HC Deb 02 March 1949 vol 462 cc473-82

Lords Amendment: In page 2, line 35. at end, insert: (4) The Corporation shall not make a loan to any person for the purpose of financing the production of a film or programme of films unless that person agrees to produce from time to time to the Corporation, as and when required by them so to do, an estimate of the cost of producing—

  1. (a) that films or, as the case may be, each film in that programme of films; and
  2. (b) any other films the production of which he finances, either in whole or in part, or in the commercial success of which he has any financial interest, at any time before the loan is completely repaid,
and in making any such loan and exercising their other powers under this Act in relation to any such loan, the Corporation shall have regard to the amount which might reasonably be expected to be received by the person to whom the loan is made from the distribution—
  1. (i) of the film or films the production of which is to be financed by means of the loan; and
  2. (ii) to such extent, if any, as appears proper in the circumstances, of the said other films."

9.5 p.m.

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

I beg to move, "That this House doth

agree with the Lords in the said Amendment."

This Amendment covers points that were raised during the Committee stage of the Bill and again in another place. The effect of the Amendment will be to empower the Corporation to require any borrower, whether a producer or a distributor, to produce budgets of the films which he financed or helped to finance before his loan has been repaid. Equally, the Corporation is required always to have regard to the borrower's expectations of revenue from films wholly or partly to be financed by means of the Corporation loan, and, in suitable cases, to have regard to his expectations from other films. It makes clear that the Corporation is not expected to make loans to the producer producing films or programmes of films merely because the films have artistic or other merits and regardless of whether or not the receipts, including, of course, the receipts from overseas, are likely to cover the costs of production.

Needless to say, the Corporation, in exercising judgment on the commercial prospects of the films, will have a somewhat difficult task to discharge. Moreover the difficulty is, I think, especially great with the more expensive type of film designed for competitive exploitation in the international market. On the other hand—and I will emphasise this point—it will not ever be possible for British film production to prosper by making only small films intended mainly for the protected home market. My right hon. Friend will, therefore, ask the Corporation not only to keep close watch on the costs involved in the projects submitted to it, but also to remember the importance, to both the industry and to the national economy, of the different types of film production, including international pictures. In appropriate cases the Corporation must be prepared to run proper risks. It will be expected—and rightly expected—to operate with reasonable prudence, but it is, after all, being established for the purpose of supporting and encouraging the production of films, and if at the end of five years the £5,000,000 remains undiminished, and if that result has been achieved only because the Corporation has, in fact, done very little business, then this Bill, which, on the whole, has been very well received, will have failed to achieve its purpose.

Let me refer briefly to paragraph (b) of this subsection, that is to say, to the films which will be financed by means of the Corporation loans. This reference is necessary, because in many cases the Corporation will look to repayment of its loans not only to the revenues from films financed by the Corporation but also to the general assets of the borrower, and this being the case the Corporation will necessarily be interested in the other activities of any person to whom money is left, and in particular will be concerned with the cost and potential revenues of other productions which he may finance either wholly or partly with other money.

9.8 p.m.

Mr. William Shepherd (Bucklow)

We on this side of the House are, of course, pleased to see this Amendment, because I think it is true to say that it was due to the intervention of the Opposition that the attention of the Government was directed towards the need to insert in the Bill some provision to make certain that there was not rash expenditure out of money disposed by the Corporation. However, this Amendment is extremely weak and extremely woolly, and I do not think it gives the protection to public funds, or, indeed, the direction to the industry, which would have been given if the Amendment moved originally by the Opposition had been accepted. I think that to confuse the issue by saying that because we want some lien on the assets of the distributor or producer, we are going to involve ourselves in some spread-over with films not financed by the Corporation, makes it impossible for the intention that was behind this Amendment to be carried out. If we are to relate a given expenditure to a given set of films, then the Corporation can check the expenditure and presumably say what should or should not be done. If we are to say that they should have regard to other films which they are not financing, the task of segregation will be one which I think the Corporation is not likely to carry out satisfactorily, and, therefore, I think that the Amendment is not as satisfactory as it ought to be.

I should like to have seen the Amendment drawn in more rigid terms. While we want to see risks taken—and we know that there must be risks taken with money—I should like to have seen a definite limit put on the risks per picture, so that we would have the satisfaction of knowing that the Corporation was not lending money without any chance of getting it back. I hope that the Parliamentary Secretary will tell us what will happen, and whether this particular Amendment will apply to the money already loaned to the extent of £1,000,000 by this Corporation whose record of expenditure in the past has caused many of us to raise our eyebrows. Will he tell us what steps the Government are taking to see that the £1,000,000 is not used in a reckless fashion? The Amendment is by no means as satisfactory as we would wish, but we have long since learned to be thankful on this side of the House for small mercies.

9.12 p.m.

Mr. Eric Fletcher (Islington, East)

I do not think that it is right for the hon. Member for Bucklow (Mr. Shepherd) to pretend that the Opposition are entitled to claim the credit of having inspired this Amendment which was made in another place, and which this House is now being asked to accept. I was looking at the Report of the Debates in Committee in this House on 8th December, from which it is quite clear that an Amendment designed to secure the object of the Amendment which was made in another place was in fact moved by my hon. Friend the Member for Eton and Slough (Mr. Levy), and set out in column 444 of the OFFICIAL REPORT.

While I agree with the hon. Member for Bucklow in that I do not think this Amendment is entirely satisfactory, I think that it is important to bear in mind that it was Members on this side of the House who urged, on the Committee stage, that some such safeguards as these were desirable. May I remind the House that the hon. Member for Eton and Slough moved to insert in Clause 2 of the Bill words to this effect: That the Corporation shall make no loans without the right to examine and amend the budgeted costs of production and without being satisfied that all reasonable economies are made."—[OFFICIAL REPORT, 8th December, 1948; Vol. 459, c. 442.] That Amendment was not accepted by the right hon. Gentleman the President of the Board of Trade because he wanted time to consider the matter, and he gave an assurance that the matter would be considered in another place.

Personally, I think it would have been far better if an Amendment in the language suggested by my hon. Friend had been adopted, for this reason: I think that the Parliamentary Secretary has tonight made a most important statement. We now know much more about the intentions of the Government in regard to this Film Finance Corporation than was known when the Bill was adopted by this House before Christmas. Before Christmas questions were asked about the extent to which this money would be available for what are, necessarily, the hazardous ventures of film production, and at that stage it was doubted whether the primary object would be that the Film Corporation should advance what is called the "front money," or the relatively safe money, or whether it was intended that this money should be used for the more speculative part of film production.

Tonight, the Parliamentary Secretary has, I think wisely, announced that it is not the intention of the Government that the Film Corporation should adhere strictly to a policy of safety-first. As I understand it, the Parliamentary Secretary has announced that it is intended that the Film Corporation should take a sporting risk in backing film productions, both those which are intended primarily for entertainment in this country, and also those on which necessarily more money must be spent, and which are intended for international consumption. That being so, it is a proper corollary that, if public money is to be spent on what is necessarily a speculative enterprise it is essential that adequate safeguards should be taken to protect the expenditure of public money.

All this Amendment does, as I understand it, is to say that the Corporation shall, before making any loan, either to a distributor or to a producer, obtain an estimate of the cost of production. I should have thought, that even without this Amendment we might have expected any prudent lender of money to have required an estimate of what the film would cost; that what was necessary was, that the Amendment should go further and, in the language of my hon. Friend the Member for Eton and Slough, contain some machinery to ensure that the public money which is to be spent is spent wisely and with all due regard to economy; that it was not enough merely to have an estimate, but that it was essential to have a detailed estimate showing how the money is to be spent—what is to be paid for the story and the script, how much is to go into the pockets of the producer and the stars, and so on—and that there should be every possible opportunity for a vigilant check on expenditure.

It is common ground among those who are interested in the film industry that one of the root causes of the parlous condition in which the industry is today is the expenditure and waste that occurs in the production of films. Now that the Government are to be directly interested in this industry by spending public money, I believe it is time that the most careful steps are taken to ensure the elimination of all unnecessary waste and extravagance in film studios. I believe it to be quite possible to eliminate a great deal of the waste and extravagance that goes on today, without any adverse effect on the quality of films which this country can hope to produce.

Having said that, I think it is difficult to say whether one ought to vote against this Amendment or to support it. If it were possible within the rules of procedure, I should have hoped that there would still have been an opportunity, before this Bill becomes law, to tighten up this Clause along the lines I have indicated, in order to protect the public purse; if that could be done I should have hoped that it would be done, if not, I would hope, in view of what was said on this side in Committee, and in view of what I believe is the intention behind this Amendment, what has been said tonight will be borne in mind by the Films Finance Corporation.

9.20 p.m.

Mr. Benn Levy (Eton and Slough)

I confess that when, during the Committee stage of this Bill, an Amendment I moved was rejected, I accepted the reasons given and thought that the matter was finished. The reason for rejecting my proposal was that the Portal Committee was being set up and that all my suggestions fell within the province of that investigation; that it was therefore appropriate to wait and take no action until the Committee had reported. But, an Amendment now comes along from another place whose ostensible purpose is to carry out the purpose of at least one of the Amendments then rejected. The fact that this Amendment has apparently been accepted by the Government can bring us to only one of two conclusions: either it has been accepted because the Government have changed their mind and no longer consider it necessary to wait for the findings of the Committee, or it has been accepted because the Government have considered it very carefully and have come to the conclusion that it does not mean anything and that therefore they might just as well accept it. My hon. Friend the Member for East Islington (Mr. E. Fletcher) made the point quite clearly, that only an estimate of costs is called for, which does not mean very much.

Mr. Donovan (Leicester, East)

It does not even do that. As I read it, it is only an agreement to produce an estimate from time to time.

Mr. Levy

I am obliged to my hon. and learned Friend. I thought it was the shadow of an Amendment that we were discussing, but apparently it is only the shadow of a shadow. Is there really any reason why an Amendment should not be accepted by the Government which really has the effect of doing what is ostensibly the purpose of this Amendment? If the excuse is no longer valid that we have to wait for the Committee's report, will my right hon. Friend consider at this late stage accepting an Amendment in a form which will have some force. After all, what is the purpose? The purpose is not to lend public money unconditionally. I want public money to be lent to help the industry over an awkward patch, especially as that patch is involving very serious redundancy in the studios. But I do not want public money to be lent unconditionally. The conditions are quite clear and are recognised by the House even without any findings from the Portal Committee. The conditions are that economies must be effected, and there are only two ways of doing, that; the one is on the floor of the production studio, and the other is by cutting the exorbitant tax which is levied by the distributors. The Amendment I should still like my hon. Friend to accept in the place of this Amendment was an Amendment which specified both these forms of economy, not merely one of them, and saw to it that they would be implemented. I ask my hon. Friend whether he will reconsider the point.

9.24 p.m.

Mr. J. Edwards

I am sorry I cannot accept the suggestion of my hon. Friend the Member for Eton and Slough (Mr. Levy). We are discussing a Motion to agree with the Lords in this Amendment, and it is impossible, short of rejecting it, to do anything about it. My right hon. Friend has been at considerable pains to try to do what he thought was the best in all the circumstances, and having regard to the other inquiries and so on that are at present on foot, it would be wrong of me tonight to go into details of these things. I hope the House will accept the Motion.

As regards the money already lent, a subject raised by the hon. Member for Bucklow (Mr. Shepherd), I am advised that the operating company will have to produce detailed budgets of all future films in conformity with this Amendment. The point about detailed estimates was raised by my hon. Friend the Member for East Islington (Mr. E. Fletcher). I should have thought it would be, in any case, for the Corporation to insist on getting a proper detailed budget, as indeed the interim company is already doing. I do not think that there will be any difficulty on that point. I hope we may have agreement on the Amendment tonight.

9.26 p.m.

Mr. Edgar Granville (Eye)

There is one point made by the Parliamentary Secretary in his first speech to which I should like to refer. He said he thought that this money would not be used merely for productions for the Home Market.

Mr. Edwards

I am sorry to interrupt the hon. Member, but I do not think I said that. What I said was that it would never be possible for British film production to prosper by only making the small pictures. I did not go any further than that, and I did not tie up the provision of the money with the whole setup of film production in any way.

Mr. Granville

I hope that that does not mean that it is the intention of the Corporation to lend large sums of money for extravagant and experimental films in an attempt to capture the dollar market, which hitherto has been such a disastrous failure. I hope that this does not mean a reversal of the general trend of opinion made quite clear on both sides of the House during the Committee stage of this Bill. It was shown that in the present set-up a certain amount between the distributor and the exhibitor is completely lost. Despite quotas and Government co-operation, at present in the film industry we read about more and more redundancy. The industry appears to be almost bankrupt, and it would be a completely unwarrantable act on the part of the Government to advance money to finance films which were experimental and to produce prestige films in an attempt to capture the dollar market, which hitherto has been such a disastrous failure.

Mr. Edwards

I was not implying that loans would be granted for what are called prestige films, but I do not want the House to think that money would not be forthcoming for the proper production of what I call international pictures. There is an overseas market which we have to bear in mind. That is all I had in mind.

Mr. Granville

All I hope is that the Corporation will get better advice than the Parliamentary Secretary's Department were able to get. I hope we are going to see this money used for the production of films which will enable the loan to be repaid from revenue. The hon. Member for Bucklow (Mr. Shepherd) called this a weak and woolly Bill. I call it wild and woolly. So far as one can see under this Amendment the companies will not have to produce an estimate, so presumably the money can be advanced, and when some part of it is spent they will have to produce an estimate. If the estimate is not satisfactory we do not know whether the money will be lost, whether it will be repaid, whether it will lead to a stoppage and more redundancy, and whether Pinewood and Denham will follow Shepherd's Bush. I can understand the President of the Board of Trade being anxious to try to satisfy the general opinion on the Committee stage that some safeguards should be included. However, this is not a weak and woolly one; it is a very wild and woolly one. I sincerely hope that this will not be the last word and that the Corporation itself will take every opportunity of seeing that there is an effective, proper and economic control on how the money is spent in the interests of film production.

Question put, and agreed to. [Special Entry.]