the whole country is prepared to recognise that.

What I am perfectly certain of is this, that if the cinema-going public had the choice today of seeing additional British or additional American films, they would demand a very much larger number of British films before their taste for them was glutted. The day has quite gone when one inserted a British film into a programme with an apology for doing so. I should myself very much doubt whether, under free and equal conditions, and an adequate supply of films, our own cinema going public would wish to see as much as 50 per cent. of imported films, provided our own producers had the confidence and the resources necessary to make enough films of the right quality. So in my submission this House, if it endorses this Bill, will not only be contributing to a solution of our long term balance of payments problem: it will also be making it possible for the British cinema goer to see the films he or she wants to see.

Perhaps now I should say something about the lay-out of the Bill itself. As the House will have seen, there are only 10 Clauses; and the rest of the print, from page 8 onwards, consists of two Schedules. This is because the greater part of the ground that needs to be covered is ground which has been already dealt with by the Cinematograph Films Act, 1938. The new Clauses, therefore, deal in the main with new exhibitors' quota provisions to replace the expiring provisions of the 1938 Act, and with certain other points of substance on which a need has now emerged for amending the present Act or for adding to it. For the rest, and subject to certain changes, the Act will be continued.

The new provisions will entail some consequential amendments to various detailed provisions surviving from 1938, and one or two other minor amendments of the 1938 Act are desirable for one reason or another. The 10 Clauses of the new Bill are, therefore, followed by a First Schedule which amends or repeals various provisions of the Act of 1938. Part I of the Schedule deals with amendments and Part II deals with repeals. The latter includes the repeal of the renters' quota provisions enacted in 1938, and the formal repeal of the whole Act of 1927. The Second Schedule sets forth the revised text of the 1938 Act as that will read when amended, and the new words now written in by the Bill are printed in this Schedule in heavy type.

The major point in the Bill, of course, is the provision for the maintenance of quota protection. All sections of the industry were given an opportunity to give their views on the form of protection which should now be provided, and a most useful report—published as a non-Parliamentary publication last July—has been received from the Cinematograph Films Council, which includes not only representatives of the trade but also independent members. From these consultations it became quite clear that, while on individual issues there were many and quite substantial differences of opinion between one section of the industry and another, there is throughout the industry general agreement that the framework of the present Act was sound, and that it should be retained with various adaptations to meet the new conditions of today.

The main change in the quota mechanism is, of course, the abolition of the renters' quota and the remodelling of the exhibitors' quota. The renters' quota was thought to be necessary in the Act of 1938 because, in the then prevailing conditions there could otherwise have been no assurance that sufficient films would have been forthcoming to meet the quota requirements of the exhibitors, which were fixed within quite narrow limits by the First Schedule to that Act; and there could not have been any certainty that production resources would not be from time to time seriously underemployed. During the war and since the war, apart from quite recently, studio space in this country has been quite insufficient to meet the demands on it. It has, therefore, only been possible to maintain the renters' quota obligation by providing an alternative method of fulfilment under which the obligation is assessed in terms of money spent on film production instead of feet of film produced.

So it now seems that the re-imposition of a renters' quota could not increase the supply of films unless additional studios and other facilities were provided. The principal British producers have said that they have every confidence in their ability to maintain full production in the studios, and their Association has pressed for the abolition of renters' quota as being no longer necessary or justifiable on protective grounds. On the other hand, it is only right to inform the House that the exhibitors have pressed for its retention, on the grounds that without renters' quota the supply of British films would be concentrated in the hands of only one or two renters, and that to keep in being the alternative channels of production and distribution provided by the American companies will do something, so the exhibitors say, to maintain the element of free competition, and to avoid the dangers of monopoly, even if the volume of production is only small.

After considering very carefully the arguments advanced on both sides the Government came to the conclusion that the case for abolishing renters' quota is the stronger, and. there is, therefore, no re-enactment of renters' quota proposed in the new Bill; and it is for this reason that we agreed to a proposal inserted in the draft Charter of the International Trade Organisation, under which countries undertake not to impose for the protection of their film industries any form of quota other than a quota on the exhibitor.

It has been possible to go some way towards meeting the point raised by the exhibitors by obtaining from the American industry an undertaking with regard to future production in this country. The Motion Picture Association of the United States has given us an undertaking that, subject only to the qualification that no company will be pledged to make films here if and when it is not sending American films to the British market, the American companies who are its members will maintain film production in the United Kingdom at the rate contemplated by their original plans for production which were formulated early last year. This should result in a volume of production from this source at least as great as we could have expected from it if we had maintained the renters' quota.

Mr. William Shepherd (Bucklow)

Could the right hon. Gentleman say whether he has received from the American corporations any assurances about the quality of the films to be produced here?

Mr. Wilson

No, Sir. I think they know pretty well they will have to look out for themselve in that matter, owing to the improvements going on in British films. I should, however, tell the hon. Gentleman that I have arranged very recently to meet American producers in this country, and to have a general discussion with them an their whole programme of future production in this country, especially their immediate programme, because we are very concerned to see that they make the fullest use of the studio space that we have available, because studio space is a very scarce asset, and we cannot afford not to use all of it.

With regard to the operation of the exhibitors' quota there are two special features to which I should like to call the attention of the House. The first is that I am proposing separate quotas for first features and for the so-called "supporting programme." In the 1938 Act a distinction was made for quota purposes between "long" and "short" films—films respectively of over and under 3,000 feet in length. There is, however, no distinction between first and second features, both of which are included in the long film quota. So, under the existing Act it is possible, at least in theory, for any exhibitor to reserve the whole of his first feature screen-time for foreign films and to fulfil his quota by showing the required footage of British films among the second features. In the usual double feature programme there is generally such a wide gap between the price and the quality of the first and the second feature films that there was always the danger that they could set off, foot for foot, films of one class against films of another class, which would almost mean just no parity in earning power at all, and we considered that wrong.

The Bill, therefore, proposes under Clause 1 to correct this anomaly by abolishing the "long" and "short" film quotas, substituting separate quotas for the "first feature" and the "supporting programme." This phrase "supporting programme" will cover the items in programme additional to the first feature, except for the newsreels and advertisement films, which will continue to be excluded from the quota calculations. The effect of the first feature quota will be to ensure that foreign first feature films are matched by the proper quota of British films of the same type; and this quota can be calculated now on the basis of the number of films shown, because the variation in length between the different first feature films is not sufficient to make it necessary to distinguish between them. The effect of the supporting programme quota will be to enable foreign second features to be matched by British shorts and documentaries, and so on, and we hope this will lead to an increased showing of the products of this very important branch of the industry. In this case, though, because of the diversity of films involved, the supporting programme quota has to be calculated by reference, not to the number of films, but to footage.

The second new point about the exhibitors' quota is the power to fix a different quota for different classes of cinemas. Experience has shown that, because of their geographical position, or because they belong to powerful, groups, some cinemas are very much more favourably placed than others for booking a satisfactory proportion of good British films. In other words, this means that any exhibitors' quota which falls equally on all classes of cinema will be bearing too lightly on some cinemas and too heavily on others. That is why, in recent years, between a quarter and one-third of the exhibitors have been in default on their quota obligations, even though exhibitors over the country as a whole have rather more than satisfied the quota percentage on the average.

The Bill, therefore, includes provisions permitting the obligation to be varied between three main classes of cinema. In the first class are circuits comprising more than 200 cinemas and the prerelease cinemas in the West End of London. The second class covers the main run of the cinemas; that is, all those cinemas which are not in the first class, which I have just mentioned, and all those which do not suffer the special disadvantages of those in the third group. This third group will comprise those about which the Board of Trade are satisfied that their competitive position justifies specially favourable treatment.

The Bill also gives effect to the Films Council's suggestion that cinemas whose average weekly takings are less than £100 a week should be exempted altogether from the operation of the exhibitors' quota. It has been considered that their importance is not sufficient to justify the amount of administrative and clerical work involved. The House will have noticed the provision for the settlement of the quotas.

Mr. Benn Levy (Eton and Slough)

Is the right hon. Gentleman prepared to give the figures on which those calculations are based, with regard to cinemas below the £100 a week level?

Mr. Wilson

Yes, I would be glad to give them, with notice. I think a figure has been quoted unofficially in many quarters, suggesting that there are 1,500 of them; but our own inquiries suggest that the figure is nearer 500 than 1,500.

On the settlement of the quotas, the 1927 Act contained rigid schedules of rising quota percentages for each year without any provision for adjustments in the light of the actual volume of production The 1938 Act contained similar schedules of percentages, but gave power to the Board of Trade to vary the figures within fixed limits on three specified occasions during the currency of the Act, and subject to affirmative Resolutions of both Houses of Parliament. This change made the operation of the Act a little more flexible, but even so it has not been satisfactory. We see an illustration of that in the fact that, for example, in 1944, when even the duration of the war was still uncertain, an order had to be made in that year fixing the quota percentages for the years 1945 to 1948.

Clause 2 of the new Bill now provides for a completely flexible quota structure, subject only to the limitation provided for in our international agreement concluded at Geneva, that the quota percentages must not be altered at intervals of less than a year. In accordance with the views expressed by all sections of the industry, the quotas will be fixed in future by Board of Trade Orders, made after consulting the Cinematograph Films Council, and requiring affirmative Resolutions of both Houses of Parliament. The first order, taking effect on 1st October next, has to be made not later than 1st July this year. In fixing the quotas we shall pay attention to the foreseeable output of British films available for exhibition during the next two six-monthly periods. The orders will aim on the one hand at ensuring that every worthwhile British film has a full opportunity of the widest possible exploitation in this country's own cinemas, but at the same time not imposing an undue burden on the exhibitors.

On behalf of the producers it has been suggested that, in order to give them the maximum degree of security the quota percentages should be fixed as far ahead as possible. I sympathise with that proposal, but at the same time we must be sure that whatever quotas are set the British films will be there to fulfil them, otherwise this places an undue burden on exhibitors. Even in the case of first features, the future output for a long way ahead cannot always he forecast with any degree of certainty. However, I do contemplate an ascending level for the quotas, and they will be fixed from year to year with the most careful attention to the for-seeable output of pictures which will be available. If the producers are giving us the increased volume of production we hope for, it is the Government's firm intention that the quotas shall be correspondingly increased, and the producers can draw up their production programmes on that basis, and with that assurance.

Though I should like to give some indication of the quota which I might have in mind, it would be very difficult and, in fact, improper for me to do so, because I ought not in any way to prejudice the views of the Films Council, whom I must consult in this matter, and which is to be newly constituted under the Bill.

Mr. Edgar Granville (Eye)

What is the existing quota?

Mr. Wilson

Twenty-five per cent., but as I have explained, it is on a different basis from the new one which comes on the first feature basis calculated by the number of films shown.

Now I should like to say a word or two about shorts and documentaries. The Government are very anxious to assist and encourage the production of the high class documentary films, in which I think this country has always led the way, and to stimulate the production of other good short films for theatrical distribution. The chief problems confronting this branch of the industry are, first of all, to get a wider showing for their products on the screens of the ordinary commercial cinemas; and, secondly, to secure from their showing a return to the producer which bears some reasonable relation to the costs of production.

I think it is not unfair to say that, so far, the public has not been prepared to accept factual or documentary films as a substitute for the second feature in a two feature programme, and in fixing the appropriate level for the supporting programme quota we shall have to bear this in mind. On the second point, the question of the rate of return received for this class of film, I hope the cost test imposed by Clause 3(6) will at least help to protect this section of the industry against the so-called "quota quicky" shorts and the cheaply produced featurettes.

I now come to Clause 8, dealing with the Cinematograph Films Council. Under the 1938 Act the Cinematograph Films Council—the body appointed under that Act to discharge certain special advisory functions—consists of 10 members representing different sections of the industry, and 11 independent members, including an independent chairman. A statutory body for these purposes will be needed under the new legislation, and both producers and exhibitors have suggested that any such new body should include wider representation of their own sections of the industry. In particular, the producers have argued, not unfairly, that their present allotment of only two seats on the Council is quite insufficient to allow proper representation, particularly as their interests are so diversified, covering long-film producers and producers of documentary and short films. I felt also that it was right to allot two more seats to the trade unions concerned with film production and distribution.

On the other hand, the total membership is already inconveniently large, and I have reached the conclusion that I could reduce the total number, and at the same time provide for a fair representation of the four main sections of the industry, as well as for a sufficient nucleus of qualified independent persons. The Bill proposes, therefore, to increase the number of trade members from 10 to 14, and to reduce the independents from II to five. I wish to make it quite clear that we all envisage that the Film Council will be as strong a body and a more effective body, in which the independent members, although reduced in number, will play a very full part in influencing the future development of the industry.

Mr. Skeffington-Lodge (Bedford)

Does not my right hon. Friend regard it as a retrograde step to increase the influence of the trade on this Advisory Council, and to diminish the number of independent members?

Mr. Wilson

It is not entirely a question of the number of independent members. It is also a question of the things the Council will do and the effectiveness with which they carry out their work. I am very confident that with the new arrangement we are proposing the independent members will be no less effective in the part they will play, even though they are reduced in number. I do not in any way consider it as a retrograde step.

The old Council was really too large to do a proper job, and the, smaller Council can do a better job, although I would not detract from the very valuable work which the old Council have done under very difficult conditions. The exhibitors, however, since the Bill was published, have expressed to me the fear that the increased allocation given to two of the interests on the production side will leave their point of view inadequately represented on the new Council. If, during Committee stage, hon. Members feel that it is right, we shall be prepared to consider making some adjustment to meet this point, and I shall welcome the views of hon. Members on this matter.

I now come to Clause 5, which puts into statutory form the undertakings given by two of my predecessors—my right hon. Friend the Member for Bishop Auckland (Mr. Dalton), and my right hon. and learned Friend the Chancellor of the Exchequer—about the further expansion of the major circuits, and the agreement to show a number of films by independent producers. These provisions are, I think, self-explanatory, and I do not think I need elaborate on them. They were very well known as private and voluntary undertakings, and they are well understood. I ought, perhaps, to make it clear that I do not intend to control the groups, covered by the Clause, in such a way as to give one group a permanent advantage over another. This leads me to a matter of fundamental importance in the development of our film industry, whether we are thinking about the production or the exhibition sides of the industry.

In the past few years, there have been several developments in the organisation of the exhibition side of the industry, and I do not feel it is right that we should pass from this subject without satisfying ourselves on it. I have decided, therefore, as soon as the international film position is clarified, to set up a committee to inquire into the whole question of the distribution and exhibition of films. It will deal especially with such matters as competition and monopoly, the relation of the independent exhibitor to the big circuit, and such practices as the booking of films by entire circuits instead of by individual cinemas. The results of this inquiry will extend far beyond the field of the cinema exhibitor. It will have a bearing on film production—especially as it affects the independent producer—since the prospects of securing a showing often dominate the production side of the industry even more than finance.

Earl Winterton (Horsham)

In view of the importance of this announcement, can the President of the Board of Trade tell us whether this committee will report to this House? Presumably it will be a Royal Commission?

Mr. Wilson

It will, of course, be a public report. I can certainly give that assurance. I am sure that the whole House will support the noble Lord in his very natural and characteristic efforts to consider the interests of the small men in this field, which is why we are setting up this inquiry.

Earl Winterton

I was merely concerned with the House of Commons point of view in this case, as I would be in the case of any other industry where a committee is being set up. That committee should be a committee which reports to this House.

Mr. Wilson

I understand the noble Lord's intervention, and I can tell him that the House of Commons point of view will be fully protected. I am sure he will agree that we should have at heart the interests not only of the independent producers, but also of the independent exhibitors, who are often forgotten in these matters.

I should like to say a word about the immediate and also the more long-term prospects of British film production, because it is impossible to discuss quota provisions which lay down the proportion of British films which exhibitors are required to show, without going into the possibilities of expanding production. In the two and a half years since the end of the war, the production side of the industry has been faced with two main difficulties. The first is the shortage of studio space mainly resulting from requisitioning and bomb damage, and the second and more recent is the danger that unsettlement arising from the imposition of the duty, and the American embargo, might make exhibitors, or those responsible for finance, or even producers, chary about expanding production to the utmost.

As far as the physical rehabilitation of the industry is concerned, I think that good progress has been made. Repair, reconstruction and modernisation of film studios have cost, for building alone, about £1 million since the end of the war. That is the cost of the building work which has actually been done. Building licences have also been granted for about a further £500,000. The completion of this programme should raise the total productive capacity of British studios to somewhere about 75 first-feature films a year. When the building position eases, we shall be prepared to consider proposals from those in the industry—or those who choose to come into the industry—for the construction of further studio space.

In particular, I hope to be able to earmark building resources for providing British film producers with an additional first-class feature studio, capable of accommodating at least two simultaneous productions. This studio might possibly be provided by adaptations and extensions to existing buildings suitable for conversion, but used at present for other purposes. It will, however, be at least a year before a place can be found for a major studio project of this kind in the national programme of industrial building.

There is another point. The Government have always been very mindful of the important role discharged in this industry by independent producers, and the need for assuring them of access to studio space for producing their films. Some people believe that the provision of a studio owned or owned and managed by the State could make an important contribution to solving the difficulties of the independent producers. I want to say right away that I have an open mind on this question. I can see considerable advantages in a proposal of this kind, but at the same time there are many difficulties, and we should always be very careful about our approach to such a question where such an important medium of influencing public opinion is involved. Therefore, although I would be prepared to go into this myself and make up my own mind, I am quite sure that my duty is to have this reviewed by a completely independent body which will make a report—I can assure the noble Lord that it will be published and will be available to the House—

Earl Winterton

And there will be need to have a Debate on it as well.

Mr. Wilson

—on this question of whether the proposed new studio could be more advantageously operated by the State, or whether the ownership and/or the management of the studio could equally well be entrusted to private enterprise under safeguards which would ensure consideration for the needs of independent producers, which are not always guaranteed in the case of privately owned studio space today.

I have referred to the unsettlement of the industry as a result of the American embargo, and the danger that this unsettlement would lead to a slackening off in film production. We have done our best to see that the maximum amount of studio space is available to the industry, and it is now more than ever necessary that this space, and the manpower which it employs, should be used to the best advantage and with the maximum efficiency. To this end I am issuing invitations to the various interested parties to nominate representatives to serve on a National Joint Production Council for the production section of the film industry under my own chairmanship. The purpose of this Council will be to keep under review by the Government and by the industry the measures being taken to promote all aspects of production efficiency. As the House knows, the two sides of the industry have also recently resolved to set up joint production machinery, leading, in the near future, to the establishment of individual production committees for each studio.

To my mind one of the main questions which faces the industry, and which I shall want the Production Council to consider, is that of the costs of production, which appear to have reached a level at which they may well hamper the all-out effort that is needed. I know this is a difficult and intricate problem which can only be solved if all the interests concerned are really determined to work together, and if each of them will make its own contribution to the solution. Film production is traditionally an extravagant industry, and there have been many signs recently that the British film industry has not altogether escaped the infection. Whatever Hollywood can or cannot afford, our own industry, which must in common prudence face the need for covering most of its costs by its proceeds in the home market, just cannot afford extravagance, or inefficiency or restrictive practices—on either side of the industry.

Naturally, we hope that in America we shall find a wider and expanding market for at least the best of our films—but we cannot count on this, and our costs in general need to come down. This problem must be solved. We cannot allow this industry again to fall from its present high quality into the trough, after its achievements of the past few years. I believe that given a real spirit of cooperation the industry can surmount its present difficulties. I shall watch the position with close attention, and in the light of the facts when I have got them—and, so far, I have not—I shall be prepared to consider whether there is any contribution which the Government can properly make to ensure the stability of the industry in these difficult times.

Finally, there is, in particular, one field where it is often urged that the facilities available to the industry are inadequate. This is the field of finance—finance for particular films, or even for new concerns—and the suggestion has been made that a films bank or film finance corporation is needed, especially for the independent producer. Certainly if we are to get the expansion we require in the industry, it will need the provision of additional working capital. I feel that the financial problem for a new film is to a large extent associated with its prospects of being exhibited and it may be that the committee I am proposing to set up to consider the exhibition side of the industry will have something useful to say on this.

But it is the fact that apart from a few of the larger organisations finance for film production has been in the past and still is, very haphazard. The banks play their part in providing against guarantees a proportion of the capital required but the productions that I have in mind—the independent productions—depend ultimately on less settled sources of finance, often indeed on the backing of private individuals. Clearly, in present circumstances we cannot count on adequate support from sources of this kind for the enlarged programme that we have in view. It is not satisfactory for the film industry to be going on as it has been going on recently.

The Chancellor of the Exchequer and I are going into this question very carefully with all concerned to make sure that any deficiency that is found in the financial facilities available to the industry shall in one way or another be made good by the establishment of appropriate machinery. I would not like to leave this point without saying that in an industry of this kind, where the, criteria are so largely those of art and public taste, the problem of providing finance must be an extremely difficult one. Naturally, I shall be most interested to hear the views of hon. Members—many of whom have considerable experience in this field—this evening.

I hope that this brief review of the background against which we see the machinery proposed in this Bill operating, will have given the House some idea of the Government's policy for the industry. I hope, even more, that it will have left in the minds of hon. Members, as well of those who live by, or enjoy the products of this industry, a realisation that we are prepared and willing to do anything that lies in a Government's powers to help the industry through the present very difficult times. Whatever may be the outcome of the discussions about foreign films and the American embargo. I am sure it is the desire of Members on all sides of the House to see the production side of the industry developed, in quantity and quality, so that the period of operation of this Bill will see not only the growth of an important economic asset, not merely the development of an industry dedicated to the entertainment and education of the public, but a veritable renaissance of film-making as an art. It is in that spirit that I commend this Bill to the House.

4.27 p.m.

Mr. Oliver Lyttelton (Aldershot)

We on this side of the House are, in the main, in agreement with this Bill. I believe that this is the first Bill which the present President of the Board of Trade has introduced to the House since he assumed office, and I am glad to think that he has had the opportunity, which was denied to me when I occupied the same position, of getting his hand in with a Measure which is not acutely controversial. We feel that the right hon. Gentleman has handled his subject today in a workmanlike and straightforward manner. It is possible, on the first reading of the Bill, to feel that it is rather academic at this moment, because its object is to, give a favoured market to films produced in British studios. Today, almost anything that has any pretensions to artistic merit or catching the public's fancy—and I am sorry to say these two things are not the same—would be readily snapped up by exhibitors. Nevertheless, I think such criticisms are beside the point because we are legislating for 10 years, and these conditions will change. We should have in our minds the later period of the 10 years, rather than the immediate prospect.

Before I turn to the more particular aspects of the Bill, I would like to cover some of the ground which the President covered, concerning the future of the industry and its structure. Its future is, of course, now under a cloud of uncertainty. The complete embargo on the import of American films threatens not only the exhibitor but the support which the exhibitor can give to British productions. I believe that at one time there were as many as 450 American films imported into this country, a large number of which, I must say, speaking from my own point of view, were entirely unsuitable for this market or, indeed, for any other market. At the top of this list of 450 there were the finest examples of the art illumined by the genius of great artists like Greta Garbo and Charles Chaplin; in the middle range there were films of high technical achievement, the slick, finished comedy, the lavish spectacle, and the sustained suspense in the drama. But of the last 100 or more I think it would not be unduly rude to say that they reached the bottom of any art which has been put before the public in our century. In this bottom lot vulgarity and insipidity seemed to be engaged in a rather unfortunate competition for ascendancy.

The exhibitors here require some American films to fill the bill of the 4,000-odd theatres which are here to beguile the public. The cutting off of American films jeopardises the very existence of the theatres. It threatens the amusement of the public, as the President of the Board of Trade has said, and the not inconsiderable number of workers who are employed in the industry, and who, I think, in the main are represented by that engagingly frank and arresting, personality, the hon. Member for West Nottingham (Mr. O'Brien), who, I hope, we shall hear later on. Equally, the British market is absolutely essential to Hollywood. The President of the Board of Trade has confirmed that. I think that American producers should by now understand that we are in earnest when the Government say that we cannot afford the dollars on anything like the scale that they hope.

So far as I can judge, the Treasury is willing to remit about £4½ million worth of sterling to be changed into dollars—I think there is a misprint in the leading article of "The Times" this morning—and that about £4½ million worth of sterling is the extent to which they would go. That amount, if spent entirely on American films, would not satisfy the American producer, nor would it fill the gap which at present exists in our own requirements. It seems to me that the need of some accommodation on both sides is so great that I hope that the deadlock can be quickly brought to an end. The President mentioned that proposals had been advanced by His Majesty's Government by which this £4½ million might be increased by the equivalent of dollar earnings on British films shown in the United States.

I should have thought that was a basis of a solution of some part of the problem, and if the Government are unwilling to look at the blocked sterling provisions, I should have thought that there was some other chance of bridging the gap by saying that theatre receipts must be invested in film production in this country, or, in other words, unconvertible sterling might be changed into convertible celluloid, and a very great advantage, I think, would come about in that way. American films would continue to come here in large numbers. A new source of independent production would be built up and healthy competition with our own films would then ensue. I do not suggest—I want to make this very clear—that, in our opinion, His Majesty's Government should retire from the main position they have taken up. I express the hope that with certain good will and flexibility the present problem can be satisfactorily resolved.

I turn to the rather larger and longer aspects of the industry upon which the right hon. Gentleman has touched. I do not think that anyone can be other than somewhat apprehensive about the size to which the two groups of exhibitors have grown. The mere figures of the number of theatres that they own does not, I think, give the true picture. Although they only own or control about 1,000 out of the 4,000 odd theatres in the country, they have a very much larger hold in the Greater London area, and it is from that area that the film producer has to look for his market. If he can get into the Greater London market that ensures a wide exhibition of his films. The Bill gives the Board of Trade powers to refuse licences to a group if it gets too large, and it refers specifically to the ownership of more than 200 theatres. It puts in Statute form the gentleman's agreement which has existed with the larger of the two groups for some years past.

I think that the description "monopolist" which is often levelled at some of the exhibitors is rather a misuse of the term, considering the very keen competition that exists, at least between the two main groups. It is often inaccurately stated that one group is American controlled. In fact, the Americans have about a 25 per cent. voting right in that particular group, and although it is true that they are in a position to exercise a strong influence in the group, that is a very different thing from control. I happen to know also that in the arrangement with their American associates, the British companies have reserved specifically the right to buy or rent films from any producer, and they are not in any way dealing only with their American associates.

It would be idle to deny that there are grounds for wishing that these two groups did not overtop all the others. At the same time, it would be ungenerous—and I am not accusing the President of the Board of Trade of being so—not to acknowledge that the great revival in British film production and in the prestige and artistic value of these films has been mainly brought about by the powerful support of the three groups of exhibitors. It is a significant thing, which I have been at some pains to check up, that the best British pictures earn more money in this country than the best American pictures. This is most desirable, because it is the most natural and least artificial way of getting an assured market for British films. The fact that that has been achieved is due in no small measure to the support and backing of the big circuits. No one would fail to welcome more independent producers, and those who control the circuit would, I am sure, welcome them too.

Everyone knows that by far the most hazardous and uncertain part of the film industry is the actual production of films. It is not too much to say that in this country the very nature of the business is unprofitable. I believe that the cost of a first feature film in Hollywood "in glorious Tech." has risen to about £500,000 or £600,000, but as the successful Hollywood producer has on his doorstep about 61 per cent. of the total filmgoers of the world, he can calculate on an appreciable profit. I do not think that it would be right to put the maximum receipts in this country at above £200,000, to which might be added another £100,000 of international money if the film was a success. Therefore, the producer of British films here is starting out with the "weights"—to use a sporting term—doubled against him.

I support what the President has said about better organisation being necessary to fill the gap. I believe that two minutes of the time of the audience is produced by one day's work in the studio. That seems to be a proportion that might be improved by better organisation. I would have said that this industry was the very last that could say that they fill the unforgiving minute With sixty seconds' worth of distance run. I had a great friend, a well-known author, who was engaged by Hollywood at an astronomical salary to take the anachronisms out of historical films. He was known in America by the engaging title of a "period-hound." He told me the amount of leisure which he had so far outweighed the amount of work he had to do, that he was positively ashamed to draw his pay packet. I do not profess to be dogmatic about whether such economies could be effected, but I see some grounds when we have this handicap against the American producers, for making a great drive to try to improve our industry in this particular matter

I do not propose to detain the House for more than a few minutes because I have already said we agree with most of the Bill. It remedies some of the defects of the 1938 Act and lays down much better rules about first feature films. It is a just criticism of the 1938 Act that in the particular times through which we are passing schedules under which the quotas of British films are to be exhibited were too rigid. The cinematograph industry is in the unique position of being partly commercial and partly artistic. Whilst it will be reasonable in a commercial business to lay, down a schedule of deliveries, it would seem to be quite out of place to ask a painter or a composer to produce so many bars or so many pictures either on a time or a footage basis. Pictures and music cannot be turned out in that way. I do not think we have got to the condition—no doubt it is very regrettable to hon. Members opposite—when we can discuss State poetry or a State musical service. When I hear about a film bank and things like that, I am more aware of the dangers than the right hon. Gentleman is of the advantages.

I agree that the old schedules were too rigid, but in the present Bill the Government have gone too far in the other direction. There is no minimum quota of British films laid down at all, but only a provision that the Board of Trade shall by order and after consultation with the Council lay down percentages which are to be prescribed. I think I am right in saying that the variation in the quota is only subject to three months' notice. I suggest that that is too short a time, because the making of a first feature film is a long business. It may take a year between the time it is started and the time it is exhibited. Those who go into this hazardous business are entitled to more security of tenure about the quota than is given in the Bill. I should like to see the amount of notice increased by three months and possibly six months, so that those who, when they start off, know the quota should also have a chance of finding it the same when they are finished.

Mr. Wilson

I explained in my speech—and I am sure the right hon. Gentleman, agrees—that it is right that we do envisage ascending quota figures as we go forward. Therefore, whatever quota is in force at a particular moment is bound to be a minimum for the period which will follow. Though I can see the force of the point to increase the notice be- yond three months, to give real security from the time when a film begins to the time when it is ended and when the producer can see it paying its way, it would require two years, which is not possible.

Mr. Lyttelton

I am obliged to the right hon. Gentleman. I only want to increase the period of notice because it is an uncertain business and the more we can remove uncertainty the better we shall do. Although we have got a rising quota that does not quite feet my point that we should start with a minimum quota, because that is one of the things which does remove one of the financial risks very definitely. That this is a very uncertain business is seen by the extraordinary moves which film producers take to narrow down the risk. Once a film about G-men and gangsters has gone down well, we are treated to a whole series of such films until one more fatuous than the last stops the run. I am told that psychiatrists, the frontiers of the mind and psychopathic crime and punishment are now the rage. I hope at least that we shall not have a run of whimsies, but one never knows. A rather greater period of notice of the fixing of the quota and the need for a minimum quota is necessary, and this is a defect of the Bill.

I am not quite sure reading the Bill whether the six films produced by so-called independent producers—and I do not know what that means and I think it will have to be more closely defined—are to be included in the quota or excluded from it. I urge very much that there should be a minimum quota of 25 per cent. if the six independent films are excluded and 35 per cent. if they are included. That would be a much more secure basis both for financing and for the production of British films.

I had some criticism to make about that part of the Bill which related to the special quotas. I should like to have seen some special quotas, even if at a graduated rate, imposed upon the smaller circuits as well as upon the big ones. I am informed that in certain parts of England there are very much smaller circuits which in particular localities have a very dominant position and particularly is that so in Scotland. I do not believe that any hardship would be inflicted if those circuits had also to exhibit films at a special quota rate even if it were reduced below the obligation imposed upon the big circuits. I think it would be wise to alter the 200 laid down in the Bill to about 20 and provide for a graduated obligation.

I should like to say a word in passing about Clause 4 (4). That is a more than usually elusive piece of drafting and I do not believe that any reader who started to read it without a knowledge of what it purported to mean could understand it, not even if once in his life that person had been a Parliamentary counsel. I believe it means that an itinerant exhibitor can aggregate his showings during his itinerancy and treat them as if the showing had been in one theatre. I have reached that conclusion after consultation with one or two professors of Sanscrit and ancient hieroglyphics. I should like the hon. Gentleman who is going to reply to the Debate to confirm whether that interpretation is correct.

I turn now to the subject of the six films produced by independent producers which the big circuits are under an obligation to accept. That means 18 films in all. [HON. MEMBERS: "No."] There are three separate circuits at the present moment so it means 18. The Clause as at present drafted is open to serious objections. It gives far too wide powers to unknown people and these films are to be chosen by a selection committee. However, we are left in the dark as to how that selection committee is to be composed and what its terms of reference are to be. The Bill framed as it is would be very valuable propaganda in the hands of the Government—I do not necessarily mean this Government but the Government of the day. It would not be so serious for the present Government, because their life at the worst is very short. Here we are legislating for 10 years. It is not the films which purport to be propaganda which are the most insidious or dangerous. It is the propaganda conveyed by the vehicle of amusement and entertainment that is the most insidious.

The effect of this Clause might be, unless safeguards can be inserted, that a President of the Board of Trade and his colleagues could at any time insist on a large number of theatres throughout the country exhibiting a film not for its artistic but for its propaganda value. I know what the answer will be, a quite candid answer that the Government have no intention whatever of using it for these purposes. That is really no answer for the House of Commons which has to make the legislation so that these evils are not possible. During the Committee stage we shall be insistent that the composition of the selection committee shall be closely defined and shall try to get some assurances that it will be a really independent body which will look on these matters solely from an artistic point of view.

I confess, with the hon. Member for Bedford (Mr. Skeffington-Lodge), that I am apprehensive about the change in the composition of the Films Council. That will be developed by my hon. Friend the Member for Bury (Mr. W. Fletcher) when he speaks later. It is a retrograde thing in an industry of this kind to reduce the number of independents when most of us are rather apprehensive that the larger people are a bit too large. It seems to be going against the national tendency in these circumstances which would be to increase the number of independent members or their proportionate representation.

I have only to repeat that in the main we agree with and support the Bill. It remedies a number of defects which experience shows to have existed in the 1938 Act, and I hope that the Government, having started in the right direction, no doubt an unusual and exhilarating experience for them, will continue in the right direction by giving due weight to the serious and constructive suggestions which I have advanced.

4.52 p.m.

Mr. O'Brien (Nottingham, West)

I think the House shares my view that my right hon. Friend the President of the Board of Trade has handled his difficult case very efficiently. Not only has he given a short but adequate summary of the difficulties before the film industry at the present time, but he has done it with an attitude that cannot provoke too much controversy. The right hon. Gentleman the Member for Aldershot (Mr. Lyttelton) was quite correct when he said that the Minister, in the short time that he has been at the Board of Trade, has adapted himself very finely to a difficult and highly complicated industry.

We of the trade, particularly of the trade unions, appreciate very much the fact that the Minister has brought forward a Bill which has aroused the least controversy in the film industry for many years, particularly with regard to the overriding issue of the American tax. Hon. Members will appreciate that there are 15—probably more—organisations of employers and trade unions in the film industry. These organisations are highly competitive one with the other, even among the trade unions. While there is a common interest in all the employers' organisations and all the trade unions, there are other factors which bring about natural divisions of opinions and policies When we consider that these 15 organisations have been brought together and have discussed their business with the right hon. Gentleman, we appreciate how progressive has been his way of handling the situation.

We on the labour side particularly welcome the proposed step to establish a joint production advisory council under the right hon. Gentleman's presidency. I do not know whether he appreciates all that he is taking on, or grasps the significance of getting all the opposite numbers in the film industry round one table under his chairmanship. He indicated in his speech some of the factors and some of the things he hopes to do. God bless him and God be with him. I wish him every success. Among the qualifications he will require to possess for this very difficult job are the wisdom and judgment of Solomon, the skin of a rhinoceros, the face of a pawnbroker and the combined charm of Cary Grant and Anna Neagle. If he possesses those things, he will make a success of it.

We have heard from the President of the Board of Trade something about the beginnings of this Bill. My mind goes back about 20 years to the campaign which the unions then initiated, with the support of my right hon. Friend the present Minister of Agriculture. The British film industry owes a great debt of gratitude to my right hon. Friend because he was about the only hon. Member at the time who knew anything about the British film industry or even cared anything for it. I, therefore, welcome the new interest which has been shown in British films by many of the newer hon. Members, because it makes up the great leeway. I notice in various weekly and daily publications articles by many hon. Members who talk about the film industry as if they understood it. Some of them do, of course. I am not referring to any hon. Member specifically. If I had any charges to make, I should do so. It is a welcome sign that we now have here great protagonists for British films. Ten or 20 years ago we had hardly one. My right hon. Friend the Minister of Agriculture was a lone voice in this House, trying to battle against all the odds possible, including the right hon. Gentleman the Member for Aldershot who was one of the Ministers at the time.

As to the American tax issue, I do not know what all the fuss is about. About 6 million or 7 million dollars are at stake. I listened carefully to my right hon. Friend when he referred to the unfortunate deadlock; but who is responsible for the deadlock? It is no use burking the issue and trying to act like an ostrich, burying one's head in the sand and talking about a great British film industry, and the production of British films, when there will very soon be no British film industry left to make films and no places left in which to show the films if they are made. The cinemas might as well be taken over for other purposes at the end of the year and the public told frankly and brutally that they have to do without films, as they have to do without many other things. Do not let us shed crocodile tears about the deadlock. The British Government, by their premature method of handling this issue a few months ago, are directly responsible for the deadlock.

I will tell the House why. When the dollar situation broke over the country, we had, quite rightly, to conserve dollars. My personal opinion is that the Government, in a form of panic, stopped the purchase of American films, or prevented them from coming over, without taking into consideration the very difficulties which are now before us. If there had been, as was promised, consultation between the three interests—the American interests, the interests of the British film industry and the Government—I do not think these difficulties would have occurred. The position now is that before a settlement can be reached—this is very important—one of the three parties to the controversy must climb down. That is a most regrettable state of affairs. The Government are responsible for bringing about this situation in which one of the three parties must climb down before progress can be made. That is not diplomacy. It is not even good business, for we have to get rid of the tax deadlock before we can get on with making films. People can say what they like, but the facts are there.

Whatever our desires or wishes may be, it is quite impossible for the British film production industry to provide the necessary pictures for our cinemas, even for a one-feature and a small supporting programme, within from five to seven years. The Government have not indicated any priority of manpower for production; they have not indicated whether they are prepared to give priority to the building of new studios, to the training of new technicians and artisans, to the training of new stars, and all the other things which go to the making of a picture. The Bill is defective in that regard, for nothing has been said about those things.

Therefore, we are faced with two things—on the one hand, the workers in the industry and, on the other, the people who pay their money at the box offices to see the picture, the audience. The most important factor in the entertainment industry is the audience, the people who pay to be entertained, and their voice must be heard. These 30 million people a week will be deprived soon of almost the sole remaining means of relaxation and amusement open to them in a world of gathering difficulties. On the Other hand, thousands of workers in various sections of the industry, not only in production but also in distribution and exhibition, will have their livelihood threatened. It is true that people may say they can be transferred to other more essential industries, but why is not that test applied to all other industries? Why should the bad handling of a difficulty of this character throw out of jobs people who have been trained in this class of work, and why should millions of the public be deprived of a means of entertainment which they could have continued to enjoy?

I share the opinion of the House and of the Government—as a citizen, apart from being a trade union leader and a Member of Parliament—that we cannot continue to spend dollars on American films. There is no question about it. We cannot spend 17 million dollars a year on American films, we have not got them to spare; but that is not the issue. Why say that the issue is "food or films"? I suggest that is misrepresentation. The dollars that are hypothetically saved represent roughly two-thirds of a pennyworth of imported flour per week per person in this country. If one were to ask our people whether they would do without two-thirds of a pennyworth of flour per week to have their films, I think they would say, "We will have our films." That is a bad presentation which does not help to solve the problem.

The overwhelming majority of workers in the British film industry engaged in studios, distribution and exhibition want this tax problem to be solved in the interests of the industry, the country and British films. There is an element, as there is an element in every industry, that would resist domination. It would resist any domination of the industry from any quarter, unless it came from Moscow or from the Cominform. We are not immune in the entertainment industry from this tendency, but it is a minority, and the overwhelming majority of the workers want the Government and the American interests to assist in solving a difficult problem.

Therefore, I appeal to my right hon. Friend to do something to break this deadlock. I have in my hand a recent speech made by Eric Johnson. He says: The British Government, as a result of the discussions in London, give us no choice except to continue the policy of withholding shipments of pictures to Britain until an alternative to the confiscatory tax is worked out. On behalf of the members of the Motion Picture Export Association I now reaffirm this policy. We have offered, as evidence of our desire to aid the British people in their struggle towards recovery, to leave a substantial part of our revenue there. This has been our position from the first. It is our position now… During discussions the British stood firm on the tax and summarily rejected in principle our alternative. They declined even to receive or to consider the mutually beneficial proposals we were prepared to offer to reduce Britain's dollar expenditures on films, while, at the same time, maintaining an uninterrupted flow of pictures desired by British audiences and required by British exhibitors to keep their theatres Open. Even before the Dalton 75 per cent. tax was imposed, five out of every six dollars taken at the British cinema box offices for American films were being kept in Britain as British taxes, British wages and British profits… We are equally baffled by the British attitude because of our oft-repeated assurances to the British Government that we are most anxious to find an accommodation that would ease Britain's dollar stringency. In view of that statement and the statement made by my right hon. Friend, it is difficult to know where we are getting in this matter. I stress this point at length because it is my considered view, and that of every responsible person in the British film industry, that the industry, whether on the exhibition or on the production side, cannot carry on without a certain number of American films. That is a fact which no responsible person in the industry would be prepared to contradict. In view of that situation, cannot the Government try to rescue this falling industry now, when it should be rising? As my hon. Friend the Member for Eton and Slough (Mr. Levy) said in a recent speech, at a time when the industry should be rising, the tendency is for production to fall in the midst of the greatest opportunities that have ever been presented to it. I hope sincerely that the Minister will take note of these things.

The objects of the Bill have been explained adequately. Their endeavour is to promote British production for 10 years. I hope the deadlock will not last 10 years. If it does, then we shall go back to skating rinks, or something like that. We might be better off, but there will be no pictures in this country. It will take roughly 170 feature pictures per year to keep the main cinemas of this country at work. That is the very minimum, even with the cutting down of programmes. We shall be lucky if we make 45 feature pictures in this country in this year.

Two or three people are trying their best to wrestle with the problem. Sir Alexander Korda is doing a magnificent job as an independent producer, as are Michael Balcon and Herbert Wilcox. Those three men are contributing to the prestige of British pictures in the world market. On the other hand, the circuits represented by the J. Arthur Rank organisation are doing a magnificent piece of work for British films. I am amazed when I hear my friends talk about the domination by Hollywood of the British film industry and yet describe as a monopolist the first person who has had the guts to spend his money and range around him a force to produce British films of a high quality character, namely, J. Arthur Rank. That discourages such men. It is very difficult to know what is wanted.

If we are to expand and to maintain a high standard in the British film industry, let us give a square deal to the independent producers, those who have initiative, whether they are circuits or whether they are not. Of course, that does not mean that we must not keep an eye upon monopolistic tendencies. The workers in the industry will fight against any attempt by a monopoly to dominate the film industry. Trade unionists are quite well aware of the evil effects of monopoly in other industries. Speaking for my own executive and for a considerable number of other workers, I say that we, who are close up to the film industry, have every regard and admiration for, and would give every encouragement to, people like Arthur Rank, Alexander Korda, Herbert Wilcox, and other men of that character who are doing a fine job of work. We are prepared to face all the critics, and the schemes that they may care to advance.

I liked the way in which my right hon. Friend skirted round the subject of State ownership of studios. When an eminent economist is also a leading Minister and an astute politician, it is very difficult for him to commit his Government even to an elementary proposal. I hope that the day will come when the Government will be able to own film studio space. I hope, at the same time, that the day is far distant when the Government, as a Government, will be responsible for the making of films, or even for the writing of plays. That is another matter. We must preserve the artistic and creative work of the men who are possessed of those qualifications.

The Government should facilitate film production. They should be able to provide film studio space to meet the needs of the independents, especially of independent producers of proved worth. I do not mean producers who call themselves independents, some of the cranks we read about who think they have great genius for making films, and who have complete incompetence for everything else. The Government should provide studio space, facilities, equipment, and so on, for independent producers, and I hope that the Government will reconsider their position in this respect.

The difficulty of finance is one of the great evils of the present time, especially when seen against the background of the tax situation, upon which we have already touched. Money cannot be raised now anywhere for the making of films. The difficulties which a certain circuit has recently gone through in order to have enough cash reserves to meet costs of production for themselves are well known. There could be a combination of people, for example, in this House, who thought they had a good play or a good script, but unless there were very powerful strings somewhere being pulled, and powerful reasons for supporting the group, it would not be possible for them to raise a shilling in the City to further independent production. Independent producers are in danger of going out of existence.

I should like my right hon. Friend to put a suggestion before the Chancellor of the Exchequer. From year to year the Government take out of the entertainments industry as a whole several million pounds in Entertainments Duty. I think the figure goes into £50 million or £60 million a year from the film industry alone. That taxation is earned by the drawing power of an artist, or of a play or a film. The Entertainments Duty collected upon a bad play in the West End of London or in the Provinces is less than upon a good play. The same applies to the cinema. If a picture is good, and £1,000 per week—I am using any figure for the sake of illustration—is taken gross at the box office, £200 of that sum goes to Entertainments Duty. If the film is bad and the takings are only about £400, the Entertainments Duty will be perhaps £50 or £60. The principle is that the tax is earned by the drawing power of the film. The tax is one which the people pay and it is collected through the entertainments industry. The principles of taxation in any other sphere of industry are not involved in this case. The public's money is not taken away by other forms of taxation in exactly the same way.

The suggestion I make is my own idea. Therefore, I can be condemned for it if it is bad. On the other hand, if it is good, there will probably be plenty of people who are prepared to say that they had thought about it before. I put it forward for the President of the Board of Trade to consider in conjunction with the Chancellor of the Exchequer. There should be some way or some means of financing films, either from the inde- pendent producers or any other kind of production, instead of having a film bank or a film credit corporation. It should be possible, under proper conditions, to subsidise production out of the earning power of particular films. The details can be worked out later. I will just give the broad outline of the suggestion.

If one film has been successful and its producer has been proved to be successful, the next picture, or possibly the next but one, of that producer might be subsidised according to the value of the Entertainments Duty which his successful picture has been able to attract. I will leave the idea at that, until the Committee stage. It can be developed later. It will be sufficient to say that I think the Entertainments Duty which comes from the industry should be used, in a difficult industry, such as ours, in order to give practical encouragement to production and for the entertainment of our people, as well as for the extension of world markets. This would be a way of giving practical service as well as lip service to the export drive.

I have two further short points to put to the House. We welcome to a large extent the principle of exempting from quota the smaller exhibitor whose takings are £100 or less. When I say "we" I mean the cinema employees. In the past we have had great difficulty in extracting from the small exhibitors a decent living wage for their employees. Those exhibitors have always pleaded poverty, with a certain amount of justification. We hope that if the Measure goes through in its present form—I may he looking at this matter selfishly—it will mean that the lower-paid people in the industry will benefit.

On the other hand, I want my right hon. Friend to appreciate that a considerable number of these smaller exhibitors would like to show British films. They do not wish to be outside the scheme for allowing their public to see British films. Possibly some way may be found in Committee of giving exemption in a modified form, so that these exhibitors may have the advantage of a small quota and yet participate in the showing of British films. I agree with the right hon. Gentleman the Member for Aldershot, and so do most of the unions in the industry, that the fixing of quota percentages is desirable. The Bill, as drawn, might make the task of producers, distributors and others somewhat uncertain. A floor should be put into the building, we think. The edifice is pretty good. The Bill is far better than anything we have had before. I believe that most of the unions agree that we should commit ourselves to a figure, perhaps of 30 per cent. or 40 per cent, as the case may be, and a beginning should be made with quota percentages.

My last appeal to my right hon. Friend is to continue his good work at the Board of Trade generally and for our industry. We believe British films can assist in the great work of the country. Not only can they do a good job of work in our own land, but in foreign countries apart from America, in remote countries where the communities' first contact with British life and civilisation has been the seeing of a British film. There are millions of people in remote parts who cannot read or write and whose first contact with the British has been to see a British film. I hope my right hon. Friend will go on with the work with the joint production advisory council. In every progressive step that he may take we shall co-operate with him to make this industry second to none in the world.

5.21 p.m.

Major McCallum (Argyll)

The hon. Member for West Nottingham (Mr. O'Brien) referred to remote areas to which he hoped the British film industry would bring education and recreation by way of films. I gather that he meant remote areas of the world, but I would remind him that there are remote areas in my own country in which large numbers of people have never seen a film, British, American, or any other. On behalf of those people, a small community compared with the total British population, I wish to say a few words.

The Government are, I believe, sponsoring an organisation in the North of Scotland, the Highland and Agricultural Association, which sends out mobile film units of the 35 mm. type films, or smaller films, to be exhibited in the Highlands and Islands. This is a most praiseworthy activity, and I look forward to great developments of it; but in the Clauses of the Bill I find no reference to this, except that a Clause refers to those exhibitors gaining less than £100 a week. There is an alarming tendency to palm off on those exhibitors old films, which are perhaps considered not worth using in the more populous areas.

My right hon. Friend the Member for Aldershot (Mr. Lyttelton) mentioned that the cinema industry looks to the Greater Landon area for its market. I hope the Cinematograph Films Council, whose constitution is to be amended by Clause 8, will include some representation from Scotland. I am saying that in no parochial or nationalist spirit, and I am not bringing up the old question of Scottish representation, but I feel that in this film industry the tastes, not only of the Highland people of Scotland, but of Scotland, as a whole are entirely different from those of the English public. Films which go down well in England and Wales are complete "flops" in Scotland. Hon. Members who have had experience of some of the Glasgow cinemas will bear me out in that. When the hon. Gentleman replies, I hope he will give some assurance that the peculiar characteristics of Scottish culture and tastes will be borne in mind in sponsoring the production of British films.

5.28 p.m.

Dr. Stephen Taylor (Barnet)

Two and a half years ago I could honestly say I knew nothing whatever about the film industry. It may be that when I have sat down hon. Members will feel that that situation still obtains, but I have had cause in the last two and a half years to try to find out something about the industry, for two reasons. I represent in this House, Elstree and Boreham Wood, where there is the biggest concentration of the film industry in this country. At present, it is a potential concentration as I shall shortly show. The second reason is that I am one of the independent members of the Cinematograph Films Council, which was in part responsible for the origin of this Bill, and which is a statutory body set up under the previous Measure, not merely to look after the working of the quota, but also to advise on the general way in which the British film industry should be nurtured.

The Minister of Health once referred to the British building industry as a jungle. If that metaphor be correct, I would like to refer to the cinematograph industry as a tropical jungle. It is a flamboyant, vigorous industry, it is wasteful and biologically fascinating, and shows a kind of economic Darwinism, in which there is the "survival of the fittest" and "nature red in tooth and claw." In the Films Council all these delightful peculiarities become apparent. We have a collection of colourful personalities. First we have Mr. Rank himself, Sir Alexander Korda, another Sir Alexander, Sir Alex King, who represents the independent exhibitors and runs a chain of cinemas in Scotland, Sir Philip Warter of A.B.C., my hon. Friend the Member for West Nottingham (Mr. O'Brien) who represents a section of the cinematograph industry workers, particularly those employed at cinemas, and the more simple technical jobs, Mr. Elvin representing the more highly technical workers in the industry, and a number of others. We independent members are sometimes hard pressed to know on which side of the fight we should come down at any particular moment, because battle is frequently joined, and frequently vigorous.

I should explain in regard to what the right hon. Member for Aldershot (Mr. Lyttelton) said that at present there are 11 independent members. They are not primarily concerned with the independent producer, or the independent exhibitor, but are there because they have in theory no connection whatever with the cinema industry. The people who look after the independent producer or exhibitor are trade members. We are the representatives of the public, and there is something in the idea that the Council is over-weighted on the independent side. Indeed, quite a lot of us, I am afraid, often do not turn up, particularly when the agenda is dull. There is something to be said for cutting down a little on the independent side, though I think the cut has been a bit too drastic.

A lot of the work of the Films Council in the past has been dull work, consisting of the renewing of the quota life of British films. The quota dies after three years, and their life has then to be renewed, or they have to apply for renewal for quota purposes, and going through these lists of films is frequently rather a dull business. The question of whether "Gasbags," a film which none of us perhaps have seen, should have its quota life renewed, is not very exciting. However, the production of a report from which the Bill has, in part, sprung, was very interesting indeed, and it was remarkable that the Cinematograph Films Council was able to get the degree of unanimity which it achieved, considering the conflicting interests involved. That was due largely to two things—the excellent chairmanship of Lord Drogheda and the work of Sir Arnold Plant, who is an apostle of free enterprise but remarkably skilful in devising the restriction of free enterprise when he thinks it comes to free enterprise luxuriating too freely.

The structure of the British film industry is extremely complicated and it is very well illustrated by the situation in my constituency at Boreham Wood. Though people speak of Elstree when referring to the cinema industry, Elstree is a little village adjacent to Boreham Wood and it is there that the studios are located. First, there is an enormous block of studios which looks almost the size of St. Paul's as one approaches. It is the second largest block in the country, and the most modern. It belongs to M.G.M., and contains seven stages. It was used during the war for aircraft production, and was severely damaged by bombing. Since the war, although a large amount of building has been done on it—it has been completely reconstructed—it is not being used at all. One film has been made in it so far by an independent producer renting a stage. Another film is to be made in the near future by the Boulting Brothers, who are renting a stage.

The other six stages are idle; most of the time all seven are idle, and that, at a time when we are short of studio space, is a ridiculous state of affairs. It is, however, quite understandable. It belongs to an American company. They have put the embargo on as a counter-measure to our decision to retain a large percentage of film earnings in this country. They do not intend to see the embargo broken by the production of films in this studio, but if the negotiations about the present position break down, we shall have to do something about this. We have let them have the building labour to complete this studio. We should make it clear to them that if the negotiations break down we do not intend to build more studios while this is standing idle. We shall have to requisition it, or take other action, and let it out to independent producers.

Only slightly less large than this M.G.M. palace are the big A.B.C. studios at Elstree. They belong to Associated British Pictures, who, the right hon. Member for Aldershot (Mr. Lyttelton) has said, are not controlled by American, interests financially. A.B.C. are, in fact, the agents of Warner Bros. for the showing of Warner Bros.' pictures in this country. The way it works is this, and it is perfectly reasonable: A.B.C. have a circuit of 440 cinemas; they also have their distributing firm, and, at the top, their arrangement for producing a certain number of films in this country. In normal times they give first priority to showing Warner Bros. pictures, and second priority to the showing, not of British pictures, but of M.G.M. pictures. The reason that they give this second priority to M.G.M. is because they have a reciprocal arrangement with M.G.M., as the latter control a circuit in South America, where Warner Bros. have not got a circuit, and they exchange facilities, which is an understandable arrangement.

A.B.C. make a certain number of British pictures at their small studio at Welwyn. They also finance independent producers to make pictures, and they make very good ones. I think that "Brighton Rock," and a very good picture it is, was made with A.B.C. money. But this great studio at Elstree is standing idle. During the past two years it has been reconstructed. Its roof has been raised and its walls have been pushed out. Many of the workers in the cinematograph film industry believe that it could have been used in this period. The question of American finance enters into the matter, since A.B.C. is primarily an American exhibiting machine, and the Americans naturally do not want to make pictures here to get round, as it were, the very thing which they themselves are fighting.

The third group of studios in my constituency is the British National studios. They are smaller studios. They were, I believe, and may still be controlled by Lady Yule. It is said, I do not know if correctly or not, that A.B.C. have now got control of these studios. Moderately priced pictures are made in them very efficiently. It is a very good and very efficient organisation. These films are of moderate quality, sometimes of poor quality, it must be confessed, which are primarily shown, not in London but in the North of England and elsewhere in the Provinces. This is an efficient organisation, doing a job which is quite worthy, and which is certainly not wasting a lot of money.

The fourth studio is the Gate Studio, a small studio belonging to Mr. Rank, and used for making documentary and religious films. The main part of Mr. Rank's organisation is at Denham and Pinewood and at other studios outside my constituency. The Rank producing companies look at first sight as though they were a number of independent concerns—one even goes by the name of Independent Producers—but I understand that this is a purely financial arrangement, and that it is sometimes a good thing to have a single company set up to produce just one picture so that if it should run at a loss it need not be set off against the profits of another picture.

Rank films are handled by his distributing organisation. It is worth saying here that the film industry has these three tiers, the producers, the distributors and the exhibitors. Mr. Rank has his own distributing arrangements, General Film Distributors, and two chains—Odeon and Gaumont British—with 660 cinemas in them. As has been said, although they number something under a quarter of the total of British cinemas, they have a greater number of seats than that proportionately, since they are usually the biggest cinemas, and are very often in the best places. Normally, and by that I mean when the present restrictions on the transfer abroad of film earnings does not exist, Mr. Rank does not make anything like enough British films to fill the cinemas in his circuit, particularly where he has two houses in one town, and he has to rely to some extent on United States films to make up his programme. A considerable, but not the controlling interest, is held by 20th Century Fox in the Rank circuit.

That means, again, that the American distributors and producers have a strong bargaining position, to say the least of it, with Mr. Rank as to the number of British pictures he should make. There will be about a thousand cinemas on the circuits, leaving approximately 3,600 independent cinemas. Some of those, although they are called independent, are in fact grouped into large groups of up to 75, and the right hon. Member for Aldershot made a very reasonable point when be suggested that there might be something to be said for putting a special quota rate on what are in fact small circuits. The only difficulty would be that it would make the quota, which is already pretty complicated, even more complicated. Do we want to make it even more complicated? When it comes to showing British pictures Mr. Rank and A.B.C. put their own pictures out to their own circuits first. As a result, the independent exhibitors get them either from Mr. Rank or A.B.C. at second hand, as it were. They have to go to the independent producers, of whom there are very few, or to the American distributors, to get their first feature films. That is why the independent cinema exhibitors are so keen on getting back their supply of American first features. They are their main source of first features which have not been shown anywhere else.

This Bill, as I see it, is designed to do four things. It is designed to safeguard the position of British films whether first features or supporting features—including in the second category shorts, documentaries, and the rest of it—in the British cinema, on the actual screen. I think the variable quota, which will be varied from year to year, is a very good arrangement, though there is a point, and a good one, in saying that the minimum quota for any one year should be announced, not three months, but six months in advance. It is not so much that for feature films, producers want to be sure of their market. The whole idea of the variable quota is that we can raise the quota year by year to take in however many British films of reasonable quality are made. It is so that exhibitors can plan in advance. Unless they know what the quota is likely to be, it is hard to book up appropriate British films. The Bill allows the President to make that arrangement of six months. It merely says there shall be a minimum of three months. I think that is necessary because in the first period when the Bill starts to operate there will be a period of only three months.

One point which the Bill as it stands does not answer is that of a fair return from the distributor and exhibitor to the producer; it does not say that a minimum percentage of the takings shall go to the second feature. What has happened in the past is that the renter has bought up cheap British shorts to make up the quota and give them to the exhibitor to make up a programme. The result is that the maker of British shorts, particularly of good quality, may get back the bare cost of production, or he may not even get that. He may lose a lot of money. He is seldom likely to make a profit. That has been one of the difficulties of the documentary film industry. I am pleased that the President should announce the setting up of this committee to study distribution and exhibition and I am sure that that is one of the points that ought to be considered. I do not think it should be embodied in the Bill as it stands, because it is a complicated and technical business and would lengthen the Bill unduly.

The second thing the Bill is designed to do is to safeguard the British films as regards minimum quality. It is a very difficult thing indeed to guarantee, or advise legislation to guarantee the minimum quality of an artistic product, and the best thing that can be done is the application of this cost test to both feature and supporting programmes. The cost test, so far as feature films are concerned, of 10s. per foot labour cost, or about £1 per foot total cost, is really of no significance at all because one may say it is almost completely impossible to make a feature film at anything approaching as small a cost as £1 per foot of film. So it is not likely to apply.

The cost test could only be significant in relation to the supporting programme and that is where we want to see it operating. We are now up against the quota quicky short documentary—"A day in the life of a swan in Regents Park"—or something of that sort, which is cheap to make and is easy to complete and is made by people who exploit the potentialities of the film. It is sold for almost nothing, and is pushed out to complete the quota supporting programme. The cost test of 10s. per foot labour cost will put an end to this, and help British documentary films to get a fair crack of the whip in the cinemas. We, on the Films Council think we should help them a bit more.

Since the programme is divided into two sections, the feature and supporting programme, the quota has to be covered in both. There is not the slightest chance of Britain being able to make sufficient second features to cover the supporting programme with second features. This will force exhibitors to take in documentaries in the second half of the programme to make up the British quota. I personally find some documentaries incredibly boring. I do hope we are not going to have these pictures of clouds or the sea breaking on the shore or a plough going across a hill indefinitely. It is not good enough. The documentary film people have got to brace up their ideas. There are too many small units. They have got to get a good story and a vigorous script into their productions and turn out something entertaining as well as educative.

The third purpose of this Bill is to help the independent producer to get films shown, whether features or shorts, both in the independent cinemas and in the circuits, and that is mentioned in Clause 5. This is a continuation of the voluntary arrangement entered into by the circuits with the predecessor of the present President of the Board of Trade. There was the selection committee set up to which any independent producer could send a film and get it sent round the circuits. Time and again, about once every three months, I have asked a discreet question of the President of the Board of Trade as to how many films have so far been to the selection committee. The answer has invariably been "None, Sir." I think it is still none. In other words, it has not worked, on the face of it. It may be that the mere existence of this selection committee has been a sufficient deterrent to the circuit to make them accept independently produced films, or it may be—and I suspect the truth is—that there have not been sufficient films made for the machinery to operate. I do not think that the idea has any great significance and that we need to worry about the propaganda importance of the selection committee. I do not mind what restrictions or specifications are laid down about the position of this selection committee because my guess is it will never select anything.

The fourth purpose of this Bill is, as I see it, to restrain the growth circuits or what have been called the monopolies and thus to protect the independent exhibitor and, in theory, to increase the outlets for independently produced films. This is the part of the Bill about which I am most doubtful. I believe it springs from a false conception of the economics of the cinematograph industry. Films differ from almost every other industrial product in that the whole of the production must be completed, and the money spent, before the marketing of the product can begin. If one is making a motor car, or soap, or anything else, one's traveller can take it round and show it to the retailers when only one has been made. One does not have to do the whole of the production before starting to explore the market.

In the case of films, the whole of the production process has to precede the marketing. If the product is denied retail outlets, the producer just cannot market it direct. There is no dodging the cinematograph exhibitors. He cannot sell it through the post as the producer of an ordinary commodity can. Assuming that a producer is not linked with the circuits he is entirely dependent upon independent cinematograph exhibitors. They are a very worthy race of people, but, in my experience they are not the most imaginative section of the community. They tend to judge a film—I may be wronging them completely when I say this—upon whether there have been lots of films like it in the past which have been successful, and whether it has got some stars in it and, if so, how brightly those stars shine. Provided that those two criteria are fulfilled they will take it. If it is anything out of the ordinary, they view it with the very greatest suspicion.

There was the case recently of "The Overlanders," a film in which there were no stars. The cinema exhibitors threw up their hands and said, "We cannot possibly book that." In fact, it was a terrific success, and incidentally, a very cheap film. This means that the producer of independent films has to keep his eye not on the public but on the cinematograph exhibitors who will be showing his productions. That is a bad thing. That means that his level of taste is below what I believe is the level of public taste. I suspect that the cinematograph exhibitors are generally a bit behind the public taste. That is a difficulty which arises.

Making a feature film costs anything between say, £75,000 and £500,000. For example, the film, "It Always Rains on Sunday," which I thought was an excellent film, cost about £170,000. The expenditure of £500,000 in the making of a film is pretty extravagant. We hope that there will not be £500,000 spent on making many more British pictures. It costs a great deal of money to make a feature film—perhaps a minimum of £100,000. Somebody has to put up that money in advance before the picture is made and before there is any knowledge whatever of whether it will be a success. If the producer has not a guaranteed circuit showing, that is to say if he is really an independent producer, then it is an absolute speculation. Every producer and director must have his on and off days, as it were. Sometimes he will make a first-rate film, sometimes he will make one that is not so good. For that reason, the financing of independent films is bound to be a gamble. It cannot be any other than a gamble. In my view it is bound to make for non-continuity of employment of film directors and technicians of all kinds. It is bound to prevent the building up of a team of film workers who get to know each others' techniques and are able to make good films because they work as a team.

This is where Mr. Rank comes in. I think that he has spotted the essential fact of film economics that teams of film makers can only be got down to the job of continuous production, of improving their techniques of production, if their retail outlets are guaranteed. I believe that that is the secret of any kind of film producing. Vertical integration of the film industry, or of a large part of it at any rate, is an economic necessity if British film production is to be anything more than sporadic. Vertical integration, as hon. Members know, means linking together the whole chain of production from the point of starting, through the distributing machine, and out on to the cinematograph screen. The result of Mr. Rank's activities, the result of vertical integration, has been that the great majority of great British feature films, and in the past two years the great majority of the best British documentary films, have come out of the Rank stable. There have been some terrific flops, but that is inevitable in any organisation where art, science and industry are all mixed together in this way and where we get dynamic explosive people like stars and all the rest of it.

It is because Mr. Rank has been able to give a measure of continuity and stability to British feature film production that the standard of our British feature films has steadily risen. Many of my hon. Friends on this side of the House attack Mr. Rank as a monopolist. As a good Socialist, I have always understood that monopoly was an inevitable development in any vigorous capitalist organisation. The British film industry provides an ideal example of Marxist theories in practice. Film production on a large scale cannot be organised without vertical integration which results in monopoly. As we all know now, the only thing to do with monopoly is, in due course, to socialise it in the public interest.

I like to speculate on what would have happened if the cinematograph industry had suddenly been discovered de novo, fully fledged like the radio. I can imagine, in, say 1923 or 1924, a Royal Commission being set up to investigate the potentialities for cultural and general entertainment of this terrific new invention. I can imagine the Royal Commission reporting and the Conservative Government of those days considering, as a result, that this great industry, with its vast potentialities for education and human welfare, could not possibly be left in private hands. I can imagine them very reluctantly setting up a British Cinematograph Corporation as a sort of visual brother to the British Broadcasting Corporation. Instead of that, we are approaching things by a different way. We are approaching things by the commercial creation of monopoly which, I think, will in due course become public enterprise.

I look forward to the day when there are three or four vertically integrated circuits, publicly owned with public corporations with the maximum of independence from Government interference or at least the amount of independence which the B.B.C. enjoys—and that is pretty considerable when sometimes Ministers want to make statements on the radio. I look forward to three or four vertically integrated corporations with production, distribution and exhibition in each of the organisations with full facilities for the showing of any independently made picture. I think that there is a lot to be said for the idea of a films bank provided that those who run it realise the risks they are taking. I look forward hopefully to seeing Mr. Rank as one of the director-generals of one of these corporations. I am sure he would make a very good director-general. I hope that the President of the Board of Trade will use his power to prevent the growth of the circuits very modestly and with great restraint.

Finally, I hope that his committees of inquiry will start without any anti-Rank or anti-circuit bias. We owe a very great debt to Mr. Rank for the work he has done in the British film industry. I wish to pay tribute to the freedom he has given to his individual directors and producers to make what films they think fit, to display a great deal of originality and to play, as it were, above the public taste yet in fact to be on a level with public taste. I believe that without vertical integration in our film industry we shall have no worth-while British film industry at all.

6.0 p.m.

Mr. Edgar Granville (Eye)

I am sure the House has listened with great interest to the hon. Gentleman who represents the capital city of film production in this country. He has given us a detailed exposition of a very complicated, difficult and technical problem, and I think he carried most hon. Members of the House with him. He also gave us a first-hand account of the work of the Cinematograph Films Council which we were very pleased to hear. I hope that the hon. Gentleman will continue to be one of the independent members of that body. I think, however, that he led us up the garden path a little by solving all the problems for us and telling us how the industry should work, but leaving the sting in the tail, or surprising us rather at the end of his speech, by visualising a state of affairs in the distant future of film production by Karl Marx, direction by Mr. Rank.

Nevertheless, I agree with a great deal of what he said, and, from an impartial point of view, I join with him in welcoming the new Committee which the President of the Board of Trade envisaged to inquire into the questions to which the right hon. Gentleman referred in his speech this afternoon. I think that no harm will be done, but that only good can come of it. As the right hon. Gentleman himself said, this subject will be available for the House to discuss in one of our future Debates.

Personally, I would like to congratulate the President of the Board of Trade on his grasp of his subject this afternoon. I have listened to a number of these Debates on the film industry over a number of years, and I thought that the right hon. Gentleman's speech came like a gust of fresh air in the quarrel which is now going on between the United States, Hollywood producers and the British tax imposition. Nevertheless, we all wish him well in bringing these discussions on that dispute to a successful issue.

We have had 20 years of these quota Bills dealing with the film industry, and I am not sure even now whether we can say that the quota has been of a lasting benefit to the film industry or not, but it would have been interesting if the right hon. Gentleman could have given us some figures to show how many cinemas and renters have been able to fulfil their quota obligations, apart, of course, from the war period, when a very difficult position arose. On the whole, I think this is a reasonable Bill, and I believe the House will give it its support without a Division. A great deal does depend on the kind of agreement we get with the United States in the negotiations over the dispute which is going on at the present time, for the successful working of this new producers quota Bill.

I hope that some action may be taken on one point, for which I think a good case can be made out. I think there is a good case for a separate Scottish Advisory Council.

Mr. Gallacher (Fife, West)

Hear, hear.

Mr. Granville

I am glad to note that the hon. Member for West Fife (Mr. Gallacher) and I are in complete agreement. It was found necessary in the case of civil aviation, and on many of these questions, and particularly on films, Scotland has a contribution to make, and films dealing with Scotland are extremely popular in the United States and other overseas cinemas. I hope the President has not closed his mind to the suggestion that there should be a separate Scottish Films Advisory Council to work under the arrangements of this Bill. I thought it was a pity to reduce the independent representation on the Council, but I know what the right hon. Gentleman had to do, and I am sure he has done his best. Nevertheless, I hope that, in the light of future experience, there may be some opportunity for an amendment of the new composition which has reduced the independent membership of the Council.

One of the things which this Bill does is to abolish the renters' quota, and it gives powers of flexibility to the Board of Trade to determine percentage of quota, and I think a warning note has been sounded that enough notice should be given to the exhibitors in order that they can, in regard to their bookings, rest assured for a certain future period of programmes. It is no good having a quota Bill, however, unless we can produce and supply the films with which to satisfy the quota. The president has said that only one-fifth of the total screen showing time is occupied by British films, and that position, at the present time, has been worsened by the American refusal to send films here and to produce here. Up to the present time, we have been able to satisfy our quota, but we cannot any longer produce enough films in this country for our cinema requirements.

I should have thought that, if ever there was an opportunity after a long period of trial and experiment, for a boom in British film production, it would have been now. Here we have a position of unfulfilled quotas and cinemas which cannot get enough new films, when no American films are coming into the country and re-issues are being used. I should have thought that that would have been the occasion and opportunity for an unprecedented production of British films, but I am told that there is empty studio space and that there are unemployed technicians in the industry. We have to bear in mind the fact that the United States is a big film producer in Britain as well as in their own country, and I am glad that the President of the Board of Trade is going to meet the American producers in this country to try to determine more particularly what is going to be their immediate production programme.

I think one of the reasons why there is not greater increased production of British films is that we are short of equipment. I believe that, even today, in our studios, on the production side, we are seriously short of good new and replaced equipment for film production. We are also short of artists who are known internationally, and I suppose the number of such artists may be counted on the fingers of both hands. The obvious reason is that they go to Hollywood, where the remuneration is much greater. We are also lacking in arrangements for the independents to produce films here and use studio space, and I hope the right hon. Gentleman will look into the arrangements of independents in their relations with the renters. Equipment comes from the United States, or at least, it used to come from there. I hope that special measures will be taken by the right hon. Gentleman or by the Minister of Supply, to speed up the production here of the necessary equipment.

Then there is the question of the artists who go to the United States of America. I hope that the President of the Board of Trade, in any agreement he makes on the distribution of United States films in this country, will also include the question of the exchange of artists, and whether Hollywood is to take the best artists immediately they establish a name for themselves, by offering bigger contracts. This country has got to draw a line with the Hollywood film interests and for every film produced and sent to this country over that line, there should be a corresponding British film sent to the United States. At the same time, if we send a British star to America, even upon a dollar earning project, there ought to be a corresponding American star available to this country on a reciprocal basis to ensure the future of our star values.

We must also make more films—apart from those such as the Dickens films which have been such a great success—with an international appeal. I was glad to hear the hon. Member for Barnet (Dr. Taylor) defend Mr. Rank. I personally, am not a Rank critic. I have no interest in the film industry at all, but I think that Mr. Rank has made a serious and sincere attempt to rationalise that industry. On what I would call his "dollar experiment," which has now been going on for some time, and on which considerable sums of money had to be spent in the United States in order to establish British prestige films—it is too early yet to know whether that venture is going to succeed or not—the tendency of his producers has been, of course, to put the emphasis on the production of the higher priced films. I think it would have been better if a greater proportion of his total production had been in the direction of the £100,000 film, which could have got its money back in the market of this country. As hon. Members know, the economics of film production in this country vis-à-vis the United States are very simple.

In the United States, they have a home market of 120 million, whereas we have a home market of only 45 million. If a Hollywood producer spends £500,000 on a production, he can get that money back in his home market, and he makes his profit in this country where, because it is an English-speaking country, no "dubbing" costs are involved. If we are to recover our production costs on the home market, we cannot afford to go beyond the £100,000 limit. Our gamble comes in selling the film to the United States market, and that, frankly, has been Mr. Rank's fight with his dollar experiment. The President of the Board of Trade must stand firm on this; it is something beyond politics, beyond anything but the ordinary economics of the film industry. America must give our pictures a fair showing on the first and second distributions in that country if we are to give them reasonable dollar profits on the films which they send to this country.

The urgent necessity in our film industry—and the President of the Board of Trade referred to this—is to cut production costs, and the overheads of the film companies, or the companies which go to make up the larger organisations. I know that the costs of production are seriously inflated. They must be limited for home market consumption. The time has now come for a stand-still arrangement on American exploitation costs. It is perfectly clear what has been happening in the past. If it was necessary for the Rank organisation to establish our prestige films in the markets of the United States, considerable dollar promotion expenditure was necessary to that end. I am not asking for a presentation of a dollar balance-sheet, but I do say that the time has come to halt those exploitation costs in order that we may see where we stand with the American market in this expenditure of dollars and the gross returns available to the Treasury.

Lastly, I would join with the hon. Member for Barnet in paying tribute to the production of films in this country. I wish, however, that they would make a few happier films. There seems to be a tendency to concentrate on the Soho-spiv type of crime film, whereas I am certain it would be better, from the box office point of view, if they made happier films. We on these benches welcome this Bill, and hope that it will give British industry the opportunity it deserves.

6.16 p.m.

Mr. Benn Levy (Eton and Slough)

This has been a surprisingly uncontroversial afternoon, and I am afraid I cannot guarantee to transform the atmosphere. In fact, I have even found myself very largely in agreement with what I thought a very good speech by my hon. Friend the Member for West Nottingham (Mr. O'Brien), with, of course, the reservation that I dissent from his usual attack on the Government in respect of the 75 per cent. import duty. He asked today, as I believe he has asked before, why the Government cannot do something to break the deadlock, but he was not very specific in suggesting what should be done. It seemed to me that the President of the Board of Trade this afternoon did, in fact, do something very substantial towards breaking that deadlock. He made it crystal clear, beyond any possibility of misunderstanding, that the Government are absolutely in earnest and adamant about this duty.

In this regard I much appreciated the public spirit of the right hon. Member for Aldershot (Mr. Lyttelton) in reinforcing that attitude, and in associating the Opposition with it. I think that was a very valuable contribution. There are two other points which the right hon. Gentleman raised upon which I wish to comment. He argued, as, indeed, have some of my hon. Friends, that it was desirable to fix the quota figure now, instead of waiting. The argument was that producers were in a state of uncertainty without a fixed figure. I thought that the answer which the Minister gave by way of interjection was sufficient. But there is a second answer It is fallacious to say that the producer is influenced in his programme, or in his plans, by the size of the quota. If a producer were to ask the right hon. Member for Aldershot to finance a film—which, no doubt, has often happened, and probably often will—the first question the right hon. Gentleman would ask is not, "How big is the quota?" but, "Can you guarantee that there will be a release for your film in the cinemas?" The answer to that question is what is going to decide whether the producer gets the backing or not. Indeed, supposing that the producer declares, "Well, the quota for this year is 50 films," the question which will immediately be asked by the potential backer is, "How do we know that we shall not be the 51st?" I feel, therefore, that there is a certain confusion which suggests that a delay in fixing the quota figure really affects the producer's plans.

The second point mentioned by the right hon. Member for Aldershot was the question of extravagance and high expenditure in film studios. This, of course, is really a very serious matter. He said, quite rightly, that production, broadly speaking, was not a profit-making matter at all. Incidentally, my hon. Friend the Member for West Nottingham suggested that there should be a Government subsidy, but a suggestion of that kind is really very wide of the mark. It is not true that the film industry as a whole makes no profit, although it is true of the producing end of the industry. In fact, the losses at the producing end have to be made good from the very big profits at the exhibition end, which is the reason for what my hon. Friend the Member for Barnet (Dr. Taylor) called vertical integration.

Even so, if it were possible to arrange that a bigger share of the profits from film-making should be shifted over directly to the producer, by way of earnings, not merely in terms of compensating losses—which would be very difficult to work out—there would still have to be some cutting down of expenditure. I heard a very characteristic story yesterday of a film director who wanted to furnish a set, representing a small back room. Very sensibly, he sent out his assistant director to a shop in a small street and said, "Buy some junk." The fellow came back with £17 worth of junk and the bill was duly presented to the production manager. "But," said the production manager, "We cannot do that. It has got to go through the proper channels; take the stuff back. We will supply it." They did supply it, similar stuff: it was charged up at a figure of £365. That is a trivial story, but it illustrates the standards and the attitude of film production.

It is not irrelevant here to quote a few figures to show how costs have increased. It has been said that labour costs have gone up; they have gone up by 100 per cent. compared with prewar, excluding artists and actors. Actors' salaries have gone up 160 per cent., rents have increased 200 per cent. and overheads have increased 1,100 per cent. I mention that because there has been so much clamour about increased wages, but those are the least of the mounting figures. I was very glad to hear my right hon. Friend say that he would do something—though I do not know what—to curb extravagance in the industry.

Now this, of course, is a producers' Bill. It is none the worse for that. Personally, I always tend to have a prejudice in favour of the man who makes things rather than the man who sells things, and it is usually the former who gets the thin end of the stick. So long as production remains the poor relation of exhibition, it is an unhealthy situation, because it is worth remembering that, although a poor relation can sometimes cut a dash, he cannot really flourish. It is also worth remembering that it is production and not exhibition which saves us dollars. So, although this Bill is very small and, my right hon. Friend will agree, not a radical nor a fundamental Bill, it is in the right direction.

But the most important thing that has happened this afternoon is the announcement by the President of the Board of Trade that he is resolved to establish a commission of inquiry. That completely overshadows the importance of this Bill, and it also indicates that he appreciates that, although the prestige of British films has grown enormously in recent years, fundamentally the situation in the film industry is unhealthy. Some remedy must be found. Unlike my hon. Friend the Member for Barnet, I say quite unequivocally that I do not believe that wholesale nationalisation is the remedy. Nationalisation is not the only weapon in the Socialist armoury. It is a poor doctor who applies the same remedy for every disease. The nationalisation of the coal mines may, and indeed has, helped to secure and promote freedom from want, but the nationalisation of the film industry cannot help to secure freedom of speech. Freedom, where means of expression are concerned, is the overriding consideration. I would like also to remind hon. Members opposite that freedom of this kind cannot be guaranteed by law alone. There must be the requisite economic organisation. The freedom of the novelist is guaranteed not merely by the law but by the fact that there are 200 alternative publishers.

Mr. Osborne (Louth)

That is good capitalism.

Mr. Levy

The hon. Gentleman will not be so happy in a minute. The law could not protect the writer if there were only one publisher. So I say the condition of freedom of expression is really a multiple market. And that is precisely what we have not got in the film industry. There is a comparable situation in regard to the Press. The freedom of the journalist to say what he wants is only guaranteed by a multiplicity of newspapers, and every contraction of the market is a threat to freedom. That is why hon. Members on this side of the House clamoured, quite rightly, for a commission of inquiry into the Press, because there were undisputable signs of a contraction of the market. If the new-found devotion to liberty which has been displayed by hon. Members opposite—

Mr. O. Lyttelton

New-found!

Mr. Levy

I used the phrase "newfound" advisedly because if the devotion had been deep-rooted and genuine hon. Members opposite would have joined in the clamour for a commission of inquiry. But I want to be quite fair and I was very glad to note that the flavour of the speech of the right hon. Member for Aldershot showed that his mind was not closed to the dangers of the monopolistic situation which exists at present in the film industry.

Mr. Walter Fletcher (Bury)

Could the hon. Gentleman say what he means by the word "monopolistic"? Surely, the essence of that word is "mono" which means "one."

Mr. Levy

That is a pedantic correction which I will certainly accept. What I mean is that it is virtually true that you cannot produce, write, direct or act in a film without the consent of Mr. Arthur Rank or Sir Philip Warter. I submit that it is not an exaggeration to describe that as a monopolistic situation.

Mr. Collins (Taunton)

Does my hon. Friend say that there would be likely to be more freedom of speech under a films corporation similar to the B.B.C. than there would be under Mr. Arthur Rank or Sir Philip Warter?

Mr. Levy

I certainly believe that if monopoly were unavoidable the more democratic form of it is a national monopoly, because any Government is subject to some influence, whereas the private monopolist, though theoretically subject to the influence of shareholders, is in fact nothing of the kind, as we have recently noticed.

There is a second danger. Not only is there danger to freedom in the present situation, but there is also danger to the very existence of British film production. So long as British film production depends for its finance on the will of the financial monopolist operating the exhibition end of the industry, it is in a precarious situation. If it is more profitable for the monopolist to import films than to produce films, then production is in danger. If the monopolist exhausts his resources, for example, by buying cinemas abroad at the top of the market, or by attempting to gatecrash into the American market and overspending in the process, or by too extravagant production at home, or by astronomical overheads and expense accounts, or by any other method—the production end of the industry is immediately in danger. Does anybody doubt that something of the kind has been happening now? Is there any other explanation of the fact which my hon. Friend mentioned that here, at this moment, when there is likely to be more British screen time available than at any other period in our history, nearly one-third of the studio space in this country is empty?

Dr. Taylor

If the hon. Member will permit me, that is very largely American studio space or American-controlled studio space which is empty.

Mr. Levy

It is only partly so. I could give the right hon. Gentleman figures, but it would be rather long and tedious. At a matter of fact, of the American-owned studios in this country only 15 per cent. are owned by companies outside the A.B.C., which for this purpose I am not regarding as American. That is a very small percentage because that American block in itself is less than 40 per cent. of the total.

Dr. Taylor

I think the hon. Gentleman is wrong. I can name eight stages straight off.

Mr. Levy

That is still only 15 per cent. It is very small. What I am trying to establish is that our twin problem is first how to create freedom for the film-maker and, secondly, how to make the very existence of the film industry no longer dependent on the financial prudence or imprudence of one or two men. The crux of the matter is that the key cinemas are in the hands of two organisations and without access to those cinemas no producer can get his money back. It is exactly the same situation as would exist if there were only two book publishers. You have only to state it to see how shocking the situation really is.

Now, unfortunately, to produce a film requires about a quarter of a million pounds. To write a book requires only sufficient capital for the writer to live and to buy pencil and paper. That is the great advantage of writing a book over making films, because it is a poor artist who is not prepared to gamble his time or even forego a meal for the price of pencil and paper. But where in this world is one going to get £250,000? One can get it at present only by enlisting a guarantee in advance from the cinemas.

The more one examines the problem, surely, the more abundantly clear it becomes that the only solution is somehow or other to create a multiple market; and that, in turn, can only be done by tackling the heart of the problem. We have got to increase the number of circuits and diffuse the ownership. There should be not merely two circuits—which is, in effect, all there are now—but there must be four or five, This proposal has been embodied in a scheme drawn up by Members of this House in Committee, but I will not elaborate that because it would be one of the schemes that the new Commission of Inquiry will inevitably examine: and as you, Mr. Speaker, are becoming impatient, I will leave it with my recommendation in their hands.

6.36 p.m.

Colonel Gomme-Duncan (Perth and Kinross, Perth)

I am delighted to follow the hon. Member for Eton and Slough (Mr. Levy), with his wholesale renunciation of Socialist precepts. I cannot help feeling that gradually it is dawning on him and his friends on the other side that this does not apply only to the film industry, but to any other industry which is to be efficiently run—which I can well believe Members opposite have tried to prevent hitherto, with this exception. It still remains fundamentally a principle of the Socialists that the means of production, distribution and exchange shall be in public hands. If so, how do they leave out the film industry?

Mr. Levy

I would like to point out that I made a distinction which is important for Socialists and for non-Socialists—that is, the distinction between industries which concern means of expression and industries which do not.

Colonel Gomme-Duncan

I am very interested to hear that, in which case I expect the Labour Party will have an addition in its programme marked with an asterisk which says "With the exception of the film industry." At the moment, it has not that addition and, therefore, there in no doubt that the dawn is at last breaking in their hitherto very dark forest. I expect the hon. Member for West Fife (Mr. Gallacher) would not even agree to the film industry being under this capitalist system. So far as I can remember, one hon. Member also said there was a Marxist influence in the film industry and he hoped there would continue to be. I can only ask which branch of the Marx family he was referring to.

Dr. Taylor

I am afraid the hon. Member is mistaken. I did not say a Marxist influence. I was illustrating a Marxist hypothesis.

Colonel Gomme-Duncan

Would the hon. Gentleman tell us which Marx he means? Is it the Marx Brothers, or that silly old man Karl Marx? However, I will leave that at the moment. There are two points in a serious vein to which I want to draw the attention of the House. One has already been mentioned. It is the question of the Films Council. I am frankly disturbed about that and I think there is an undue balance proposed in favour of the production side. The hon. Member for Eton and Slough gave some extremely interesting figures on money and the exhibition side, and the production side very often goes a bit thin, but I feel there is, as at present proposed in this Bill, an undue weight of representation on this council in favour of the producer.

Mr. Gallacher

Does not the hon. Member agree that really the undue balance in the Council is the fact that there are only two Scottish representatives? Film exhibition in Scotland is a different proposition from exhibition in England.

Colonel Gomme-Duncan

If the hon. Gentleman will leave me a moment, he can rest assured that I will not let his point go by without saying something about it. I ask the Minister to give some assurance that this actual balance, as set out in the Bill, as between production and exhibition is not final. I hope it is not final. I understand that the Films Council is for the purpose of advising the Board of Trade on matters appertaining to the carrying out of whatever films Act may be in operation at any time. I understand that in advance of each quota year they decide what, in their opinion, should be the percentage of British films to be imposed—if I may use that word—upon the exhibitors. At the end of a quota year, if an exhibitor has been unable to fulfil his quota requirements, the Council recommends whether or not that exhibitor should be prosecuted. I think I am right in saying that.

That seems to emphasise very clearly the necessity for tremendous care being taken in the representation of the different interests on a council which has these powers. I think it is a matter of high principle. In fact, it is the big principle inherent in the Bill that fully adequate representation of both sides of the industry, and particularly of the exhibitors' side, should be guaranteed on the Council. I say "particularly of the exhibitors' side" because, after all, whatever may be said about the other side, it is the exhibitors' side that produces the money; and it is the public which, we must remember, ultimately provides the money for the whole industry. I hope that we shall have an assurance on this matter at some stage of our consideration of this Bill.

Clause 10 lays down that Northern Ireland is exempt from the operations of the Bill, and I presume, therefore, that we can take it for granted that Scotland is not exempt. My hon. and gallant Friend the Member for Argyll {Major McCallum) has drawn attention to this point, and the hon. Member for Eye (Mr. Granville) from far away Suffolk has given a ray of hope to our Scottish hearts, by saying he would encourage us in all possible ways to secure a Scottish Films Council. I should like to know, if the Board of Trade is dependent upon the Films Council for advice on all matters affecting the film industry, why it is they can do without a Council advising them on Scottish interests and, more particularly, Scottish tastes and opinions concerning this most important industry. It is no good pretending that representation on an English Films Council covers our Scottish interests. It does not. One is not being parochial in saying so.

Many of the English pictures which are sent to Scotland are totally unsuited to Scotland. That does not mean to say that they may not be very good and suitable for some parts of England. We have had a most deplorable series over the years of so-called Scottish films. Never has my Scottish soul been rent as it has been when watching some of my ancestors—some of my fellow countrymen's ancestors, at least—as they were supposed to have been, and doing things they were supposed to have done, according to English producers and American producers. One case that I felt very deeply was that of a film which had for its sub-title, "A History of the Famous Black Watch." That particular film started off at the date 3rd August, 1914, in the evening, and showed the officers of the First Battalion of the Black Watch in a mess which was a cross between the Albert Hall and a Lyons' Corner House. They were sitting at dinner, and in came the entire pipe band—not just a few pipers, but the bass drum and all the side drums as well; and they bowled round that table in a pandemonium that not even the Black Watch could stand for long. That film went all over the world as a history of the famous Black Watch —and the rest of the film was exactly on the same lines as those of the opening scene.

Mr. Gallacher

It was what we might call "rank."

Colonel Gomme-Duncan

Really, it was before the present Rank system. We had another film, "Mary, Queen of Scots," on which tremendous energy was expended, but nothing much else. It showed her, after she had had her usual troubles with the lords of her Kingdom, putting her hands on the side of her throne and saying, "My lords, I am through." I do suggest that, whatever our views on the great disputes over that great lady may be, it is a little hard that those words should have been put into her mouth as being her final decision to the assembled lords of her Kingdom. We have later instances than that, and one in course of preparation. It all points most distinctly to the vital necessity of having a Scottish Films Council to advise on the proper spirit of Scottish films that are sent out to the world as being representative of Scottish life and history.

Mr. Gallacher

And Scottish production.

Colonel Gomme-Duncan

And Scottish production. There should be a Films Council for Scotland to advise the Board of Trade and the right hon. Gentleman its President, for he is the one who has to decide. I want to emphasise this point. If, at the end of a quota year, a Scottish exhibitor is found not to have fulfilled his quota, he must submit his case for consideration to the English Films Council. His inability to fulfil the quota may have been due to the fact that his audiences, whom he had to please, would not take films included in that quota. The English Council, however, presumably sits in judgment on that Scottish exhibitor, and recommends to the President of the Board of Trade whether or not that exhibitor should be prosecuted. With a council heavily overloaded with Englishmen, what justice is likely for a Scottish exhibitor, who, very likely, failed through no fault of his own to fulfil the quota, the reason for his failure being that his public would not take the stuff? Yet, a Scottish exhibitor may be arraigned before this English body, and may be recommended for prosecution. That points very clearly to the need for a change, and I hope that at a later stage, at least, this matter will be looked into.

Speaking generally, the Bill is worthy of support, and will be more so if these few points are attended to. Of course, there will be some Committee points as well. Anything which will ensure an improvement in the quality of films which are put out to the people of our country, whether in Scotland or in England, is to be supported. It is absolutely essential that, if there is a shortage of quantity—that may be necessary on financial grounds, and on others which I do not understand—we should never let down on the quality, because the amount of drivel which we have to watch in a cinema before we can see the good picture we have gone to see is almost enough to make one get up and walk out without seeing any more of the programme at all. Whatever happens I hope that the President of the Board of Trade will give instructions to the Films Council that they must never let down on the question of quality. Any contribution that may be made by this House or by a Committee of the House towards ensuring the maintenance of quality will have most important results.

6.47 p.m.

Mr. Mallalieu (Huddersfield)

The hon. and gallant Member for Perth (Colonel Gomme-Duncan) began his speech with some amusing play about the Black Watch, and also about the speech of my hon. Friend the Member for Eton and Slough (Mr. Levy), who said that, in his view, the film industry was not a fit subject for nationalisation. The hon. and gallant Gentleman deduced from that that my hon. Friend must feel the same about other industries. I would say to the hon. and gallant Gentleman that there really is a difference between material things and thing spiritual, that there is a difference between a brick, on the one hand, and an idea, on the other. One distinction is that ideas are things which are held on this side of the House, and bricks are things which are dropped by Members on the other. Whatever one's views about the correct way of dealing with material things, it is certainly true that anything to do with ideas is not a subject for monopoly, whether that monopoly be in private hands or whether it be in public hands.

We are, however, faced with the difficulty that the organisation of the film industry today, if it is to be efficient, necessitates this vertical combination running all the way through, so that the producer can have a link-up with a circuit. That being so, I believe that the proposals which were referred to by my hon. Friend the Member for Eton and Slough, and which were put to the Board of Trade by a group of Members of the Labour Party, are the most sensible ones for dealing with the present situation in the film industry that have yet appeared.

I was particularly delighted that this afternoon the President of the Board of Trade announced his intention to have a working party and a full-scale inquiry into the industry, because that would present us with yet another chance of putting forward our particular views. Our views were, in essence, that we should have, not just two circuits, but at least four large circuits, two in private hands and independent of each other, and the other two in public hands, each of the public corporations being independent of the other and of the Government. We believe that in that way it would be possible to secure freedom in the sense that we on this side of the House mean; freedom for the fullest possible expression of ideas, not the freedom for exploitation and suppression, which we are tending to get in the film industry at present. We shall be able to get the type of freedom we require in no other way.

Everybody who has spoken so far has given praise to the President of the Board of Trade for his extremely lucid exposition this afternoon, and, indeed, for the content of his Bill. I should like to add my congratulations on both those scores. However, there are, of course, a number of questions about which I wish to ask him in regard to the Bill—points on which I am genuinely not very clear.

I am delighted to see in the Bill an attempt to introduce a provision to beat the old practice of putting in the quota time at ten o'clock in the morning by showing a film to an audience of charladies engaged in cleaning the cinema. The Bill provides, at the moment, that for a film to count for quota purposes it must be shown at least once—which means once a day, I imagine—between the hours of five o'clock in the afternoon and ten o'clock at night. That is good as far as it goes, but there still seems to be a loophole. It still seems possible for anybody who wanted to get round the quota provisions to show a film only on Mondays, Tuesdays and Wednesdays, and not on Thursdays, Fridays, Saturdays or Sundays at all. I believe it is possible for him to do that and still have the film count for quota purposes. Most exhibitors will agree that the most profitable days of the week, the days on which the takings are the largest, are the last days of the week, Thursdays, Fridays, Saturdays, and probably Sundays. I should like an assurance from the President, or from the Parliamentary Secretary when he replies, that there is some provision whereby British films can be assured of a showing not only between five o'clock and ten o'clock, but also on the best days of the week.

I am not yet quite satisfied—because I have not the information which would allow me to make up my mind—about the exemption from quota obligations of the smaller cinemas, the £100 a week and below types of cinema. The President himself said that there were not very many of them, and that the work of administering the quota would not be worth the takings that would come in. That may be so, but before I am prepared to be convinced on that subject I should rather like to see the figures, and I hope the President of the Board of Trade will produce figures to justify that, if not tonight then during Committee. The more normal objections to imposing a quota on these small cinemas are that they cannot compete with the big circuits to get a British film in time.

I consider those sorts of objections to be quite invalid. In the first place, they have four years grace in which to get a particular film; a film will count for quota purposes if it is not more than four years old, so there is plenty of time to get a particular film if they want to. Further, a great many—I should say the majority—of the small cinemas do not suffer competition of any sort or kind. They are usually the one cinema in the village or small town, and there is no danger that they will have to compete with large and powerful interests in getting a film. Finally, of course, there is always the provision that if they genuinely cannot get hold of a British film they can be specially exempted by the Board of Trade. That provision is already in the Bill.

There are one or two points, too, about the six films proposal. I cannot make out whether it is six, 12, or 18 which the President of the Board of Trade will have the right to insist on being shown. Is it six? It is a point on which there seems to be tremendous argument on these benches already. I should be glad if the President could clear up whether it is six, 12 or 18. Let us call it six for the moment. Why are these six films to get a showing only in the large circuits? If the idea is a good one, why does not the President carry it on to cover the vast majority of cinemas? If it is a good thing for six selected films to be shown in the large circuits, why should it be a bad thing for them to be shown in the smaller circuits, or even in individual cinemas? If an idea is good, I do not see why it should not be carried out wholesale right through the industry.

I am seriously bothered, however, about the whole idea, although the intention is extremely good. The intention, of course, is to give a helping hand to the independent producers; but I very much doubt whether that particular proposal can really give very much help at all. The time when the independent producer needs help is before he makes his film, and unless he can be reasonably certain of an assured market he probably will not make the film at all, because he will not get the finance. In my opinion, if he is to be helped it is not very much use this selection board merely going to a cinema to see the finished product. In order to decide whether they will back a film they must look at the idea only, before the film is made, and decide from the idea whether the proposed film is likely to be a good one. One can imagine that that is an extremely hazardous undertaking, but unless the selection is made at that stage I believe this six films proposal will not be particularly effective in helping the men it is designed to help.

The last point I wish to make is one which I was glad the hon. Member for Eye (Mr. Granville) touched on earlier in the Debate. We have heard a great deal from both sides of the House this afternoon about the freedom of the industry. Some hon. Members have said they do not want producers to be dominated by the people who control large circuits. Others have said they do not want the film industry dominated by the Government. Yet others have said they do not want the film industry dominated by Hollywood. I am very much afraid, even if we did all the various things that have been suggested in order to safeguard the freedom of the industry or the various sections of it, that freedom would still be in danger unless we did something else along the lines referred to by the hon. Member for Eye.

The greatest single menace to the independence of the British film industry at the present time seems to me to be the fact that it is, I believe, wholly dependent upon the United States for one or two absolutely essential pieces of equipment or material. I believe that every single inch of stock, of base—that is, the raw material—which goes into the making of a British film comes from the United States. It certainly did until quite recently. If it is still true that any large proportion of that raw material comes from the United States, then if the United States wanted to be awkward at any time—and it looks as if they might want to be awkward in the near future—they could switch off British film production almost overnight, or as soon as our supplies of stock had worn out. What applies to the question of base or stock applied also for a very long time to lenses, cameras, and to many other aspects of equipment. I should like to hear from the President, or from the Parliamentary Secretary in winding up, a little of what has been done to try to relieve the British film industry of this dangerous dependence upon the United States, because unless that position is rectified, and rectified soon, it will be useless for us to stand up in this House and ask for a free and unfettered British film industry.

7.0 p.m.

Mr. Osborne (Louth)

The hon. Member for Huddersfield (Mr. Mallalieu) expressed the fear that the British film industry was rather in the hands of the United States for its supplies. He quoted lenses as an example, and suggested that we could not carry on unless we got our supply of lenses from America. So far as I know, the best lenses used in Hollywood are made in Leicester, and something like 95 per cent. of the lenses used in America come from a very fine firm in my city. I hope that his other information is more reliable than that.

If I understood the Minister correctly, he said that if there were no settlement with Hollywood, the cinema habits of the people of this country would have to be seriously altered. It is only fair to the people of this country that they should know exactly what he meant by that. He told us that at the present time we had two films per night, and a double change each week. He went on to say that at the present time British films occupied only one-fifth of the showing time.

I want to make a special plea on behalf of the film-goers that every effort should be made by the Government to come to terms with Hollywood, because if there is no settlement arrived at, and if what the Minister envisaged happens, four cinemas out of five will have to close down, or cinemas will be showing only one night in every five. I wonder if Members realise what would be the reaction of factory workers to the closing down of cinemas to that extent. I think it would be as serious, if not more serious, than if all the tobacconists shops were closed, or even the "pubs." If there is a breakdown involving the closing of our cinemas, there will be some very serious social consequences. Therefore, I ask the Parliamentary Secretary to tell us what was meant by the President of the Board of Trade when he spoke of altering the habits of the cinema-goers if there is no settlement.

We were told that if the people of this country were asked whether they would prefer food to films, they would choose food every time. I agree, but why should it be a question of food or films? Why cannot it be food and films? The hon. Member for West Nottingham (Mr. O'Brien), who speaks with great knowledge of this industry, took up this point, and said that the cost of American films represents two-thirds of a pennyworth of flour per person per week, and that if every film-goer were asked if he were prepared to go without that two-thirds of a penny of flour every week, he would elect to have films. The hon. Member put the matter in its true perspective. When we are told that the problem is this £17 million pounds of rent which goes to America each year, we ought to look at the matter in this way. In the White Paper of 1947, it was stated by the Government that our total national income was £8,200 million per year and of that amount, this £17 million represents only one five-hundredth part. To bring it down to terms which the wage-earner can understand, it means that a man working a 40-hour week would have to work only five minutes extra per week to get all the films he wanted.

I think that we are letting this problem get out of all proportion. I am glad to see on the hoardings a letter signed by the Prime Minister asking for a 10 per cent. increase in production. I wish that he had said that two years ago. If we achieved that 10 per cent. extra, we should have a national increase of income of £820 million, and then there would be no question of cutting out films, basic petrol, or any of the other desirable things this country needs so badly. The hon. Member for Barnet (Dr. Taylor), who spoke with great authority on the production side, said that there were about four tiers of producing studios. He told us that the third tier, which was controlled solely by British interests, produced films of rather an inferior quality. These, he said, were not the sort of films which could be shown in London, but they were, of course, shown in the provinces and in the North of England. Being a provincial myself, and representing a provincial constituency, I consider that to be a bit thick. It smacks a little of the attitude of the Lord President of the Council to people in the provinces generally, with the Londoner always looking down on the provincial. I say that this is not good enough, and it should be realised that those of us who are proud to come from the provinces do not give an inch to people who live in London. We were told that people in small villages and little market towns had to take what is sent them. It should be remembered that these people, owing to the restrictions in travel and on petrol, cannot go into the bigger towns to see the films which are being shown there, and, therefore, I make a plea to the industry and to the Government to see to it that the provinces get as good a show as the people in London.

7.8 p.m.

Mr. Reeves (Greenwich)

I am sure that the reception this Bill has received must be most gratifying to the President of the Board of Trade. On that account, it is likely that the spotlight of public attention will not be so much on the Bill itself, but upon the extremely important pronouncements which the President of the Board of Trade has made today. I am sure that his proposal to set up a committee of inquiry into the whole working of the industry is one which will meet with general approval. We all feel that this industry is so important to the life of our people that it is essential it should be run as efficiently as possible, and to the best advantage to the nation. I sincerely hope that vigorous steps will be taken so that the committee may get on with its job as quickly as possible, because it is now that we need its recommendations.

The situation in the industry at the moment is extremely critical on account of the various circumstances which confront us at the moment. The tentative suggestion that the Government may consider providing studio space is a matter which will become more and more important in the months ahead. Studio space is one of the limiting factors in the field of film production. We need studio space more than anything else, and if we are to expand our productions so that they meet the ideal of the President, namely, that they should occupy 50 per cent. of screen time we must do something very quickly. The suggestion that a joint production advisory council should be established is a proposal which will create a great deal of interest. I think it is agreed on all sides that every country wants to show its own films, and, not only that, but, if possible, wants to show them abroad. In that respect we have been very backward. The fact that we have supplied only 20 per cent. of screen time with British films is an indication of how backward we are. It means that we must make a big advance. Quite apart from the crisis caused through the imposition of the 75 per cent. tax we must, for our own sake, be sure that considerably more than 20 per cent. of film time is occupied by British films.

We do not have to be anti-American in wishing to see British films on British screens. We are entitled to ask our industry to meet our needs on behalf of the British people, and as the Bill encourages British production, and guarantees an increasing measure of showing time of British films in our cinemas—because it does this—I am sure that it is a good Bill. The President has said that the rate of the quota will be on an ascending scale, and by that I presume he means that it will be something above, perhaps considerably above, the rate which was laid down in the last Act. There is no doubt that the film industry, unlike any other industry, except, perhaps, the Press and the radio, has an enormous effect on people's minds. It is always expressing ideas and influencing public opinion. Commissions which have been set up have proved beyond a peradventure, that people learn more quickly through the eye than through any other medium. It therefore follows that the Government cannot help being interested in the film industry, perhaps more than any other industry.

I was reading a very interesting leading article in "The Times" only this morning, which reproduced a statement made by the Films Council some time ago. It said that the possibilities of the film were vast as a vehicle of expression, of national life, ideals, traditions, and as an instrument of propaganda. No one can doubt that it is a most important medium. If that is true then, in a sense, the provisions of the Bill do not go far enough, quite apart from the question of nationalisation. During the war, the Government recognised the potency of the film as being of extreme value in the field of influencing the minds of the people at home, carrying British prestige abroad, and influencing public opinion abroad. They spent many millions of pounds on the production of films. They created new film-producing organisations, such as the Crown Film Unit, which undertook some very important work, and produced some first-class documentary feature films which some of us have seen. The Government also called into being the Colonial Film Unit, which was quite a new departure. The Army, Navy, and Air Force also had their own productive organisations making films, because it was so urgently felt that this work should have the attention of the Government at that time.

Not only that, but the Government literally kept going a number of documentary producing organisations which were working almost exclusively for the Ministry of Information, and a large number of documentary films were produced for showing in our own cinemas and for sending abroad. In spite of the artistic objections which have been raised against the Government having a hand in the production of films, the Government were actually responsible for the production and financing of two feature films. One was "49th Parallel," which was a great success and out of which, I am told on reliable authority, they made money as a result of their investment, and the other was "The Lion has Wings." It is important that the Government should take a direct interest in the industry, that they should give it every encouragement. If the industry is failing, the Government must meet the deficiency, no matter in which field that deficiency occurs. We must remember in and out of season that only 20 per cent. of screen time is now being occupied by British films.

I want to say, with great respect to Mr. Rank and all those associated with him, that this situation proves that the industry has failed up to a point. It is true that remarkable progress has been made during the last 15 years, more especially in the last 10 years. A great deal of the credit for that is due to Mr. Rank, and I want to pay tribute to his enthusiasm for the industry and for the first-class work which has been done by his organisation.

Earl Winterton

I am sure that in fairness to British producers the hon. Member will recall that during the war it was extremely difficult for British production to be carried on in this country in the way in which it could be carried on in other countries.

Mr. Reeves

During that time I was associated with the industry and I realise, of course, the severe handicaps under which it had to work. It is not so much that the industry failed during the last 10 years as that it failed before that time.

I want to say a word or two now about our documentary film industry, which is the Cinderella of the film industry. In spite of the fact that we all say that our documentaries are the finest in the world, and that we praise them up hill and down dale, they are not being supported. They are not being shown in our cinemas to any great extent. The exhibitor has the feeling that the public resents the documentary film. I think such exhibitors are quite wrong. When the public have the opportunity of seeing documentary films, they always appreciate them. In my own experience, I have found that they enjoy seeing the type of documentary film produced in this country. We have to encourage that side of the industry. Documentary films rank for quota, but sometimes you cannot give them away, let alone sell them, because the exhibitor does not want them. I think that we ought to insist that a certain percentage of the takings should be allocated to documentary films, because they are so characteristically British. It is a form of art which we ought to encourage. I would like the President of the Board of Trade to give consideration to that suggestion.

Colonel Dower (Penrith and Cockermouth)

Does the hon. Gentleman think that he knows what the public want, or that the public should be told what they want?

Mr. Reeves

I think that the trouble is that a kind of habit has grown up. The public have the habit of going to the cinema to see two feature films. Most of the cinemas have two-feature film programmes. An exhibitor is afraid to cut out the second feature and substitute a series of "shorts" or a longer documentary feature film. I think that is the difficulty. Where a supporting programme of short films has been tried, it has been, I understand, successful.

I think that the President of the Board of Trade will have to use with a considerable amount of care the power he proposes taking to regulate the showing of sub-standard films. Hitherto, substandard films have not been included in the Acts of Parliament, and those who work with this medium have had complete freedom to show them under any given circumstances. I feel that any regulations which are made ought not to cover the exhibition of scientific, educational, or any type of film outside the commercial cinema, and by the commercial cinema, I mean not only the cinemas where the standard films are shown, but also the units that go about the country showing feature films for profit-making purposes. I am in agreement that the regulations should apply to sub-standard films in that respect, but I would not like to see them applied in any other way.

Finally, no proposals have been included in the Bill to regulate the children's film clubs. Certain film organisations are doing a first-class piece of work, and spending a lot of money for the purpose of showing children specialised films on Saturday mornings. Only a few days ago, I went to see that delightful film called "Bush Christmas," which was made specifically for children. The Rank organisation allocate very large sums of money for the production of specialised children's films. This thing is growing, and all manner of people are taking an interest in it. The level of quality differs from organisation to organisation, and sometimes the children are shown exactly the same programmes as are shown in the ordinary cinemas. I think that this thing has to be properly regulated, and I would like the Government to interest themselves in it. It is a matter of supreme educational value, and I would like the President of the Board of Trade to give it consideration.

7.26 p.m.

Mr. Peter Roberts (Sheffield, Ecclesall)

I should not have risen had it not been for the interesting remarks made by the hon. Member for Eton and Slough (Mr. Levy) with regard to monopoly. Resulting from that, we had a definition, I think, from an hon. Member who followed him, of the principle of demarcation of nationalisation. He said that the Socialist Party would not nationalise ideas, but they would nationalise material things. He seemed to forget—I think that this point must be made—that production is one long battle of ideas. It is the whole essence of production that the man with the better ideas gets on, and the man without ideas does not. We on this side of the House should not allow to go by a statement of Socialist principles based on such a misconception. I believe that we are beginning to see dawning on the other side of the House an appreciation of some of the great dangers of monopoly. It is on that matter that I wish to address the House for a very few minutes.

I think there is danger in the cinema industry of this country suffering from monopoly. In my opinion, the organisaton of Mr. Rank and others, in the long run, will not have done good service to this country, because I consider that they have canalised initiative and stifled the independent producer. If we look to France, Czechoslovakia and other countries, we find that the independent producer is really leading the progress of the cinema industry. I consider that the Government, because of the monopoly build-up in this country, is not in as strong a position as it might be to deal with American competition. I would point out to the Parliamentary Secretary that it is a bad thing to start a battle when we are not on our own ground and certain of our own defences Because of the stifling of the independent producer and the monopolistic attitude, I do not consider that the cinema industry of this country is capable of stepping into the breach quickly enough.

Mr. O'Brien

Would the hon. Gentleman develop the point about stifling and monopoly, and his suggestion that the Rank monopoly would, in the long run, stifle British production? Can he give the alternative?

Mr. Roberts

I was coming to that. The alternative lies in the actual financing and producing of films. One should not have to go to one monopolistic cinema organisation for the financing of films; films should be financed by other organisations.

Earl Winterton

Will my hon. Friend explain exactly what he means by that? What is the one monopolistic organisation that we have to go to? There are a number of organisations.

Mr. Roberts

There are a number of big organisations, but once the film is produced it has to be shown, and I am referring more to the distributive side. I do not know whether the noble Lord has experience of film production, but, if he has, he will have found that to invest any serious amount of money in it he has to be certain of showing the film once it is produced, and that is where monopoly comes in.

I want to come back to the more constructive point which arises out of that. When a film has been produced, goes before the various councils which are to be set up under this Bill and gets the approval of those councils, I consider the Government should enter into some sort of arrangement whereby such films, although they may have been produced under the auspices of a monopolistic organisation, should be able to be shown in the cinemas of the country. At the present moment there is likely to be a ban on these films. It is the breaking down of monopolies, whether the films, the B.B.C. or any monopoly of ideas, in which I am interested. The independent producer should be able to show his film whether or not he is in the good graces of one big distributive organisation or another. It is along those lines that the Council may do beneficial work. Under the auspices of this Council, these films from independent producers will be shown. It was to speak on the subject of monopoly that I got up. I dislike monopoly whether it is in coal, films or transport. I will fight monopoly to the best of my power. I consider it is the job of the Government to help the independent producer and to give the lead which is necessary in this case.

7.31 p.m.

Mr. Scott-Elliot (Accrington)

I hope the hon. Member for Ecclesall (Mr. Roberts) will forgive me if I do not follow him too closely, although I do not dissent altogether from what he was saying. There is only one point I should like to make in regard to what he said and it is that in any event the producer has to make a film before it can be decided whether that film is a good proposition. I know it can also be said that at one time there was an arrangement between Mr. Rank and Sir Alexander Korda that in view of the outstanding merit of Sir Alexander Korda's films, Mr. Rank would take so many of these films each year. That was an exceptional case. Any ordinary producer would have to wait until a number of circuits undertook to show his film in order to be sure of a release for it.

If I had to describe this Bill in two or three words, I would say that it was a sensible but not very important Bill. Indeed, I go further and say that the announcement by the President of the Board of Trade this afternoon in regard to the setting up of a commission to inquire into the working of this highly complicated industry is a considerably more important matter than the introduction of this Bill. I want to turn to the Bill itself, and it seems to me that we have got to remember certain points. The first is that the film industry in this country differs from that in the United States in that production and exhibition in this country are more integrated than they are over there.

Secondly, arising out of this and certain other circumstances, there is a certain tendency to monopoly to which attention was drawn by a report published some two and a half years ago by a subcommittee of the Films Council. My third proposition is that today British audiences appreciate British films to a greater degree than at any time in the past. I believe I am right in saying that of the ten films which last year were rated as the best, five were British films, which is a considerable achievement having regard to the relative output of American films compared with our own. My final proposition is that because of circumstances over which the industry has no control, it finds itself in a period of transition.

I come now to the special duty which the Government have been obliged to impose. I recognise it was absolutely essential because in our present economic circumstances we could not afford to import American films at the rate we were doing. I believe I am right in saying that the effect of the duty is not being felt to the extent that it will be later on owing to the fact that a considerable number of old American films are being released, and these films are not subject to the duty. In the intervening period I hope that there will be an agreement between us and the Americans on this question, because such an agreement would seem to me to be to our mutual interest. The average American feature film depends to a great extent for its profits upon the money that it earns overseas. It is generally agreed that the British market is by far the largest market. In other words, the largest amount of the profit on the average American feature film is likely to be made by showing in this country.

Similarly the British feature film needs to earn overseas money if it is going to be a high-class film and achieve a certain degree of distinction. I do not want to be misunderstood when I say that. An expensive film is not necessarily a good film, and a modestly priced film is not necessarily a bad film. To continue my argument, it seems to me to be absolutely in our interests as well as in the interests of the Americans that we should come to some agreement. They should agree to what they have never agreed before, and that is to take a limited num- ber of British feature films for their circuits. Mr. Rank has shown films in America, but never to my knowledge on the circuits. Any showing he has arranged in America has been by special arrangement.

Until we get British films being regularly shown on the circuits, we shall fail in the earning of the amount of dollars which we need to earn if we are going to get a proper return from the film industry. Equally the Americans could send us a good many more films for the same money owing to the fact that the British market is a considerably smaller market than the American market. I believe it is fair to say that the American market is four times the size of our own. Therefore, it is reasonable that the Americans should send us a great many more films than we send them.

I turn to the question of British cinemas closing down. I do not agree with the hon. Member for Louth (Mr. Osborne), because I think that the whole question was being overdone. I will not say that some of the smaller cinemas may not have to close down, but I do not believe that it is going to happen for some considerable time. Cinemas will go to any length in order to avoid closing down, and, if necessary, they might even go so far as to provide "live" turns. Exhibition in this country is very nearly as wasteful as is production. There is no need for two programmes every week, and there is no need for the double-feature programme. If single-feature programmes were developed, it would help the production of documentary films. My hon. Friend the Member for Greenwich (Mr. Reeves) made reference to this subject, and I think it is particularly important that we should develop the British documentary films in which this country is pre-eminent. Documentary films do not at present bring in the amount of money that they ought to bring in.

Let us now consider what increase in production is possible. When giving a Press interview the other day, the President of the Board of Trade said that this year we should be able to make 75 feature films. I hope we shall be able to step up that figure as the years go on and increase the production of studio space, which is the limiting factor. We must aim ultimately at 200 feature films a year. We must remember the very great importance of what can be called "second feature" films. They are tremendously important in an expanding industry, since they are to be the training ground of technicians who will ultimately come into the making of British feature films.

To turn to the details of the Bill, I approve of the abolition of the renters' quota. Despite the very high level of the Debate it has not been made clear that the renters' quota has tended to encourage the production of inferior types of films, which have done no good to our industry. There is no minimum figure in the Bill for the exhibitors' quota but no doubt that is all right provided a clear assurance is given when the first order is made laying down what the quota shall be that that is the minimum. I am glad to see that there is a new definition of a feature film—it is a very good definition—and that the whole question of quota no longer depends on the cost of a film. I cannot emphasise too strongly that it is possible to make films of a very high order which do not necessarily cost a great deal of money. I am sure that a special quota is desirable, and I do not see why the big interests should not shoulder it. I do not regard it as a burden. If only six feature films made by independents are to be chosen every year I do not see why they should not bring in good box office returns.

There is also the question of the monopoly. It is right to take power to forbid additions to the existing circuits. As the hon. Member for Huddersfield (Mr. Mallalieu) said, we want more circuits. That will probably grow of its own. I believe I am right in saying that in the period of the slump in 1931 both Gaumont British and A.B.C. built up their big circuits. It may be that a rather more difficult time will come to the film industry—every industry has its ups and downs—and, provided there is a ceiling on the existing circuits, that will be the time for one or two other progressive individuals to buiild up larger circuits by means of amalgamation.

Like other hon. Members, I am not entirely happy about the Films Council. The hon. Member for Barnet (Dr. Taylor) gave as an excuse for cutting down the number of independent members that certain of those members did not turn up at the meetings. That is not a very good answer. If they do not turn up they ought to be put off the Council and replaced by new members who have higher regard for their duties. The number should be kept at 21. I recognise the need for producers to increase their representation and I equally recognise the need for the employees, but let us keep the number at 21 and cut down the number of independents from 11 to seven instead of the steeper cut suggested.

Mr. Skeffington-Lodge

Why cut it at all?

Mr. Scott-Elliot

If the Council is kept at 25 members, it will be altogether unwieldy. I am convinced that this is a useful Bill and that the House will give it a Second Reading without a Division.

7.45 P.m.

Mr. William Shepherd (Bucklow)

The House in general will agree with what the hon. Member for Accrington (Mr. Scott-Elliot) has said about the reduction of the number of independent members of the Films Council. The President of the Board of Trade did not make out the case for, or even give the House the impression that he is convinced that, the decision he has arrived at is the right one, and I hope this matter will receive further examination in Committee. Another point with regard to the Council which is important is the extent to which representation as exhibitors, renters and producers will be accorded to what I may describe as the cartel element of the British film industry. It will be highly undesirable if we are to make this material increase in the representation of producers, renters and exhibitors and to give a great deal of it to those who represent the Rank organisation. That would be undesirable, and I should be glad if the Parliamentary Secretary would give an assurance that it is intended to encourage the independent producers and exhibitors by giving them improved representation on the Council.

The President of the Board of Trade has been very lucky today because, for his first Bill, he has introduced one which has met with the general approval of the House. Even more than that, his view on the background and the general situation obtaining in the industry has also met with the general approval of the House. As the right hon. Gentleman the Member for Aldershot (Mr. Lyttelton) said, we on this side approve in principle what His Majesty's Government have done in restricting the earnings of American films in this country. Our American friends must realise very firmly that the pattern of trade and trade principles which we observed in the years before the war is no longer possible and that we have to cut our coat according to our cloth, and they must come to a reasonable compromise with us. It is obviously a good thing that we should exchange films with America, and we must try to arrive at some compromise.

I want to say one or two words about the Rank organisation. Nobody ought to be very satisfied or secure about the position. I should say that the Rank organisation as it is has done immensely fine work for the British film industry, but that it is a potentially dangerous situation. Those people who condemn Mr. Rank surely do so only in complete ignorance of what he has done for the industry. The industry would not be in the state it is today had it not been for what he has done. What the British film industry needed in the years before the war was a man of integrity who would clear out all the doubtful elements, all the speculative elements and all the fly-by-night elements who absolutely infested the industry. Mr. Rank has given the industry tone and integrity and he has built up a group which is by no means too large. When judged by American standards, Mr. Rank's group is of moderate size, but it is sufficiently strong to give this country a bargaining ground to deal with the Americans on something like their own footing on their side.

We should not decry what Mr. Rank has done, because he has done immense good for the industry, but what we should be very careful about is that this situation is potentially dangerous. It is obviously undesirable, whether in times of scarcity or of plenty in the supply of films, that there should be so close an integration of the producer and exhibitor. The solution is not to pour scorn upon Mr. Rank but to encourage independent producers, so that Mr. Rank's position in the producing world no longer occupies the major proportion as it does today.

Government experiences with independent producers, so far as financial assistance is concerned, have been very grim. We all know what happened when we gave guarantees to independent producers to produce films some 15 years ago. Every kind of racketeering gentleman in the City of London or outside it got on to this and said, "Here is a good thing; we will get a Government guarantee, we will get the money, and clean up very soon," and in fact, they did clean up. However, I do not think those experiences, unprofitable and discouraging as they were, ought to stop the Government from pursuing the all-important task of encouraging the independent producer. We have, on the one hand, the Films Council which ought to be able to "vet" the producers, and we have also two Government corporations designed to finance industry. From their reports it would seem that these two organisations are not lending as much money as they had hoped to do. They have not found as useful and secure an outlet for their activities as was the intention when they were formed. I put it to the Government as a suggestion that we might try to utilise the services of these two corporations for the purpose of financing men of proved worth in this business. It is well worth investigating what can be done along those lines.

If we are to have sound production in this country, the cost of film production must of necessity come down. We do not want to aim at merely financing independent producers; we want to aim at getting the costs of British films to such a level that it is a proposition for independent people, by their own finances, to produce the films. In this industry one wants a constant flow of new ideas and people. We want people coming into the industry to give it new life, new ideas and new vitality. We have to get those costs down. The hon. Member for West Nottingham (Mr. O'Brien) is an official of a trade union intimately concerned with the industry, and I am sure he can do something to reduce the costs of film production in this country—

Mr. O'Brien

Does the hon. Member suggest by that remark that I should start reducing the costs by advocating reductions in the already inadequate wage scales in the industry?

Mr. Shepherd

I feel sure that the hon. Gentleman's intelligence is more keen than that. I would not suggest for one moment that one should reduce the wages, which I would not describe as inadequate, although of course, as a trade union leader, he must always do so even at the height of the inflationary boom. What I suggest is that on film sets generally, and in all the film industry, far too many people are employed in doing far too little work. We have to get the costs down to an economic level which will enable people to go into the business, develop their ideas, and start new companies and studios, because on that depends the vitality of the industry. Therefore, I hope the hon. Member for West Nottingham will play his part as a trade union leader in doing something along those lines

I hope that by the force of circumstances, over which we have little control, we shall get away from the evil of the double - feature programme which is disastrous to the film business. First it is quite impossible to manufacture the necessary volume of films of good enough quality to support two films in each cinema every week. It is impossible to get sufficient original ideas, or slants on old ideas, to inspire producers to produce the enormous number of films necessary for a double-feature programme. Therefore, we ought to go for quality rather than quantity. Secondly, the transport facilities today are so poor, and stop so relatively early in the evening that it is much better in the interests of the people themselves that the programme should not be as long as it used to be in the days when more facilities were available.

I am certain that this moment is a good one for British films. We have the writers, the technicians, a great background of literature, and all the necessary things for producing films, and we are now on the quality scale. I am sure that if we tackle this problem aright and the Government act wisely and give reasonable support to people who can do something, the British film industry will be not only satisfactory to the people of this country, but a great earner of revenue in foreign countries.

7.57 P.m.

Mr. Eric Fletcher (Islington, East)

My reason for venturing to rise after the long and interesting Debate we have had this evening, which has covered so wide a field, is merely the fact that a substantial part of my professional career happens to have been spent in advising various sections of the film industry on the construction of previous Quota Acts, sometimes producers, both American and British, sometimes technicians, sometimes cinematograph theatre owners and others. As some hon. Members may be aware, I am at present closely associated with the A.B.C. circuit, about which I gather my hon. Friend the Member for Barnet (Dr. Taylor) had some rather critical things to say when, unfortunately, I was out of the Chamber. Whatever he may have said about the A.B.C. circuit, I think it will be generally recognised that it provides the sole surviving bulwark in the industry against a complete monopoly by Mr. Rank.

Dr. Taylor

I think when my hon. Friend reads HANSARD he will find that I was really remarkably uncritical of the A.B.C. circuit.

Mr. Fletcher

I am glad to hear that, and it is what I should have imagined knowing that my hon. Friend, as an independent member of the Cinematograph Films Council has played such a prominent part in the deliberations of that Council and had some opportunity of studying the subject. I would like, first, to add my congratulations on the exhaustive way in which my right hon. and learned Friend the President of the Board of Trade opened this Debate, showing that he had mastered completely a complicated and intricate subject.

I found myself in substantial agreement with much, though not all, of what my hon. Friend the Member for West Nottingham (Mr. O'Brien) said. It is perfectly true that the trade find that this Bill is being introduced in circumstances of some unreality, because the industry at the moment is overshadowed by the uncertainty of the present deadlock on the tax situation. It is obvious to those who have listened to the Debate, and to those who are aware of the position, that the present deadlock in the negotiations between His Majesty's Government and the Americans have produced a situation which must be disastrous to the cinematograph trade in this country and, if not equally disastrous, very inconvenient to the Americans themselves. Therefore, in such a situation it is not unreasonable to expect, by a measure of good will on both sides, that a solution will be found which produces equally beneficial results for both sides. It is notable that the conditions in which the Bill is introduced assume that some such solution will be found. Without it, the Bill would be unnecessary.

I will leave the tax situation, adding my wishes to those which have already been expressed that another attempt will be made with a reasonable attitude on both sides, in order to arrive at a solution of the unfortunate deadlock. The Bill, like the Quota Act has, as its primary objective—a very laudable one—the protection of the British film industry. Statutory protection was essential to enable the British film industry to be set up on its feet at all. Its continuation is necessary to enable the industry to meet competition from America. I welcome the innovations in the Bill, as compared with the two previous Quota Acts.

One or two ambiguities have been referred to. I hope that the Parliamentary Secretary will be able to dispose of them. For example, it has been found difficult to know the precise effect of Clause 5, which imposes upon circuits the duty of showing six films per year. The three circuits will in future each be under that obligation to show six British films certified by a selection committee. That will make 18 films per year. Those films will be counted in the quota obligation of the circuits. If they have satisfied their quota obligations by booking other films, that fact will not excuse them for departing from the obligation to show six specific, selected films. All the three circuits willingly accept the obligation. For the purposes of accuracy it is important to point out, in view of the alleged hardships and grievances of independent film producers, that the provisions of the Bill do no more than to give legislative effect to the undertakings which were given by the circuits two or more years ago to the then President of the Board of Trade, the present Chancellor of the Exchequer.

It is also significant, in the bearing which it has upon the alleged grievances of the independent producers, that, during the last two years, as far as I know, when each of the circuits had voluntarily assumed an obligation to show six British films a year approved by the selection committee, no films have been submitted to the selection committee. Certainly, none has been passed by the Committee. The circuits have not been asked to honour that undertaking, which is now to be given legislative effect. That fact disposes of the grievances to which I think my hon. Friend the Member for Aston (Mr. Wyatt) referred, in a contribution to one of the weekly papers a few days ago. In that contribution my hon. Friend suggested as indicating one of the hardships of the independent producer—he has been good enough to lend me his copy of the paper—that the only hope for them has been to take a place in the queue for the few available weeks on the A.B.C. circuit. So far from that being a true statement of the position, the truth is that the A.B.C. circuit have, for a very long time been only too willing and anxious to give a showing to any independent or other British film produced in this country.

That brings me to the point which was made by my hon. Friend the Member for Barnet, when referring to the studio at Elstree belonging to the A.B.C. circuit. My hon. Friend suggested that that studio ought to have been producing films during the past two years. The fact is that, as a result of the occupation of the studio by His Majesty's Government during the war, it has been impossible to use it. The A.B.C. group have spent a very large sum of money in modernising, enlarging and re-equipping it, with a view to producing, in what I think will be one of the finest studios in the country within a few months, a series of high-class British films.

In view of the remarks made by my hon. Friend about the association between Messrs. Warner Bros. and the A.B.C. circuit, the House will probably be interested to be reminded of what has already appeared in the Press. It is that Warner Bros. have agreed to show throughout their circuit in America at least three of the films to be produced each year at the Elstree Studios.

Dr. Taylor

Can the hon. Member hold out any hope of the A.B.C. at Elstree going into production? Secondly, will that take place even if the embargo continues?

Mr. Fletcher

For the benefit of my hon. Friend I will say that I was at Elstree on Monday and that very considerable progress is being made in the extensive work which is in progress. It is confidently hoped that the studios will be in production in July of this year.

Dr. Taylor

Even if the embargo continues?

Mr. Fletcher

Irrespective of the embargo.

Perhaps I may now pass to the most serious point of criticism of the Bill, the constitution of the Cinematograph Films Council. Concern is felt in more than one quarter about the provisions of Clause 8 and at the reduction in the number of independent members. Concern is also felt at the inadequate representation of exhibitors. Hon. Members will appreciate that the Bill, no doubt necessarily, places obligations only upon exhibitors and not upon producers, distributors or technicians. Exhibitors are required to show a certain number of films yearly, and a higher figure is required if the cinemas are owned by circuits, than if they are owned independently.

Bearing in mind the fact that the Cinematograph Films Council is a statutory body to advise the President of the Board of Trade, that the Bill will give him a much wider measure of discretion and flexibility than he has ever had before in the fixing of quotas, and indeed in the fixing of differential quotas; and the further fact that he has to be guided on each occasion by the Cinematograph Films Council, it does not seem unreasonable to suggest that exhibitors, including those from Scotland, ought to have adequate representation upon the Council. That would put them in a position to express their points of view about the quota and the differential quota and, equally important, whether in the case of an unfortunate exhibitor who is unable to fulfil his quota obligations, that exhibitor should be penalised or should be given some relief.

Mr. Gallacher

Does not the hon. Member recognise that there is a language difficulty between Scotland and England and that there should be a Scottish advisory films council? At the present time there are two representatives of Scotland on this Council and one of them is Irish.

Mr. Fletcher

I am glad to have the support of an hon. Member from Scotland on this occasion. Passing from that may I suggest for the consideration of my right hon. Friend who is always so reasonable in these matters, that it might be of advantage if, instead of fixing the quota for half yearly periods, as is contemplated in the Bill, the quota were fixed for yearly periods in order to give exhibitors and producers and others concerned more time to make their arrangements. The only advantage in fixing a quota for a half yearly period instead of a yearly period is to ensure that the proper proportion of British films is shown not merely during the summer months, but also during the winter months from October to April. It would be more convenient to the trade and the Government would be equally protected, if the quota were fixed for a year ahead with a qualification that at least 50 per cent. of the quota obligation should be fulfilled during the six winter months.

I should like to commend the announcement made by the President of the Board of Trade of his intention to appoint a committee of inquiry into the conditions of the industry. That will be welcomed by all but I hope the terms of reference will be wide enough to enable the Committee to deal not only with the conditions of exhibition, but also with conditions of production. It is important for the future health and prosperity of this British film industry that any tendency to extravagance should be curtailed, that we should have a rational system of making British films, and should not assume that it is necessary to spend large sums of money on the Hollywood scale. It is desirable in my opinion that the industry should be looked at as a whole.

Mr. Wilson

The question of production costs will be a matter for immediate inquiry by my own Production Council, and not for the Committee of Inquiry into the exhibition side of the industry. It may be that my Advisory Council after a first look at this question will decide to set up some special inquiry to go into these questions, but in the first instance it is a matter for the Production Advisory Council.

Mr. Fletcher

I appreciate that assurance, and will conclude by saying that, subject to the details I have mentioned, I welcome this Bill. I hope and believe it will lead to greater collaboration between all sections of the industry. It will make a notable and valuable contribution to the building up of a healthy and vigorous British film industry, which in turn, by virtue of its immense possi- bilities, has such an important part to play in the economic and cultural welfare of our country.

8.18 p.m.

Mr. John Foster (Northwich)

The hon. Member for East Islington (Mr. E. Fletcher) said that the Bill was necessary at the present time. While not dissenting from that, I think it is a matter of regret that the British cinema industry is not yet in a position to stand up to competition. I hope the aim will be kept in view that the British industry should stand on its own legs as soon as possible.

It is true that in the past the renters' quota has led to abuse, and to the production of films perhaps not of the first quality; but, in the light of the American difficulties, that creates a difficult situation for the independent exhibitor. At first, exhibitors were opposed to the abolition of the renters' quota, but their opposition was withdrawn on the understanding that the American companies would continue in this country; I have been informed of that by the exhibitors. If the American deadlock continues, it may well be very difficult for exhibitors to fulfil their quota under this Measure. It would not be so difficult for the producer-exhibitor, but it would be difficult for the independent exhibitor. I hope the right hon. Gentleman will have in mind that by abolishing the renters' quota he may create a difficult situation. It is important to see that all studio space is fully utilised for production, both English and American studio space. That is very important because, if the deadlock continues, it is suggested the American companies in some instances will refuse to make films over here. That is the fear of exhibitors who have communicated with me. Then the independent exhibitor will have difficulty in fulfilling his quota. We are grateful for the assurance of the hon. Member for East Islington that this particular American company is going on producing irrespective of that.

Mr. E. Fletcher

I said the American company in association with A.B.C.

Mr. Foster

Warner Bros., I am sure, will play a prominent part in the partnership. I think some speakers, including my hon. Friend the Member for Bucklow (Mr. Shepherd) are rather too quick to welcome the abolition of the double feature. From the point of view of the cinema-goer, that means a reduction in the quality of what is being shown. My hon. Friend said it was impossible to produce good double features, but we ought to remember that from the point of view of the consumer the production of one feature is a reduction in the article supplied. It is possible to have two features, but that, of course, is probably only possible if the American impasse is ended.

On the question of the tax, there is doubt whether it was wise to impose it without consulting the Americans. Hon. Members from all sides of the House have asked the right hon. Gentleman to use his best endeavours to be reasonable and to come to some arrangement with the American film interests which will allow the consumer in this country, who deserves a good product, to benefit from good English and American films.

Finally, I wish to raise the point, which was raised by the hon. Member for East Islington, about the representation of the exhibitor on the Films Council, which seems to me to be too small. He is the man who has to deal with the consumer, the cinema-goer; he is the man who has an obligation under this Measure. It is important that in considering this industry and the necessity for this Measure, we should remember the point of view of the man who goes to the cinema and sees the films. It is important to keep him very much in the foreground, because, after all, the whole industry exists to produce an article for him. I ask the right hon. Gentleman to bear this point in mind, and to see whether it would not be possible, perhaps at a later stage, somewhat to increase the representation of the exhibitors, because those gentlemen who represent the exhibitors will, in fact, be representing the independent exhibitors who have the choice of what film is to be shown, and upon whom the prosperity of the industry, in the last resort, depends.

8.22 p.m.

Mr. Collins (Taunton)

I entirely agree with the hon. Member for Northwich (Mr. J. Foster) on the importance of the person who goes into the cinema and pays his 1s. 9d. It is the first time during this Debate, and I have heard the whole of it, that the member of the public, who is, after all, the most important of all in this matter, has been specifically mentioned. It has been a Debate on the highest level, with a number of expert contributions. I think I am the first Member who has spoken who has not been intimately connected with the cinema in some way or another. Perhaps for that reason we have had a Debate in which there has been a great deal of Rank, but very little rancour. I feel, too, that the Debate has been deficient in one or two respects, in that we do not seem to have realised sufficiently that it may be another 10 years before we again consider this vital question of the film industry in so far as new legislation in concerned. In those 10 years there may be major differences in the position of the cinema. It may well happen that in that period television may have just such an effect upon the cinema as the development of the cinema 20 years ago had on the music hall as a means of entertainment.

I feel, too, that during the Debate there has been a tendency to treat the American situation as if it were to be permanent. After all, we hope that whatever happens about this vexed and unhappy question it will only be a temporary difficulty, although most hon. Members seem to have taken the view that the present position will continue, and that there would be an overwhelming demand for British films for a long time. If we accept that position, and if we do not do all we possibly can by means of legislation to ensure the future of the British film industry, we shall be failing in our duty. We have to see that this Bill ensures that we encourage by all means in our power the development of the British film industry to the maximum possible extent, particularly with regard to the quality of its output. Present conditions create a tremendous opportunity for improving the standard of the programmes that are offered.

A great deal has been said about documentary films, and it has been rightly put forward that they could properly be developed into a means of providing adequate supporting programmes. I hold the view that the first essential for a film of this kind is that, however much it informs and educates, it must at the same time entertain. I do not want to attempt a definition of what entertainment is, because obviously it must differ according to different types of people. It has been suggested during the Debate that docu- mentaries are something rather painful to endure. Yet, in this very House, a few weeks ago, I saw a documentary film called "The World is Rich," which I think is one of the most remarkable films I have ever seen. I do not know whether it would be called entertainment. It certainly gripped the emotions, informed and held the attention as very few films do. Everything possible should be done to ensure that the public get an opportunity of seeing films of that kind. The point is that it is at present, and as far as I can see from this Bill it will be in the future, utterly impossible or extremely foolhardy to produce films of that kind because there is no assurance that they will be shown. Only one organisation, British Lion, has agreed to the showing of that particular film, and it will be shown in one London cinema. That is disgraceful.

The real reason has not been spoken about in this Debate. It is the one reason why the documentary or specialised film industry has never been able to get its products into the ordinary commercial cinema, and has, therefore, had to confine itself to sponsored film production outside theatrical circles. The reason is that the whole of the film industry has for years been built up on the "star" appeal system. Feature films are based on well-known "stars." There is publicity, very clever publicity in all possible ways, directed to ensure that when a particular film is offered to the exhibitors there is already a demand for it, and in many respects they must have it. In fact, the renters hold the whip hand. They may demand perhaps 50 per cent.—sometimes even more—of what the film will take in a particular cinema. In order to continue to foist that system on the cinema industry, they have been ready, sometimes literally, to throw in the second feature and everything else for nothing. That system has made it absolutely impossible for real documentaries with ideas, with thought and energy of mind behind them, to be shown in the commercial cinema.

There has been some discussion on nationalising the film industry, some talk, even, of socialising or nationalising ideas. Any such talk is utter and complete nonsense. But what we have to do, if possible, is to see that in this Bill, or by some legislative means, ideas can have an opportunity of finding a proper out- let. They must not be completely stultified by the fact that the eventual production of the idea in the shape of a respectable film is denied a showing in the cinema. My hon. Friend in his reply, may say that the provision in this Bill regarding labour costs of 10s. per foot minimum is a step in the, right direction in ensuring that the worst of the "quickies" can be eliminated, but I submit that the limit is so very low that it will only ensure the elimination of the very worst of the films, and that many others will still be made of a very poor quality.

The difficulty is that if there is no certainty that a film can be shown, in all probability, it will not be made. I submit that it is absolutely necessary, in the case of second-feature films—and probably of all films—for the Board of Trade, not merely to fix a labour cost figure, which I submit should be at least £1 per foot, but to ensure also that the second-feature films, or the shorter films, do receive a minimum percentage of the money which is paid by the public at the box office. In that way a floor would be put under this particular section of the industry.

I want to reinforce what has already been said about quota obligations applying to all cinemas. One of my hon. Friends mentioned a figure of 1,400 cinemas out of the 4,800 which have weekly takings of less than £100 a week That figure, it was suggested, was too high. In any case, it is obvious that the number of those cinemas is very high indeed and there seems to be no reason at all why they should completely escape the quota obligation, particularly as many of them are in rural areas, which would provide a very useful field for good British films of the type about which I have spoken.

I believe that if these alterations which I have suggested could be made, it would be possible for the British film industry to produce, in a year, some 50 long films, not first-feature films, but long films as defined in the Bill, and possibly 200 short films of good quality. That would mean a major contribution to the entertainment of the British public supplied by the British film industry. That, together with the excellent first-feature films already being made, and which it has been sug- gested should be considerably increased, would mean that our own industry could supply a proportion very much larger than the present 20 per cent., or any of the figures suggested during this Debate.

I hope, therefore, that my hon. Friend will, pay particular attention to these points which have been raised, and which are all aimed at ensuring what must certainly be the prime object of this Bill—that anyone who is prepared to use ideas and to spend time and money in producing a good film can do so in the certainty that there will be no artificial obstruction to the witnessing of that film by the public, and then letting it have the real test of public opinion as to whether it is a good film or not. If it is a good film it will reap the reward of its value. If it is not, it will not. We cannot have this situation where there are barriers, either of big combines of renters or of exhibitors combining together, to ensure not merely that these productions are not shown, but that they are not, in fact, made at all. In welcoming this Bill, I submit that these matters should be considered in order that we can give the industry a real opportunity over the next ten years of building up on the right lines.

8.34 p.m.

Mr. Wyatt (Birmingham, Aston)

I thoroughly agree with most of the references made by my hon. Friend the Member for Taunton (Mr. Collins) to the fact that we should have no artificial barriers between the film consumer and the film producer in the first instance. Obviously, this Bill goes a very long way towards stimulating the production of British films. I wish to add my congratulations to all the others that have been showered upon the President of the Board of Trade this afternoon. But I would point out to him that it really is not very fair to come down to the House, when introducing his first Bill, and concede in advance all the points which his backbenchers wish to make, because that takes away most of the fun of the Debate. It really is not done. However, I think that he can be forgiven on this occasion as this is the first time that he has introduced a Bill. All the concessions should come at the end of the Debate and not at the beginning. They should appear to be made as a result of pressure from the back benches.

This Bill does go a long way, but to be really effective the sights must be set high. As other speakers have emphasised, it is a pity that there are no quota rates fixed in the Bill to give a minimum, so that the trade can know exactly where it stands and that the figure will never go below a fixed minimum. I do not think that it would be too high to start it off at something like 35 per cent, for first feature films. British film producers made 50 first features last year and, no doubt, they can make as many this year. No doubt, in a short period of time they will be able to make more than that. Of course, it might mean some closing of cinemas and abandoning of twice-weekly programmes. That would not matter a great deal in our present very difficult circumstances. Even if we had to close down a few cinemas, there ought to be other even more important work for the usherettes now employed there.

It is clear that the Treasury cannot commit itself to a very severe dead loss on American films for any period within the next four or five years. Therefore, if we do not make more films ourselves, very largely, we must do without. The big circuits ought to start off with nothing less than 35 per cent., and cinemas other than those taking under £100 a week, at something like 25 per cent. I agree with the right hon. Gentleman the Member for Aldershot (Mr. Lyttelton) that it is a very strange anomaly that the under £100 a week section are not included in the Bill. I am told by a highly reputable distributor that the figure of cinemas taking under roc, a week is somewhere in the neighbourhood of 800 and not 1,500 or 500. That represents a very large aggregate gross taking per week.

The real trouble about this is not merely the fact that many of the cinemas are in isolated districts in villages where they are the only cinema and if they do not take the British film then the people who live locally will never see it. It is also the fact that these types of cinema are the most difficult of all in regard to the taking of British films in the first instance. They can get for £5 outright—or even cheaper; sometimes for 10s.—an American Wild West film. They show it and people are obliged to see it. They would rather do that than show a good British film. It is very dubious to fix the special quota to apply only to circuits of 200 or more cinemas. Some of the very worst of the circuits with regard to the taking of British films are the smaller circuits. It is quite notorious that Mr. Sidney Bernstein, who owns the Granada circuit of some 35 cinemas, refuses point blank to give a fair and decent price for British films. He says, "I will not give you above a certain figure. If you do not like it, you can leave it. I can quite easily get a cheaper American film." He will always get an American film of comparative quality more cheaply, because the British market is merely surplus profit for the American films. Without a tax being in operation, American films must always be able to undercut British films in Britain. That fact should be made clear; it has not really been mentioned in this Debate.

That is why the smaller circuits have been able to maintain this policy of refusing to take British films. If anything, they should have a higher quota than the over 200 circuits. In the case of the Granada circuit, it owns every theatre in Shrewsbury, it has a virtual monopoly in Rugby and the best cinemas in Bedford. That is an example of the way in which it operates. It means that no British films, or very few of them, will be shown in this circuit, unless Mr. Bernstein is forced to take his full quota. The same applies to the Shipman and King organisation of 37 cinemas in the Home Counties, and in many places like Esher and some other small villages and towns, this circuit has the only cinema there, and its refusal to take British films means that the people will not see them. The same applies to another organisation—the Eckart circuit in Yorkshire.

In spite of all that has been said in defence of the Rank organisation and A.B.C., particularly by my hon. Friend the Member for East Islington (Mr. E. Fletcher), they really do represent the greatest menace to the future of the British film industry. I would like to try to explain what I mean. They are not an immediate, day-to-day menace because of the peculiar circumstances operating today, but what has happened has been precisely this. They are, in the main, the best cinemas, in the best and most paying positions. Roughly speaking, the Rank organisation cinemas and the A.B.C. cinemas take about three-fifths of the total box office takings in the country, and they are obviously in a tremendously strong position from the buying point of view. Despite all that my hon. Friend says about the desire of A.B.C. today to show British films, in the past, there has not been that overriding desire in that organisation to show British films, because of the tie-up with M.G.M. and Warner Brothers. There has been recently a slowing-down in production in Hollywood which is now of many months' standing, and that has made it possible for more British films to be shown in the A.B.C. organisation, and the same applies to the Rank organisation. It is because of these tremendous financial ties, with which I will not bore the House, and of which I am sure my hon. Friend is fully aware, that British films, in the past have not had the openings which they could have had on the circuits and on the British screen, and that affects particularly to the independent producers. It is because of that past situation that all the independent producers, or very nearly all of them, have been driven out of business, except for Ealing Studios and London Films, who were the only two large ones tough enough to stand this racket.

With the slowing-down in production at Hollywood, the limitation and the new quota which comes in under this Bill, of course, there is a very different situation. Of course, today, any independent producer who makes a film in which all the characters do not walk backwards can sell it to a circuit, because they are very short of films, but that is not always going to be the situation. It certainly is not likely to remain like that for another 10 years, because Mr. Rank, very wisely, no doubt, from his own point of view, is building up a large number of producing companies, and A.B.C. are doing the same. What is going to happen, if we do not take very great care, is that Mr. Rank and the A.B.C. organisation are going to be the sponsors of films which they need to fill the quota for their own circuits, and they will then say to the independent producers, "Thank you very much, but there is no room for more than six of your films on our circuit in a year." That is not really enough to keep an independent producer going at all, for even an independent producer of the type of London Films has the capacity to make at least 12 films a year, and, if they are to be cut down to six a year, it will not be worth their while to try to embark on any new production. If Mr. Rank goes on like this, he could sell every film he makes, because he will have no competition, and the same thing applies to A.B.C. Then they are likely to produce some shoddy work and get careless about it. It is like a man having the only grocery shop in a small town, in which he can sell very poor quality goods because he has no competition.

But, of course, this does not only affect the independent producers; it very largely affects the consumers as well in places like Oxford, where, I think, my hon. Friend's company is the only one which owns the cinemas. If they have not booked a film which has been made by Rank, then the film will not be shown in that particular town. Again, it works very badly on the wretched independent producer who gets his film taken by a circuit which then refuses to let any other cinemas in the district have the film, as, for instance, in Gloucester. Again, I am afraid, the A.B.C. is the culprit. It owns a somewhat poor cinema which is not in the middle of the town, and which only takes an average of £450 to £500 a week. There are two independent cinemas in the middle of the town which average £1,000 a week, but, whenever the A.B.C. circuit buys a film, that film is only shown in Gloucester in the poor quality cinema, and not in the two larger independent and better cinemas. Therefore, the wretched independent producer gets only half the value which he might have got in his returns.

Mr. E. Fletcher

Does my hon. Friend want the A.B.C. to have more cinemas in Gloucester or better cinemas?

Mr. Wyatt

I am going to deal with the A.B.C. circuit in a moment. It is clear that I am not alone in seeing this danger. The Government have seen it and have set up a committee of inquiry. If they think fit, they will take powers to refuse a licence to anybody who owns a circuit of more than 200. I think they could lower that figure to 20, in view of the danger from the smaller circuits. One of the ways in which the monopolistic situation could be broken up—and I hope my hon. Friend the Member for East Islington will think this is not a bad idea, because, at the moment, it is operating with, I think, a fair measure of success in that great home of the films, America—is by copying the consent decree operating these. By this, if any cinema in any district desires that a particular film should be put up for auction in that district, the distributor of the film is obliged to offer it to him.

To take the example of Gloucester, both those two independent cinemas in the centre of the town, which each take £1,000 a week, could say, when a film such as, for instance, "An Ideal Husband" had been booked by the A.B.C. circuit, and when it was due to come to Gloucester, "We desire to bid for that film, and we do not wish it to be shown in Gloucester beforehand. We can prove that our takings are greater than the A.B.C. cinema in this particular district." The film would then have to be surrendered to that particular cinema. That, I think, my hon. Friend would agree, is one method of breaking up that particular type of monopoly, or, at any rate, of lessening some of its evils. It is something which is working in the United States, and I do not see why it should not work here. It gives the independent producer the chance to get a better price for his pictures, and also gives the consumer a better chance to see the films he wants to see. That, of course, as I think my right hon. Friend the President of the Board of Trade clearly recognises, is the direction from which the chief danger to the British film industry will come in the future.

It is not altogether fair to curse Mr. Rank as a monopolist, because he has done his best to sell and sponsor British films in America. I would not wish to deny him the credit for doing that. But this monopoly is a dangerous business, and, it nothing is done about it, will ruin the health of the industry which, if allowed to flourish a little more freely, would bring us great credit abroad if not as much money as we desire. It will certainly save us a good deal of money if we are able to show more British films at home. I hope this commission of inquiry which is now being set up will go very closely into the remarkable financial ramifications which operate within these circuits, and all their various tie-ups with American companies, and will also ensure that it is not possible for there to be any further wriggling round the quotas in the future and that one circuit which happens also to be a producer will not be able to crowd out other producers by fulfilling its British quota from its own production.

8.51 p.m.

Mr. Skeffington-Lodge (Bedford)

I am in some difficulty in making the points I want to make in this Debate because I understand a Member from the Opposition is to reply within five minutes. I would like, however, to touch on one or two aspects of the Bill which have not been adequately and fully dealt with in what has been a most interesting discussion. As I see it, one of the most important objects of the Bill consists in countering and curbing American competition. In the speeches which have been made from both sides, not enough has been made of the considerable American influence in all the ramifications of the British film industry. It exists in greater or lesser degree in the three biggest existing circuits, and it is always exerted where it can make its weight felt against those trends which I, personally, think desirable in the film world.

The fact that the composition of the Cinematograph Films Council is being altered, as I think in an undesirable way—and I was very glad to have the support of the right hon. Member for Aldershot (Mr. Lyttelton) in this respect—will not help at all in countering the undesirable influence of which I have spoken. The change in the composition of this Council means that the subservience of this advisory body to the trade will be considerably increased. In recent years the cinema has undoubtedly become one of the strongest influences in family life. I think it was Professor Joad who once spoke of people taking "an emotional bath in the dark" when they watched the average film, and it is the average film which I contend is often so bad. The policy of producing, in the shape of British films, a few expensive and extravagantly priced films has inflicted more average stuff on film-goers than would have been the case if a diversified output had not thereby been slowed down. As it is, with the curtailment of American imports, it looks as if before long some cinemas may have to close altogether. This I must confess will not worry me in the slightest degree.

One reads a lot about public taste in films. About that, all I would say is that one can defer too much to a public taste based mainly on habit. Where something better and newer is produced in films, as in most other things, one finds that people will generally give it a fair chance, and when this happens they usually grow to like it. As things stand in the film world, and despite the considerable measure of monopoly in the industry, I do not think the bad influence of many films lies half so much in their propagation of any form of ideology, be it British or American, as in their becoming a sort of anodyne for the public mind, lulling and soothing in its effect. Where this happens, alertness to social and political urgencies is definitely blunted. Hollywood's good gifts to us in the shape of Walt Disney and the Marx Brothers are few compared with the long list of films which act as a social narcotic and which have merely a brassy vulgarity.

The shocking of social conscience in American films never plays the same part as creating a thrill through violence or through erotic suggestion. What we need in this country is a cinema which fully reflects the values of British democracy, that will show us the zest and courage necessary for building a life we can live in fun and in grace. What we do not need and what are positively harmful are those American pictures whose content reflects escapism, sensationalism, glamour and the belief that cinema-goers need to be put to sleep in their hours of recreation. Perhaps one day the more radical measures of reform advocated by employees of the Council will take concrete form. Their proposals are certainly dramatic and drastic; the provision of Government studios and also State finance for the independent producer are two things we would do well to think of for the years that lie ahead. Until then, this Bill does at least represent some progress, though not all of what I personally might wish to have.

8.58 p.m.

Mr. Walter Fletcher (Bury)

It is no exaggeration to say that not only has the ground of this Bill been covered this afternoon, but it has been trampled over by a herd of experts drawn impartially from both sides of the House. The winding up speech which I have to make has been made at least six times already by three Members on each side of the House.

Before coming to the actual Bill itself, I would like to say that the announcement made by the President of the Board of Trade, regarding the setting up of a commission, which I thought at first was going to be so entirely welcome has taken a rather disappointing turn since he intervened a little while ago. I should like to ask him and the Parliamentary Secretary who will, no doubt, reply what form this commission is going to take. It is vital that whichever form it takes—whether it be a Parliamentary Commission or a Royal Commission—it should be one which reports to this House and is responsible to this House. I think that it should cover the productive side of the industry as well as the exhibiting side. During this Debate the close link between production and exhibition has been proved as an actual fact, whether it is good or bad. If this report is to have the effect it should have not only inside this country but throughout the world—because it is an examination of the whole of the industry, and it may have a vital effect in popularising our films and raising the prestige we already enjoy as producers of films—it is highly important that it should not be the less important committee which the right hon. Gentleman is to have at his disposal but the main commission, which should examine these two vital sides of the industry. I would ask him if he would reconsider the matter, because I believe the general consensus of opinion is that if we are to have this desirable commission, the full value cannot be got out of it unless it examines production as well as the exhibition side.

I turn to one or two points in the Bill itself. The quota question has been examined and re-examined to such an extent that I do not wish to say much about it except that I think I join with those who wish to see the quota extended to the cinemas—800 I believe is the correct figure—which take about £100. I believe one should declare one's interest, but I can declare with some relief that I recently abandoned my interest in this trade and disposed of my small chain of independent cinemas which I built and created over the last 15 to 20 years. I can speak now with relief. It lies with many of these smaller cinemas which are sometimes dignified by the name of "flea pits" and sometimes promoted by being called cinemas—between the "flea pit" and the luxury cinema there is the ordinary cinema—to show British films to those who pay to go there, because they have no alternative cinema to which to go, and to have a quota of British films. I should like to speak from the point of view of the man who pays to go to the cinema, and I believe that there is a need to show British films in those cinemas. The case for it is firmly based on the interest which those have in showing British films who distribute British films. If British films are to succeed in the world they have not only to maintain their present standard, but to improve it, and that will be achieved only by the force of public opinion.

I am not one of those who believe that we have a certain right, because of our own tastes, to impose our tastes on others. There is a freedom of taste as well as of everything else, and to arrogate to ourselves the right to say "This is what ought to be shown to the public" would be mistaken. I have had support very recently in so thinking from the leading low brow on the Government side, who happens to be also the Leader of the House. He has declared without any doubt that he likes Dick Barton on the B.B.C.; and he likes Dick Barton because he likes him—and that is ultimately the best reason of all for liking anything. I, therefore, feel that the remarks which were just made by the hon. Member for Bedford (Mr. Skeffington-Lodge) will bring him into head-on conflict with the Leader of the House.

I do, however, believe that it should be urged upon the group of some 800 smaller cinemas that they must come into the quota scheme in some form or another and show British films, just as much as any other part of the exhibiting industry must show British films. It should be made possible for them to do so. I believe also that the smaller circuits, the smaller groups outside the big three group, should also be brought into some form of the set quota, but graduated; and that to this end some of the many bodies which are being set up should see how the small cinemas can shoulder their share of the burden of showing British films in this country, so that the quota shall be as evenly spread as possible throughout the whole exhibiting industry. I would urge upon the Board of Trade, who are taking a very enlightened part, as is obvious from this Bill, that they should not content themselves with having imposed on the three big circuits this burden, but that they should distribute it more widely and more evenly. It is sometimes rather dangerous to talk of these three big circuits as though they were one, or as though they were three components. Although they are locked in an embrace which is sometimes of mutual affection where there are mutual interests, they are sometimes constrained by less good intentions than all-in wrestlers; they are always very close to each other because of the nature of their business; but I think we should remember, in considering the problems which arise from the three big circuits, that they are sometimes antagonists and sometimes close friends.

In the Preamble we are told, quite rightly, that this is a 10-year Bill. In the two decades in which I have followed with some interest the working of the cinema industry in all its ramifications in this country, two major changes took place, and the grave danger in this Debate today has been undoubtedly that it has been conducted too much under the spell of present circumstances that will not exist 10 years hence and which did not exist 10 years ago.

The laws of supply and demand work in this industry as in every other. They may be antiquated in the view of many, and substitutes that are temporarily satisfactory may have been found; although I very much doubt their satisfactoriness in the long run. I remember so well, as a former small cinema proprietor, the days when there was too much profit, when the film renter would be at one's door saying, "Now, old boy, won't you take this? If you take it we will give you this, that and the other." They cooed like turtle doves. A man in a solo position could more or less name the figure at which to book a film; but if a man were one of the small circuits, then the barring clause of the big circuits was waved in his face for one reason only, namely, that there was too much profit. After that phase, the wheel turned and we entered the era of too little profit, when the independent cinema was very lucky to get anything and could not argue about the price.

In this Bill there are many provisos for getting round the evil of blind and bulk booking, but they will not work. If there is the urgent need of a man who owns a cinema to keep it open because his livelihood is at stake, then the sort of practices which existed before will start up again: one cinema is booked for, a contract is made and there is an agreement, but there is still the risk, because whether there is a contract or not the small independent cinema owner knows quite well that in many cases contracts are not of very much value. For instance, we have to consider not only whether there are enough films, but whether there are enough copies, because if there are not enough copies of a film then, inevitably, two days before the small cinema is supposed to have its copy the telephone rings and the owner is told, "Sorry, old man, but your copy is rather badly scratched," and so on. But the cinema proprietor knows quite well what that means—that somebody who has more pull than he has is to get his copy.

These are matters which the various bodies that the President of the Board of Trade is to set up must undoubtedly examine. When the Films Council is being constituted independents of all sorts must be very fully represented. I join issue with the right hon. Gentleman on the question of the constitution of the Films Council, because I do not think it is a sound argument to say that a body of 24 members is notably more unwieldy than a body of 21 members. I know from experience that a body of 19 stone is not very much more unwieldy than one of 17 stone. That matter of degree does not make all that much difference. What does matter, and matter vitally, is that the independent representatives on the Films Council shall be drawn from a great many sources, and that they shall be much more representative than has been the case in the past. We are again starting from scratch, and the old Council has not worked very well. The new Council, inspired by this Bill and by the great interest that there is in this question now, must undoubtedly work quite differently.

In this Council two things are very necessary. First, in the representatives of the trade itself, in the various categories—outside the trade union category—the greatest care must be taken to see that the big circuits have not a plural vote; and those who come from the same interests, and from interests which are centrally controlled by the circuits, must not make that part of the Council some- thing like a packed jury. There must be sufficient opportunities for independents. As to the 11 members, who are now being reduced to five—although I hope they will be restored to a greater number—let us have public representation of the widest possible sort.

A little later I shall suggest certain dangers that exist in this industry at the present moment on the propaganda side. That leads me to make the following suggestion, which falls into place here, namely, that one representative on the Films Council should be a newspaper representative. Just as there is a move to watch what the newspapers are doing in the way of controlling in too narrow a way the means of influencing the public, so will that be very necessary in the film industry, and a representative from the newspapers may very well be called for on the Films Council.

I should like to turn to a topic which all Members have tackled today, and that is the Rank organisation. When Mr. Rank reads the report of this Debate tomorrow, or when this Debate is reported to him tonight, he will have a sort of hot and cold feeling. He will be hot because of the nice things that have been said about him, and he will feel cold because of the threats of nationalisation. It was he who created the industry and put it on its feet. How rapidly we tend to forget the great courage he showed a good many years ago, when the film industry was not at its best from the financial point of view, or from the point of view of what it was producing. He had no need to get into the industry, and he has never really been in it primarily for financial reasons. We forget very easily the great courage and enterprise needed to take over what was not exactly an Augean stable or a boudoir. We must pay a great tribute to Mr. Rank and his organisation for what he did and has done. Nevertheless, I think that that form of organisation does constitute a great danger, although not necessarily because of what Mr. Rank wishes to do.

It has been referred to by many Members on the other side as a vertical integration, but I do not believe it is that at all. On the contrary, I believe that it is a lateral expansion. It is a pyramid standing on its apex, and as such is a source of great danger, because it represents to the world in general and the people in this country the essence of the film industry. It is the most dangerous thing in the world to follow this easy argument in business. It is the easiest thing in the world to say "I am an owner of cinemas. I must make sure of my profits, and the only way I can do that is to make certain of production. Therefore, I must go into production." Then, having gone into production, to use the same argument to go into the renters' business, and then into the building business and to producing machinery.

These are not fancies, but are facts. The Rank organisation is at the present moment in the lens-producing industry, and I doubt very much whether that is really an economic necessity. It has even gone so far as to take a controlling interest in the make-up industry. Although the total consumption of make-up by the stars may be higher in this line than in any other, an investment of that size cannot be justified. The trouble with this sort of organisation is that when it achieves justifiable success, due to imagination and courage, it really expands dangerously and laterally.

Mr. O'Brien

Would the hon. Member develop that point? I asked the hon. Member for Ecclesall (Mr. Roberts) to develop it, but he did not do so. I speak of the trade with some knowledge. While I agree that the situation is becoming difficult and dangerous, these ramifications of the Rank organisation are very necessary in order to have that complete command of facilities so that good British pictures can be made to meet American competition. If Mr. Rank is the only one who has had the courage to do that could the hon. Member suggest what alternative there is?

Mr. Fletcher

I do not think the hon. Member can really believe that it is necessary for the production of good films in this country to own a make-up business. If he will give me the figures of consumption, within the Rank organisation, of make-up during the war, and what was invested in it, we shall get some idea of what is necessary. The Rank organisation is expanding overseas into the Empire. It is curious that in this Debate little has been said about the Empire as a taker of films. The overspill, both from the American market and the home market, will one day compete strongly in the rest of the British-speaking part of the world and it is, therefore, wise to think of what will happen. I am afraid that it presents a great danger, by putting too many of our cinema eggs into too few baskets. If this or any other organisation expands to that extent, by taking an interest in South Africa, New Zealand, and Australia, it is making itself vulnerable. We must remember the Æsop fable of the frog which tried to swell itself to be an ox, but only succeeded in bursting with an atomic explosion.

The Rank organisation has expanded, and has been pushed, I think sometimes willingly, in a way which makes it extremely vulnerable. When we talk comparatively of the British film industry and Hollywood we must remember that Hollywood has been making films for 30 years. Its finance, experience, and equipment render it infinitely more powerful and better equipped from every point of view. What we have to do is what so often happens when there is just a position of mass production against quality. It is essentially quality that we have to set against it. That means quality fined down to the production end, which is the basis of the whole industry as it stands at present, and as it is likely to stand for a few years. I believe that the only remedy for this expansion—which, I think, had to take place in many cases, although it has been rather overdone—is to see that other groups, equally powerful and well financed, are created inside the industry. This Bill is a step in the right direction, but I must issue a warning about it. It is not easy, as so many have said today, to attract the necessary capital to the very difficult business of making films.

I would like to turn for a few moments to the question of film production. I built a cinema in Elstree, when there was not one there, and I have a fairly intimate knowledge of what went on in the studios there. The films that were made were run off in my modest cinema, and I used to hear of what went on in those studios. In essence film-making is expensive, extravagant, and rather wasteful, because it needs a spark of genius, which may not be present on Monday, but may be present on Tuesday, to produce what is wanted. It is possible to have all the cookery books, the best cooks in the world, and all the ingredients, but unless there is, at the head, a chef who instils into the dish he is making part of his own genius it is a flop. The same might be said of cocktails, although nowadays the ingredients may not be so easy to obtain.

One of the things to be emphasised is that every sort of restrictive practice which may hinder the making of good films by circuit or by independents must be cut out. Restrictive practices can arise from various sides. There are instances of organisations stopping independents from making films. But that does not hold good today because of the shortage of products. There is a large proportion of floor space in small hands, and there is no sign at present that it is being abused. There is also the possibility of restrictive practices by the unions. As a Member for a working man's industrial constituency, I speak with great regard for the union when it is carrying out its proper functions. It is a vital part of the industrial life of this country.

There is one union behind which the controlling genius is the hon. Member for West Nottingham (Mr. O'Brien). I have no criticism to offer; he has done a good job by his members with reason, moderation and proper methods of negotiation. I saw a look of horror on his face when it was suggested that if we were really short of products and could not run two features, we might run a few music hall turns in the cinemas. I think that upset him. On that point, I belong to those who prefer the music hall to the cinema. I would rather have half-an-hour of Marie Lloyd than three hours of celluloid.

There is another union—the A.C.T. That is a very different kettle of fish. I would say openly in this House that one of the things which the Board of Trade and the various councils that are to be set up must watch very carefully is the pressure, the almost bottle neck pressure, that may be brought from that quarter which is not inspired from the same source as the hon. Gentleman's union, and which may in fact produce exactly the state of things we do not want. Those are restrictive practices. We cannot tell, when we are producing films, at what particular moment the spark will kindle, and when after hours of work we will get what we want. By knocking off at a certain time because it is the rule, one may waste a day, and increase the cost of a film. It is not only on the trade union side that we have to watch restrictive practices, but it is on every side. I think that we are in the stage when all sides of the film industry understand that we are passing through an extremely dangerous period, and when all sides have to make their contribution so that the natural genius that is behind the making of films shall not be frustrated by the mechanics necessary to their making.

I would like to say a word on the propaganda side. As the House knows, the set up of the Press is being very closely examined. The difference between Press and cinema propaganda is this: With Press propaganda, we know when we open our paper—with the exception of one or two which wander to each side of the road with some irregularity—what particular colouring will be given to the news by the paper we are reading. When one goes into the cinema one does not know that. The news reel is a very potent weapon of propaganda for influencing public opinion. If the news reel is confined in its production to too few hands, as it is, in my view, at the present moment, it is putting into the hands of people, who may not be in any way abusing it now—but when it is taken over by others it may be abused—a weapon of public influence which should not, without being very carefully regarded by the President of the Board of Trade and his various councils and advisers, be left in exactly that state. There is, I believe, at the moment no real abuse; but there is a possibility of abuse. I think that we should be very jealous of seeing that it is not allowed greater freedom without being carefully watched.

There are certain other sides of this industry which I need not touch upon, but I want to ask how are we going to persuade the correct flow of capital which must come into this industry from its most natural sources. Obviously, the first way in which we can do it is by proving in every possible way that it is a sound industry. At the moment we cannot do that because we are restricted by the dollar situation, to which I am coming in a moment. If we see as a result of the Commission which is being set up that the renter is no longer over-favouring the big groups, that the producer is going to have free and proper access to the means of making films, and that the exhibitor is not tied down in any way when booking and exhibiting what he believes is right in his part of the world, we have the three essentials which will attract that flow of capital without which this industry will go sterile in a short while. No matter how powerful the circuits may be, that will happen unless the capital is forthcoming. They themselves have shown that they do not want to remain in the position in which they find themselves today.

I should like now to come to the question of the situation with America as it exists today. There is a little parallel between films and tobacco. When we cut off the import of tobacco and of films we are to a great extent exporting unemployment; that is to say, we are creating in the tobacco growing districts of America and in Hollywood a very serious situation for those who have to spend their lives in building up those great industries and for the Government who are responsible for looking after them. It is extremely important to consider the Hollywod point of view. It is not wise, nor is it justified, to condemn Hollywood films as being, one and all, very much worse and inferior to ours or anyone else's. France, Czechoslovakia and Russia have produced good films, and we are producing good films. Hollywood, too, has produced good films and also bad ones, as we have done. The worst service that can be done by the President of the Board of Trade in his negotiations is to say that Hollywood films should not be admitted here on their merits or on their demerits. The whole cinema structure in this country may possibly survive and will survive even if we do not come to an arrangement. It will go through lean years and we will have to tighten our mental belts as well as our physical belts. What we have to do in our approach to America on this subject is to give the impression, which is fully justified throughout the country and has been proved in this Debate, because of the support which has come from both sides of the House, that we are fully and absolutely determined, because of the situation in which we find ourselves, not to give way on the main point that we cannot at the moment afford the dollars for films.

What will influence the mind of Hollywood and secure support from their own Government is if the American public and the public in the rest of the world, from which the ultimate pressure will come, are convinced that the films we are producing here and which we are going to produce here, are such that it is in their interest to supply the public demand in America for our films. If that is accomplished, then half the battle has been won. To do that we must be perfectly fair-minded. We must find a means of reciprocity and must realise the serious situation which has been caused. There must be firmness in negotiation, and no doubt that will be displayed. Firmness is not necessarily synonymous with obstinacy.

We have heard this afternoon from one or two sources that, as the Americans would say, the Minister is soft in his opinions. He has to be a little more flexible possibly, without conceding the principle that we cannot spend more dollars, but in various other ways. If he will do that and explain that he has the full support—he has had full support during this Debate—of all sides of the House in the attitude he has taken and preach, as he is entitled to preach, that the films we want to send to America are high-class films with great attraction which will make money for those who take them out there, he will break down the difficulty of getting into the circuits and the difficulty of Hollywood giving up something like a 30 years' monoply in its own market, which represents 61 per cent. of the world's cinema-goers. In that task he must be refreshed by the unanimity which has been displayed in this House in giving him a welcome.

We on this side of the House welcome the Bill and do not propose to divide against it. We have issued certain warnings and made certain constructive suggestions, and we realise that, inspired by the sort of feeling that so often blows up suddenly in this country, these negotiations will succeed because we are right in what we say, we are determined to see them through, and every side of the industry and the public are well behind us.

9.32 p.m.

The Parliamentary Secretary to the Board of Trade (Mr. Belcher)

It will be agreed that we have had a very good Debate indeed. I have been impressed by the knowledge displayed particularly by hon. Friends of mine who obviously have a much closer acquaintance with the film industry than I have. I am one of those people—to whom reference was made by the hon. Member for Taunton (Mr. Collins)—whose acquaintance with the industry consists of a few visits to the cinema when I have had the time and an enjoyable visit to a film studio when I was entertained by some very delightful ladies. I am not an inveterate cinemagoer. Like most hon. Members, I cannot often find the time. I do not even listen to Dick Barton, so I cannot qualify for fame on that account. I am interested in the industry because of its value as an entertaining and educational medium in this country and because I believe it possesses great potentialities for good in its use to explain our people and our manners and customs to the people of other countries.

I am glad that the hon. Member for Bury (Mr. W. Fletcher) drew the attention to the fact that here we are not dealing with something which is static. It is indeed very dynamic. It is a comparatively young industry and there have been wide changes over the past 20 years. I have no doubt that equally wide changes will come about during the next 10 or 20, years, and therefore we ought, in our consideration of this Measure to keep away from the existing backcloth, if I may use a theatrical expression. It is true that this Bill is presented to the House at not the most propitious time, but it would be wrong, I hope, to assume that that situation will necessarily continue.

Again, I agree with the hon. Gentleman about the necessity for all those people who have the capacity to indulge in restrictive practices to stop doing so, not only in this industry but in all our industries at this time when we are doing our utmost to make ourselves more efficient, to build up our productive capacity and to expand our possibilities of trading with other countries. It is vitally essential for all people who have any ability to impose restrictive practices to examine them and get away from them as quickly as they possibly can.

The right hon. Member for Aldershot (Mr. Lyttelton), and most hon. Members who have spoken, have had a good deal to say about the import duty on foreign films, and I think it is a matter that we are entitled to discuss on the Second Reading of this Bill, because its operation, when it becomes law, is bound to be affected to a very considerable extent by the situation vis-a-vis American films particularly. I am most grateful to the right hon. Gentleman and his colleagues, and all those hon. Members who have spoken, for the support they have given to His Majesty's Government on this subject. It is, of course, a fact that we cannot afford the outlay in dollars. We have made that quite plain. That is our only reason—as I have said on a previous occasion in this House—for imposing the duty. I agree with the hon. Member for Bury that it is certainly not my job, or anybody else's job, to talk about the merits or demerits of Hollywood films. I agree entirely with him that good and bad films have come out of all the studios of all the countries in the world. I do not pose as a judge. I know my own taste; the hon. Gentleman's taste may be quite different. It is not a question of discriminating against Hollywood films because we do not like them; it is a question of stopping the drain on our dollar resources.

We heard some rather interesting statistics from my hon. Friend the Member for West Nottingham (Mr. O'Brien) and from the hon. Member for Louth (Mr. Osborne). My hon. Friend spoke about the amount of dollars saved by this import duty being the equivalent of two-thirds of one penny worth of flour per week spread over the whole population of the country. I have had very little statistical experience, but what I have had has led me to be extremely suspicious of cases represented in that fashion. I am reminded of the occasion when I was told by a very wise man that there were such things as lies, bad lies, and statistics, and I suggest that one can reduce this to something too simple—

Mr. O'Brien

It is the truth.

Mr. Belcher

The fact is, of course, that there has been an outpouring of something in the nature of £17 million worth of dollars a year on imported American films, and the country cannot afford it at this time. What the situation will be like at some time in the future, I do not know. One hon. Member referred to the negotiations going on between this country and the representatives of the American film industry. I can assure him, as I can assure the right hon. Gentleman opposite, who hoped that what appeared to be a deadlock would end soon, that there is no question of my right hon. Friend or any other Member of the Government or representative of the Government going into these negotiations with the firm resolve not to yield an inch, not to bargain in any way. That is far from being the truth. We are prepared to consider most sympathetically any reasonable suggestion which can be put forward by anybody, as long as that suggestion does not involve us in additional dollar expenditure. Whether the suggestion took the form of a greater showing of British films on American circuits with a view to balancing the amount of dollars earned by American films in this country by the amount of dollars earned by British films in America, or in any other way, we would be quite prepared to consider any reasonable suggestion of that kind.

The right hon. Member for Aldershot spoke about the suggestion made by my right hon. Friend that, with a view to assisting in the financing of the British film producing industry, there might be a film bank. He said he was more aware of the dangers of a film bank than of the advantages. I would point out that my right hon. Friend was being quite tentative. He did not suggest that there was anything final about this suggestion; in fact, he stressed the difficulties attaching to film finance. I agree with the hon. Member for Bury that it is important to get capital into this industry, and my right hon. Friend showed that he is prepared to look far and wide with a view to seeing how far it is possible for the Government to assist or to encourage the better financing of the film industry.

The right hon. Gentleman and my hon. Friend the Member for West Nottingham and one or two other hon. Members have suggested that we should have included a minimum quota in the Bill. The Bill leaves it to the Board of Trade to fix the minimum quota, but if we were to attempt to legislate a minimum quota, I am afraid we would have to fix a figure low—possibly too low—at present because we would have to allow for all sorts of contingencies. We prefer not to fix a figure which might be too low, and therefore discouraging to producers, but to look at the number of films in sight at the time when it is necessary to make the Order and then to fix, in the light of the information available at the time of making the Order, a quota figure which will encourage the producer, and which will be capable of being fulfilled.

My right hon. Friend gave an assurance this afternoon that the initial quota figure will be fixed with close relation to the number of films in sight at that time. The right hon. Gentleman was critical of the provision for three months' notice only of a quota alteration and suggested that this was not long enough. We are aware that there are people in the industry who feel that a three months' notice of a quota alteration is not long enough, but our feeling is that if we fix the quota too far ahead—that is to say, if we give six months, 12 months, or two years, as is suggested by some in the industry—we cannot really be giving a realistic figure. I do not think it is possible to fix the quota in relation to two years ahead with any real knowledge of what the supply situation may be at that time. As the period diminished, it would be easier, and six months would not involve such a possibility of drastic error. This is a matter into which we can go more fully in Committee, and it may be proved to our satisfaction that this is a point on which there should be some adjustment.

A number of hon. Members suggested that special quotas should be extended beyond those circuits to which it is proposed they should apply at present, and some cogent arguments were produced in favour of such a policy. There is an answer to those arguments, and we are advised that that suggestion is not really practicable. It is an extremely difficult technical point, but I believe it is the case that the mere fact of being one of a group does not necessarily make it possible for one to bear a higher quota. I believe the point was made by one of my hon. Friends that in some cases an individual cinema proprietor, if placed in the right geographical situation, might find it easier to bear a quota than a member of a group in competition with bigger groups of cinemas in the same town. We are satisfied that the amount of work which would be involved in extending a special quota agreement applied to other circuits than the three which have been mentioned, or right down to the individually-owned cinemas, would not be justified by results. However, that is something which can be considered in Committee. It is a point of detail, and we are prepared to give consideration to any arguments which might be brought forward.

Mr. W. Fletcher

Is the hon. Gentleman judging results entirely on the financial side? The results, in the view of a great many people, are not to be judged only by that yardstick, but also by the fact that it would build up, in the long run, the biggest possible backing for British films.

Mr. Belcher

I must confess that I have in mind the financial relations, but I agree there is a great deal to be said for the point made by the hon. Gentleman. The right hon. Gentleman opposite, referring to the selection committee to choose the six special films, mentioned the possibility of some future President of the Board of Trade—I am quite sure he did not mean the present President—forcing the selection committee to put some unwelcome propaganda on at several hundred cinemas. I really do not share his apprehension, although I do agree that there is, of course, always the incipient danger of these things. There may be changes of Government at some time in the future. There may be changes of personalities serving on the selection committee which may result in something of that kind taking place. But so long as we have the present selection committee, the present Government and the present President of the Board of Trade, there is no danger.

Mr. Lyttelton

And the present Parliamentary Secretary.

Mr. Belcher

He is not important enough to be mentioned. This is a matter I would like to consider in Committee, and if it is possible to introduce something to make absolutely certain this eventuality will not come to pass, I see no reason why we should not put such words into the Bill. There was a most interesting discussion about the reference made by my right hon. Friend to the possibility of the Government constructing some premises which might be used as studio space, particularly for independent producers. My right hon. Friend said that nothing had been finalised about this. It has been suggested that it might be leased by the State to independent producers or that it might be better left in the hands of private individuals to lease it to independent producers. It is not merely bricks and mortar walls that are needed. There are all kinds of accessories and all kinds of technical staff involved, and the position is not so simple as it sounds. I am glad the idea was welcomed by my hon. Friend the Member for West Nottingham, who is very knowledgeable in these matters, but I was not too sure about his insistence—perhaps I was wrong in interpreting it as insistence—that studio space should be leased only to independent producers who have proved their worth. If the State go in for this kind of encouragement, they should encourage not only people who have proved their worth, but also people who have never had a chance to prove their worth.

My hon. Friend the Member for West Nottingham put forward the interesting suggestion that we should finance the production of British films in the future by subsidising productions out of the yield of the Entertainments Duty. The House will realise that is not a matter about which I should be expected to say anything. It is a matter of high fiscal policy which would have to be considered very carefully by the Government, and about which the Chancellor of the Exchequer would have a good deal to say; but the suggestion will go on record, and I have no doubt that at some stage during the Committee discussions he will have something further to say about it.

There was an intervention by two Scottish Members who, as usual, were very concerned to safeguard the particular interests of their country. The hon. and gallant Member for Argyll (Major McCallum) asked for an assurance from me that Scottish taste would be catered for when films are being produced or sponsored. That is not really a matter for the Government or for the Board of Trade to deal with. We do not produce films, nor do we dictate as to what films shall be produced. The matter of Scottish taste may be left to the film producers who will no doubt have an eye on the Scottish market, though what its value is compared with the English market I do not know. So far as we have any say in the matter, Scotland will be safeguarded. The hon. and gallant Member for Perth (Colonel Gomme-Duncan) was anxious to have Scottish representation on the Films Council. I am prepared to say that we shall be ready to deal with this in Com- mittee. There is at the present time, and always has been, a Scottish exhibitor included among the four exhibitors' representatives on the Films Council. We are ready to look at that suggestion in Committee and to see what can be done.

Apart from the tax and the quotas, the point of most interest in the discussion has been the change in representation on the Films Council—the reduction in the number of independent representatives from 11 to five and the increase in other representatives. I quite realise the desire of some of my hon. Friends on this side to ensure that there is on the Films Council an adequate representation of people who are not connected with the industry. An industry of this kind is not merely a producing industry in the sense that the engineering and other industries are; it is much like the Press, the stage and radio in having a capacity for influencing people's minds, and it is essential that the cultural interest should be carefully watched by people whose prime concern is the cultural interest and not the commercial interest of producers or exhibitors.

On the other hand, we feel that the present membership is somewhat unwieldy. It is true that present membership is not reflected in the attendance at the meetings. I do not know whether it is a particularly strong argument for the reduction of the independent membership if I tell the House that, leaving aside the five independent members who have the best attendances, the record of the remainder is that, on an average, they have attended only one meeting in 3.9, but it does show that we can possibly get along quite well with a smaller number of people there. I am advised that one of our difficulties is to get the right sort of people to serve on these bodies. There are so many bodies of this kind, not only Government but voluntary bodies, upon which people are continually being invited to give their services, and there are not such great numbers of people with the requisite qualifications and the amount of, time to spare to serve. We propose to reduce the number of independent representatives from 11 to five.

Then there has been a further suggestion that the scales are weighted unduly at the present time against the exhibitors. I am not prepared to say now whether I think that is the case or not, but having carried this Bill, we do not want to embark upon a new Films Council and start off on our new course with dissatisfaction in the various camps. If, in Committee, any accommodation can be reached which will give satisfaction to those who feel that there should be more independent representation and those who feel there should be a closer approximation of trade interests on the Council, there is no reason why we should not be able to come to an agreement on the subject.

My hon. Friend the Member for Huddersfield (Mr. Mallalieu), who takes a close interest in these matters, made an interesting point about the Bill containing nothing which would stop people showing British films on three days in the week and not on the other three days in the week. I am advised that it would be burdensome to exhibitors to make an allocation for different parts of the week, and that there is always a difficulty that in many parts of the country a large number of theatres change their programmes in the middle of the week. I do not know how many do so, but I believe it is quite a large number.

The point was raised by the hon. Member for Greenwich (Mr. Reeves) that there was no reference in the Bill to the children's Saturday morning film clubs. I do not know that this is the correct vehicle for dealing with that subject, but I do know that there is very considerable controversy about the Saturday morning film clubs. About 50 per cent. of the people I meet are wholeheartedly in favour of them, and the other 50 per cent. regard them as the work of the devil in the person of Mr. Rank. I am not prepared to express an opinion. My children are not old enough to go to Saturday morning film clubs. It is certainly not a matter to be dealt with in this Bill, although I agree that, in view of the impact of films upon a child's mind, it is something which should receive the attention of everybody who has the good of the children and of the film industry at heart.

My hon. Friend the Member for Accrington (Mr. Scott-Elliot) and the hon. Member for Bucklow (Mr. Shepherd) were both very much concerned about the point, with which I have just dealt, about independent representation on the Council. I would merely repeat to them that it is a matter that can be discussed in Committee and that we will be as sympathetic as we can on the subject. My hon. Friend the Member for East Islington (Mr. E. Fletcher)—another one of those who speaks with far more knowledge of this matter than I do—asked me if I would clear up the position under Clause 5 in regard to the six independently produced films to be shown by the three circuits. He asked me if it meant that each one of the three circuits would have to show six specially selected films and that they would count as quota, but that if the quota had already been filled, then that would be no argument. The answer to that, of course, is that he is perfectly right. His assumption is quite correct.

Mr. Lyttelton

Eighteen.

Mr. Belcher

It could mean 18 films. I do not think that it necessarily means that there will always be 18 films, but it could mean that.

We have come to the end of our discussion of this Bill. I am sure that we will have some equally helpful and cooperative discussions during the Committee stage. There is a considerable amount of detail which falls to be discussed in Committee, but I am encouraged, by the way in which the Debate has been conducted today, to believe that we shall not run into undue difficulty. We are dealing with an industry which has grown very rapidly. I would like to say how much I agree with the noble Lord the Member for Horsham (Earl Winterton) who intervened to point out that during the last 10 years the British film industry, for the greater part of that time, has had to put up with inconveniences and disabilities such as have not been known certainly by its greatest competitor on the other side of the Atlantic ocean. In view of these very great difficulties which have been encountered, including not only the smashing up of their studio space but the drafting away of their actors, actresses and technical people, and everything else, I think that the fact that they have done as well as they have in the last 10 years is very encouraging. I hope that this Bill will mark one further step in the onward march of an industry which I feel has a great deal to give to this country in the years to some.

Question put, and agreed to.

Bill accordingly read a Second Time.

Bill committed to a Committee of the Whole House for Monday next.—[Mr. Snow.]