HC Deb 29 June 1950 vol 476 cc2489-592

4.43 p.m.

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

I beg to move, That this House takes note of the Annual Report and Statement of Accounts of the National Film Finance Corporation for year ended 31st March, 1950. The first Report of the National Film Finance Corporation shows clearly how much it has achieved during its first year of operations. In recording that achievement, I am sure the House would want me to pay tribute to Lord Reith and his colleagues for their hard work and for the imaginative way in which they tackled their very heavy responsibility. I should like to refer, especially, to the part-time members of that Corporation. If ever part-time directors earned the very small fees they are paid, these certainly did. I should like also to pay tribute to Sir Michael Balcon for his services in advising the Corporation on individual film projects.

I think the Report justifies the statement I made in the Debate in December last that: …if the Government had not established the National Finance Corporation a year ago there would have been by this time an almost total collapse of British film production."—[OFFICIAL REPORT, 14th December. 1949; Vol. 470, c. 2695.] I do not need to summarise the Report to the House. It sets out clearly a number of things. It sets out the difficulties the industry was facing when the Corporation was established, the difficulties due to the poor revenue expectations of the film producers. I shall add a few words about the revenue position later.

The Report had a good deal to say about the position of financing in the industry and describes the methods of finance it has had to adopt in providing working capital for different kinds of film production. It emphasises the difficulties in this industry of getting sufficient control over the budgets and production costs of individual producers.

The House will have noticed that a large proportion of the money available has been loaned to a single company, the British Lion group. The House will re-member that it was the original conception, when this Corporation was established, that it should lend to distribution companies which were themselves financing production, though we intended, at a later stage, to work out methods of financing independent producers direct, and not through distribution companies.

As the Report makes clear, both methods are now in operation. The loan to British Lion has come under some criticism in certain quarters, and the House will have noticed that on the matter of the British Lion company the report is very frankly worded, as I am sure, the House would wish it to be. But it is clear, and I want to stress this, that except for that loan to the British Lion company a high proportion of film production would never have been made. It was a necessary first step in saving the British film industry from disaster, even if it meant, as it did mean—and one must be frank, and the report is quite frank—putting loans into a company before being able to take all the necessary preliminary steps to secure effective control over expenditure.

If the Corporation, and the committee preceding it, had had to wait for such control, British film production would have come to a full stop. The Corporation is not complacent on the control of expenditure even now. It makes clear that, even at the end of the first year, its control over the production of the British Lion group, being indirect, is "less effective than elsewhere," as it says in paragraph 63 of the report.

The report refers to improvements in financial control it was able to insist upon as a condition of loan, but it goes on to comment: The degree of independence given to, or assumed by, some of the producers, is such that full information, especially when units are on location, is not always provided. Too frequently, also, approved budgets are exceeded. Therefore, the Corporation is not yet satisfied that its control is adequate. It is right that I should say that, and not burke this issue in any way.

There are three things that can be said about the part of British Lion in the Corporation's activities. In the first place, films of great value and great prestige—and what is even more important from the financial point of view—of great box-office appeal, have been made as a result of the loan made to the British Lion company. During the period since the British Lion group was enabled to continue production, as a result of this loan, there have been produced "The Third Man," "State Secret," "The Happiest Days of Your Lives," which has been very successful in terms of box-office, "Odette," which has set up new records and is likely to be a film of world appeal on the scale of "The Third Man," and there has been "Maytime in Mayfair" and other films. That is a point to be borne in mind in considering the Report of the Corporation, that these films could not have been produced, in all probability, if this Corporation had not been established.

The second point is that, in spite of the problems of financial control, the degree of financial control over production by the British Lion group has greatly improved, though the Corporation is not yet satisfied—and I think the House would want the Corporation to exercise more vigilance in this matter of financial control over production. Third, although the accounts of the British Lion company have not yet been published, I understand that they are likely. to show a material improvement as compared with the position at the time the original loan was made. I think it right to make that point to the House in considering the position of loans made by the Corporation. Some loans have been made also to other distribution companies, and here the Report shows the Corporation is satisfied with the control exercised over the production involved.

Turning to the Corporation's activities in relation to independent producers, on which many of my hon. Friends expressed some concern when the Bill went through the House, because they thought it involved a concentration of finance on distribution companies, they will be glad to see from paragraph 26 of the Report that most of the Corporation's loans have been to independent producers, though not, of course, the bulk of the capital loaned. The Board of Trade were not slow in defining, and later extending, the clases of case in which these loans could be made direct to independent producers. In fact, there have been 36 such loans to 29 companies, as one can see in Appendix D to the Report.

The Report shows that the usual methods of financing have been taken into account. It was always assumed that the commercial banks would provide "front money" up to about 75 per cent. of the budget or the cost against the distribution guarantee; but the Report shows that one of the major distribution companies has recently reduced the proportion of cost covered by its normal guarantee. Then there have been cases in which the bank concerned has failed to discount a distributor's guarantee, leaving not 25 per cent. or 30 per cent. of the cost of the film to be financed by other means, but 100 per cent.

The recently successful film "Morning Departure," which I am sure many hon. Members would agree was a first-class production, brings great credit to the British film industry, and at the same time is of considerable box-office attraction. It was one for which the N.F.F.C. had to provide "front money" and "end money" as well. The House will have noticed in paragraphs 40 to 45 of the Report a dissertion on the question of the security on which the Corporation has insisted. This has been the subject of a number of Questions and also of Debate in this House. I do not wish to repeat the whole of that section, but the House will have noticed that the general condition of the Corporation is such as to ensure. that its loan is not the first money to be lost. The Corporation has generally provided "middle money" or, as it says in the Report, "the front part of the end money."

The House will have noticed, I am sure with approval, a new class of case which was approved on 20th February this year, and is referred to in paragraph 50 of the Report, under which the Corporation's loan-making authority was extended to cover advances to companies organised on a co-operative and nonprofit distributing basis, without insisting on private investment apart from the deferring of a certain portion of the fees, salaries and wages until other costs had been recovered.

This enables loans to be made to guilds or co-operative groups of independent producers, and the cases which gave rise to this authority arose from a decision of two of the prominent trade unions in the industry to form such companies for purposes of production. I am sure that the House will welcome this development and will wish it every success. It has been gratifying to see in an industry in which the normal production units have been forced to contract, for one reason or another, an example of private enterprise from the trade union side.

I am sure, without in any way being complacent, that the House will agree that the Corporation has done a first-class job in the face of considerable difficulties. It has had success, and—I think one can use this phrase in no sense of complacency—its success is not to be measured solely in terms of the number of films which have been made and which would not have been made but for its activities. I think its operations have also had a wholesome effect on the methods and financial working of film production.

In paragraph 20 the Corporation takes up a point which has been expressed a number of times in this House, that when the Corporation was established it was felt that it might be possible to establish more economical standards and perhaps in general a higher code of commercial practice. The Report continues: Something, at any rate, seemed to be necessary if the industry were to regain the confidence of private investors. So, by exercising a measure of financial control both over the distributing companies and also over independent producers, it has been able to achieve a great deal in affecting some measure of economy as well as in encouraging higher commercial standards in budgeting, cost control and in the presentation of accounts, though this improvement is very far from complete. As I have said earlier this afternoon, it is not possible to achieve miracles in this industry in a single year.

Let me now turn to the future. The Government's policy on the rôle of the Film Finance Corporation is exactly the same as when the Corporation was established, which was through the provision of working capital, to enable this industry to float itself off the sand bank on to which it had drifted and to become once again an industry which can expand the quantity of its production without lowering its quality. That is still our objective today, and I believe we have advanced a long way towards it, though, as became clear from the Bill which has been given a Second Reading by this House, the job is certainly not yet complete.

There is a general point that I would like to make. Taking into account especially the good effect which the Corporation is having on the industry in aiding it to improve its commercial standards and economy. I am sure hon. Members will be coming to the conclusion that the Corporation is fulfilling a rôle for which there may well be a permanent need in the industry, not indeed on the basis of the provision of Government money, but by association with more normal means of obtaining finance. I believe that those who in past years have advocated what used to be called a Films Bank as an integral part of the industry's structure, will feel that this first Report of the Corporation has considerably justified their arguments.

It is impossible to discuss the position of the Corporation either as regards its present or its future without talking about the financial position of the industry as a whole, because the future of the Corporation and its financial prospects are closely bound up with the wider prospects of the industry as a whole. Let me remind the House of the concluding words of the Report: … whatever the Corporation may be able to do, its financial operations cannot be more than a measure of expediency. The lending of money will not bridge the gap between income and expenditure. There has been considerable thought and public discussion, not least in this House, on the question of bridging the gap between income and expenditure in film production. It raises very many questions. First of all, of course, it raises the question of the share of box-office receipts which come to the producers, and that in its turn raises the question both of the share of those box-office receipts taken by the State in the form of Entertainments Duty and also the question of the relative shares of exhibitors, distributors and producers. First of all I should like to deal with the question of Entertainments Duty, which was referred to in the Plant Report and has also been much discussed in recent Debates in this House.

Earl Winterton (Horsham)

It was not only referred to but criticised very strongly in the Plant Report.

Mr. Wilson

I agree with the noble Lord's correction. It was criticised in the Plant Report and also in the Gater Report. The view has been expressed in many quarters, and not least by the noble Lord himself, that it was impossible to get a reasonable revenue for producers without some reduction of Entertainments Duty. That raises very wide financial considerations, which has been the subject of debate by this House in recent weeks, and, quite apart from that, I think the House would agree that a straight reduction in Entertainments Duty would have been a costly and clumsy way of achieving the aim of getting more money flowing back from the box-office to the producer. As I said in some remarks to the Association of Cine Technicians two months ago: If the present proportions between the various sections of the industry were continued, and if no reduction in Entertainments Duty were passed on to the consumer, for every million pound remission of Entertainments Duty not much more than £100,000 would come back to the British producer. Again, there have been proposals, taking various forms, under which a lower rate of tax would be charged for British films than for foreign films. But I am bound to remind the House that discriminatory taxation of this kind would be in defiance of our international obligations.

As the House will be aware, discussions have been going on during the past fortnight between the Treasury and representatives of the film industry in the hope of drawing up a scheme to be introduced within the industry under which, as a result of minor changes in admission prices and adjustments of the Entertainments Duty Schedules, revenue coming from the box-office to the producers of British films could be increased. I am glad to be able to tell the House that as a result of these discussions agreement has now been reached and that I have received a letter only this afternoon bearing the signatures of the four associations principally concerned in this matter, recording their agreement on the scheme which has been before them.

Mr. Shepherd (Cheadle)

Is it also true to say that there was no qualification in the agreement?

Mr. Wilson

I am not quite sure what the hon. Member means by "qualification." I propose to say a little about the agreement and if, at the end, he has any questions to ask I shall be glad to try to answer them.

I do not think it would be convenient to the House for me to attempt to read the whole of the agreement, because it is rather long. I sent a copy to the right hon. Member for Aldershot (Mr. Lyttelton) and I hope it was received. I have also placed copies in the Library so that hon. Members may study it in case they want to read it quickly before they make their contributions to this Debate. I am considering what is the best way of as quickly as possible making a complete copy available to all hon. Members who want one. It might be for the convenience of the House, however, if I indicated the main outlines.

The Treasury have indicated to the industry their willingness to abolish Entertainments Duty on seats up to and including 7d. and to reduce by a halfpenny the duty on all seats above 7d. and up to and including Is. 6d. This will not involve any change in the price of these seats though it will be of some assistance to the exhibitors, particularly those owning small theatres who are in a difficult position in competition with the bigger theatres; it should enable them, in due course, to improve the quality and the service which they provide.

At the same time, provision is being made by which seats exceeding 1s. 6d. and not exceeding 3s. 9d. in price could be raised by 1d. in each case, of which a halfpenny will go to the Treasury in increased duty to offset the loss of revenue of the reductions on the lower priced seats. Special provision is also being made in the case of seats above 3s. 9d. The principal changes which my right hon. and learned Friend the Chancellor of the Exchequer will be proposing to the House involve changes in the whole Schedules of Entertainments Duty enabling the exhibitors to make the small increases in prices for admission without bringing themselves into new and higher ranges of Entertainments Duty.

The results of these changes will be, first of all, a net reduction in the Treasury receipts from Entertainments Duty of some £300,000 and an increase in the amount of box office earnings remaining in the hands of the exhibitors, in the first instance, at least by some £3 million. As part of the arrangement, however, the exhibitors have agreed to pay half of this additional sum, in other words, about £1½ million, into a central pool from which payments will be made to producers of British films. The administration of this pool will be in the hands of a committee consisting of representatives of the four trade associations who have signed the agreement: the principles by which allocation from the pool will be made will require the approval of the Board of Trade, and the Board of Trade will also appoint the independent chairman of the committee which will operate these allocations.

The Government have made it clear to the industry that payments from the pool to producers of British films must be made on a purely automatic and objective basis. I think it would be wrong for the committee to be in the position to make discretionary grants to particular producers and I am sure the House would not wish there to be any such element in the payments made. Although detailed arrangements have to be worked out, payments will be made on the basis of a fixed percentage of the actual box office earnings in this country by British films, thus providing a further financial incentive to produce films of high box office appeal.

I should make it plain that the receipts of the pool will be channelled through not only to first feature producers but also to producers of supporting items, short and documentary films and so on, though not to news-reels.

Mr. Michael Foot (Plymouth, Devonport)

May I ask my right hon. Friend whether the American companies producing films with their blocked sterling in this country will be included?

Mr. Wilson

The definition of a British film in this case is the definition of a British film in the Cinematograph Films Act, 1948, and is all films counting for quota. That would include, of course, films produced in this country by British subsidiaries of American firms.

I should also mention that the Government trust that it will be possible to use a small proportion of the receipts from this pool to aid bodies which have been established within the industry for the purpose of improving the quality and value of British films and also to support the production of types of films the value of which is not always measured by their box-office earnings. Nevertheless, by far the larger percentage will go to first and second feature producers. An illustration of what I mean is, for example, children's films which it might be possible to aid out of this pool, although the exact working of the pool is a matter for further consideration and discussion.

Mr. Beverley Baxter (Southgate)

I am afraid I did not quite understand the right hon. Gentleman. I understood him to say that these sums which have been recovered from Entertainments Duty will go, in proportion to box-office earnings, to encourage companies to make pictures of high box-office value. Now he says the money is going to encourage artistic and not necessarily box-office films. Does that apply to feature films?

Mr. Wilson

I do not think the hon. Member quite heard what I said. I must apologise. The point is that by far the greater proportion—one might say 90 per cent., although I do not know what the figure will be—will be channelled on a purely automatic basis on box-office earnings to first and second feature producers. A small proportion will be allocated both to aid some of the bodies to which I have referred—what they are is being considered—and also to make possible the continuance of the production of particular types of films which I am sure the House would wish to see maintained but which, by their nature—and I am sure the noble Lord the Member for Horsham (Earl Winterton) appreciates this—are not at present able to meet their cost out of box-office earnings. I gave the example of children's films as a case in point. This matter is to be further considered by the industry and there is to be further discussion and I cannot say very much more about it at present.

Mr. Ralph Morley (Southampton, Itchen)

Can my right hon. Friend say whether any organisation is to be set up to which a portion of this money shall be allocated for the production of children's films, and what would be the nature of the constitution of such an organisation?

Mr. Wilson

I think my hon. Friend is taking the matter much further than so far has been considered. I am sure that he and other hon. Members and quite a number of people in the country want to see the production of children's films maintained and, as I have said, the use of the pool in a small way, without diverting too much from the main purpose, may be to assist in that direction although it is too early at the moment to say what will be assisted.

The main results of the scheme should be to provide a considerable increase in the revenue of the British film producing industry since they will receive not merely the £l½ million from the pool but also, of course, their share on a rental basis of the increased box-office revenue remaining in the hands of the exhibitors. The result should be that the revenue flowing back to producers should be increased by some 15 per cent. or 20 per cent. above the present figure and that should have a very considerable effect on the revenue position of the industry.

I am sure that the House, while endorsing the need for additional capital in the hands of the National Film Finance Corporation to maintain film production—as it did a few minutes ago—will agree that by far the most important thing is to improve the revenue position of the industry on a commercial basis. Indeed, I think one of the pleasing things about this scheme is that the additional money will be found, not from any outside sources, but from the sale of the products of the industry—from the box-office; from the public who want to see the films being produced, and who wish to see maintained a good British film producing industry.

I am sure the House would wish me to pay tribute to the representatives of the associations concerned within the industry for the way in which they have put sectional interests aside and have combined to agree to a policy which is designed to help the whole industry. Perhaps it will not be inappropriate particularly to refer to the position of the exhibitors, because in the past a number of us have pointed out that their direct financial interest as exhibitors was not always coincident with the financial interests of the country, and not always directly coincident with the financial interests of the producers, though when I said this last December I pointed out that there were many leaders on the exhibition side of the trade whose devotion to the public interest far transcended any considerations of financial or short-term views.

I think that this has been proved by the attitude of the exhibitors in these negotiations. The exhibitors do, in fact, get relatively little out of the new proposals, and are involved in more work in making their contribution to the pool. However, I am certain that what they are doing to help the British film production of this country will, in the long term, redound to their own benefit as well as to that of film production.

I should like to turn to the problem of the distribution of the revenues of the industry after tax—that is, the distribution between the exhibitors, distributors, and producers. On this, of course, we had the Plant Report which the House debated last December. Various organisations in the film industry were invited to comment on the Report, and their comments showed differences of opinion, of course, on various points; but I have got to say that the general view of the industry was hostile to the main thesis of the Report, particularly to the central recommendations for introducing more competition into the industry and for setting up an independent tribunal.

The comments of the various sections of the industry were referred to the Cinematograph Films Council for a general view. The Council, as the House knows, has, under the Cinematograph Films Acts, a wide mandate to keep under review the progress of the cinematograph films industry in Great Britain. I am glad to say that the Council, instead of recording mere differences of opinion, got down solidly to the job of giving a view of the industry as a whole. It set up a subcommittee—of which, I believe my hon. Friend the Member for Nottingham, North-West (Mr. O'Brien) was a member—which put in a great deal of hard work, and produced a report which is a unanimous report apart from the memorandum of dissent by the representatives of the A.C.T.

The Council's Report is in striking contrast to the earlier views expressed by the trade organisations, and it does show a real effort on the part of the trade members and producers to take a wider and less sectional view of the state of the industry. They have accepted the chief contention of the Plant Report, which is that the arrangements for distributing and exhibiting films in this country have become too rigid to allow the good films to earn as much as they could for the producer, and have agreed that more competition and flexibility should be introduced into the trade. But they could not agree with the more drastic measures recommended in the Plant Report, particularly the measures for competitive bidding, because they felt and said that the theoretical advantages of this form of competition could not be thoroughly applied to the film industry owing to the impossibility of standardising film production or of having any common formula covering the different kinds of films.

But the Council felt that more could be done and should be done to give as much encouragement as possible to the more successful films. Of course, the scheme I have announced today will help with that. They agreed that certain adjustments in the distribution system were needed in order to bring this about. The individual recommendations they made to achieve this are complicated and technical, and I think it will not be necessary for me to enter into any detailed discussion of them, particularly as joint discussions are going on between the exhibitors, renters and producers on this question.

So I turn finally to the other side of the problem, that of reducing the gap—the problem of production costs. This was the subject, of course, of the Gater Report which we debated in December, and I need not repeat what the report said or the points we all made in debating it last year. However there are one or two points I should like to stress. First, I hope the changes in the revenue position arising from the new scheme I have outlined to the House today will not lead to any remission of activity in getting costs down on the part of the industry.

This industry, with a home market of only a fifth or sixth of the market which the United States industry has, cannot afford any extravagance, any excessive fees or payments, or any excessive pandering to artistic perfectionism. [Interruption.] The right hon. Gentleman knows what I mean, even if he does not like my choice of language. Great strides have been made in the past year or more in getting costs down, and these are also showing considerable results. As I have said, the National Film Finance Corporation has itself made a considerable contri- bution to this work. The work must go on, and the improved financial position of the industry must not be allowed to stand in the way.

Mr. Baxter

I am sure the President will forgive me for interrupting him. If there should be a decision to turn another Shakespeare play like "Hamlet" into a film, will that come under the term "pandering to artistic achievement"?

Mr. Wilson

If there were any suggestion to spend £1,250,000 in producing a film—and I am not referring to "Hamlet" or "Henry V," which did a great deal of good to the British film producing industry, and were thoroughly good propositions in every respect—

Earl Winterton

The right hon. Gentleman's supporters below the Gangway are manifesting anxiety.

Mr. Wilson

—but if there were any suggestion to spend £1,250,000 to produce a film likely to earn at the box-office far less than its cost. then that would be a proposition that I should not consider economic. We have all known of films—examples have been quoted in the House—produced not only in this country but in the United States, in the making of which thousands of pounds were spent in order to try to get one particular scene just right. I think the right hon. Gentleman has given us illustrations of this sort of thing—where they have expended tens of thousands of pounds upon one particular scene which, in the end, has not appeared in the finished film. It was that sort of thing to which I was referring. I was not speaking of the sort of thing the hon. Member for Southgate (Mr. Baxter) mentioned in his interruption.

It is important also to make active progress on what is one of the central themes of the Gater Report, the relationships between managements and workers in the industry. A few weeks ago, when I was addressing the bi-annual conference of one of the trade unions of this industry—with which my hon. Friend the Member for Nottingham, North-West is associated—I said this: The technicians and workers in the industry led by their trade unions, have a substantial contribution to make to the revival of the film industry in this country. For example, to insist on the over manning of a particular job, whether in the studio or on location, may look like reducing unemployment. In fact it is likely to hinder the recovery of the industry and, therefore, in the long run, to cause unemployment. The Gater Report drew attention to what needs to be done in this direction.

The existing wages agreements undoubtedly require review, in particular to provide greater elasticity in working hours, and in conditions of work on location.

That was one of the lessons of the Gater Report. For 12 months or more the two sides of the industry had had before them proposals for a joint industrial council to act as a negotiating body between employers and the three principal unions one of whose first jobs would be to examine the present agreements. It is extremely disappointing that the difficulties which have been experienced in establishing this joint industrial council have not yet been overcome. It is a matter of urgency, if the production cost problems of the industry are to be solved, that these difficulties should be overcome.

Another of the subjects still requiring attention on the production side is that of studio costs. Independent producers who are obtaining finance from the National Film Finance Corporation complain that in order to get a distribution guarantee from one of the major distributors they are frequently forced to use a studio associated with that distributor, and that they thus have to pay a higher studio rental than they can afford. I am not suggesting that the major studio owners are taking advantage of their position to overcharge. I think the point is that one of the main reasons for the high level of rentals at the bigger studios—those associated with the big distribution companies—is the heavy overhead expenses due to the existence of elaborate general service departments which are frequently not required at all by the small producer.

Mr. Shepherd

Might it not also be that owing to the burden the industry carries continuity is not possible, and that therefore the overhead charge on the studio is very heavy indeed?

Mr. Wilson

That is a point I have made on a number of occasions. It is, of course, very much a matter of argument how much of that overhead charge should be passed on to the individual independent producer by these big companies. It is a very debatable point. If the major organisations are not prepared to allow independent producers whose pictures they distribute to use the less costly small independent studios, then it is urgent that they should take steps to re-organise their own studio charges so that they can accommodate these independent producers at rentals which they can afford.

Earl Winterton

I am sure the right hon. Gentleman will not mind my putting this point, to which I think he will be sympathetic. It must be remembered that a good deal of this so-called heavy overhead charge is due to trade union restrictions which only allow certain people to do certain things.

Mr. Wilson

I have already dealt with the relationship between the two sides of the industry, but I think the noble Lord will agree with the point I have been making about studio costs. It is in-fensible for any company to use its control over distribution to force a particular independent producer into a studio at a higher rental than he would have to pay on, say, the free market.

Now I come to what is to my mind the central problem of the industry—the responsibility for initiating production, the mainspring of the industry, because whatever questions have been raised in this House about why more films have not been produced this is really what we have been discussing. The National Film Finance Corporation is not the mainspring of the industry, and was never intended to be. It exists to provide working capital for appropriate projects that are brought to it, and its main problem in stimulating production has been, as the Report makes clear, the shortage of good projects and good scripts coming forward. In drawing attention to this I want to make it quite plain that I am casting no reflection on our script writers and others concerned with the planning of production, because our script writers and technicians are second to none in the world.

The deficiency is rather in the organisation of the industry, which seems incapable of mobilising the available talent to the full. As long as the Rank Organisation was in the centre of the picture we had a central organisation which was mobilising the available talent and organising what in the industry is called pre-production, and so on. Now a great deal is still being done by other groups, by the Rank group itself, and by independent producers, but the mainspring of the industry is still, I think the House will agree, inadequate. To my mind, one reason for this is that distribution is far too much in control. The distributor in this industry fulfils two functions. First of all, he acts as a wholesaler, selling and distributing the films made by the producers. But secondly, he acts also as a banker, giving guarantees of sufficient standing and security to enable the producers to obtain bank loans in the form of front money. The distributor is, in financing production, taking very considerable risks, and therefore his services as distributor are expensive.

Of course, the dependence of the industry on the distributor involves the independent producer in the use of particular studios. If the industry were in a sounder financial position, as we hope it will be, there would be less need for distributors to act as bankers. If other sources of finance were available, if banks were willing to lend front money direct to producers, distributors could confine themselves more to distribution and charge no more than a reasonable commission for the function of wholesaling.

Mr. Drayson (Skipton)

Could the right hon. Gentleman suggest whose money the banks would be lending for this purpose?

Mr. Wilson

I do not know what the hon. Gentleman really means. For a considerable time the banks have been lending money the sources of which are known to the House.

Mr. Drayson

Their own depositors.

Mr. Wilson

Their own depositors. They have, in fact, been lending it against guarantees from the distributors. I have suggested that the excessive control of the industry by distributors is involving the industry in high costs of distribution. I was going on to suggest and I think the House will agree, that the existing distribution services are inadequate; they are too costly and too rigid, and it is certainly a question whether we shall not need a distribution agency capable of acting on behalf of producers, doing a purely wholesaling job and not a financial job; a distribution agency established either as a co-operative agency by producers, or by an enlargement of the functions of the National Film Finance Corporation. Even this will not, I think, provide enough of a mainspring to ensure full production in the industry.

If, as I think, there are disadvantages in the excessive control of the industry by distributors, this does point to the need for a stronger organisation on the production side by concentrating a number of independent producers, for instance to produce on a group basis. This would facilitate production planning and preplanning, the commission and preparation of scripts, and so on. If this happened I think it would be a healthy and important development in the industry, and I am sure that the National Film Finance Corporation can play an important part in helping to get it established. I am sure the whole House would wish to see the National Film Finance Corporation assisting in this way.

Another need, I think, is for better arrangements for overseas distribution. A good deal has been learnt in the past few years about overseas selling, and a great deal has been done, especially by the Rank Organisation, in very many countries in all parts of the world, in many cases in face of tremendous difficulty in the form of restrictions on our films. The industry is still, I think, in need of some central organisation representative of the main production units for the purpose of maximising our revenue from overseas. There is a great deal the industry could do on a voluntary co-operative basis in improving this, particularly in working together to choose films appropriate for particular markets, and also giving appropriately selected films—films capable of earning money abroad and raising the prestige of our industry—the advantage of selection by such a voluntary co-operative body.

In spite of the length of time I have been speaking, I am aware that there are very many aspects of film production, and of the factors bearing on this Report and the future of the Corporation, which I have not touched on. I have said nothing about joint production with American companies, for instance, which is already an important part of current production in this country, and which is an integral part of our programme for producing films capable of showing on world markets. I hope, as a result of the relationship with the American industry which we trust will follow the discussions I have had recently with Mr. Eric Johnston and Governor Arnall, that American production in this country and co-production can be facilitated to the benefit of the industries in both countries.

I have frequently stressed that the problems facing this important industry can be solved only if all the parties to it—Government, both sides of the industry, exhibitors and renters—play their full part. On the changes in the Entertainments Duty structure, which will enable greater revenue to flow to the producers, I have already indicated this evening what the Government are prepared to do. It is now for the industry to put its house in order, to eliminate waste, to increase its efficiency, to reduce its costs, to remove rigidities in distribution, and to make those structural changes which I have indicated are in my view essential.

The industry now has a great opportunity to put itself on a sound and secure economic basis. Remembering the thousands who depend on it for their livelihood, the millions who depend on it for their entertainment, and the rôle it can play on the screens of the world, I am sure this House will want to express to the industry the view that in facing up to this heavy responsibility it must not allow itself to fail.

5.30 p.m.

Mr. Oliver Lyttelton (Aldershot)

I hope that the President of the Board of Trade will not take it amiss if I say how profoundly disappointed I was by his speech, which ranged over almost all the subjects which are not relevant to the present position of the industry and made no mention of those matters which really are of import. He spent a large part of his time in an exegesis lecture to everyone else and at the same time said very little about the Government's rôle in all these matters.

It is first necessary to look at the background against which this Debate is now taking place. The Plant Report was presented to Parliament in November, 1949, and a Debate was initiated by the Government in the following month. December 1949. At that time, the President of the Board of Trade, in his opening remarks, used these words: I am sure it will be a Debate that will cut right across party lines… as I hope this one will, too— and I should like to say here and now that the views expressed by hon. Members in all parts of the House will be of the utmost assistance to the Government in framing a long-term policy for the industry, which we were not in a position to do until these reports were received, and until public opinion had had time to make itself felt on their conclusions. He went on to say: I am sure the House will understand that the Government, in proposing that a Debate should be held so soon after the publication of these reports, and before we go away for the Recess, are not in a position—apart from expressing their broad agreement with most of the conclusions of both reports—to go into any detail on plans for giving effect to these conclusions until an opportunity has been given to the various sections of the industry to comment on them."—[OFFICIAL REPORT, 14th December, 1949; Vol. 470, c. 2682.] Now we have another Debate, and bearing in mind the words of the President of the Board of Trade at that time, which I have just read out, we should not have considered' it unduly precipitate for a long-term policy to be before us now considering that the industry is very hard-pressed. I am not in a position today, I say quite frankly, to criticise the Government's long-term policy on these matters for the simplest of all reasons: that they have not got one. Seven months have elapsed since the publication of the reports with no action, or no action of any significance, from the Government side.

The present Debate is taking place today not because at long last a policy has been formulated, but because the National Film Finance Corporation are now practically out of funds, or up to the limit of advances which the Board of Trade can make to the Corporation by statute. It is a new crisis and not a new policy which has been the cause of this Debate. If proof of the justice of these remarks were needed, it would be found in the fact that it has been left to the film industry itself to take the initiative in this matter. It is common knowledge that my noble Friend, the Member for Horsham (Earl Winter-ton), the hon. Member for Cheadle (Mr. Shepherd) and many other gentlemen engaged in the industry met and formulated proposals for the Government which formed the subject of the arrangements of which the President of the Board of Trade has told us.

Mr. Wyatt (Birmingham, Aston)

Can the right hon. Gentleman say whether this was a public meeting or a private meeting?

Mr. Lyttelton

I only know that a meeting took place; I was not there.

Mr. Wyatt

Then what is the point of the right hon. Gentleman referring to it, if he does not know what it was.

Mr. Lyttelton

The point is that I am making this allegation so that if the right hon. Gentleman has any reason to deny it he can do so—that the present proposals were the result of this meeting. The point that I am making is that the initiative in this matter came from the side of the industry. The arrangements concluded with an agreement by both sides. The President of the Board of Trade was courteous enough to send me a copy of the agreement, which came into my hands at the earliest possible moment; it was I think at 3.30; and I should like to thank him for having sent it. I hope that it will not sound ungracious, but the last paragraph of this report states: The Association whose signatures are attached accept the agreement as a whole as an interim measure. I think that we must remember these words when we are discussing it.

The Government appear, in the film industry, in three different rôles. They first of all appear as tax gatherers; secondly, they have forced themselves into the position of being the patrons, impresarios and financiers of the industry; and, thirdly, they are indirectly, through the National Film Finance Corporation, setting up in the business of being the judges and arbiters of public taste in films. This time, having wasted seven months, although, no doubt, their labours have been great, I do not think that they can take it amiss when I say that not even a Government mouse has been produced.

I do not say that the President of the Board of Trade may necessarily be the villain of the piece, or I should say, the villain of this no feature film. He has been a Minister in search of a policy, a policy that would not only put the film industry on a firmer foundation, but a policy which would have been acceptable to the Treasury. He has not been able to pull off the double event, and I am not sure whether he can even manage the single event.

I said that there was no long-term policy in what he has explained to us today, and I feel that I ought perhaps to try to justify that remark. I must refer first to the arrangements, suggested by the industry, which the President of the Board of Trade has given us this afternoon. Frankly, I do not think that even the most complacent supporter of the Government could say that this was a long-term policy. It has all the marks of being dictated by hasty expediency, and by a crisis which is bound to recur unless the main problem is tackled and the underlying conditions are improved.

Before I come to the Report of the National Film Finance Corporation itself, I must make this criticism, which really belonged more to the Second Reading of the Bill. These new arrangements are still insufficient and the extra £I million which we have just given are merely being put in to bolster up a structure which is still thoroughly unsound and rocky.

I must now go back for a moment to the Report of the Plant Committee. It appears to me that Ministers are not yet fully aware of the embarrassment with which they are likely to be faced when independent reports are called into being. They are quite undecided, for example, what to do about the Lloyd Jacob Report, which would never have been ventilated but for a Private Member's Motion. Here again, in the film industry, the Plant Report made a series of recommendations.

Mr. Wilson

What does the right hon. Gentleman mean when he says that it would never have been ventilated had it not been for a Private Member's Motion?

Mr. Lyttelton

I mean that the only time the recommendation of the Lloyd Jacob Report has been before the House has been on the Motion of a Private Member.

Mr. Wilson

The right hon. Gentleman will forgive me, but perhaps he will recall that in the Debate on the Budget I referred to this matter and said that we were going to consider it and were going to put proposals before the House.

Mr. Lyttelton

It is a matter of fact. We cannot regard the right hon. Gentleman's interpolations in a Debate on some other subject as putting the matter before the House. There has been no official meeting on the matter of the Lloyd Jacob Report.

I do not want to carry this any further except to say that, in the film industry. the Plant Report made a series of recommendations, and admittedly the most important concerned the Entertainments Duty. On the occasion of that Debate, I asked the President of the Board of Trade a number of questions to which. of course, I have received no answers. They would be embarrassing questions to answer. One was concerned with the position of the producers. The Plant Report said: The higher the British quota, the more certain it is, having regard to the amount of producing and playing talent and productive equipment available, that the value of the films produced in this country will not at best be more than average and that their share of the net receipts from British cinemas will not suffice to recoup their production costs. The Entertainments Duty takes too much. Later on, it says, and these are very strong words: When full allowance is made for errors of computation, it remains abundantly clear that the average receipts fall far short of the minimum average cost of production.…On either assumption, the average cost of production cannot be recouped at present from the cinemas of Great Britain, because of the high rate of Entertainments Duty. The Annual Report of the National Film Finance Corporation reinforces, in a single staccato sentence, the findings of the Plant Report. The President of the Board of Trade has already quoted the sentence, but I must do so again: But whatever the Corporation may be able to do, its financial operations cannot be more than a measure of expediency. The lending of money will not bridge the gap between income and expenditure. These words are about as far as we can expect a nationally-owned corporation, sponsored and controlled by the Government, to go. Personally, I am surprised that they went as far as they did. The writing is on the screen in unmistakable terms in that sentence.

The main burden of the Plant Report concerns the Entertainments Duty, but there are many other recommendations about which I shall have to say a word later. I must at this point express my personal view that the present arrangements will not be sufficient to put this industry on a sound footing. Of course, these arrangements represent an advance, because they are an acknowledgement by the Treasury that the milch cow cannot be milked to the extent that it has been without the danger of the poor beast collapsing in the dairy from debility. In one way and another, a good deal of overmilking is still going to take place.

As far as I understand it, the new arrangements appear to work like this. About £3 million is to be shared equally between exhibitors and producers, and £1½ million will be placed in a pool, managed by a committee, which will be solely for the benefit of the producers. I suppose that between 200 and 300 first feature films are required per annum to keep the cinemas open on the present scale. I do not know what number of British first feature films the President of the Board of Trade has in mind. If it is, say, 100, the direct advantage to each of these pictures will be about £15,000, plus a rather difficult calculation of the extra part of what the exhibitor gets which is to flow into the producer's pocket from the percentage of box-office receipts.

If the President of the Board of Trade has in mind 100 British first feature films, including these unremunerative films, the producer will get an advantage of £15,000 on each of them as a result of this new arrangement, plus some small extra percentage. But the Plant Report makes it abundantly clear that the minimum average cost of production for a British first feature film is £140,000 to £150,000 on the most efficient and economical scale, whereas the maximum, under the present arrangements, that the producer can get back from box-office receipts is about £90,000. In other words, there is a dead loss of between £50,000 and £60,000 which the producer has to face year in and year out on the production of British first feature films.

We do not need to be told that this arrangement which reduces the loss by £15,000 per film is an alleviation. I imagine I am exaggerating the number of British first feature films when I put it at 100. I may be grossly exaggerating. The number may be 50, in which case the producer will still be losing, according to the Plant Report, between £20,000 and £30,000 on every production.

It might be worth mentioning that one of the disadvantages of the scheme, or so it appears to me, is that the fewer British first feature films are made the greater will be the help from the fund. If the industry is run mainly with an eye on its financial advantages, there is what we have now come to refer to as a "disincentive" to making large numbers of British first feature films. The incentive is to make less films so that the £1½ million can be spread over fewer films, which is a curiously inverted result of an arrangement to stimulate and expand production of British first feature films.

So much for the relief the present arrangements give to the industry on that score. The House has just voted £1 million to bolster up for a short time a position that is still inherently unsound, without any long-term policy being discernible in the speech of the President of the Board of Trade. On the other hand, if this is "it," then what has happened to the other recommendations of the Plant Report, in which the hon. Member for Devonport (Mr. Foot) and others take even more interest than I do? It is true that I am more doubtful about some of these recommendations than they are, although I do not pretend to have studied these matters to quite the same extent. There is, for example, the subject of conditional bookings, which is allied to what shall be the maximum percentage of box-office receipts allotted to the producer. The House is very familiar with the subject. I am only summarising it by saying that members of the Plant Committee think that if there were much higher maximum box-office receipts available to the producer when he has a real success, then the need for conditional bookings could be dispensed with. Not a word was said about that, except in passing, by the right hon. Gentleman.

If this was a long-term policy we were discussing, maybe the Government would reject such a contention. but the House is entitled to know why. Again, I say that the absence of any reference to the subject underlines the fact that these proposals are not a policy but an expedient to meet another crisis which has occurred. The right hon. Gentleman comes down to the House and gets £1 million, and then proceeds to explain some of the reasons why he has had to do it. If this is "it," and if the idea of the Government is an arrangement by which they continue to levy Entertainments Duty at the present level—and the total levied will be very little different under the new arrangement from what it is now—it means that the old Government motto, "The consumer always pays," will be carried on in this Bill. If that is what it is, we should have been told so. But are there some other plans germinating in the right hon. Gentleman's fertile brain. If so, how long will be the period of gestation? Last time, seven months failed to produce any visible deliverance.

The Minister of National Insurance (Dr. Edith Summerskill)


Mr. Lyttelton

I thank the right hon. Lady, who has a vast knowledge of these medical subjects, for assisting me on this subject of conception and delivery. Perhaps I can put it in another way. If in seven months the right hon. Gentleman produces absolutely nothing, how long will it take to produce something?

Once again the Government have had to turn on the tap of the taxpayers' money. It is true that it is only a dribble, £1 million—nowadays we think nothing of £1 million here and there—but it is still dribbling into a tank full of holes. Some of them have been stopped up but many more remain. Hon. Members will not follow into the confusion of thinking that the finance is in any sense a return of the tax. The finance is loaning money against every stick of security which the National Film Finance Corporation can obtain. The President of the Board of Trade has different views about successful finance from an old-fashioned man like myself. He describes the operation of the Film Finance Corporation, which loses £700,000 on loans of £5 million, as a striking success. I should have expressed it a little bit differently. I should have said the fact that it has lost such a large proportion of its capital in a short time must not blind us to the fact that it has done successful work in other directions.

Mr. H. Wilson

Would the right hon. Gentleman have been satisfied if, on his old-fashioned canons, he had allowed the film industry to collapse? Would he have considered it then a striking success?

Mr. Lyttelton

The interruption is hardly worthy of the right hon. Gentleman's usual level. I was making the limited point that he should have expressed his gratification with the results in slightly different terms. He should have said—and I was coming to this when he interrupted me—that the industry owed a great debt to the Film Finance Corporation which, nevertheless, has involved a very great financial loss. It is a sign of the times that a Minister of the Crown should describe as a signal success a Finance Corporation which loses one-fifth of its capital in a few months.

The real reason why it has lost this money is because the Government have created business conditions over the general run of the British films in which films will always be carried on at a loss. There is no sign now of the possibility of the producers getting even a meagre profit.

Mr. Foot

It would be interesting to the House if the right hon. Gentleman could tell us when it was discovered by the people who produce films in this country that the Entertainments Duty was making absolutely inevitable a burden on the industry which prevented them from operating at all?

Mr. Lyttelton

I am not in the councils of the big film producers, but I should say that I became aware of it when I read the Plant Committee Report, which Committee was set up by the Government, and which lays down that on the most efficient basis there will be a loss of £50,000.

Mr. Foot

The level of Entertainments Duty has been the same for many years. At the end of 1947 the Rank Organisation, for instance, announced the biggest programme of film production ever organised in this country. That was at a time when the Entertainments Tax was at the same level as at present, but there was no mention, when it was proposed to go ahead with a £9 million production programme, that the Entertainments Duty would interrupt it.

Mr. Lyttelton

It turned out that because of that tax it was a losing programme. There is no doubt they put the need to fill the theatres at too high a figure, and Mr. Rank himself confessed that they engaged on too large a scale of film production. Neither the script writers nor artists existed on a scale sufficient to sustain that plan.

There is one other subject on which I want to speak, and that is the administrative difficulties. I do not know, but I thought that the President of the Board of Trade held out some hope that the present scale, which is set out in this table of the Report, is going to be radically altered. It really is intolerable that the scale of taxation should be so jerky and arbitrary as it is at the present moment, causing the utmost amount of administrative confusion. It should be imposed in a different way. Surely the time has come when we should have an ad valorem tax at two or three rates, and the Government, who have been continually engaged as amateurs in the industry, should leave it to the industry to work this ad valorem tax quite simply.

Hon. Members know very well that, for example, if an exhibitor wants to get another penny on the 1s. 9d. seats, under the present arrangements of taxation he would either have to raise the price to 2s. and give the Treasury 2d., or he would have to engage in one of those exhausting negotiations with the Treasury and the right hon. Gentleman, by which he keeps the ld. and the Treasury gets ½d. Surely the time has come when we can safely leave to the experts in the industry the planning of their business, so that they can make up the maximum price they can get consistent with the maximum attendances, letting the Treasury take the tax ad valorem.

Mr. Blackburn (Birmingham, Northfield)

I agree, and have agreed for over a year, with the general view put forward by the right hon. Gentleman that the producers, in general, are bound to make a loss on a first feature film, but as the right hon. Gentleman has accused the Government of lack of a long-term policy, I think it would help if he would tell us what is the Opposition's long-term policy for the industry?

Mr. Lyttelton

That is not our role. It is never the role of an Opposition. This old red herring has been dangled in front of my nose in more attractive terms and tones than those used by the hon. Gentleman. If I were, upon the Report of the National Film Finance Corporation, to elaborate at anything like the length taken by the President of the Board of Trade, on what my policy would be, I should be not only out of order, but I should take far too long a lease of the patience of the House.

I hope in anything that I have said I have not shown myself unmindful of the help which £5 million—now to be £6 million—has been to the producers. They have been given up to date exactly £5 million of help at a cost of about £700,000. It is difficult to overrate the plight to which British film production would have been reduced without this money. What I do not like is the continued bolstering up of a position which I still think is inherently unsound. Mr. Lawrie and his colleagues on the Board are to be congratulated on presenting an annual report in a series of short sentences, most of which appear to me to be couched in English language. It is very refreshing, and very few of the more popular cliches of our time are to be found there.

I confess to some amusement, as a Tory, not untinged by nostalgic sentiments, to see that the taxpayers' money has been used to finance productions which are intended to titillate the public fancy under such titles as "Saints and Sinners," "The Wonder Kid"—I wonder if that has any particular significance—"What a Carry on," "School for Randle," "Skimpy in the Navy," "She shall Have Murder," "Happy go Lovely," "The Galloping Major," "The Body Said No," and "Her Favourite Husband." It would have surprised some of the right hon. and learned Gentleman's predecessors at the Treasury—we heard a great deal about Gladstone in the earlier part of this afternoon's proceedings—to see the Treasury in their black funereal dress present at the first night of say "Skimpy in the Navy." And present they must be, at least in spirit because not only is the taxpayers' money being invested in these somewhat unorthodox products on the one side, but the Treasury get back £38 million in Entertainments Duty from the industry on the other.

I have already quoted the most significant paragraph in the Report and Accounts. They say in a very indirect way that much more comprehensive and broader-minded policies are required if larger operations are to be other than a stop gap and an expedient. They evidently think the same way as the Chancellor of the Exchequer thought, upon a broad national front. He said: We have tried to deal with it ever since by a series of temporary expedients which have led to a serious crisis as each expedient became exhausted. That is very true of the whole policy, if there is one, of the film industry.

I have two main criticisms to make upon the operations of the Corporation. The first is that £700,000, although a very massive sum, will prove to be far too small a provision for the loss against the total loans which the Corporation made. I am not entirely out of touch with expert opinion in this industry, and they put it, I hope wrongly, at a very much higher sum than £700,000. I suppose that if the Corporation lose a couple of million in the next 12 months they will say that they nave been three times as successful as they were last year. I have a great deal of confidence in Mr. Lawrie and his colleagues, but if losses on this scale are to be suffered it will be from the causes which I have discussed. We are asked to provide finance for producers who are not what the Americans call creditworthy, under these conditions. Whoever replies for the Government should give us some idea of what the size of the losses may be during the next 12 months.

The next criticism, which I fear is a very strong one, is that no less than three-fifths, or 60 per cent., of the advances are made to a single company. I hope that the President of the Board of Trade's explanation, both halting and incomplete, will be supplemented by some further statement. We are entitled to know in much greater detail why this has happened. I consider that a loan of such a disproportionate amount to a single company cuts across the whole conception of the Corporation and its usefulness to the industry. It says in the report that some time before the Corporation was formed the British Lion estimated that £2 million would be required to finance its production programme, already planned. My own information is that British Lion were promised this money, or a large part of it, by the Treasury before the Corporation came into being.

We are entitled to have an explanation of why this was done. When the accountants investigated the affair it was shown that £2 million was quite inadequate. The loan was eventually agreed at £3 million. It does not increase our confidence that such large advances should have been made to a single company. The report, in paragraph 11, descends into one of those Sibylline platitudes with which we are familiar in other contexts. It announces something which we can really see for ourselves when it says: Throughout the period covered by the Report the relationship between company or corporation and the British Lion Film Corporation has been radically different from that between company or corporation and any other concern, distributing or producing. Those are rather double-edged remarks. We would like to have a much fuller explanation why three-fifths of the money put up has gone to a single company.

I conclude my remarks by expressing my sympathy with Mr. Lawrie and his colleagues in that they are being asked to loan money, and public money, to an industry in which lending is, by the Government, made a highly hazardous operation. It is no use the President of the Board of Trade sneering at the City as he did during the last Debate, because it did not want to lend its depositors' money when the underlying conditions created by the Government means that there must always be a loss on the average of every British production. The time will come when Mr. Lawrie and his colleagues will be subject to a great deal of uninformed criticism. I do not think they will deserve it.

That criticism, as I have tried to show, should be directed to the Government, which cannot make up its mind about its long-term policy. What it does, it does too often, too little and too late. Too often, because it is bad for an industry to be tinkered with several times a year and to have its affairs the subject of debate in this House every six months. That is not good. Too little, because, as I have. shown this afternoon, the concessions do not bridge the gap between the cost of production and the estimated receipts. Too late, because it is not until crises actually develop that any schemes to deal with them are formulated or brought before this House.

6.6 p.m.

Mr. Edgar Granville (Eye)

The President of the Board of Trade has his sequences all wrong this afternoon. He introduced the cinematograph film subsidy before we had an opportunity of seeing the annual report of the National Films Finance Corporation. He told us in his speech that an agreement had been reached and that a copy of it will be in the Library. Those who have not seen a copy before the Debate will not be in possession of that information.

However, the right hon. Gentleman has been given the extra £1 million and I have not the slightest doubt that the Report will be received, as a result of the Debate, with general agreement by the House. I was a little disappointed that the right hon. Gentleman was not able to tell us something about his discussion with Mr. Eric Johnson, the representative of United States film industry producers. He said, in passing, "I have had talks with Mr. Eric Johnson," but there was not a word about them, although it was on a subject in which hon. Members take a considerable interest.

Undoubtedly, the President of the Board of Trade is in search of a policy. He comes to the House and makes a speech, we all make contributions, and, finally, the Debate is wound up, without a policy having been stated for the film industry. We get committee after committee. The committees would make good films which could be shown profitably in the cinemas. We could have been able to make them in abundance. There has been a long list of committees which have all made recommendations and we have discussed them in our Debates. Then we read in the newspapers that the industry is in a bad condition and that production is at an all-time record low level.

It has generally been believed that it is because of lack of capital that the industry is suffering and that if we could increase the capital we would increase the production of British films. I do not believe that. I believe it is the other way about. It is because we produce a series of first-class films, world beaters of export value, but use a series of bad films in the cinemas, with the result that they undoubtedly frighten away a good deal of money. I do not believe we shall solve these problems by coming to the House of Commons and making the kind of announcement that the President of the Board of Trade has made this afternoon. That will not provide the long-term policy and it will not establish or re-establish British film production on a successful basis.

Many of our technicians have gone out of the industry. In the old days we built up the industry by importing technicians from the United States. We never had an abundance of technicians. I have no doubt that, having read the Debates in this House and having gone from crisis to crisis, they have given up all hope of seeing a long-term policy for production and have gone into other industries. It will require something more than the establishment of a pool of this kind to attract them back. Artists, directors, lighting experts, cameramen, script writers and the rest have all suffered from the fact that the industry has been in the doldrums, and as many as could do so have left the country and gone to the United States of America or the Continent to find employment.

I am extremely disappointed that despite his favourite child—Governmental management of the film industry—all the right hon. Gentleman can offer us is this arrangement, about which he has told us and which was hinted at on the Finance Bill, which will be something in the nature of a production pool to encourage more production in our studios. An hon. Member asked the right hon. Gentleman the Member for Aldershot what his long-term policy was, and he was entitled to ask that. We have had quotas and we have had Debates for 15 or 20 years in this House, but I have never yet heard of a really long-term policy for the industry. A long-term policy has certainly not been produced by the Opposition.

At the risk of being thought heterodox, may I express my belief that the only way in which we shall be able to establish the British film industry upon a permanent basis, is by putting it upon a Commonwealth basis. We shall never build up our film industry upon a narrow parochial basis. Such things as accents give rise to difficulties in exporting films to the dollar markets. We shall never make home-produced films international until we try to plan them internationally. Before we are through with the tricky job of trying to put the industry on a permanent basis we shall be forced to organise it on a Commonwealth basis. All the Commonwealth producers are under quota. The Canadian producer qualifies for quota, and he has the additional advantage that the Canadian accent is better for the export trade in second releases, and so on, in the Middle West. We have had good films from Australia, such as "The Overlanders" with its exterior shots in Australia and studio shots in this country. India has produced some good films, and South Africa has great advantages in the production of films.

Why does not the right hon. Gentleman do something a little bolder and try to create a Commonwealth film industry and invite the Commonwealth Governments to make a similar contribution to the pool for financing production? I ask the right hon. Gentleman to consider this because—let us be frank about it—the attempt to get British films in any quantity upon the United States market, particularly in second releases to the Middle West, and so on, has been a flop. I do not know what the figure is; we have often asked for the figures of the Rank dollar balance sheet for the grandiose experiment to try to capture showings in the United States cinemas, which failed. Every attempt to build up parochial production here to reach the United States market has failed.

Why should we not do something a little bolder and bring in the producing industry of Canada, Australia and South Africa, and make a Commonwealth production pool assisted by a Commonwealth production council in this country? The Treasury of each Commonwealth country could make its contribution, and each country would qualify for the quota in this market.

I have said before that I think the film is international, and I repeat that to the right hon. Gentleman today. The Labour Party came into being preaching internationalism. It preached internationalism from a thousand platforms. Yet time and time again the Government have introduced Measures which try to build up or safeguard a nationalistic viewpoint. We cannot possibly save the British film industry unless we plan it on an international basis, and that can only be done with the co-operation of the Commonwealth and United States exhibitors and producers.

6.16 p.m.

Mr. O'Brien (Nottingham. Northwest)

I shall resist the temptation to go all round the earth on this subject. I agree with the right hon. Gentleman the Member for Aldershot (Mr. Lyttelton) when he says that these Debates are occurring in this House far too frequently. It is not good for an industry such as the British film industry to have these periodical inquests, for they are becoming inquests rather than discussions.

It would be most ungracious of me as the representative of thousands of men and women in the British film industry, if I did not convey our gratitude to the President of the Board of Trade and his Department for their constant and zealous interest in our affairs and their constructive aid. It is true that had the National Film Finance Corporation not been established there would, to all intents and purposes, have been no British film producing industry today.

The launching of the National Film Finance Corporation was timely. It was coincident—although it was not organised—with the decline in fortunes of the production side of the Rank Organisation. Those of us who know the subject and the facts witnessed that decline—temporarily, we hope—of the fortunes of production by the Rank Organisation with great regret because no man and no organisation could, out of their own commercial resources, have done more to try to put the British film industry on the map than did Mr. Rank and his Organisation. They were supported by others. There was the British Lion Film Corporation, with its great team of producers and executives. There was also the Associated British Picture Corporation, which has followed an active and progressive policy in keeping our studios going.

The fact still stands out that thousands of executives, artists, mechanics, artisans, technicians and others, both high and low, owe their employment today to the facilities offered by the National Film Finance Corporation. I regret that my right hon. Friend and subsequent speakers did not refer to the simple fact that, quite apart from the prestige of British films, and so on—I agree with the hon. Member for Eye (Mr. Granville) about the international claims of films—there was a human factor in this.

It may be of interest to the House to know that hundreds of families have, during the last 15 years, left their homes in various parts of London and established themselves in the vicinities of our larger studios—Pinewood, Denham, Elstree—where they rented houses or, in those early years, bought them on the instalment plan through building societies. Believing, as they had the right to believe in common with any worker in the country, that they could look for reasonable security in this growing and important British industry in which they chose to work, they got married and reared families. Today, the lot of these people is depressing and disturbing. Several thousands of them, most of them members of my own organisation, are in sore straits as a result of the decline in the fortunes of the British film industry.

Those who are left, are grateful for the help given by the President and his Department, though that help from our point of view, is completely inadequate. We talked about £1 million on the Bill which has just received its Second Reading. That may seem a lot of money, but the Treasury, in the last 10 years, have taken nearly £500 million out of the cinemas of this country in Entertainments Duty alone. It is no good hon. Members on both sides of the House dismissing it as an irrelevancy and saying that it is a racket, a bluff or a facade because a real problem arises when money is taken out of an industry which it cannot recover from the public because of increasing costs. If the Treasury have taken about £500 million in the last 10 or 12 years, what is £5 million or £6 million given back to it in this way? It is less than chicken-feed to an industry which has to operate in a big way.

I have said before, both inside and outside this House, that the Government should look at this problem in a bolder and bigger way than they are doing. The arrangement reached this morning with certain managerial associations in the industry is indeed an ingenious one, but I am afraid that Sir Wilfrid Eady of the Treasury was too clever a man for the puny minds of the industry. How they swallowed that scheme I do not know. It is true that it brings money into the industry, but it is entirely inadequate.

Before leaving that point, may I say that I feel there has been a serious departure in the practice of the Treasury, operated by other Government Departments, in coming to an arrangement of such importance as this one, affecting the livelihood in so many ways of nearly 100,000 people employed in the industry without consultation with the trades unions concerned. My right hon. Friend at the Board of Trade has always consulted the unions in the industry on all important matters of policy. While we have no right to be consulted, it is a practice which Government Departments have followed, especially in the last 15 years. I hope I shall not have to criticise the Treasury again in the House as I was obliged to criticise the former Chancellor of the Exchequer when he did something similar in imposing an ad valorem duty without consulting anybody.

It would be helpful if, in the Report next year—it is too late now—we could have in Appendix D another column showing the precise sums loaned to each producing company and, in another column, the repayments that have been made on those loans or whether any repayments have been made at all. In other words, we should have the facts itemised. I do not intend that as a criticism, but as a suggestion. Apart from that the Report is a splendid piece of work, submitted in record time.

While a rate of interest of 4 per cent. or 5 per cent. may appear to be reasonable, it can be a great trading handicap to some independent producing companies. The interest mounts up and has to be paid. Perhaps the Film Finance Corporation might consider in certain cases reducing the rate of interest so as to allow greater elasticity and facilities to certain independent companies.

We welcome the setting up of cooperative schemes and the blessing given to them by my right hon. Friend. At present my colleague association, the Association of Cine Technicians, has established a co-operative society for the purpose of production. My own organisation is embarking on a similar plan and in that way we hope to contribute constructively to the maintenance of the industry. But this idea of co-operative schemes should not be limited necessarily to those inside the industry. They should be open to any body of people who have at heart the interests of the industry and of international films. The right hon. Member for Aldershot mentioned a long-term programme, but he overstressed it. I support my hon. Friend the Member for Northfield (Mr. Blackburn), who asked the right hon. Gentleman what proposals he had to make.

Is it realised that the British film industry is 100 per cent. private enterprise? It is not my right hon. Friend the President of the Board of Trade or his Department or the Government who are on trial, it is the British film industry, a commercial, free, independent industry that is on trial. It is because of the breakdown of its component parts that the Government have had to intervene and give it aid, although that aid, in the view of many of us, is inadequate. If the Conservative Party or any other body of people can prepare a policy which the industry can operate without having recourse to Government support, I shall be happy, because I can see that a continued subsidy from the Government towards the film industry might, in the long run, lead to great difficulties and raise considerable problems.

I detain the House for this short time only to identify myself and those I represent with the work of my right hon. Friend. I have resisted the temptation to deal with many other points which can be dealt with in the future.

6.30 p.m.

Mr. Batcher (Holland with Boston)

The hon. Member for Nottingham, North-West (Mr. O'Brien) always speaks with such authority in these matters that anyone who follows him in Debate would be doing him the gravest discourtesy if he were not to refer to some of the remarks which he had made. I found myself very largely in agreement with much of what he said. The first and most important way in which we can view the problem of the film industry is in the terms of human suffering. Hardship is being sustained by members of the association which he so successfully leads and on behalf of whose members he entertains such a genuine and sympathetic interest at all times. Another point of great importance is that the amount provided by the Treasury by way of loan to the industry is very little com- pared with the large sums which have been taken from the industry over a period of years.

Nothing was of greater interest to me in the speech of the hon. Member for Nottingham, North-West, than to learn that his own and other similar organisations, by means of co-operative ventures, were engaging in film production. I am sure that the whole House would wish great success to these co-operative ventures. At this stage, however, my views begin to diverge from those of the hon. Member. He suggested that there should be co-operative ventures by people who are not connected with, or interested in, the film industry. I rather thought that the implication was that these co-operative ventures by people inexperienced in the industry were to be financed by the National Film Finance Corporation, whose first report we are considering. I am bound to remark that if a few of us with no knowledge whatever of this matter could secure from that body financial support to the extent of 100 per cent., we would be perfectly happy to experiment, and to see how we fared.

The hon. Member said that in the case of the film industry it is private industry that is on trial. He would be right but for one thing: namely, the heavy toll now being levied on the industry by the Treasury. But for this heavy burden of taxation, they would have only themselves to blame if the industry has got into a muddle and there would be no reason why the House should come to their assistance; but when, as the hon. Member himself said, so large an amount of money is regularly taken from the industry, it is not right to suggest that it is private industry which is on trial. Nor is it the breakdown of the components. Indeed, I hope to show later why I think that there should be a greater breakdown of the components in the industry.

I turn now to the report of the National Film Finance Corporation. I hope that whoever replies to the Debate for the Government will give us considerably more information on one or two points than has been given so far. The first point on which the Government must be pressed is the substantial loans which have been made to the British Lion Film Corporation. I know nothing at all about that organisation. All I know is what I see in the Report. One thing which is obvious, however, from paragraph 10 of the Report, is that British Lion are pretty bad estimators of their needs. That paragraph says: British Lion had originally estimated that £2 million would be required to finance its production programme… an independent investigation by accountants was required… The investigation showed the estimate to be quite inadequate. One is entitled to ask what steps the Corporation have taken to ensure that future programmes and suggestions which are advanced by British Lion do not contain the 50 per cent. error of their earlier estimate. In the light of their failure, as disclosed in paragraph 10, to estimate with any degree of accuracy, it is rather disturbing to learn from paragraph 11 that the relationship between the Corporation and British Lion has been "radically different" from that which any other concern enjoys.

Again, also on the question of British Lion, I ask the House to examine paragraphs 86 and 87 of the Report, which refer to money coming back to the Corporation for the purpose of re-lending. It is clear that money by way of repayments will come into the account of the Corporation but that none of it is due from British Lion We are entitled to ask why some of the smaller companies are able to make more rapid repayment than this larger concern and principal beneficiary under the loan I should like the President of the Board of Trade to give some further indication, for which the hon. Member for Eye (Mr. Granville) also asked, regarding the present state of his relations with Mr. Eric Johnston. If we are to examine all these matters, we should be told where the British industry stands in relation to the American industry.

It would be of the greatest possible interest to us all to be given some information as to the position of Mr. Rank's organisation. The whole country is-greatly indebted to Mr. Rank and his organisation for the way in which, at the request of the Government—let it never be forgotten that it was at the request of the Government—they assumed hurriedly the task of rapidly increasing our film production. They did well, but unfortunately their venture did not secure the hoped-for results. Nevertheless, Mr. Rank is greatly to be thanked for what he did, and we hope that the President of the Board of Trade will be able to say in what way he will be able to assist Mr. Rank's organisation on the lines of the assistance which is being offered to British Lion.

Earl Winterton

I naturally welcome that friendly reference to Mr. Rank, but I ought to say in reply that Mr. Rank is asking for no such assistance as that given to British Lion. I think that it would be better to keep his name out of it, because it really has nothing to do with this particular point.

Mr. Butcher

I am grateful to the noble Lord; I take his point. Nevertheless, it should be made clear to all producers—and I mention no names, if that would please the noble Lord—that if they require assistance for increasing film production, it will be made available to them.

The President of the Board of Trade indicated that some arrangement had been come to between the industry and the Treasury for a readjustment of the incidence of Entertainments Duty. As I understood it, the proposal was that the Treasury, by readjusting the prices of the cheaper seats and imposing additions upon the higher seats, would make a concession of some £300,000, and that these adjustments would result in an increased revenue to the exhibitors of £3 million. If that is so, one can only assume that the difference between £300,000 and £3 million is to come from the pockets of the ordinary picturegoers. Let us be quite clear what we are doing. We are basing any hope of coming to the rescue of the industry on the assumption that Bill Jones and his girl, who now sit in the 2s. 3d. seats will be prepared to pay 2s. 6d. or 2s. 9d. instead of moving to the ls. 6d. seats and so making a small saving for themselves.

The right hon. Member for Aldershot (Mr. Lyttelton) suggested that the Government were interested in the industry in three ways: as tax collectors, as im-pressarios, and as arbiters of taste. He forgot the fourth, and, perhaps, even more important, way in which the Government are interested: they are its creditors.

In dealing with this industry we ought to realise that we are dealing with an entertainments industry, and that all entertainments industries are subject to ebb and flow. This industry is suffering not only because of the shortage of money, although it is interesting to note that the duties on beer and tobacco, both heavily taxed commodities, are now providing diminishing returns. The film industry is also in competition with other and newer forms of entertainment of which television is perhaps the most notable. It is also in competition with the newly found freedom of the road due to the abolition of petrol rationing. It is also in competition with the live theatre. We are, through the Arts Council, endeavouring to establish a better taste in ballet and opera. It is in competition—

Mr. Speaker

I cannot find any reference to that matter in the Report.

Mr. Butcher

I hope that I am in order in suggesting that the sum contained in this Report which we are now discussing, and in relation to which we are forecasting the continuing activities of the National Film Corporation, must be judged in the light of the continued desire of the ordinary people to see the films which this Corporation is proposing to finance. I will pass from that point, merely saying that the whole future of the film industry and of the Film Corporation which serves its ends are bound up with the continuing desire of the ordinary man or woman for this kind of entertainment.

It is very difficult, as the President of the Board of Trade said, to know what can be done to put this industry back on a proper basis. We are all grateful to Mr. Lawrie and his colleagues for the magnificent work they have so far done, and the clarity with which they have explained what they have done. That in itself is refreshing. Their work will depend on whether the ordinary man and woman can be persuaded to continue to go to the picture houses.

I believe that in presenting this report to the House the President should consider whether the time has not come to make a much bigger separation between the production and exhibition sides of the business. Production and exhibition should be as far removed from one another as possible. I also believe that there has not been on the part of the film industry sufficient thought or desire to make local bookings to suit local needs. There has been far too much block booking and of not allowing the exhibitor as much freedom of choice as one would wish.

I believe that the President of the Board of Trade is eager to do all that he can to nourish the tender plant of the film industry, but as an hon. Member opposite has said, we have rather too many of these Debates on film matters. The President is rather like the childish gardener—if he will pardon the simile—who is constantly digging up his tender plant to see if the roots are any longer than they were a few days before. Doubtless that is interesting to him but unfortunately it does not contribute to progress and development in the way we are discussing in the light of the report. It is time we had some long-term plan from the Government, failing which these Debates will come along with their present regularity.

6.45 p.m.

Miss Burton (Coventry, South)

Last week, in common with certain other hon. Members, I put my name down in support of an Amendment to the Finance Bill dealing with children's films. Arising out of the Report which we are now discussing, and out of the opening remarks of my right hon. Friend, I should like to say how very gratified many people on both sides of the House and outside the House will be at the words used by the President. I know that they were general, but it would be an understatement if I were to say that we gathered from them that he would be in favour of looking into the question of children's films in this country.

Most of us have had experience of children in one way or another. I have had charge of them in school, evening institutes, youth clubs and at work. All who are accustomed to dealing with young people would agree that they copy. When we hear stories about young people of today having no manners, and this that and the other, I suggest that it is probably we who have been lacking, because the young people copy us. Therefore, it is most important that they should see on the films or in reality, people or things fitting for them to copy.

To take instances' of actual people, many young people would gladly copy Denis Compton, or, to be up to date, Washbrook or Stanley Matthews; or, to take the cinema, a gangster, Garbo or Jean Simmons. We should give these young people examples worth copying. Opinion may differ as to whether the examples I have mentioned are worth copying, but we know that when we have been to a serious film or a gangster film we have only to go out in the streets, where young people are imitating the persons they have seen on the screen, to realise what an effect the cinema has upon them.

I do not know whether it is good or bad to quote actual examples, but I remember having seen depicted on the screen a habit which many children I was teaching at the time seemed to like—that of chewing gum, which is not a prepossessing habit. When I was in America a friendly cab driver gave me a stick of chewing gum, and as he turned to face me I had no option but to eat it. That was all very well until I reached the end of the sweet part. I had no idea what to do with it; it seemed never ending. I remembered that I had seen people in films "park" their chewing gum, presumably when they had finished the sweet part. I had to "park" mine in the cab of the driver who had given me the chewing gum. That may have been a good or bad example.

Speaking seriously, the type of film that children see is most important. I am not speaking for any organisation; I have no connection with any; but I should like, as an ordinary Member of the House, and as one who is interested in the education of children, to pay tribute to the work of a woman who has done a great deal in this sphere. I refer to Miss Mary Field who has played a big pioneering role in the production of children's films. I hope that in the future the President of the Board of Trade will find it possible for the making of children's films to continue.

I believe that the only country other than Britain which makes a big effort in this direction is Soviet Russia. I have not seen any of these films, and I do not know whether they are good or bad, but I believe that we in this country should not fall behind in this matter. I urge my right hon. Friend to let us give the children something on the films which is really worth having and make possible more productive efforts, which may not necessarily yield sufficient revenue by themselves.

6.50 p.m.

Mr. John Grimston (St. Albans)

I wish to make only three points, one of which has been touched on by the hon. Lady the Member for Coventry, South (Miss Burton). The first point about the Report we are discussing is that I very much agree with my right hon. Friend the Member for Aldershot (Mr. Lyttelton) who said, "Thank heaven at last we have a Report in short and readable sentences which make English." Up to paragraph 21 I became more and more enthusiastic. but then, in paragraph 25, I met the sentence: all personnel probably have to be engaged ad hoc." I felt the standard had been let down, and much that followed was, possibly, not as good as that which went before. Then, in paragraph 26, there comes an assumption which, I think, is basically incorrect. It says: Many films have thus been produced … that is, due to the Corporation's activities— which could not otherwise have been made. We all agree that with the present level of taxation that sentence is probably true, but the burden of complaint from this side of the House is that the need for this Corporation has come about through the Treasury taking too much money out of the industry. Had the money been allowed to remain in the industry, there would have been no need for a Corporation of this kind and no need to have overcome all the difficulties which are so clearly stated in the Report in the subsequent paragraphs. The Minister has referred to many of them and, certainly, in the last paragraph of the Report it is pointed out that the whole of the activities of the Corporation do not and cannot resolve the troubles of the film industry.

I certainly believe that the Minister and many considering this problem are obsessed with the production of feature films. Admittedly, we have an existing pattern of exhibition in this country and have got used to it. But the basic function of the film industry is to amuse ourselves and if, in 1950, we think we cannot amuse ourselves without buying our amusement from abroad we seem to be in an extraordinarily poor position. If the President wants to set up a really healthy producing industry he should concentrate on building up the smaller units and learn to walk before he can run.

That leads me to the specialised film producers, many of whom operate near and from my own division. I have been at some considerable trouble to work out the effects of the financial provisions for these people. These people provide a training ground for technicians, scriptwriters and all the essential technical services of the film. Surely the more we can draw these people in and the more they can get experience in cheap ways the better will be the ultimate result.

If we are to encourage these people there is one step above all that the Minister can take easily, and for which he does not need any powers he has not got. That is to stop the practice of selling a composite programme to the circuits or cinemas. If we examine it we find that by doing so we are simply importing from the United States, at cut rates, mass produced and rather shoddy second feature films. This is the kind of thing on which the House obviously will be divided, not from side to side, but up and down. Those who, like me, stand for the producer, not only in this but in every walk of life, and not least in the case of the producer against the salesman, will see that this principle limits the producer and is a bad thing for the industry. I ask the President to go into this matter, about which he is fully informed.

My third point, which is quite simple, relates to the proposals he announced to the House. During his announcement he was interrupted by my hon. Friend the Member for Cheadle (Mr. Shepherd) who asked whether this arrangement had been agreed to by the exhibitors without any saving clauses. That seems to be a most vital question, and I hope we shall get an answer to it. It seems that, as the Minister admits that under our Geneva international agreements no compulsory scheme can be put into operation, he must, therefore, rely on a voluntary agreement with the exhibitors for the payment of the £1,500,000 they are to make.

Can the right hon. Gentleman enforce that payment? If he cannot, does it not make nonsense of a large part of this much vaunted encouragement to the trade? Possibly, large sums of money which we all now think are going to go to the producing side of the industry will not, in fact, go there. If the Minister cannot enforce the payment of this amount I would very much like to know what steps he proposes to take to achieve the result he now thinks he is achieving.

To a large number of small producers who are very concerned about it, failure to enforce these payments would be a most bitter blow, which would take a good deal of living down. I ask the Minister, or whoever replies to the Debate, to give a perfectly clear answer to the question of whether these agreements are enforceable and, if there has been any reservation on the side of the exhibitors, as to whether or not they propose to pay the full sum of money envisaged.

6.58 p.m.

Mr. Reeves (Greenwich)

The President of the Board of Trade set the tone of this discussion when he said, referring to a previous speech he had made, that, but for the work of the Corporation, whose Report we are considering, there would have been a total collapse of film production in this country. In all probability that is putting the situation at its very worst, but there is no doubt that the industry, before the institution of this Corporation, was in a very parlous state and that the work of this Corporation, difficult and trying as it has been, has considerably helped the industry to overcome a very severe crisis.

When listening to the speech of the right hon. Member for Aldershot (Mr. Lyttelton) I could not help feeling, that in chiding the Government, or my right hon. Friend, for not having produced a long-term plan, he was putting the responsibility on to the wrong shoulders. As my hon. Friend the Member for Nottingham, North-West (Mr. O'Brien) has said, this is a private enterprise industry and, although it has been necessary for the Government from time to time in the national interest to undertake measures in support of the industry, surely it is the responsibility of the industry itself to see its way through the difficulties of this time.

This young industry, which is of so much importance to our national life, has. during the last few years, literally staggered from crisis to crisis. The House must regret most sincerely— because we are all interested in the success of the industry—that it finds itself in this parlous state. Parliament cannot shut its eyes to the situation with which it is confronted today. First of all, our national prestige is involved. We want to see British films not only in British cinemas. but in the cinemas of the world.

The film has become the advance agent in the export industries of other countries, and in view of the great export drive we are undertaking it is imperative that we should have a flourishing industry in this country which can portray the British way of life on the screens of the world. Not only in the field of industry but in entertainment and education the film plays an important part, and 30 million people every week of the year still go to their local cinemas.

By quota lists, by loans and by other devices, the last of which is an involved system of rebate on the Entertainments Duty, the Government have helped in some measure to alleviate the situation. But the fact remains that American films have free access to our markets whereas our films are confronted with almost a closed market so far as American is concerned. That is good neither for us nor for America. There is no comparison between the two industries. Our industry is always at a disadvantage owing to the fact that the home market finds it difficult to recoup the cost of production.

A few years ago we thought that the British film industry was going through a period of renaissance, and very fine films were being produced. I would pay tribute to the work of the Rank Organisation whose films were becoming popular both at home and abroad. It was only when we tried the Hollywood method of producing films, which cost fabulous sums of money, that our difficulties started. In the end the inevitable crisis came; we could not cover our costs anywhere, and so we closed down production over a very wide field. Thousands of technicians and experts were thrown out of work and had to find employment elsewhere.

That was a very bad day for the British film industry. Fine pieces of work then being undertaken, particularly the series called, "This Modern Age" were finished, and now, finally, the production of children's films has gone the same way. I think of the magnificent work performed by Bruce Woolf and Mary Field, who were encouraged by the Ostrer Brothers in the production of these fine films. It is a great pity that the situation has reached this sorry stage. I believe the President was able to say that he hoped the new pool which was being arranged would enable funds to be available for the encouragement of this type of work.

The industry as at present organised cannot pay its way, and it seems to me all wrong that the taxpayer should be permanently involved in such subventions as we have heard of recently. The industry needs to be considerably integrated. The three parts of it work in a totally independent manner; there should be considerably more co-operation than there has ever been. I suggest that the distribution side is doing relatively well. The exhibition side is doing well, and has done, almost since the days when films were first shown on our screens. It is only the producer who is badly treated. He is the man who has the raw deal. It is he who cannot recover his costs. In this respect private enterprise has failed lamentably and, having failed, it falls back upon the taxpayer.

After carefully reading the Report of the National Film Finance Corporation I am forced to the conclusion that only drastic measures within the industry itself will contribute to a solution of this problem. When the Corporation was established we understood that it hoped to contribute to the continued projection of British films on the screens of the world. That appears from the Report, which also states that its object was to assist in maintaining stable employment. In spite of all its work neither of these aims has been achieved. It was recognised by all that great risks were involved in lending money for film production, and in its Report the Corporation had to conclude that loans would be justified only by overall achievements.

It is very difficult to discover what was meant by overall achievements. I suppose it was hoped to put the industry on its feet. If that were the hope then, surely, it has failed lamentably. If the industry is to live, and particularly if it is to survive the impact of television, which will be a growing competitor in the days to come, I believe that it has to pool its resources. It cannot afford to be divided as it is at present. Studios are going into disuse. One very large studio, I refer to Lime Grove, has already gone over to television, and will certainly not be available in the future for film production in this country.

A great co-operative effort is needed if the production side of the industry is to survive. I am sure that the offer to assist co-operative groups, or groups of technicians, to undertake the production. of films is the right move, particularly as these co-operative groups are organised upon a non-profit making basis. That is only one aspect. Many other reforms are necessary if this industry is to be saved. Rather than demand that the Government should provide us with a long-term policy, I suggest that it is the responsibility of the industry itself to go into its own affairs and to provide a solution to a problem which is harassing the industry and bedevilling the whole situation.

7.10 p.m.

Mr. Bell (Buckinghamshire, South)

The hon. Member for Nottingham, Northwest (Mr. O'Brien) said, and I agree with him in this, that the common feature of these Debates which we have periodically on the film industry is their inconclusive termination. We all have our views upon what ought to be done for the industry, but nothing seems to get done for it.

As my hon. Friend the Member for Holland with Boston (Mr. Butcher) said, one of the troubles that the industry is suffering from is that it is constantly being pulled up by the roots to be examined by the President of the Board of Trade and others. No one can expect this delicate plant to recover its robustness under this treatment. I do not know how often the President of the Board of Trade has dug up this delicate plant, but I should like to express the hope that he might dig up the Plant Report and have a look at the roots of that. Then we might get a little more constructive action.

As I understand the position, the principal objects of the National Film Finance Corporation were three, and two of them have been achieved. In doing so, it has performed a very useful function. First, it has kept in being the physical assets of film production which, otherwise, might have been lost in this difficult period. It has kept the studios and the equipment together. It has also succeeded in holding together the film technicians and operatives. I do not like the word "operatives," but it is a convenient general term for those engaged in the production of films, whether as players or technicians. It has held together a body of people who are able to produce films.

In those two objectives the Corporation has succeeded, and succeeded well. Of course, it has also succeeded in a limited degree in its financial object of attracting private capital to the promotion of films. But it certainly has not succeeded to the degree which was hoped. Nor has it succeeded in its ultimate financial object of attracting private capital back to the making of films without that capital being guaranteed, and indeed almost subsidised, from public funds. The Corporation, in the last paragraph of its Report, summarises and comments aptly upon its own performance when it says: But whatever the Corporation may be able to do, its financial operations cannot be more than a measure of expediency. The lending of money will not bridge the gap between income and expenditure. The hon. Member for Greenwich (Mr. Reeves) and the hon. Member for Nottingham, North-West, said that it was private enterprise which was on trial in this respect. It seemed to me that the hon. Member for Greenwich himself gave a partial answer to that argument though the answer was sufficiently remote from the argument to give no impression of inconsistency. Part of the answer, as the hon. Member rightly said, is that the British film industry is competing with an American industry which has a home market some three times as large as our own. Therefore, even an efficient private British industry might not succeed in holding its own against that competition. I do not say that it would not: I merely postulate that as a possibility.

But there is the immense further consideration that the British Treasury is levying £40 million a year from this private enterprise British industry. I deprecate the approach to this subject of the Government—and mainly, no doubt, of the Treasury—that there is a certain sum which it is reasonable to look for from the film entertainment industry and that the condition within which it has to operate successfully, within which the National Film Finance Corporation has to attract private capital to it, is the condition that that industry must supply £40 million a year in revenue to the public Exchequer. I entirely agree with the two hon. Gentlemen opposite, and my hon. Friend the Member for Holland with Boston, when they say that an entertainment industry is one which ought, in the nature of things, to be self-supporting. It ought to stand on its own feet. But I think that it is only true that it ought to stand on its own feet if it is given fiscal freedom; that is to say, if the Treasury's approach to it is that which it has to any other exercisable activity.

If the production of beer were to slump to such an extent that the brewers were being put out of business, I have a fairly confident suspicion that the duty on beer would be appropriately adjusted. But when we deal with the film industry, the machinery is entirely different. The Government say, "No. We have to get £40 million out of the film industry. We will set up a Film Finance Corporation and through that body we will feed back to that industry"—as it turns out—"some £700,000 a year."

At one stage I think that operation was called "priming the pump." As I understand it, priming the pump is an initial operation. One primes the pump a few times, and then one can pump and the water comes up without any further priming. But at the moment the National Film Finance Corporation is operating on a permanent priming of the pump basis, and nobody can see, in the immediate future, any time when that operation can be stopped.

I record my protest against the attitude which underlies the whole policy of the Government towards the film industry that they should treat the present crisis, for it is no less than that, by priming the pump for the Treasury. That is what they are doing. They are taking from the industry some £40 million a year and using about £700,000 a year of it to keep alive that industry so that they can continue to extract the same amount of tribute in the future.

I ask that the Government should begin to treat this industry from the revenue point of view in exactly the same way as they treat every other producer of Excise revenue. When they see that the burden imposed is too heavy, they should make the appropriate adjustment. We should not have this monkeying about which is going on by the prolongation of the National Film Finance Corporation. In saying that, I want to make it clear that I fully appreciate the work which that Corporation have done, are doing and will continue to do in the immediate future. But, as the members of that corporation have themselves been the first to say, their work is an expedient only; it is no policy for the industry. It is the duty of the Government to think out a policy and to bring this expedient to an end as soon as reasonably can be done.

7.20 p.m.

Mr. Michael Foot (Plymouth, Devonport)

From the remarks made by every speaker in this Debate, it seems that these film debates follow a familiar pattern and course. First of all, we usually have a speech from my right hon. Friend the President of the Board of Trade, in which he shows his good intentions about the industry and his obvious zeal to assist it, despite the criticisms which might be made of particular remedies which he puts forward. Then, we have the right hon. Gentleman the Member for Aldershot (Mr. Lyttelton), who shows how gracefully and wittily he can comment on a subject which he approaches with such a fresh and open mind. Then, we have my hon. Friend the Member for Nottingham, North-West (Mr. O'Brien), who tries to berate the Government very often for not adopting his advice, although he very often does not remember what that advice was.

We also have the noble Lord the Member for Horsham (Earl Winterton), who will no doubt be back in his place later, who tells us how brilliantly successful the Rank Organisation has been, and how, if only the Government will let them get on with their work, they will not make a worse mess of it than they have done already. On some occasions—at least, we had it in the last Debate—we have had the right hon. and gallant Gentleman the Member for Kelvingrove (Lieut.-Colonel Elliot), who addressed us on an amateur dramatic society which he had known some years ago. The suggestion was that if only they had had the good fortune to have been present some useful points might have been picked up by Carol Reed and others. We usually conclude these Debates with another speech from the President of the Board of Trade, and, a few months later, we find a few more film technicians out of work and the industry in a slightly more difficult state than it was at the beginning.

I agree with the right hon. Member for Aldershot that we should have had in this Debate a declaration of long-term policy by the Government, and a statement of what in their view could be done to help the industry generally. Despite the fact that my right hon. Friend the President, in his speech today, said that he was not going to be complacent, I think we have to recognise that the industry faces a very serious crisis. It is-perfectly justifiable for the President and others who have the responsibility for conducting the affairs of the British Film Finance Corporation to take full credit for having saved the industry from an even worse catastrophe. They have performed their functions on the whole fairly well, but do not let us imagine, whatever has been done by the Finance Corporation, that these measures are sufficient to establish a prosperous British film industry.

There are still much more serious-problems which have not been faced, and which, in my view, are not even faced in the statement made by the President today. What happened in previous Debates was that some of us said we thought there is something radically wrong in the industry, and that, until measures are taken to deal with these radical defects in the industry, no amount of provision of finance by the Film Finance Corporation or other such makeshift measures will solve the problem. That is not merely the view of a few back benchers on this side of the House, but it is also the view of the Association of Cinema Technicians, which is one of the trade unions concerned or one which includes in its membership most of the talent in the industry. It is the view expressed in much more moderate terms in Government Reports.

The right hon. Member for Aldershot suggested that I was in favour of the conclusions of the Plant Report, but I do not think they are anything like sufficiently revolutionary to deal with this situation., I think that, if the measures. suggested by the President of the Board of Trade were not effective, the proposals put forward in the Plant Report were equally proposals for tinkering with the situation. I was glad to hear the President's suggestion regarding the operations of the Film Finance Corporation as a permanent body, and also his suggestion that these operations might be extended to deal with the problem of distribution in the industry. That was the most hopeful hint in the speech of my right hon. Friend, but I would have liked to see it elaborated in greater detail.

The deep-rooted evils in this industry, to which there is reference in the last paragraph of the Corporation's statement, are simply these. First of all, the dictatorial powers exercised by the distributors; secondly, the near monopoly, both in exhibition and distribution; thirdly, the reduction of artists and technicians to a position of complete subordination. My right hon. Friend the President made some reference to "pandering to artistic perfectionism." I do not think there is a great deal of that in the film industry, and perhaps a little more pandering to the artists, instead of to the distributors, might make for a great improvement in the industry.

The other deep-rooted evil to be dealt with is that referred to by the hon. Member for St. Albans (Mr. J. Grimston)—the present position in which the producer takes all the risks and the other people do not take any. The distributor does not take any risks, nor does the exhibitor; the whole risk falls on the producer, who has the most difficult task in the industry. Nothing that has been suggested by the President deals with the remedying of these evils.

Nor has much been done to deal with the question of the fantastic overheads on the production side. Here, however, I hope that the Finance Corporation in its operations may have some good effect, not only in reducing the costs of films for which it is itself responsible, but in setting an example to the rest of the industry. But in the main no proposals have been forthcoming from my right hon. Friend the President which are sufficiently radical to deal with these deep-rooted evils of the industry which I have cited.

In the last week or two, there has been a visit to this country by Mr. Samuel Goldwyn, who knows something about the making of films in America, and who launched out in America against the whole monopoly set up there, because he believed that, if the film industry was to be successful, the film directors and producers must make the films which they wanted to make, and not films which the distributors dictated to them that they should make. He broke out and became an independent producer, and, because of his experience, he fought for the separation of exhibition from production. We can learn from his example and realise that no creative producer will be able to make the real contribution of which he is capable unless steps are taken to recognise his vital role.

It is a great pity that these essential problems of the industry—which have been discussed ad nauseam by the trade unions concerned, or at least by one of them, the Cinema Technicians, and who put forward proposals on the subject over three or four years ago—it is a pity that these essential problems should be submerged by the kind of campaign conducted by some sections of the industry and supported by every speaker on the other side of the House on this question of Entertainments Duty. That is really an alibi, and, if we concentrate on the question of Entertainments Duty, we still would not be dealing with the radical problems of the industry.

As to the speech of the hon. Member for Buckinghamshire, South (Mr. Bell), one would imagine that it was the industry which paid the Entertainments Duty and not the consumer. But the consumer pays the duty, and, if there was to be relief of that duty, presumably, the consumer ought to get cheaper seats. What is suggested by all these persons in the industry who are conducting this campaign against the duty, is that, if the duty was to be reduced, instead of the consumer getting the benefit, the money would go back into the industry, but, if it went back into the industry as it is at present organised, very little of the money would trickle through to the producer.

The exhibitor and the distributor, who are already making fat profits with no risks, would get the major advantage from any reduction in the Entertainments Duty, as advocated by hon. Members opposite in every speech they have made. As I said in an intervention, this story will not wash. This tale that the film industry in this country is in a state of chaos solely because of the Entertainments Duty has only cropped up in the last one and a half years. It was only after Mr. Rank and his friends had produced this chaos in the industry that they came along with this organised squeal and said that it was the Entertainments Duty which had caused all the difficulty.

In 1947, Mr. Rank introduced a proposal for spending £9 million on the greatest film production programme ever put forward in this country. On 25th January, 1948, he wrote an article in the "Sunday Times" in which he said: Now our target is steadily increasing production of first-rate films, based not on fear of public taste, but on faith in it. We have to see now that money is not wasted as has sometimes—though rarely to the extent that some people delight in believing—happened in the past; but we have also to see that money is not skimped to make pictures cheap in every sense. Still more important, we must never try to substitute money for ideas. The outlook, I think, is not so dark for British films as some would have us believe. Within our industry we have men of fine creative talent, men of integrity and vision, we have great industrial resources, we have the encouragement of Britain's own filmgoers. I do not believe that we can fail. That was in January, 1948. There was in that article not a word about the Entertainments Duty. If it were such a handicap to the industry, surely it might have occurred to Mr. Rank then. Of course, he and his friends thought that they were going ahead with the kind of scheme they had put forward, and for them to come along now, when their plans have collapsed owing to their organisation of the industry, and say that it is the fault of the Government through maintaining the same Entertainments Duty, is really the most extraordinary piece of logic one could imagine. An hon. Gentleman talked about the milch cow, but there was no talk of that by Mr. Rank in 1948 when he was embarking on this venture.

Mr. Lyttelton

The Plant Report talks about the Entertainments Duty.

Mr. Foot

Although I do not think the Plant Report is quite so wrong as Mr. Rank, I believe that that Report, and the Gater Report, and most of the other reports, are wrong for the simple reason that on most of these inquiries the Government appoint many of the people who are responsible for having got the industry into this mess.

Mr. Speaker

We cannot discuss the Entertainments Duty now because I have to select Amendments on the Finance Bill relating to it. If we anticipate the discussion on the Finance Bill, I shall have some difficulty in selecting an Amendment of that kind. We are only debating the Report of the Corporation.

Mr. Wyatt

When the President of the Board of Trade introduced this Report, he talked at some length about the Entertainments Duty, and it was then held to be in order. If it is ruled out of order now, Sir, it will be very difficult for any hon. Member to comment on what he said.

Mr. Speaker

I was not in the Chair at the time, and it has rather horrified me to hear so much as I have already. It is not really relevant to the Report of the Corporation.

Mr. Foot

I apologise, Mr. Speaker. I think the House would confirm that both Front Benches devoted a considerable part of their speeches to this subject. The reason why I want to refer to the Entertainments Duty is because I believe it is this campaign on the subject which has persuaded my right hon. Friend the President of the Board of Trade to produce the agreement which he announced today. I think that agreement has been made as a kind of concession to this campaign. I have no doubt that in reply to my criticism of the agreement my right hon. Friend may say that all sections of the industry have agreed to it, and that, therefore, what right have I to raise any criticism. I do not think that argument is very powerful because if the Treasury proposes to a group of people that it is going to release a certain amount of money to them, they will probably agree to the suggestion, even if they do not think that the proposal is adequate or one calculated to put the industry completely on its feet.

I think that what is even more wrong with the agreement is that it shows that those responsible have not grasped the real troubles that afflict the industry. Here is a proposal under which the exhibitors and the distributors are going to benefit along with the producers. I do not see why the exhibitors should have any relief at all. I have not heard of any of them going bankrupt in the last 10 years. They are making roaring profits. Even Mr. Rank's exhibitors' organisation is making fat profits all the time. Why should there be an agreement that part of the money is to be handed over to the exhibitors who are already making enormous profits?

In reply to a question which I put to him, the President of the Board of Trade said that the American firms who are making films in this country with blocked sterling and which, of course, qualify under the quota as British films, are going to be able to get money out of this central pool in the same way as the British producers. That, again, indicates that my right hon. Friend and those who advise him do not realise the dangers to the British film industry of this blocked sterling arrangement. It is quite true that it enables some films to be made in this country, and, as a temporary arrangement, we cannot easily object to measures which help to arrest the unemployment in the industry.

But do not let us imagine that by enabling the Americans to make more American films in this country we are really assisting in building up a British film industry. These are not British films that are being made under the blocked sterling arrangement. It is true that many British technicians are being employed, but the main artists are American, and the production of these films is building up the prestige of the American industry rather than our own. When these films go abroad, they are often not shown as British films at all.

They are regarded in New York as American films, and yet, when shown in this country, they are not only allowed to qualify for the quota, but, under this special arrangement, the American producer in Britain, who is not short of capital, is going to have the same access to the pool as the British producer and director whose prestige we want to build up, and who must form the basis of any future film industry which can survive in this country. We are already in the position where only one in five of the pictures shown on British screens can be described as British films. That is a dangerous situation, and I am sure that this proposal, instead of reversing the tendency, may give more assistance to American producers in this country than to genuine British producers.

There is one material suggestion that I would make to my right hon. Friend, and, perhaps, also to the National Film Finance Corporation. I would refer the House to a paragraph which appears on page 5 of the report, and which refers to the policy which the National Film Finance Corporation proposes to adopt in the future. In paragraph 57 it says: Few independent producing companies are organised to carry out a programme of production with the economies and other advantages of continuity. The Corporation intends to examine the possibility of financing groups of independent producers, working together to achieve these benefits but without sacrificing individuality. At present producing companies borrow for one film at a time, but no loan has been approved unless the company was thought to have both ability and intention to continue in production. I think that on the basis of that proposal some great advantage can be secured in the way the National Film Finance Corporation operates in future.

And this is the reason why I feel this clause is important. I am glad that the President of the Board of Trade did not put it in the crude fashion it has been put by some others, but one of the tales that we are always being told is the reason why we cannot develop the British film industry is because of the shortage of talent and of script writers, and of other people of talent who contribute to the industry. That was one of the alibis used by Mr. Rank for his failure. He said there was a shortage of talent in the British film industry, and particularly a shortage of stories which can be properly put on the screen.

I believe there is a reference in this Report to the effect that, apparently because the Corporation has not had a lot of scripts that they like coming forward, on their conditions, there is a shortage of talent and a shortage of subjects to put on the British screen. That is the most amazing tale I have ever heard. Anyone going into the cinemas as often as I do would not come away with the impression that there is a shortage of subjects. He might think that the people who made a particular film were short of subjects; but there is the whole world to put on the screen, and a great part of it has never been put on the screen at all.

It is absolutely fantastic to say that we have a shortage of ideas or of talent in this country. One of the troubles is that the people who have to write the films feel that they have to satisfy the National Film Finance Corporation first, and then the distributor and a particular producer. That is quite a difficult thing to do. Somehow or other we must get round this difficulty and have a system which evokes the talent which, I am sure, exists. The B.B.C. put on about 1,000 plays a year. I admit that not all of them are new plays, but many of them are new and the B.B.C. do not go round saying, "We have a great shortage of talent." They have no shortage of talent for new plays.

If there were a simple method of organisation whereby these new ideas could go forward there would never be a shortage of talent. One way in which it could be done is indicated in paragraph 57 of the Report. We should be able to go to recognised people who have produced or directed five or six or more well-known British films and to say to these directors, "We will give you an opportunity to produce about five or six different films under your general direction and approval, and we will enable you to be the judges of the scripts that come forward to be done in that way."

I think it would be possible under this arrangement, through the National Film Finance Corporation, to enable loans to be made for the writing of the scripts. What happens now is that it is the script writer who has to take the risk of spending six months or so to produce a script. The script writer does not get backing. The distributors and exhibitors are backed to the hilt. They are getting more money under this present proposal, but no one in the Corporation has worked out, in detail, a way in which the talent of the people who have ideas about writing film scripts can be evoked. I hope that this proposal, under paragraph 57 of the Report, does indicate that that is going to happen in the future.

I am sorry if I have been rather long. I believe the National Film Finance Corporation, as the President of the Board of Trade has said, certainly has a record of preventing collapse in the industry; but do not let us go away from the Debate imagining that that is enough. There is serious unemployment and serious frustration in this industry. There is a situation in which many of the best directors of the country have not made more than one or two films in two or three years, and where many of the people in the industry are despairing about the future.

Therefore, once again, I plead with the President not to think these proposals he has put forward today are a solution to the problem. I know that in this Parliament there are difficulties in the way of bringing forward the radical proposals required. I hope, however, that, in his speech winding up the Debate, we shall be told that the President does not accept these proposals put forward as the salvation of the industry, and that he agrees that there are more radical measures which should be taken in the future. It he does that, it will, at any rate, give a glimpse of hope for an industry in which serious unemployment and frustration exist at the present time.

7.46 p.m.

Mr. Maudling (Barnet)

The hon. Member for Devonport (Mr. Foot) began his speech by referring to speeches made previously by a number of hon. Members on both sides of the House, and particularly to the speech of my right hon. Friend the Member for Aldershot (Mr. Lyttelton). He said how interesting it was to hear my right hon. Friend approach this subject with a fresh and open mind. I do not think anyone would accuse the hon. Member for Devonport either of having ideas that are fresh, or a mind that is open on this subject. He was consistent in his disapproval. He disapproved of the Plant Report and the Gater Report, the Report of the National Film Finance Corporation and, I gather, even of the statement of the President of the Board of Trade. As far as I can see the only report that he would support would be one produced, written and signed by the hon. Member for Devonport.

I am grateful for the opportunity to say something in this Debate, because there is in the constituency I represent, at Boreham Wood and Elstree, about the largest single centre of film production in this country, and the problem of unemployment in that area is very serious indeed. As the last report of the Cinematograph Films Council shows clearly, unemployment has been growing steadily in this industry and is in the neighbourhood of 50 per cent. at present. What is particularly disturbing about this unemployment is that it so often affects technicians in the industry, for whom the hon. Member for Devonport is rightly thoughtful and concerned. They are people who, by the nature of their profession and training, cannot find comparable jobs in other forms of industry. The unemployment problem in film production is extremely serious.

In those circumstances, all who are working in or for film production have welcomed the assistance that the National Film Finance Corporation has given in maintaining film production and employment. It has helped employment and for that reason, people engaged in the industry or representing constituencies where there is film production, are grateful to the right hon. Gentleman for the initiative he has taken. The good work done has been done at considerable expense. The report shows that provision is made for losses of £750,000. It is an indication of the condition and circumstances of the film production industry that the Government have to put this amount of money into the industry at all and that, having done so, they appear to be encountering such substantial losses.

It seems to me that the reasons for the condition of the industry, which has made the Corporation necessary and made these losses inevitable are complex, and the responsibility lies both with the industry and with the Government. There have been faults on both sides of the industry. Too much extravagance in production is a common complaint levelled against the industry, and I have no doubt rightly levelled on many occasions.

On one point to which the President of the Board of Trade referred—the payment of high salaries and fees—we must bear in mind the attraction of the American industry which can offer large sums to our stars and outstanding personalities. No doubt, there has been extravagance on the production side of the industry, but surely also on the other side, the employee side of the industry, there have been and still remain a large number of serious restrictive practices which are bound to contribute to increasing production costs.

Mr. O'Brien

Would the hon. Member give some instance of the restrictive practices among employees of which he complains?

Mr. Maudling

I think the best known case was that of moving the plant pot; according to whether it was a real plant or an artificial one, a different person was required to move it.

There has been and still is some disunity in the industry both between employers and employees on the production side of the industry, and between the production side and the exhibition side. Those are valid criticisms of the industry, but I am sure at the same time that a great improvement has been made on all fronts in recent years. In the first place, it is clear that production costs have come down and extravagance has been reduced. I believe the President of the Board of Trade himself said that. Once again the Film Finance Corporation has contributed to that process by some of the work they have done on cost control, budgeting and so on. Extravagance and excessive expenditure have been reduced. Similarly, restrictive practices have been substantially reduced in recent years, I am sure, and no doubt that has been a great contribution to the problem of reducing costs.

Then there is the question of agreement between the various parties in the industry. I think the President of the Board of Trade today rather welcomed the fact that exhibitors and producers were prepared to accept the Government's proposals, though I cannot help recalling a time not so long ago when the agreement between the two sides of the industry was regarded by him as sinister rather than praiseworthy. On the question of relations between employees and management, I think that this is of very great importance.

Everything that we can do in this House to encourage good relations should be done, and we should always avoid speeches which are liable to foster ill-will in the industry. I cannot help thinking that speeches of the type made from time to time by the hon. Member for Devonport, who constantly and rather bitterly attacks the employing side of the industry, will not help solve this problem of labour relations in the film production industry.

The causes of the present conditions in the film production industry lie partly in the industry itself and partly in the actions, or inactions, of the Government. The industry has effected a great deal of improvement in recent years, and I am sure that we were all glad to hear the announcement made today by the President of the Board of Trade that the Government themselves are going to mend their ways, and will make some effort to see that further sums go to the producer.

I do not think the Government have played a very big part in this. Most of the effort is coming from the consumer. Out of an additional £3 million, which I understand is to be returned to the industry as a whole, £2,700,000 will come from the consumer in the form of higher prices, whereas £300,000 only will come out of the tax remission, which is substantially less than one per cent. of the total of the present amount of Entertainments Duty. I believe that the industry is now being given an opportunity to go ahead and recover from the position which it has reached.

When this subject of the film industry is discussed in this House there tends to be a prejudice among certain Members against the industry as a whole. I do not know what it comes from. People do not like the standard of values displayed in many films. People do not like chewing gum, or do not know what to do with it if they have any. No doubt, the industry itself in the past has been partly responsible, but we who are interested in this problem should always try to bring home to people the great importance of trying to create good relations in industry and giving the industry a chance to make a recovery from its present difficulties.

There are two final points I wish to make. First of all, there is the question of production of short films, which has already been referred to by my hon. Friend the Member for St. Albans (Mr. J. Grimston). The difficulties of people who produce short films and documentaries are very considerable and, if anything, they have been increased recently by some extra competition that they are having to meet and will have to meet. They will have to meet new competition within the cinemas as a result of a proposal contained in the Finance Bill, to which I cannot refer in detail at this moment.

I also notice that at a time when the unit which produced "This Modern Age" is having to pack up and go out of business because of the economic difficulties, the British Transport Commission are entering into a substantial business by way of the producton of short films. That seems to me to be a bit incongruous. I hope the President of the Board of Trade will pay particular attention to the difficulties of short film producers. We have in this country a tradition for making excellent short films, and that part of the industry is a training ground for the future technicians and stars of the industry.

There is a point to which reference has been made on more than one occasion, and that is the position of American production in this country. I gather that the American films produced in this country which rank as British films for quota purposes, are going to benefit under the arrangements announced this afternoon by the right hon. Gentleman. I agree with the hon. Member for Devonport that a film made in this country by an American company, even though it uses British technicians, is very much second best. What we want are British films made entirely by British people in this country.

But when I hear these matters discussed I cannot help thinking of the large and magnificently equipped M.G.M. studio in my division which is not being used at all. Surely it would be better to bring that studio into use and employ men in it, even though some American capital and personnel were involved, than that it should be unused altogether. I hope the President of the Board of Trade will do all he can to encourage the production of American films in this country; it would not be a perfect solution to the problem, but, at any rate, it would be far better than allowing the present serious level of unemployment to continue.

7.58 p.m.

Captain Field (Paddington, North)

I should like to confess at the outset that I have no experience whatsoever of the film industry. I am not very well acquainted with its technicalities; nor, indeed, am I connected with any organisation which has to do with films. But I have some experience of juvenile organisations, and it is upon this experience that I want to draw in the remarks that I wish to make.

I hope to be able to dot the i's and cross the t's in the speech made earlier by the hon. Lady the Member for Coventry, South (Miss Burton). In looking through this Report I am very sorry indeed to find among the long list of films therein not one film connected with children or made specifically for children. All that my right hon. Friend the President of the Board of Trade has done this afternoon is to throw out a vague hint that these films will, in the future, attract an unspecified proportion of 10 per cent. of a figure which was not quoted, although I believe the right hon. Member for Aldershot (Mr. Lyttelton) made an estimate of this figure.

I think the problem of children's films is sufficiently important to merit better treatment than this. As the House will be aware, the Departmental Committee set up a couple of years ago under the chairmanship of Professor Wheare has recently published its Report. I do not wish to get into trouble this evening with you, Mr. Deputy-Speaker, by going into this Report in detail, and I shall quote from it and draw from it only in so far as is necessary to illustrate the point I want to make. My contention is that there is an imperative necessity in this country for the production of special children's films, and that the National Film Finance Corporation should ensure that some of the money which is to go into this pool should be used for that specific purpose.

Surveys have been made by responsible bodies, such as the Central Office of Information and the Board of Trade, which reveal that out of all the children between the ages of 5 and 15 years, two-thirds go to the cinema at least once a week. If we take the age group 5 to 17 years, then it becomes evident that children and adolescents comprise about one-third of the British cinema-going public. It therefore appears to me that the cinema-going habit is an adolescent problem, a youth problem, of formidable proportions

It is another significant fact, proved by surveys which have been made, that the people of the lower income groups and the lower educational standards go to the cinema more frequently than those with higher incomes and higher educational standards. I suggest that this fact acquires a special significance when we consider, as I hope to prove, that the majority of the films which these children see are quite unsuitable for them.

If that be so, it surely follows that there is an absolute necessity that this large proportion of the British cinema-going public should be properly catered for by the production of films suited to their tastes and to their requirements as adolescents. I should like to add, to give a complete picture of the situation, that this problem of the showing of films to children is further complicated by the fact that children can see films in one of two ways. First of all, they can go to one of the children's cinema clubs which usually give showings on Saturday mornings or Saturday afternoons and which cater, at a very conservative estimate, for over half-a-million children every week. Films at these performances are always of the "U" category. Secondly, they can go with their parents or with a responsible adult to the cinema in the ordinary way, in which case they will be admitted, provided they are with their parents or with an adult, even if the film being shown is of the "A" category.

Category "A" films are those which, in the view of the censor, are unsuitable for showing to children under 16. It is part of my case that many "U" films—that is, films which are passed by the censor as suitable for showing to adolescents—are also quite unsuitable for child audiences, bearing in mind the recurrent themes of violence, murder and sex, masquerading under the guise of love, in those films. I am content for the moment, however, to leave as it is the problem of children going to the cinema under the aegis of their parents and to deal, if I may, with the case of the children who go to the cinema clubs which have exclusively child audiences comprising, as I have said, over half-a-million a week.

I believe that the Rank Organisation is the only British concern to have produced specialised children's films, at any rate in any quantity. I have seen it suggested—indeed, we have heard it said this afternoon—that this production is to stop because the Rank Organisation cannot make it pay. I hope that the National Film Finance Corporation will concern themselves with this matter and will let it be known in the industry, if they can, that they are ready to provide capital for this kind of film.

I know that on the Second Reading of the Cinematograph Film Production (Special Loans) Bill in 1949 my right hon. Friend the President of the Board of Trade stated that there must be no question of a subsidy for film production. Turning to page 9 and paragraph 90 of the Report which we are discussing I find, however, that the Report says that losses may be considerable, that a contingency of £750,000 has been provided for this item and that, in any case, £91,500 has been specifically earmarked for four cases. I always thought that a subsidy was money contributed by the State to the expenses of a commercial undertaking and it seems to me that this kind of loss is. in fact, a subsidy for the film industry. I should have been happier if this subsidising could have been contrived in a better fashion so that the House could have maintained some control, at any rate, over the broad channels into which the money was to flow. In that event, I feel certain that children's films would have claimed a very high priority, if films were to be subsidised at all.

I believe it has been stated, in connection with the Weir Report, that the Rank Organisation do not make any profit at all from their children's cinema clubs or from their specialised children's films and I think that this statement requires at least a little consideration. First of all, we should consider the part which is played by these performances in conditioning children to become docile and uncritical audiences of the cinema in adult life. I am quite satisfied that the industry is aware of the usefulness of these performances in that connection, and it seems to me that they will become increasingly useful to the industry in the future when the struggle between home television and the cinema grows fiercer.

We now come to the question of the renting of films for showing at these performances. I understand that 8 per cent. of the films shown at the children's cinema clubs are special children's films of the sort of which the Rank Organisation has made a speciality. They are produced for the purpose of showing to children and are very often of high merit. Even the worst of them could only be described as innocuous. The remaining 92 per cent. of the films shown are "U" films which, in the distributors' opinion, are suitable for showing to juvenile audiences. It is my contention that the vast majority of the out-of-date films which are shown to children every Saturday at these clubs are quite unsuitable for any other purpose whatsoever. Indeed, they should be unsuitable for showing to children and certainly they are quite out-of-date and unsuitable for showing to adult audiences.

It will be seen, therefore, if that is the case, that the showing of these old and highly unsuitable films is a source of revenue to the cinema industry which would not be available in any other circumstance. It seems to me that the distributors have a vested interest in keeping open this outlet for their old films, and if we look at it in that light and develop the point then the very pretentious pamphlet which was issued by the Rank Organisation in 1948 becomes merely a facade for the 8 per cent. of good films behind which the 92 per cent. of bad films are shown to our children.

Earl Winterton

As I am connected with the Rank Organisation I am sure that the hon. and gallant Gentleman will not mind my putting a point to him. I do not want to raise a point of order, but no doubt he will relate what he is saying to the matter before the House, because the Rank Organisation has not taken a penny of the money involved in this Debate. I do not see what it has got to do with this particular question before the House.

Captain Field

I am seeking to prove that the films which are at present being shown to children in these cinemas, whether by the Rank Organisation in any shape or form, or by any other, are totally unsuitable, and that there is, therefore, room for the production of good children's films. In fact, there is an imperative necessity for this. It seems to me that if we could, if necessary, get some assistance from somewhere then we should be able to go ahead with this type of film. Perhaps when my right hon. Friend replies to the Debate he will comment on this point. It seems to me —I do not know—that the large scale enterprise such as the Rank Organisation, which has hitherto concerned itself with this type of film, is rather unsuitable. I should have thought—

Earl Winterton

I am sorry to interrupt the hon. and gallant Gentleman again. It is not for me to lay down the rules of order, but the Rank Organisation does not take a penny of the money, and, therefore, although the hon. and gallant Gentleman is entitled to refer to it, and the Rank Organisation, I suggest that he is not entitled to go on and say what the Rank Organisation should or should not do, because it is not affected by the Vote.

Captain Field

I shall have to leave that to you, Mr. Deputy-Speaker, to make a Ruling upon; but I am saying that if the Rank Organisation wishes to continue with this type of film it would, per haps, apply to have some of the money—

Earl Winterton


Captain Field

I have heard it said from this side of the House that it should be—

Earl Winterton

May I point out to the hon. and gallant Gentleman that that does not rest even with the President? I am sure he will agree with me. Under the terms of the Act the money is applied for, and the Rank Organisation has not applied for the money. I would suggest, therefore, that what the hon. and gallant Gentleman is saying is going somewhat outside the ambit of this discussion—how the Rank Organisation should or should not deal with children's films. That is my point.

Captain Field

I disagree with the noble Lord. I say that the Rank Organisation is entitled to apply for some of this money if it desires, and I should not be against it if it did so, to continue making that type of film—

Mr. Deputy-Speaker (Sir Charles MacAndrew)

It seems that it has not applied for any of this money we are debating.

Mr. Wyatt

On a point of order. A large number of very friendly references have been made from the other side of the House to the Rank Organisation. Does it mean we can make only friendly references to the Rank Organisation and not unfriendly references?

Mr. Deputy-Speaker

No. The Rank Organisation has been mentioned on several occasions, but I do not think it has received anything under the Report we are considering.

Earl Winterton

May I say, on that point of order, that naturally I do not object to references, friendly or unfriendly, being made. I was merely pointing out, in the most friendly manner, that the Rank Organisation has not received any of this money, and that it seemed to me that the question of its production of children's films did not come within the ambit of the Debate.

Mr. H. Wilson

I do not know whether anything I can say would help on this matter, but I want to confirm what the noble Lord has said, that the Rank Organisation has never come forward at any time to borrow any money from the Corporation. However, it is a fact, as I made clear in my remarks earlier, that the Rank Organisation has indirectly received money from the Corporation, inasmuch as studios which might have remained empty have been let to producers, and a number of films have been distributed through the Rank Organisation distributing agency, so I should have thought that any references involving distribution by that agency of the films made by the Corporation would be in order. As the noble Lord has stated, the Rank Organisation did not have to borrow money from the Corporation.

Mr. Deputy-Speaker

I thank the right hon. Gentleman for his explanation. I am glad to have it.

Earl Winterton

It is exactly my point.

Captain Field

The point I am trying to prove is this, that films that are at present being shown to child audiences are unsuitable, and I do not think that the noble Lord will deny that the Rank Organisation has some share in the production and distribution of this type of film. I think the Corporation should be allowed to use all the means in its power to encourage the production of specialised children's films—

Earl Winterton

Hear, hear.

Captain Field

—special films for this very large audience—and let me say, unsuspected audience, for it is an audience of a magnitude we often do not realise, going to the cinema regularly in hundreds of thousands every week, and providing the cinema industry with some revenue. I do not know whether it is a profit-making revenue or not, but it must be of the order of from £12,000 to £15,000 a week at least, allowing for the minimum entrance fee of 6d.

Now I want to turn to another serious aspect of the problem which I do not think has been sufficiently stressed, and that is this: What effect does the showing of these unsuitable films have upon our children? If the effect is bad, then there is an opening, as I have stated, for the production of good films suitable for children. I think the Weir Committee came to the conclusion that the physical effects on cinema audiences of children were insignificant, and that the nervous effects could be and often were considerable in their immediate manifestations. Indeed, in some cases they are deplorable.

One decision of the Weir Committee was that there is no clear evidence that juvenile delinquency can be related to the effects of films seen by children. The link between cinema attendances and juvenile delinquency is largely based on circumstantial evidence. However, there is evidence that our social habits and their influence upon children affects the future citizens, and I think it is true to say that the cinema is probably the highest recreational activity that does have an influence upon children today.

I think I ought to mention the fact that one of the members of the Weir Committee has submitted an addendum to the Report that she is of the opinion that the cinema exercises a considerable power upon children's imaginations and behaviour, and that there is a definite connection between juvenile delinquency and attendance at the cinema. With those conclusions I entirely agree. If, as I think, it could be amply demonstrated that the film has a considerable influence upon the behaviour of adults, it must have an equal if not a greater influence upon adolescents.

For instance, we were told that since the showing of the film "The Lamp Still Burns" a number of girls and women who had seen it aspired to become nurses, and, more recently, I have seen a newspaper report that the showing of the film "The Blue Lamp"—very largely made in my constituency—has led to an increase in police recruitment. That seems to me to show what is undoubtedly the case, that films can influence adults—especially when it appears that it can influence the stolid and genial type taken into the Metropolitan Police.

It also seems to me that films must have a parallel effect upon the juvenile mind. One could go on to state many instances of the influence of the films upon the child mind, particularly, for instance, in the trend amongst adolescents, particularly male adolescents, to wear American clothes of every kind, and, as my hon. Friend the Member for Coventry, South (Miss Burton) has mentioned, in the habit of chewing gum. If adolescents are influenced in this way, surely they will also be influenced in their behaviour. So it seems to me a very significant fact that the types of juvenile delinquency to which particular attention is drawn at the present time are the types of crime usually shown on the films.

Today, we have youngsters going into shops and shooting shopkeepers, in some instances in association with girls. They see this sort of thing on the screen, and in practically all of these films the thrill and excitement is the dominant emotion. I know that to comply with the censorship laws of both this country and America the film must in some way show that crime does not pay, but after devoting 40 or 50 minutes to the excitement and glorification of crime there is, in the last two or three minutes, a short episode in which the criminal is caught or is reformed.

These are the types of films which our children see at the local cinemas, and I do not think it is good enough for people to say that they do not know whether this type of film has any influence upon children or not. It is part of my case that it has. The whole purpose of my argument, as I tried to tell the noble Lord, is to demonstrate that if bad films have a bad and evil influence upon children, then, conversely, good films, if they can be made—and they should be made—would have a good effect upon children.

I trust that in the time I have occupied the attention of the House I have demonstrated that there is here a social problem about which we know far too little, and which, so far from being left in the very doubtful and critical position in which it is today, should be tackled in a positive way. The steps that it appears to me can be taken should be for the film industry to be stimulated in some way, and I suggest that possibly the National Film Finance Corporation can have something to do with this, so that the industry can make an increasing number of films suitable for showing to children. Surely, if suitable subjects are chosen—and the noble Lord, with his greater knowledge of the film industry, can advise me about this—could not they be shown again and again over a period of years to child audiences as new generations of children come along, and thus in some way provide a continuing revenue?

I think that this problem is of sufficient importance to merit very special attention. I hope that the National Film Finance Corporation, when the pool of money to which the President of the Board of Trade referred this afternoon comes into being, will be able to finance these films. No State can remain healthy if its citizens become passive viewers of vicious and evil spectacles, as those of Rome did.

As in the case I have drawn attention to the spectators are our future and growing citizens, the problem is very urgent. At present, the majority of films give a hopelessly distorted picture of life and of its moral values. On the other hand, films properly produced with the assistance I have mentioned could have a profound influence for good upon the young citizen; they could give him healthy and decent amusement, and, at the same time, lead him to a deeper appreciation of beauty and to a view of the richness of his own life and of the whole world.

8.24 p.m.

Mr. J. N. Browne (Glasgow, Govan)

The hon. and gallant Member for Paddington, North (Captain Field), and the hon. Member for Coventry, South (Miss Burton), both spoke of the great importance of children's films, and I am sure that both sides of the House would agree with them. I cannot, however, agree with the hon. and gallant Gentleman when he says that juvenile delinquency can be laid to such an extent at the door of the cinema industry. I think that the same charge could equally be made against the B.B.C.

My right hon. Friend the Member for Aldershot (Mr. Lyttelton) spoke of long-term planning, and I should like to make two short points on that. First, the Plant Report, having laid the main stress on Entertainments Duty, said that the method of distribution in the industry could be improved in order to bring in more money more quickly. It might bring money in more quickly, but I do not think any improvement will bring in more money. Indeed, the tendency is for people to filter from the dearer seats to the less expensive seats; and that tendency will no doubt be accelerated by the announcement made this afternoon on Entertainments Duty. I do not believe that any re-organisation, however well carried out, will cure the continual drop in box-office receipts so long as the Entertainments Duty remains at its present level.

My hon. Friend the Member for Holland with Boston (Mr. Butcher) mentioned television, and I should like to hear what the President of the Board of Trade has to say about this. In considering long-term planning we must take all factors into consideration. It is unfortunate that the terms of reference of the Plant Committee did not include some ability to comment on the effect of television upon the cinema industry. I see from page 18 of this Annual Report that television films, primarily for the United States, have been financed by the National Film Finance Corporation. Television is causing the American film industry grave concern; I believe that in due course it will cause the same grave concern over here, and that long-term measures should be taken now and not later.

Lastly, I wish to refer to British Lion. My hon. Friend the Member for Holland with Boston spoke in a way with which I quite agree. I, like him, have no knowledge whatever of the film industry; I can only read what I see in the Reports. I will not repeat any of the items that have already been mentioned, but it did seem to me that British Lion got a very inauspicious start. In paragraph 64 of the Report it is said: Too frequently, also, approved budgets are exceeded. Mention is also made in paragraph 65 of the necessity for the film producer to realise that the films must be a financial success. From Appendix E, as at 31st March, British Lion do not appear to be showing any films, nor are there any films classified as "Not yet started." I do not think my doubts have been relieved in any way by what the President of the Board of Trade said on British Lion, and I should like to hear something further from him on that.

I read with great interest the Debate which took place in this House in 1948, and I was immeasurably heartened by something the President of the Board of Trade said then. When supporting the National Film Finance Corporation he said he supported it, first, perhaps, because the film industry can do much to portray the British way of life and to show our national culture and way of life to ordinary people in other countries in all parts of the world."—[OFFICIAL REPORT, 2nd December, 1948; Vol. 458, c. 2183.] It is because I echo those sentiments that I wished to take part in the Debate. I beg the Government to stop strangling this industry with one hand and giving it saving injections with the other. We all know that the only way to help production is to have a healthy box-office and the only way to a healthy box-office is by promoting the health of those who provide it.

8.29 p.m.

Mr. Wyatt (Birmingham, Aston)

This afternoon's Debate on films has followed the usual pattern of Debates on films in this House, and we have had the same performers. We have had the noble Lord the Member for Horsham (Earl Winterton) getting angry every time anybody has mentioned the Rank Organisation—and the right hon. Gentleman the Member for Aldershot (Mr. Lyttelton) making his usual negative contribution.

Earl Winterton

As the hon. Gentleman has referred to me perhaps he will do me the courtesy of giving way. Perhaps he will mention on what single occasion I have shown the slightest signs of anger. I rose to put a point of order which was answered by the Chair. The hon. Member should not put into other people's interventions the temperament which he so constantly displays in this House in extremely ill-tempered speeches.

Mr. Wyatt

I am sure that the noble Lord's reputation for even temper and calmness in Debate will not in any way have been damaged by the reference which I made to him.

Earl Winterton

What references are they? What have I said?

Mr. Wyatt

It is within the recollection of everybody in the House how kindly the noble Lord has taken to any reference to Mr. Rank during the Debate.

We have had the usual negative speech from the right hon. Member for Aldershot (Mr. Lyttelton), who attacked the Government for failing to do anything about the film industry, without being able in any way to indicate a policy of his own. He complained particularly today that no long-term policy had been brought forward by the Government. I suggest to him that one of the main reasons why we have no long-term policy for the industry is the state of the parties in this House, because the only possible long-term policy is completely to overhaul the entire industry, which would require a great deal of legislation and the smashing of the Rank Organisation's and the A.B.C. Organisation's monopolistic control of the industry.

The right hon. Member for Aldershot seemed to be under the impression that the Plant Report had said that the main thing wrong with the industry was that the Entertainments Duty was too high. I will quote from the beginning from the summary of conclusions and recommendations in the Report. The House will see that that is not at all so. It says: The fundamental contention throughout our report is that the introduction of more active competitive trading at each stage in the process of film distribution and exhibition is an essential condition for any real revival of prosperity in the industry. It goes on to say that the whole of the recommendations and conclusions are based on that contention and that they have nothing whatever to do with the Entertainments Duty except as a very subsidiary element in some of the reforms which the Committee would like to see introduced into the industry. The main worry of the Committee was not the Entertainments Duty but the way in which the industry is organised. Many of us feel that their recommendations for dealing with that do not go far enough, but their diagnosis is the same as that of anyone else who has examined the industry with an at all impartial mind.

I want to refer to the Report itself, for very little reference has been made to it this afternoon. I believe that, on the whole, the Film Finance Corporation has done a good job. It has kept the industry going. It is clear that without it the industry would have come to an end. The Report is, however, defective in one or two respects. For instance, it is not quite frank with us about the loan to the British Lion Corporation. Quite clearly the £3 million lent to it was spent on a great deal more than is shown in the Report.

The schedule of loans in Appendix D shows that only 20 films have been made as a result of this loan to the corporation. That would mean that on an average the Film Finance Corporation put £150,000 into each film, which is a tremendous sum of money for an outside body to put into each film being made by another corporation or by an ordinary film producing company. In the first place, it would suggest that no money at all of their own was used by the British Lion Corporation or by London Films and the other people connected with it. but that cannot be the case.

I cannot believe that the Film Finance Corporation is so insane as to hand them £150,000 per film without requiring them to put up any money of their own. It must obviously cover a great deal more than is shown in the schedule. I think that many people know that what it did first of all was to pay off the past debts on failed productions by the Korda set-up in London Films and then enable it to continue the production which it had on hand and launch out into fresh production. That being the case, it ought to be stated here. We ought to know how much of the phenomenal waste of money on a film like, for instance, "Bonny Prince Charlie," which cost three-quarters of a million pounds, was borne by the National Film Finance Corporation. It is not shown in the Report.

Whereas the Corporation was too bold in helping the British Lion Film Corporation without sufficient safeguards to make sure that it could control the extravagance centred round the film companies associated with that organisation, it has not been bold enough in helping other independent producers and providing "front money," as it is called, for people who have not the same resources as A.B.C. or London Films. It is encouraging, however, that at last the Corporation have decided to put forward nearly all the money for the film to be made by A.C.T. which will encourage other groups of independent producers. I do not believe it is true that a monopoly of genius exists in the Rank Organisation and the A.B.C. together with their monopoly of ownership of the studios and the cinemas.

Another criticism I would make of the Film Finance Corporation is that it does not seem to make up its mind clearly as to what type of film it wants to back. In one paragraph in the Report it says that it made several small loans to rather small companies and it half suggests the films were of a somewhat doubtful quality. Anyone looking at films made by Exclusive Films, the Mancunian Film Corporation or the Renown Film Corporation will agree with this half-admission in the Report that these films were not particularly desirable or necessary. However, perhaps they were a safeguard from the point of view of the Corporation that it would at least get its money back, as they were cheap to make and would be shown regionally. The Corporation ought to think more of quality because this is a Government-backed Corporation and it should only be backing those films likely to enhance the prestige of the film industry.

Again, it is difficult for the Film Finance Corporation to act as judges of quality. It is true that the managing director is a competent business man, Mr. Lawrie, and the Chairman, Lord Reith, is also most competent, but it is not fair to put upon them the task of choosing the films and making up their minds about quality. It was a move in the right direction to ask Sir Michael Balcon to advise them over the scripts they should select and produce. At the same time it is rather an invidious position in which to put Sir Michael Balcon, who is a person of great integrity and justified reputation in the industry, because he is also concerned with running Ealing Film Studios.

Naturally, therefore, any producer who has failed to get the Ealing Film Studios to take up his film is hardly likely to be encouraged to go to the Film Finance Corporation and ask Sir Michael Balcon to consider it in another capacity. It is an absurd position. Anyone who has to advise on the films to be accepted by National Film Finance Corporation should have nothing to do with producing and making films. He cannot say at Ealing, "This is a bad idea" and then, before the Film Finance Corporation, say "I am prepared to put Government money into it although I would not put my own in it. "That will give no encouragement to the people in the industry. What is required is a paid expert panel, composed perhaps of only one person, somebody of recognised reputation in the industry who leaves his job in order to take on precisely that function of helping to select these films.

Another criticism I would make of the structure of the Corporation is that it does not back second feature or documentary short films in the way in which it ought to be able to back them. I do not think that is the fault of the Corporation.

We get the interesting case of the "This Modern Age" series now being forced to come to an end by the economies which are being undertaken by the Rank Organisation. This is a case in point where assistance would be justified because, although the Rank Organisation has been pretty bad in many respects, this is one of the good things it has done. As soon as economies are made, they stop the only good thing they have done and throw it to the wolves. It ought to be helped by the Film Finance Corporation.

The noble Lord the Member for Horsham, continually informs us that the Rank Organisation is so loath to make films that it will not approach the Corporation for assistance.

Earl Winterton

I am sorry that the hon. Member is constantly making statements alleging that I have made statements which I have not made. All I said was—and I raised a point of order upon it—that I wondered how the Rank Organisation could be discussed in this Debate to the extent which it has been, in view of the fact that it had not applied for money from the Corporation.

Mr. Wyatt

It is a well-known fact that the Rank Organisation has cut down its production, but the noble Lord said that it does not want to come to the Corporation to ask for money to help it to in crease production—

Earl Winterton

I did not say that.

Mr. Wyatt

—thereby suggesting that they did not want to make any more films.

Earl Winterton rose

Mr. Wyatt

I cannot give way again The noble Lord, without making a speech on these occasions, manages to get a good deal of the Floor.

Earl Winterton

I understand that the hon. Member refuses to give way—

Hon. Members


Mr. Deputy-Speaker

The hon. Member for Aston (Mr. Wyatt) has the Floor and refuses to give way. The noble Lord, therefore, cannot make an interjection.

Mr. Wyatt

I have already given way a good deal, and I think the noble Lord has made his point. The Rank Organisation does not want to produce more films because it is short of money, yet it will not go to the one body which can help it by providing money to make more films.

Earl Winterton

I never said any such thing.

Mr. Wyatt

It is a fairly reasonable inference from what the noble Lord has said. Here is a case of a series of films which ought to be helped by the Corporation. I hope that when the series is finally abandoned by the Rank Organisation, that organisation will go to the Corporation to get that assistance.

The one thing which is obvious to everyone here this afternoon is that the loan will not only not save the film industry, but will not save the Corporation, because within a very short time the industry will be back in much the same position as it is today. This £1 million is simply not enough to tide over the industry for a very long time. The reason for this is the basic fact, which was brought out by the Plant Report, that exhibitors on the whole do their best not to show British films because American films are much more profitable. We all know that American films. having taken their own home market, come over here and are sold at cut prices to exhibitors who have no more patriotism than other sections of the business world, and who are only too willing to accept cut price films rather than take the more expensive home product. They have, therefore, no incentive to show British films, and they have no wish to do so.

It has been, as everybody knows, with the utmost reluctance that those on the exhibiting side of the industry have been persuaded to arrive at the arrangement by which an adjustment of the Entertainments Duty will benefit producers as much as it will benefit themselves. Their protest is that they are getting only £1,500,000 out of it and that producers are getting the same amount. The exhibitors say that this proportion is wholly wrong and that they ought to get four or five times as much as the producers. It is because of this attitude of the exhibitors that there has been reluctance in reaching this agreement

The attitude of the exhibitors exemplified in the classic example of the organisation about which the noble Lord is so sensitive. The Rank Organisation protests—[Interruption.] I have no doubt that the noble Lord is just demonstrating his well-known good temper. The Rank Organisation has said that what is killing film production in this country is the Entertainments Duty, yet, when Mr. Rank presented the last annual report of his company, he said, referring to Odeon Properties, Limited, and Odeon Associated Theatres, Limited: Odeon Associated, like Odeon Properties, is not concerned with the results of film production and it follows therefore as long as"—

Mr. Deputy-Speaker

I do not think this arises on the Report.

Mr. Wyatt

The connection, as I am trying to show, is that the Film Finance Corporation cannot be helped, even by £1 million, so long as the present state of affairs continues in which exhibitors do not want to show films which the Corporation makes. The Rank Organisation, as is well known, is the largest exhibitor in the country. If exhibitors under present circumstances refuse to show films made by the Corporation we have to consider whether we should give them the £1 million or not.

Earl Winterton

It has been given.

Mr. Wyatt

The main exhibitor in this country, as is well known, is the Rank Organisation, which owns the greatest number of halls. The question of whether or not to provide the Corporation with the money is involved here. Mr. Rank said: As long as exhibition continues to be a profitable business, there should be no doubt as to the companies' ability to meet the obligations of its prior charges. As a matter of fact, those two companies, which only own cinemas and do not exhibit films, showed a profit of £770,000 million in the last year and if the Entertainments Duty had been crippling the business they could not have made such a profit. They did extremely well. It is Mr. Rank's job not to make films himself, but to get them cheaply from America, by which he saves a great deal of money. The only way in which to deal with the situation is eventually by legislation for a long-term policy for which the right hon. Member for Aldershot was asking this afternoon. As my hon. Friends on this side of the House have said, that way is to set up a separate circuit of 50 cinemas in London and 50 elsewhere in the country in order to break the power of these monopolies to cripple the film industry and stop home production.

In the meantime we are being too squeamish about the general propaganda theme that we should keep the cinemas open at all costs. There is a prevalent notion that if the cinemas were closed for a time it would be an unmitigated disaster and the Government would be thrown out by the people; but if it happened that a number of cinemas were being forced to close down because American products were not available to them and because the British film organisations had not yet begun to make British films, then the big organisations would begin to make British films. It is no good whatever trying to support the British film industry, as is referred to in the Report, by juggling with the quota, because whatever quota is fixed, it is always evaded.

What we have to do is to limit the number of films coming from America and if we say only 30 or 40 are to be allowed to come in one year, that would compel the Rank Organisation to make British films or close its cinemas. and would compel the Film Finance Corporation's films to be shown in those cinemas. [Laughter.] The noble Lord laughs because he knows that as long as our majority is as narrow as it is, we cannot produce legislation of that kind.

Earl Winterton

I am not the only one on this side of the House, or on the side on which the hon. Member sits.

Mr. Wyatt

At any rate, we have a mutual interest. I submit that it is quite useless to try to tinker with this industry any more in the sort of way we have been trying. We can put money into the Corporation, but it will not solve the long-term problem and, as long as it is not possible to introduce legislation and introduce a national circuit run on B.B.C. lines, it is essential to stop American films coming in in the present form of dumped competition. The only way to do that is to limit the number of films we allow in every year, and we could do it on a one-for-one basis and say that we would take one American film for every English film shown in America. The Rank Organisation and A.B.C. would then feel the squeeze on them and would set about their proper job of making British films in England.

8.50 p.m.

Mr. Shepherd (Cheadle)

If the film industry is short of imaginative script writers I suggest that they call upon the services of the hon. Member for Aston (Mr. Wyatt). I have no time to go into the innumerable distortions of reality in which he indulged. He was, however, right in saying that this Debate is much the same as other film Debates and that the performers were more or less the same. We have had the usual competition between the hon. Members for Aston and Devonport (Mr. Foot) to see who could display the greater amount of prejudice. I am sorry to say that the hon. Member for Devonport usually beats the hon. Member for Aston, sometimes by a canter and sometimes only by a short head. I think that the hon. Member for Aston has done better this time than on previous occasions.

We have today listened to a statement by the President of the Board of Trade on the annual Report of the Film Finance Corporation, and I should think that on the whole those who are responsible for directing its activities will be thankful for getting off so lightly as they have done. We can, on the whole, commend the chairman and the managing director on having made a good job of a very difficult job. That sentiment is reflected in the views of Members on both sides of the House. The President gave one rather false impression in his speech which I am sure he will be anxious to correct. He grouped Sir Michael Balcon with the part-time members of the 'board. Sir Michael Balcon receives no remuneration for his services. I think that the President will see that it was possible to draw from his remarks the conclusion that Sir Michael Balcon was one of the part-time members of the board.

I wish to refer to Sir Michael Balcon because the hon. Member for Aston made a quite unnecessary attack upon him. Sir Michael Balcon does not get producers to produce films for him. He has his own producers, and they have scripts submitted to them in the ordinary way. It is wrong to suggest, as does the hon. Member for Aston, that Sir Michael Balcon would exhibit prejudice towards any man. I think we can be grateful that a man so conspicuously successful as Sir Michael Balcon is giving his services free of charge in this way.

Mr. Wyatt

I would not like the suggestion to go out, unchallenged, that I was attacking Sir Michael Balcon. I said that he was a person of great integrity and reputation but that he was connected with a large film organisation, and if someone went to his film organisation, Ealing Studios, and there failed to get his script accepted, he would not be encouraged to go to see Sir Michael Balcon, acting in another capacity, and ask for support for something which had been rejected by Ealing Studios.

Mr. Shepherd

Then the only alternative is to have someone who is outside the business or no one at all. In my view. Sir Michael Balcon is a better alternative than either of those two.

There has been a good deal of criticism today of the loan to the British Lion Film Corporation, and it is obvious that the President will have to tell the House much more about it than it now knows. The National Film Finance Corporation have indicated in the Report that the circumstances of the liaison between them and British Lion are not really satisfactory. What the House wants to know, and what the President will have to tell us, is what, steps have been taken to remove the difficulties which are referred to in the Report? To what extent at this moment is it possible to get a budget from the British Lion Film Corporation which is not exceeded? To what extent do these difficulties remain in relation to budgets of films in production? To what extent have they been coped with? The House wishes to know more about this situation before the Debate ends.

We have learned from the Report that a loss of £750,000 is provided for on this year's working. I hope that when the President replies he will be frank with the House and will indicate that this provision will be wholly inadequate to meet the real loss which this Corporation will have to face on its working so far. It is quite wrong to persuade the House that on the existing basis, £750,000 can possibly cover what has, in fact, been lost. To appreciate the situation in the film industry the President ought to give some idea of what are the total losses involved on present working.

My right hon. Friend the Member for Aldershot (Mr. Lyttelton), in an excellent speech this afternoon, denied that the right hon. Gentleman has brought forward any positive policy and it is true that the right hon. Gentleman, though he had three reels to give us today, did not show a first feature of any interest at all. My suspicion is that the President has lost the battle with the Chancellor. I do not think that any man who knows as much about the film industry as does the President of the Board of Trade can come to the House and say that this proposal, which is a slight alteration in the incidence of taxation, represents a real and substantial contribution towards the welfare of the industry. I do not think that he believes this solution is satisfactory.

During the time he has been President of the Board of Trade, since 1948, the right hon. Gentleman has seen a deterioration in the industry until we have reached a situation today when the morale of the entire industry is very low indeed. Something has to be done to raise the level to a higher pitch and give some hope to people in the industry— many of whom have given their life to it. I say that the proposal put forward by the President today does not give that hope to the industry which it ought to receive.

We have had a lot of criticism of the industry, and I agree that its past record of extravagance lays it very open to attack. But I would urge the House to appreciate that the industry is doing a great deal to reduce its costs. In 1947, the average first feature film cost something like £250,000 to £300,000 to produce. The films being produced today cost, on the average, something like £125,000. When one appreciates that that reduction in cost has taken place during a time when generally costs have risen, one appreciates that the industry has been making serious efforts to get down its costs to a reasonable level. But I would warn the House that this downward pressure on costs in the British film industry is having, and will have in the future, a dangerous effect upon quality.

What is the position today? There is—and this is an established fact—a positive restriction of choice of scripts because of the cost factor. One has to consider not whether a story is good, but whether it is possible to put it over within the limits of a £120,000 production figure. Good scrips and good stories are difficult to get. We have to appreciate that film producers are limited in their choice of what they will take because they cannot spend more than £120,000 or so upon a film.

It is not true, as was stated by the hon. Member for Plymouth, Devonport, that in the British film industry there is an absolute wealth of stories and scripts, or that we have a wonderful array of producers and directors who can turn out, ad lib, films of great quality and international attraction. I wish it were true, but the plain truth is that we have a very limited amount of real talent. I doubt whether we have in this country directors and producers capable of producing more than eight or 10 international class films in any one year—eight would probably be the maximum that they could produce in the international class. It is doubtful that whether we have a capacity to produce more than 30 first-class films. It is quite wrong to believe, as was stated by the hon. Member for Devonport, that it is only wicked capitalists working in the background who stop films from being produced.

The selection of films is limited by the stories. We cannot expect to get good story writers in the British film industry if there is no living there. The right hon. Gentleman says that we ought to have better stories and scripts, but how can we get men to give their lives to the industry if they can never be certain of their jobs? If the right hon. Gentleman had to choose between writing stories for the industry or taking a similar type of job with a newspaper at a guaranteed salary, which would he choose in present circumstances? That is a choice which confronts lots of people. It is wrong of the right hon. Gentleman to attack the absence of people with talent when the industry does not provide a living. When it provides a living we will have the people to do the job.

The right hon. Gentleman made a great show about the concessions which the Government had so kindly made to the industry. He said, in a peroration of impressive quality, that all must play their part, including the Government. What a magnificent gesture the Government have made to the industry in the past few weeks. What great sacrifices they have shown in their offering to the industry. Out of a total of £38 million, which they extract every year they are prepared, in this moment of generosity, to give back £300,000—less than 1 per cent. This offer is a disgrace to the Government.

I express a purely personal opinion when I say that I regret very deeply that the industry have agreed to accept what the Government have offered. No good can come from this industry accepting in a spirit of desperation what has been offered. That is what has happened. The Chancellor has driven desperate men to accept something less than what they know is necessary to get them out of trouble. This trouble will recur, and more and more Debates will take place in the House. My right hon. Friend the Member for Aldershot was right when he said that no good is done to the industry by discussing its affairs at length in the House month after month. If anything is to be done it ought to be done in a manner which will fit the difficulty and in a way which will make certain that we do not have to come here again and again to get relief. Many people have said that if only we had better production and more economy we would be able to put the industry on its feet. That is a lot of nonsense. People who have great skill in this business and who have been successful, people like Ealing Studios, who study economy if anybody does, cannot make the business pay. Even when they have a long series of successes unprecedented in the industry, they still have to write off enormous sums. The Associated British Picture Corporation, of which an hon. Member opposite is vice-chairman, has recently been into British film production. They do not throw money away, they are very tight with their money. Although they do not say much about it, they have had a rather devastating experience in the last 12 months.

The truth is that, in the existing state of affairs, where 40 per cent. of the revenue goes to the Government and where there is Government control of the price of seats, it is practically impossible to produce films at a profit. Many hon. Gentlemen on both sides of the House have asked why, if beer and cigarettes cost so much, we should not put a heavy tax upon films. We are not discussing the ethics of taxation, but I put it to the President of the Board of Trade, who has failed in his battle with the Chancellor, that we should not tax an industry to the point where it cannot produce its unit product at a profit. If the film industry could produce its product and pay the Government £80 million and still make a living, it might be justifiable to tax it to that extent. The truth is that it is impossible to produce films at present prices and to make them pay.

I want to say a word or two, in conclusion, about the prospects of the British film industry. I have said that I believe the offer made by the President is wholly inadequate, and I would make this plea to the right hon. Gentleman. Let him collaborate again with the Chancellor between now and the Report stage of the Bill, and try to put on the Order Paper something that will really restore this industry to a proper footing. It is useless proceeding with half-measures. I believe the British film industry contains quite exceptional ability, and that we have something to offer to the world. Moreover, I believe that the new trends in cinema-going will help us in the near future.

Hon. Members may have heard that Mr. Goldwyn came over here a short time ago, and had some most interesting observations to make about film production. He said that what struck him about modern film production was that the "star" system was on its way out, and that we could not maintain bad films with good "stars"; secondly, that stories were becoming more and more difficult to obtain; and, thirdly, that cinema-goers on the whole tended to want a more intelligent form of entertainment. I believe that all these factors are likely to be favourable to the British film industry. If the "star" system goes out in favour of technical and artistic quality, so that the quality of the story determines the value of the film, we could do much better to beat the Americans than we are doing at the moment. If we no longer have to face internationally publicised names if artistic merit is to prevail, and if cinema-goers demand more intelligent entertainment than they did 10 or 15 years ago, I think we can supply the demand.

The industry has a product which is typical of the country, and we do, in the main, provide films which are slightly more intelligent than those we get from the United States. Therefore, we have a chance at present, because this period of difficulty is clearing out of the industry many of the elements of no particular value to it. We no longer have any illusions as to what we can do. We know that we can only produce 30 or 40 reasonable films in a year, and we know it is an extremely difficult art, but, for the first time for a very long period, the industry has a feeling that it is on a basis on which it can see the road ahead, if only the Government will give it a chance. There is a great chance for the industry today, if only it can be given the opportunity of making a living.

All that I ask the Government to do is to make it possible for this industry to make a living and a profit. The function of Government is to see industry so organised that intelligent men and women working in it can make a living for themselves, and that is not the situation in the British film industry today. If the Government will only assist, instead of being so harsh to the industry, and if it does not plunder it as it is doing now, all these problems and difficulties which we talk about today will be resolved. We shall not solve these difficulties by appointing a commission, whether paid or unpaid, but, if the industry can be made profitable and the people working in it can be assured of the opportunity to make a reasonable living, this industry can go ahead.

I believe that the industry is now in a position which, if the Government will give it a chance, is perhaps better than it has known before. We have the feeling that we now know where we stand; if only we can get relief from the unequal burden of taxation we can go ahead, quite sure which way our path lies. Therefore, I hope that between now and next week the right hon. Gentleman will get in touch with the Chancellor of the Exchequer and see if proposals more reasonable and of more lasting value to the industry than those he has made today can be worked out. Unless he does something along those lines, when the second annual report of the National Film Finance Corporation is debated in this House a very lamentable financial story will have to be told.

9.11 p.m.

Earl Winterton (Horsham)

I do not propose to stand between the right hon. Gentleman the President of the Board of Trade and the House for more than a few moments. We are all very anxious to hear what he has to say and to listen to the answers which I am sure he is going to give in reply to the very searching questions put to him. But since there have been references to myself and to the Rank Organisation, and since I have been accused by an hon. Gentleman opposite of losing my temper and making a number of statements which bore no resemblance to anything I ever said—I do not complain of that—I would ask the attention of the right hon. Gentleman to the point I am about to make, which is a very serious one. If he is thinking of extending the ambit of the money, so to speak, which we are discussing today, I hope he will not forget the qualities of the hon. Member for Aston (Mr. Wyatt) for producing a "Comic Cuts" cartoon. I cannot think of anybody more suitable, especially if he made a personal appearance on the screen.

I only rise to say on behalf of those of us who are interested in this matter that I agree in the main with everything which my hon. Friend the Member for Cheadle (Mr. Shepherd) has said. Those of us who are interested in the industry, including the hon. Gentleman opposite who occupies a very important position in it, shall reserve our observations on the question of the reduction of the Entertainments Duty until we come to the new Clause which will be brought up in the Debate on the Finance Bill on Monday. I only want to say that my hon. Friends and I are disappointed that the amount is not greater, but we shall discuss that more fully when the new Clause is brought up.

9.13 p.m.

Mr. H. Wilson

I can only reply to the points raised with the leave of the House. I hope I have that leave because this has certainly been an interesting Debate, and one to which one would like to reply. It was not until a few moments ago that I knew we were to have the pleasure of a sustained intervention by the noble Lord. We have had a number of sporadic and spontaneous interventions in the course of today, and it has become clear that the remarks of my hon. Friend the Member for Aston (Mr. Wyatt) were finally too much for the noble Lord, and that he found it necessary to intervene.

May I say how delighted I am that he did so, because in his concluding remarks we had the only constructive proposal which has come from the party opposite in the whole Debate, namely, his suggestion that there should be an effort by my hon. Friend the Member for Aston, in the production of a "Comic Cuts column," and I am certainly prepared to recommend that to the Corporation. In view of their growing reputation for financing films of great value, I am sure they will insist that it be a double act of cross-talk from both sides, and that the noble Lord, if he is not fully under contract to the Rank Organisation, will be invited to take part.

A number of offers have been made to various hon. Members to enter the script-writing industry. I would suggest the hon. Member for Cheadle (Mr. Shepherd) who has shown some signs of qualifying for such a post in that he has at least shown the quality of imagination, even if he has not the quality of having any great grip of the problems of the industry. In his imagination he asserted a number of things I am supposed to have had some fictitious battle with my right hon. Friend the Chancellor of the Exchequer. The hon. Gentleman's speech seemed to be the result of seeing rather too many exciting films which had left a mark on his mind.

Mr. Shepherd

Is the right hon. Gentleman now telling the House he really has not had the courage to fight this battle at all?

Mr. Wilson

I am sorry that the hon. Gentleman's grasp of the processes of Government seems to be even less than his grasp of the processes of the film industry because, going back into history, he should have known that it is not conventional in this House to disclose just what fights and disagreements have gone on between individual Ministers and the Treasury. However, I shall deal with the point he has at heart in a few moments.

A number of hon. Members and, I think, the right hon. Gentleman the Member for Aldershot (Mr. Lyttelton) have implied that there are too many Debates on the film industry and the suggestion was made, I think by the hon. Member for Holland with Boston (Mr. Butcher) that there is too much taking up of the plant to see how the roots are getting on. I am amazed at the apparent signs of schizophrenia among hon. Members opposite when they talk about this. If it had been a nationalised industry that was involved they could not have had too many Debates. Ever since the nationalisation of the coal industry there have been demands for more discussions in order to dig up the roots of that industry to see how they are getting on.

I am surprised, therefore, that there has been this rather churlish attitude to the action of the Government in providing Government time for discussion of the first Report of a national corporation. I thought that the Opposition would have welcomed the opportunity to discuss this Report. It is not very easy to discuss the Report of this Corporation without discussing the film industry which forms the background of its activities.

Mr. Butcher

Before the right hon. Gentleman claims so much virtue in allocating time to this Debate he should remember that he was allowed a very easy passage on the Second Reading of the Bill in order that the House should come to this Report.

Mr. Wilson

I shall not claim too much virtue for that fact. It was hoped by the Government, and certainly the Opposition co-operated very agreeably in this matter, that the first Report of the Corporation should be marked by Debate in this House. I seem to remember the noble Lord the Member for Horsham wagging a minatory finger during the last Debate. If he will look up HANSARD he will see what he said on that occasion. I remember his warning us that, when the first Report was published, he or his hon. Friends would have something to say about certain aspects of the Corporation's policy. In view of his interest in the subject it would have been ungracious of the Government not to have provided this time and the opportunity for him.

Earl Winterton

The right hon. Gentleman is confusing me—and it is a very natural confusion—with his right hon. and learned Friend the Chancellor of the Exchequer. The Chancellor of the Exchequer, when I rose to speak on an Amendment of an hon. Friend behind me, the other day, waved his hand to me in the friendliest way, called me across by my Christian name and said: "For something's sake, sit down."

Mr. Wilson

There are many distinguished persons with whom I might confuse the noble Lord, both inside and outside the industry, but my right hon. and learned Friend the Chancellor is not one of them. I assure him that, if he looks up what he said, he will find a somewhat threatening reference to what would be said when this Debate took place.

The right hon. Member for Aldershot seemed to be disappointed at the absence of any long-term policy for the film industry from the Treasury Bench. He also commented, by use of analogies which seemed almost to verge on the indelicate, on the period of months which had elapsed between the conception of the Plant Report and the production of policy by the Government. But I must remind him that, in fact, the Plant Report, which was debated here in December last, had to be referred to the industry for its comments before even any policy could be worked out. Had I come and announced a policy without consulting all four sides of the industry the right hon. Gentleman would have been the first to complain.

In fact, after receiving some quite contradictory advice from different sections of the industry about it, it was referred to the Cinematograph Films Council, who in turn set up their sub-committee which produced a report, to which I have already paid tribute this afternoon as a welcome approach to the problem of the industry on the basis of overriding purely sectional views. That report was not, in fact, agreed to by the Films Council until 1st June, so there has not been a very long period of delay between the consideration of this problem by the industry, which took several months—I make no complaint of that—and the statement I made in the House this afternoon.

Certainly no glimmering of a long-term policy for the film industry came out of the right hon. Gentleman's speech. He made it quite clear that he did not regard it as the job of the Opposition to produce a policy on anything. That is not a new suggestion, of course. We get it in every Debate in this House, and I make no complaint about it. I was, however, rather interested in one of his more imaginative passages when he suggested that the new proposals for the tax and pooling arrangements which I described this afternoon, and which seems to have been the subject of violent criticism from a number of hon. Members opposite, chiefly on grounds of inadequacy, were first worked out at some mysterious dinner or gathering of the hon. Member for Cheadle (Mr. Shepherd), the noble Lord and others.

If it comforts them to feel that they played any part in drawing up this scheme I have no objection, but I can certainly assure the right hon. Gentleman that this scheme was worked out primarily in the Treasury, and that it followed an approach to the Treasury by certain of the film exhibitors who suggested that they should be able to put up seat prices by rather more than the ld. about which we were talking today, and that they should retain a considerably higher proportion of the increased revenue which would result from that without any loss to Entertainments Duty and, indeed, without anything like the same proportion going to the producers.

The right hon. Gentleman referred to the Plant Report and to passages about Entertainments Duty in it which I recall were also the subject of part of his speech in December last. He quoted that section of the Plant Report which said that it remains abundantly clear that the average receipts fell far short of the average cost of production, or words to that effect. That point has been well taken, I think, by the Government in the proposals which I outlined this afternoon. I am quite certain that hon. Members opposite, who for some time have been referring to the Entertainments Duty position, will agree with what I have said on a number of occasions, that simply to reduce the Entertainments Duty would not have been a helpful way of dealing with this situation. I am sure they agree with that; £1 million would only have given £100,000 to production.

I noted that the hon. Member for St. Albans (Mr. J. Grimston) said that the crisis was due to the Treasury taking too much. I hope I am not misrepresenting him; I think he used that phrase. The Entertainments Duty has really become a grand and glorious alibi for the industry in the crisis into which they have got. We heard very little about it in Debates in this House until just about a year ago, before these Reports were produced, when Mr. Rank made his remarks about Entertainments Duty. They were dealt with in the annual report of an organisation whose name I had better not mention, or the noble Lord the Member for Horsham will rise to his feet once again.

We heard very little about the Entertainments Duty in the Debates in this House until the last few months. I do not deny that the Plant Report and, as I volunteered this afternoon in case it had been forgotten, the Gater Report drew attention to the position of the Entertainments Duty in the industry, but to suggest that the film crisis is due to the Entertainments Duty is, I think, completely to misunderstand the position. I am quite certain that if the Treasury had taken less out of the industry the crisis would have arisen just the same because far more would have been spent in increased extravagance in the industry.

Mr. Shepherd

Quite apart from the varied views of the course of the history of the film industry in the last three or four years, I want to ask the right hon. Gentleman to give a clear answer to this question. Does he, as President of the Board of Trade, consider that it is possible to produce a film of reasonably average quality in this country at a cost of considerably less than £120,000, and, if the return to the producer for a film of that character is at the moment only £70,000, how does he expect the producer to live?

Mr. Wilson

I think one thing which has become quite clear to me from the returns I have been trying to examine from all the producers is that it is quite impossible to get any average figure or any generalisation on this basis. I only wish it could be done. I have myself asked what were the accurate figures corresponding to those which the hon. Member has just suggested and it is very difficult indeed to ascertain them, particularly when we use the distinction which he himself drew, talking at the same time about films in the international market and those in the national market. I will answer what I think is behind the question, because I believe the question itself cannot be answered.

Mr. Shepherd

Why not?

Mr. Wilson

The hon. Gentleman asked me what the figures were and I think it is impossible to give them. What he had in mind, if he will permit me to say so, was this: did I consider that the proposal I have announced today will be sufficient to bridge the gap between production costs and the revenue accruing to the producer. I think that is what he wants to know.

Mr. Shepherd

I am asking whether, in the right hon. Gentleman's opinion, it is possible to produce a film which will meet the standard I have mentioned at anything less than £120,000. I am referring to an average film producing £500,000 at the box-office in this country. That is the question I ask.

Mr. Wilson

I think the hon. Member is putting a purely meaningless question with his talk about the average film. I keep asking producers to give me figures of the average film and they say that there is no such thing. If he is asking whether it is possible to produce a film with a high box-office return at the figure he has mentioned, then of course I would say that it is. It has happened and will happen again. Whether it is possible to maintain it film by film over a period of time is, I confess, very difficult to answer but, answering the question which I think is behind his question, I would say that in my view the proposals I outlined this afternoon are sufficient to bring the industry on to a sound and secure economic basis provided they will take the steps open to them to put their own house in order.

As I was saying before the hon. Gentleman interrupted, I am quite certain that if the Treasury had taken less from the industry there would still have been a crisis because more would have been spent. I suggest that this is borne out by something which the hon. Member for Cheadle himself said—that one of the reasons for the reduction in expenditure and the improvement in control over production costs has been the difficult time through which the industry has been passing. If that time had been made easier by a different tax policy in these years, then I am quite certain that that improvement would not have taken place.

A number of questions have been asked today about the position of the loan to the British Lion Corporation. The right hon. Member for Aldershot, the hon. Member for Cheadle and the hon. Member for Holland with Boston (Mr. Butcher), asked why three-fifths of the money had gone to British Lion. The hon. Member for Holland with Boston went on to say that he hoped that if any more money went to British Lion their estimates would be a good deal better in the future than in the past and that they would not be 50 per cent. out. I thought I had explained that earlier today. It is certainly true, and it is made clear in the report, that the loan required to get the British Lion Corporation into full production was a good deal higher than we originally contemplated, and that, I think, is something of a commentary on the position British Lion were in at the time the National Film Finance Corporation came into the picture.

I quite agree that if we had been thinking in accord with the general canons of financial procedure of which the right hon. Gentleman spoke—quite rightly, if I may say so—or if we had been thinking in narrow terms as to the security of this money, which the right hon. Gentleman himself never expected to see again when we passed the original Measure—he said so—if we had been thinking in those terms, then it would have been wrong for the National Film Finance Corporation to lend a penny to the British Lion Corporation until it had really got the whole of its accounts on a satisfactory basis, until it had secured complete and adequate control over its productions and over its budgets, and so on.

If that had been done I am quite certain that the first person who would have complained would have been the right hon. Gentleman the Member for Aldershot, who would have said we had got to a crisis in the film industry through a policy of not doing anything, or of doing something only too little and too late. The National Film Finance Corporation took a risk. It was a calculated risk, and they have been very frank about it in their Report. They put money into the British Lion Corporation to get it going and avert a calamity to British film production by so doing.

Mr. Lyttelton

Is it a fact that the Treasury had already promised a large loan to that company before the British Film Finance Corporation came into being?

Mr. Wilson

I am not sure that I can confirm the exact phrase that the Treasury had promised money to the company. However, it is certainly true that it had been decided by the Treasury that money should be lent to the British Lion Corporation before the organising company was established. That was at the time when we had failed to find finance within the City—approaches had been made to certain City organisations to lend money to this company—even against a partial Government guarantee, because at that time the position was that even the Rank Organisation was also running into some difficulty—the noble Lord will not mind my saying that—and outside the Rank Organisation the greater number of independent producers were associated, directly or indirectly, with the British Lion Corporation, and the loan seemed to us the quickest and surest way of preventing the complete breakdown of production.

The noble Lord, quite correctly, commented in answer to the hon. Member for Holland with Boston that, of course, no money had gone to the Rank Organisation. The noble Lord says it has not in fact asked for any loan from the National Film Finance Corporation—and, at least, that fact has prevented anyone with script writing ambitions getting up today and accusing me of putting another nickel in the Odeon.

The hon. Member for Holland with Boston asked me about the progress of our negotiations with Mr. Eric Johnston. I think I should be going very wide of this Report if I were to answer that in any detail, but I can say—so far as this has a bearing on this Report, because co-production, to use the American expression, and their films produced over here will have some bearing on the position of the film industry and, therefore, on that of the National Film Finance Corporation—that, as has already been announced, the Government made final proposals to the American film industry as to the course of the Anglo-American Film Agreement for the next two years, those proposals have been flown to the United States for consideration, and we are urgently awaiting the reply, and I understand from the latest messages I have received that Mr. Eric Johnston and Governor Annall may be coming back about the middle of next month for further consideration.

There was a question asked by an hon. Member in relation to these talks. Certainly, the question of a unit programme is relevant to the financial position not only of the film industry but of the National Film Finance Corporation, and certainly in these discussions we made a great point in saying that, in our view, this unit programme, this composite programme arrangement operated by the American companies, ought to come to an end.

While I am on that, perhaps I should say to the hon. Member for St. Albans—who accused me of having an obsession about first-feature films and not enough interest in the short and documentary producers—that I accept all he says about their being a training ground for producers who will later produce first-feature films, and being a very important part of our screen entertainment. But I think he is going much too far when he suggests that we could meet the needs of our own screens on the basis of the cinemas being kept open by an encouragement of that side of the industry, because however important documentaries are—and I quite agree with most of what he said about them—we cannot fill the screens, as the noble Lord will agree, on the basis of second-feature and short and documentary films: the people will not go, and, as the right hon. Member for Aldershot made very plain, the box-office must be the final test so far as this industry is concerned.

Mr. J. Grimston

Would the right hon. Gentleman elaborate that? Is it not possible to increase the quota above the figure of 25 per cent., or whatever it is now?

Mr. Wilson

There has been no criticism of the quota being too low, but the quota of first-feature and supporting programmes is fixed on the basis of what the industry can produce. If I saw any sign that there was to be an improvement in production I would certainly give consideration to the question of the quota. As I have already said, there is a need for some further assistance and some further consideration to be given to that side of the industry's problems.

My hon. Friend the Member for Devon-port (Mr. Foot), part of whose speech I was sorry to miss, referred to the position of the script writers and other creative persons in the industry, and said that there were no signs that the National Film Finance Corporation had any plans which would lead to their further employment. Similarly, the hon. Member for Cheadle in a fanciful and hypothetical speech, in which he alternated between offering me work in the film industry and the newspaper industry, commented on the lack of security of script writers, and I agree with what he said in that regard. But this only emphasises, I think, the need for a properly organised production company of the kind described in paragraph 57 of this Report, to which I referred this afternoon. I feel that that, more than any changes on the exhibition side or even in distribution, is fundamental to the maintenance of continuous employment for the script writers and technicians in the industry.

I did not follow my hon. Friend the Member for Aston (Mr. Wyatt) in all he said this evening, the more so as a good part of his speech consisted of a dual contribution with the noble Lord. I should, however, like to refer to his remarks about Sir Michael Balcon, which the hon. Member for Cheadle took up. I know that my hon. Friend meant no reflection on Sir Michael Balcon's personal position; and indeed he said so very clearly in both his opening remarks and his later intervention. I do want to make it clear to my hon. Friend that Sir Michael Balcon's position is not in any way invidious.

It is quite true, as has been said, that he is not a part-time director. Study of what I said earlier will show that I did not at any time suggest that he was. I paid tribute to him immediately after paying tribute to the part-time directors, and, as I said that the part-time directors certainly earned their very small fees, I think perhaps I ought to have added that, a fortiori, Sir Michael Balcon deserves great tribute for doing so much work for, as the hon. Gentleman said, no payment at all. It is a most valuable thing that this Corporation, consisting of independent financiers and others with no detailed knowledge of the industry, although with a very fine judgment on film problems, are able to be offered technical and specialised advice through the services of Sir Michael Balcon.

But there is not, I suggest, any danger of the sort of thing to which my hon. Friend referred of a producer going along to Ealing Studios with a proposition and having it turned down and then going to the Film Finance Corporation with it and meeting Sir Michael Balcon once again on the doorstep. He probably knows that the Ealing Studios do not produce much on the basis of propositions from outside producers. They have their own production company with a continuous flow of production, and, therefore, the situation does not arise.

I was very disappointed to hear the hon. Member for Cheadle and others suggesting that what is being done in the new financial proposals is inadequate, but I agree with him that with those proposals and with the present position, the film industry has a great chance to re-organise itself. He thinks it will still fail because the proposals do not go far enough, but I do not agree with him. The phrase "chance of a lifetime" has a rather restricted and specialised meaning in film circles these days, but in a wider sense that phrase could be used accurately to describe the position of the film industry today.

The film industry has been given very considerable assistance and protection by this Government and by previous Governments over a long period of years. It has certainly enjoyed the close interest of hon. Members in all parts of the House, and all parties have shown the very greatest goodwill towards it and the very clearest desire to ensure that it is reestablished on the basis of a sound and secure economic future. In that sense, and bearing in mind the responsibilities which lie on it, I feel that the industry has before it the chance of a lifetime, and if it succeeds in taking that opportunity, I am certain that it will be welcomed by all parties and by all hon. Members.

Question put, and agreed to

Resolved: That this House takes note of the Annual Report and Statement of Accounts of the National Film Finance Corporation for year ended 1st March, 1950,