§ 3.47 p.m.
§ The President of the Board of Trade (Mr. Harold Wilson)
I beg to move,That the Cinematograph Films (Quotas) Amendment Order, 1950, dated 10th March,. 1950, a copy of which was laid before this House on 10th March, be approved.I am sure that the Order which I am asking the House to approve will be received with regret in all parts of the House. It really provides recognition of the disappointment of the hopes we had in all quarters of the House about the maintenance and increase of British production of first feature films of a quality adequate to justify their being made compulsory for exhibition under the Cinematograph Films Act of 1948. That Act gave power to the Board of Trade to fix the quota, subject to an affirmative Resolution of both Houses, and it provided that any changes in the quota have to be laid before Parliament and approved six months before the date on which they came into effect. This Order, therefore, covers the period beginning on 1st October next. It amends the previous Order which was approved by this House a year ago and its effect is to reduce the quota for first feature films from 40 per cent. to 30 per cent. The quota for the supporting programme is unchanged at 25 per cent.
The Act provides that before the Board of Trade make an Order under this Section I have to consult the Cinematograph Films Council and consider its advice in the matter. The House will therefore wish to know—I am not sure whether the noble Lord the Member for Horsham (Earl Winterton) does—something of the advice which the Council tendered on this subject. The first thing I have to report is that the Council showed much greater unanimity on the size of the quota than in the two previous years. In 1948 it was almost equally divided, the 573 producers' and exhibitors' representatives taking sharply opposed views—50 per cent. was advocated by the producers and 25 per cent. by the exhibitors. Independent members a year ago would have supported a quota of 33⅓ per cent. In both years, therefore, because of the division of opinion on the Council, I had to form a view—and so did the House—without much assistance from the Council.
This year the figure of 30 per cent. was recommended by the Cinematograph Films Council by a large majority. It is no secret that the producers and exhibitors had discussed the question together beforehand and reached a compromise at 30 per cent. This figure was also considered reasonable by most of the independent members who were present. It is equally no secret, since it was made the matter of a public statement, that the most active opposition came from the representative of the Association of Cinematograph and Allied Technicians who thought that the Council had not properly considered the evidence, and also that the compromise between the producers and exhibitors was not in the interests of British production and reflected the present undue influence of exhibiting interests in the British Film Producers' Association. I felt it was right to bring the views of the Council before the House.
I feel that I should be getting somewhat out of Order if I were to use this Motion as an opportunity for discussing the general position of the film industry, as the House does from time to time, but I should like to give the House an explanation of the figures on which the revised quota is based. The Film Producers' Association submitted to the Films Council a statement of the answers received to a questionnaire which they had circulated to producers. This gave a total of 106 to 108 films which producers thought might be available for release during the period. After careful examination of the films in the list and the probable quality of the films involved, the Council thought that a figure of 50 to 60 films could be taken as a fair estimate.
This figure of 50 to 60 has to be set against the number of films required. The chief factor in the distribution of important feature films is the "general release" through each of the main 574 Circuits, odeon, Gaumont-British, and A.B.C., of one first feature film each week. This means that the three circuits require between them a total of 156 first feature films, British and American together, each year. Most other exhibitors will generally prefer to play the same films as the circuits where they can get them, and where cinemas are in competition with the circuits they are allowed by the Act a lower quota.
For computing the quota, therefore, it is generally fair to take, under existing booking arrangements, and leaving Sundays out of account for this purpose, 156 first features as the annual requirement of all the principal cinemas on a six-day exhibition routine that are liable to the full quota rate.
Most of the other situations are taken care of by the quota relief arrangements under Section 4 of the 1948 Act, and for cases of real hardship there is always the provision in Section 13 of the 1938 Act, under which defaulters can plead "circumstances beyond their control." The British first feature quota percentage should, therefore, be based on the probable number of British first feature films available in relation to this overall requirement of 156 films a year.
§ Earl Winterton (Horsham)
I am sorry to interrupt the right hon. Gentleman, and I promise not to do so again, but before he leaves this question, would he give the House some information on this point? How many defaults have there been in respect of first feature films which have not been, so to speak, "O.K.'d" by the appropriate authority.
§ Mr. Wilson
On this basis of 156 films, the number required to honour a quota of 30 per cent. would be 48. The Films Council's estimate of 50 to 60 British first features seems a not unreasonable one in the light of our present knowledge of the prospects of the producers concerned, and it does give a certain freedom of choice, which is important in the interests of efficient production, the more so when one has regard to some of the quality factors which have crept into film production in the last year or two.
The House will naturally wonder how far it ought to pay attention to the 575 estimates of the Council, and how accurate the Council has been in the past. In fact it has been extremely accurate. Last year its estimate for the current quota year was 74 films, and this estimate will probably just about be realised—almost exactly; although of course, it allows no margin of choice as probably 10 of the films will hardly justify showing on a nation wide basis. In the previous year the Council's views of the number of films likely was also highly accurate.
The fixing of the quota, which this House is called upon to do today, always involves something of a dilemma. It is, of course, extremely important to maintain a fairly high quota as an incentive, which it undoubtedly has been to British production; and this is particularly important now in view of the changed position of the circuits, because the circuits—at least the circuits owned by the Rank organisation—have now no longer the same interest in displaying films produced in this country as they had when they themselves were a producing unit. Therefore, it is important that the quota should be fixed reasonably high, but it is also important in the interests of the quota legislation as a whole to fix the quota at a level where we can enforce a much better standard of compliance with it than we have had in recent years.
The problem has been made considerably easier by the special quota relief provisions of Sections 4 and 13 of the 1948 Act, but it is not possible to remove all anomalies by legislative definition, and there are always bound to be some cinemas less favourably placed than others for honouring the statutory quota. The dilemma is as to the size of the quota which should be introduced. We have now, however, for the first time, experience of a full year's working under the 1948 Act, and, perhaps, I should give the House some account of our quota year 1948 to 1949. This takes up the point the noble Lord has in mind.
In that year, with the first feature quota of 45 per cent.—a figure which I proposed to this House and which was much criticised at the time—on the calculation I have made 71 British first features were needed during that year. The number actually shown on the three circuits was 74, suggesting that I had not been extravagant in proposing the quota for the year. The 74 included two re-issues. 576 That meant there were 72 new films against a requirement of 71, which meant that pretty well every new film of anything like first feature standard—undoubtedly, there were some films of a very indifferent standard during that year—got a circuit booking, and the average booking actually achieved by British circuits was 47½ per cent.—in excess of the statutory quota. The average achieved over the country as a whole was 37 per cent. of the quota prescribed, after allowing for reliefs given in respect of cinemas not in a position to carry out the quota. It is certainly true that in that year the total amount of screen time devoted to British feature films was very much higher than it has been before, and the main purpose of the quota legislation was in that year, at any rate, fulfilled.
But there is a point we cannot ignore. There were 1,474 first feature quota defaults. This is a high figure taken by itself, and may give a misleading impression, because a great many of those defaults will qualify as excusable under Section 13 of the 1948 Act, and the significant figure should really include only those defaulters who have not sufficient excuse and fall to be considered for possible prosecution. They are now being examined. The House will agree that the number is higher than is healthy for effective administration of the Act, and higher than the House had in mind when the quota Act was passed. It is a fact that the quota has turned out to be too high a quota for some of the exhibitors who have to change their programmes twice a week.
In these quota Debates we always hear from hon. Gentlemen from north of the border about the special position of some of the quota exhibitors in isolated parts of the country who need to change their programmes rather frequently to maintain a clientele. I think that the right hon. and gallant Member for Kelvingrove (Lieut.-Colonel Elliot) is capable of great eloquence on that subject himself. Therefore, we have to keep in mind the question of the effectiveness of the quota and the extent to which it can be enforced, and, for my part, I should like to see the quota much more effectively enforced, and that whatever figure is selected should be effective and, apart from exceptional circumstances, binding on all the cinemas in the country.
577 Then, as part of the quota procedure, we have an additional instrument, the selection committee procedure, which can be made to supplement the quota to the extent of six films a year on each circuit. The selection committee was, of course, designed for a rather special situation, where it was thought that the circuit would have so many of their own films made by themselves that they would not need to show any independently produced films in order to meet their quota. We can use the selection committee procedure now in the new situation to meet the new difficulty created by the diminishing interest of these circuits, particularly the Rank organisation, in British production.
I want to say a brief word about the supporting programme because I know the interest that many hon. Members have taken in the special problems and special difficulties of the producers of second feature, short and documentary films. We had a long discussion about their position when the Films Bill went through this House. This quota is always very difficult to calculate because of the wide variations in the composition of the supporting programme between one cinema and another. The chief element in the supporting programme of most cinemas is, of course, the second feature, which is usually an American production. A high quota figure for the supporting programme can only be met by substituting for these American second features a substantial proportion of British films of the same length, which, I am sure, we should all like to do on production grounds and quality grounds, too. The supply of British films of that length is rather small and is unlikely to increase much so long as there is so little money to be earned on the supporting programme.
The supporting programme quota has been 25 per cent. for the last two years, and this figure seems to represent the best compromise between the need to encourage British supporting film production and the limit to which American second features can be effectively replaced by British production. The supporting programme quota actually achieved during the first year of the new Act was 27 per cent., but, here again, there were 1,381 defaults. The supporting programme producers have asked for the quota to remain at 25 per cent. next year, and the 578 Films Council were unanimous in endorsing this figure. I have received in my correspondence, and I understand that a considerable number of hon. Members have received, letters from local associations of cinema exhibitors calling on them to support a lower quota than 25 per cent., but I should point out that the Films Council were unanimous on this figure of 25 per cent., and I am certain that we should be wrong to lower it.
As I have said, this reduction in the first feature quota now before the House is a recognition of the fact, which I am sure is regretted by all hon. Members, that there has been a reduction in the volume of film production. The reasons for the special difficulties of the industry were debated in this House—I think it was almost the last full debate in this House before the old Parliament disappeared. We were all concerned then at the declining level of production, and the changing prospects in the industry due to the change of policy on the part of the Rank organisation. In the later war-time years, and in the years since the war, so high a proportion of the production potential of the industry has been bound up with the fortunes of the Rank organisation that the successive quota provisions have been determined to a large extent by the production programme of that group.
For the quota year 1948–49, Mr. Rank said that he planned to release about 60 films, and he was a warm adherent of a 50 per cent. quota. I fixed it at 45, and that was endorsed by the House, but at one stage he said that a 60 per cent. quota was possible, at least for his own cinemas. For the quota year 1949–50, he planned to release about 22 films—a big fall—and this year, as the House knows, his production programme is very small. To judge from a recent report of a statement which he made to reporters on the "Queen Mary," the prospects of any further increase in production by that group, even if his hopes on certain fiscal matters are realised, seem rather small. Our hopes for raising production and a steadily rising quota have been disappointed; and this had been very largely due to the sudden difficulty in which the principal producing organisation in the industry has found itself, and to the effect of this difficulty on its production policy.
During the past year-and-a-half, as the House well knows, it has been the policy 579 of the Government and of the National Film Finance Corporation set up by the Government to endeavour to offset this decline in the production programme of one big group by building up the production of other units, including many of the producers who for one reason or another have left the Rank organisation. The result has been an increase in the number of films made by independent producers with financial assistance from the National Film Finance Corporation, and during the last twelve months that Corporation has been concerned with something like 50 per cent. of the total output of feature films in this country.
Not only have the Corporation enabled the British Lion Film Corporation to make possible the continuance of a considerable volume of independent production within their own group, but they have also aided a number of comparatively new and small independent producers—and hon. Members in all parts of the House, including the right hon. Member for Aldershot (Mr. Lyttelton) last December paid tribute to the work of the National Film Finance Corporation in saving the industry from what would have been almost total collapse.
§ Earl Winterton
May I ask one further question? My excuse for doing so is that the right hon. Gentleman has devoted most of his speech up to now to the Rank organisation. Would it be in order in this Debate for him to tell us exactly what is the relation of the Films Council to films produced by Sir Henry Korda, and how much has been spent—this is not a hostile question—and how much recovered?
§ Mr. Wilson
I take it that the right hon. Gentleman is referring to Sir Alexander Korda. I spent a very small part of my speech in dealing with the Rank organisation, as the right hon. Gentleman would have realised if he had listened to the first third of my speech, when he was engaged in conversation with the right hon. and gallant Member for Kelvingrove. I said, and I think that the right hon. Gentleman will agree, that because of the position of the Rank organisation in production in this country since the end of the war, the quota we are discussing now depends to a very considerable extent on the production programme 580 of the Rank organisation. For reasons which the noble Lord knows more about than I do, the Rank organisation suddenly found itself faced with difficulties and stopped production.
§ Mr. Wilson
I said that it has been the attitude of the Government, accepted by the House, to build up production outside the Rank organisation. I think that more than a year before the publication of the balance sheet of the Rank organisation, which the noble Lord knows all about, a considerable number of producers had left the Rank organisation, long before, I think, there was any suggestion about the cause of the difficulties of which we have heard so much recently. Many of them were associated with the British Lion Group and there was a great danger, because of the drying up of the finances of that group and other film productions, that we should see no production in this country.
In those circumstances, the National Film Finance Corporation was set up. I have been asked by the noble Lord what is the association between the British Lion Group and the National Film Finance Corporation; I do not think that he meant to say the Films Council. I think the best answer to that is that the noble Lord should perhaps await the first annual report of the Film Finance Corporation, which will be available a very few days after the end of their first financial year, which is 31st March. Plans are in hand for the Film Finance Corporation to show commendable speed in bringing out their report and making it available to this House at the end of the first year. I am not sure whether the noble Lord and his colleagues will show the same speed in bringing out the Rank organisation balance sheet at the end of their financial year. It is certainly nice to find the Film Finance Corporation setting such a fine example to the industry in this connection.
§ Earl Winterton
I am sure the right hon. Gentleman meant that good-humouredly, but he should guard his words a little more carefully, because that reference contained at any rate an implication of dishonesty against the Rank organisation.
§ Mr. Wilson
While meaning it good-humouredly, I also assert that the Rank organisation takes a fairly long time to produce its accounts. I do not think anybody would deny that; and there is great interest in the country about it. But I am absolutely amazed to hear the noble Lord suggest that I implied any dishonesty.
§ Earl Winterton
It is no use the right hon. Gentleman holding up his hands in horror at me. This is an imputation against an organisation with which I am connected, and I must tell the right hon. Gentleman that the accounts have always been produced in accordance with company law, and on average quite as quickly as the accounts of any other company.
§ Mr. Wilson
I never said anything to the contrary. I was talking about the time. I am aware that there is always a certain interest on the part of the Opposition about the delay of which they sometimes complain—and have every right to complain—in regard to the time taken by nationalised bodies of various kinds in bringing their accounts before the House. The noble Lord put to me a question about the loan to Sir Alexander Korda, and I thought it right to say that he will get the full information about that when this report is published; but to anticipate any criticism from hon. Members opposite, who might think it would take months to get the report, I said that it would be available in a very few days after the end of the financial year, and in that respect it is certainly very much quicker than the other organisation referred to. I cannot see in that any imputation of dishonesty.
I should have thought that my reference was proof of the great care and scrupulous attention which the Rank organisation give to getting their figures accurate. It does take time to get figures accurate, especially in the film world, and I am amazed to hear the noble Lord take up this attitude. If he still thinks my reference to the question of the time taken to produce accounts implies anything apart from what I have said, I quite freely give him a full assurance on that point, in order to get on with the Debate.
582 Not the least of the contributions—and this is extremely relevant to the question—which the Film Finance Corporation has been making to building up a sounder and more efficient industry has been the influence it has exercised in enforcing economies in production, and in improving the business efficiency and accounting procedure—I am not talking about honesty here—of a considerable section of the industry. One sign of the times—I think an encouraging sign—has been the fact that the recent film "Morning Departure," which was widely acclaimed on its first showings, and which was largely financed by the Corporation after a failure to obtain finance through normal channels, was produced on a very modest budget—much smaller than the figures we have been accustomed to hearing about in this House and outside it in the past few years. This is a film which I think the noble Lord's organisation is distributing.
§ Mr. Wilson
But we have a long way still to go to build up a film production industry on a scale adequate to meet what I am sure are the views of this House as to the needs of our cinemas for British films. It is my view—and I think it is the view of many who have been concerned with the problem—that one of the limiting factors has been the supply of enough directors and producers capable of producing films of the right quality and at the right cost. While that is a view generally held, it is certainly true that there is a very considerable number of technicians, producers and directors whose records show them capable of such production, who are not at present engaged on production. To mobilise them is a question, of course, of finance and of promotion.
In this connection perhaps I should tell the House that I have recently authorised the National Finance Film Corporation to make loans to co-operative and nonprofit distributing companies, even though there will be no private linking together with the N.F.F.C. finance. In any such case, of course, the National Film Finance Corporation will expect the remuneration of the higher paid personnel, apart from reasonable living expenses, to be deferred and paid out of the profits of the films.
583 This means that the services of the National Film Finance Corporation are available to a wider range of independent producers than hitherto for projects of the right kind, and I hope that full advantage will be taken of them. At the moment the limitation on the number of films started, so far as the National Film Finance Corporation is concerned, seems to be the number of worth-while scripts coming along to them for finance.
Therefore, anything that is done to get over that bottleneck will immediately affect the number of films, and therefore the position of the quota. The extent to which this is all going to be possible, the extent to which this industry will be considered attractive for finance, involves many questions of a very wide nature, including distribution facilities, the problem of the circuits in the new situation, as well as all the issues raised by the Plant Report, and I think I should be getting very wide of the Motion on the Order Paper if I were to attempt to go into them all.
§ Mr. Shepherd (Cheadle)
Before the right hon. Gentleman departs from the activities of the National Film Finance Corporation, can he tell us what has happened financially to the films which have been partly or wholly financed? Is he able to say that any of those films have got back the initial cost, or are likely to get it back?
§ Mr. Wilson
As the hon. Gentleman knows, the Corporation was set up only a year ago. I think he knows something of the period of gestation in the film world, which is of somewhat elephantine dimensions, and he probably knows something of the delays involved before money starts coming back. Since the financing of individual films as opposed to financing distribution companies, has been normally on the basis of providing the end risk money, naturally the longest possible period elapses before that money is available back to the Film Finance Corporation. I can tell the hon. Gentleman that some money has already come back; not very much. He would hardly expect it in 12 months in the film industry. I would ask him to await the first report of the Corporation in order to form a view about that. Perhaps the 584 noble Lord could give him some evidence and a lot of useful instruction about the normal period required before the Rank organisation gets its money back on a film financed by them.
§ Earl Winterton
Yes, and I also know quite a lot, which I will not give away in this House, about what has happened in connection with the question put by my hon. Friend. I think that in about a year's time the House will be very interested to see the results.
§ Mr. Wilson
The House will have a chance to be interested in it considerably before then. Since the noble Lord is getting such a nose for financial matters in film production we shall look forward to hearing from him some time very full accounts of all the financial projects undertaken by the Rank organisation, for which he bears such a responsibility.
Let me now refer to another more encouraging, and judging by the attitude the noble Lord is taking, less controversial, fact. It is a bright feature in the present otherwise somewhat dismal situation that the general run of British film production in the past 12 months has shown a great recovery in quality. Hon. and right hon. Members on both sides of the House—the noble Lord and the right hon. Member for Aldershot on a number of occasions—have always stressed the fact that without quality the British film industry would be doomed.
It is certainly a fact that a year or more ago there was an alarming run of not very good films which did nothing to raise the prestige of our films abroad, and which caused economic problems for exhibitors and producers alike. No small part of the economic difficulties from which the industry has been suffering in the past 12 months was due to this temporary loss of quality—and I think it is only a temporary loss—as Mr. Rank himself made clear in his annual statement to the Odeon shareholders.
It is encouraging that amongst films generally released during the last six months there have been a number of outstanding box office successes, such as "The Third Man," "The Blue Lamp," and many others; it is always difficult to select one or two, and a little invidious. Recently there does seem to have been some general improvement in the quality 585 of British feature films. It is on that that the future of the industry depends. It is on the maintenance of quality and all that can be done through the National Films Finance Corporation and other organisations, the British Lion Group, which the noble Lord does not seem to like, the Rank organisation, if it is coming back into production, and the other bodies that the fate of the size of the quota we may or not be debating a year from now depends.
§ 4.20 p.m.
§ Lieut-Colonel Elliot (Glasgow, Kelvingrove)
I have not the special knowledge of my right hon. Friend the Member for Horsham (Earl Winterton), and consequently I speak only as a consumer of these articles; but it is, perhaps, the consumer interest which is the most important in this Debate. I am not specially interested in, nor do I think the House is, the rather meticulous examination of the affairs of one particular company which the right hon. Gentleman undertook after he had explained that his speech was not dealing with the Rank organisation. The earlier part of his speech may not have dealt with the Rank organisation, but after that, it was difficult to find that he was speaking about anything else. Therefore, I will speak more about the earlier stages of his speech, when he was dealing with matters of interest to the House in general, than about those later stages when he seemed to be indulging in some sort of sound track with my right hon. Friend.
We are all in agreement with the right hon. Gentleman that this is a disappointing step he has brought before the House today. We have debated this matter on more than one occasion—I have taken part in Debates myself—and the hope of the House was that an expansion rather than a contraction in the production and quality of British films was under way. It is true to say that we have supported the Government in their steps in the past, and I think we shall continue to do so, because the discussions in the last Parliament ran quite across the benches and not up and down the Floor of the House. Many of those who took part in the previous Debates are no longer with us, but there are enough left to recall how sometimes the most acid discussions were between the Front and back benches on 586 either side, and not necessarily between the two sides of the House.
I do not think it can be denied that the discussion today is not so much between the two sides of the House as between the right hon. Gentleman and the point of view represented in the memorandum of the Association of Cinematograph and Allied Technicians. I have a respect for that organisation. Its president happens to be a close relation of mine by marriage, and, even odder, he is a close personal friend of mine. I certainly get a certain amount of gossip about the affairs of the film industry, and I am not unacquainted with the arguments put forward here. I put it no higher than that.
It is true to say that what we have to consider today are the results of the general policy of the Government, because no one can deny that there is, as the technicians say, much distress and unemployment in the industry. It is, as the right hon. Gentleman has said, largely because it has proved impossible to maintain the figure, or, indeed, either of the figures which were previously asked for by the right hon. Gentleman. We have here in the successive Orders the whole chronicle of the matter: the first laying down a quota of 45 per cent.: the next saying that the Order shall be amended by substituting 40 per cent. for 45 per cent., and the next saying that there shall be substituted 30 per cent. for 40 per cent.
This is the result in an industry in which the Government have taken a great share, and to which the right hon. Gentleman has devoted a great deal of his personal attention. I am reminded of an epigram of Mae West in one of her films. Her chauffeur was struggling to get her car going, and Mae West indignantly rebuked him. Whereupon he told her, "Well, madam, I am doing my best," to which she replied, "Then do your worst because your best is awful." We are rather inclined to think sometimes that if the right hon. Gentleman were to do his worst, it might be better than the results he is now achieving.
The fundamental fact is that attendances have been falling. To take the Entertainments Duty returns as the simplest criterion of that, we find that receipts in the 10 months to 1949 were £30,670,000, and the receipts for 1948 587 were £33,070,000. The result of the close attention of the right hon. Gentleman is, at any rate, coincidental with a 7 per cent. drop in the returns, and a drop of £4,500,000 in the net receipts of the cinemas and £2,400,000 in the tax revenue. It is true to say that this tendency may be arrested; that an improvement in the quality of the films, which the right hon. Gentleman has mentioned, and perhaps a deterioration in the quality of the weather may combine to improve these returns. But there are the returns, and they are rather sinister because, of course, they reflect a falling off in the yield of this milch cow. It looks as if it has been suffering from a practice common in the Hebrides of being bled as well as milked, a process that is not attended by any permanent improvement in the health of the cow. The Treasury have, in fact, had to return some of the funds by means of a blood transfusion to this milked and bleeding animal.
The figures the right hon. Gentleman has mentioned as being handed out by the National Film Finance Corporation have really to be deducted from the receipts of the Entertainments Duty. I do not think many of use believe that a very large proportion of this money will be seen again by the Treasury. I think the Corporation was entrusted with some £ 5 million, and my information is that something like £ 4,300,000 has already been exhausted and requests are being made for further sums. These are drafts on the receipts the Treasury have been obtaining from the industry. Although we cannot go into this in detail, it is really rather like "Hamlet" without the Prince to debate the parlous state of the industry without reference to the enormous drain—
§ Mr. Wyatt (Birmingham, Aston)
Is it in order to discuss the Entertainments Duty as it affects the film industry in this Debate?
§ Mr. Deputy-Speaker (Colonel Sir Charles MacAndrew)
It can be used as a basis for finding out whether this Order should be approved or not.
§ Lieut.-Colonel Elliot
I have no intention of debating it at length, but it certainly has a very close relation to the attendances. After all, it is the fall in 588 attendances we are discussing, and it is quite impossible to dicuss this and leave out the whole question of finance. It enters very closely into the discussion we are having today.
§ Mr. Rankin (Glasgow, Tradeston)
On a point of Order. Would it, then, be reasonable to argue that a reduction in the Entertainments Duty might increase the attendances at the cinemas?
§ Mr. Deputy-Speaker
I do not see why it should not be. I should like to hear the speech first, because the question is rather hypothetical.
§ Lieut.-Colonel Elliot
An attractive vista opens. I shall not, however, go very far down that attractive vista. I am glad to find that the interventions of the two Deputy-Speakers concerned have not at any rate had the effect of limiting my remarks. It is bad enough to compete with one Chair, but when Chairs begin to arise in unaccustomed quarters of the House, it becomes all the more difficult for any speaker.
The difficulty we are in is that the policy of the Minister cannot be that of following the box office returns downwards with successive reductions of the quota. We shall require to have a further examination of this problem by some procedure, which will allow a wider Debate at a very early date, and I trust that the President will be able to give us an assurance that some such occasion will arise. The President of the Board of Trade might come down to the House with a policy. After all, he called for the Plant Report and nothing was done.
The Plant Report definitely mentions and discusses many of the problems which we are discussing today and we hope that later on we will hear from the President of the Board of Trade—to whom I am sure the House will give leave to reply—or from some other Government speaker, a little more about their intentions with regard to the Plant Report or of giving the House facilities for debating the issues arising out of that Report. Without this we cannot deeply examine the problem which faces the House. What we all fear is that this may be a step in the downward direction. That is what the technicians and other people believe. It is thought that this will not arrest the decline but that it will continue, and to reduce the quota further and further is not the 589 way in which we will get what we all desire—a healthy and flourishing industry.
It was truly said by the President of the Board of Trade and stressed by my noble Friend, that it has been proved impossible to enforce this present quota. That is what some of us feared when previous Debates on this subject took place, and although it was very generously stated at the time that exemptions would be granted, to pass a law that certain things should be done and then mitigate it by saying, "If you can show good cause why you should not obey the law we shall let you off" tends to bring the whole thing into disrepute. The President mentioned the figure of 1,474 defaulters, and he went on to say that a great number of these people would get off when their cases were examined. But these cases have continued for a considerable time, and there is a threat of a prosecution hanging over each of these people. My information, for what it is worth, is that only a handful of these people, 1,400 in all, have been prosecuted. Practically speaking, no prosecutions have resulted. All that is a most unsatisfactory state of affairs, as I am sure the President will agree.
Another interesting fact is that the defaulters were mostly independent exhibitors. According to my information, 77 per cent. of the defaulters, or 1,135 cinemas out of 4,689 returns received by the Board of Trade, were independent exhibitors, who had not been able to obtain any quota of relief at all. Obviously some kind of clearing up of that situation is urgently needed. Part of the reason for passing the Order this afternoon is that it will bring the Statute more into correspondence with the facts of the case, which at present they simply do not meet at all. The 30 per cent. quota has been unanimously recommended by the Films Council, and for the first time—
§ Lieut.-Colonel Elliot
Not unanimously, I agree, for the technicians dissented, but the decision was reached with a much greater degree of unanimity than ever was achieved before. Also this proposal corresponds more closely with the figure mentioned by Lord Drogheda as the figure which he himself desired 590 to recommend in the early period. That figure was something much more like 33 per cent. than the figure ultimately passed by the President of the Board of Trade.
The exhibitors and producers have come together. I think that is a great improvement. I do not think it is sensible or even artistically right to omit the exhibitors or to brush aside their views, for, after all, they represent the box office, and the box office is the final acid test of this form of art, and, indeed, as I hope to show, of many forms of art. Who are we to denigrate the box office? We are here as a result of box office returns as declared by the sheriff. It is not for us to say that these returns should be brushed away in favour of some small minority. It would, no doubt, be very acceptable to those who did not secure a majority of the votes at the poll, but it would not be regarded as the most reasonable way of arriving at the verdict of the public. After all, the Entertainments Duty is the servant of the public and must commend itself to the public. The box office is a very important thing. It produced Shakespeare, and it will be a very long time before any committee or advisory body, however important, produces anything better than that.
It was said by the "Economist" that the agreement in the Films Councilreflects the losses which the film producing companies have made on their trading. The exhibiting interests of the major film producing groups have become more vital to them as their producing activities make losses and have to be cut down. The new decision of the Films Council seems to me an acknowledgement that the producing game, on the scale on which it has been played, is not worth the candle."Not worth the candle"—that is the rub. The fact is that the drain on the industry has proved greater than the industry is able to bear.
These figures bear very hardly on the exhibitors who change their programmes more frequently. The President of the Board of Trade said that I would no doubt display great eloquence on behalf of those north of the Border. It is not entirely or even by a majority a Scottish problem. Cinemas are not all luxurious halls which run their programmes for six days of the week. There are over 800 cinemas which change their programme three times a week, and certainly not more than 100 are in Scotland. Far and away the majority of these smaller 591 cinemas are—not to be too arrogant—in the adjacent part of the island. But there are 5,000 active cinemas in Great Britain, and only 800 have regular six-day programmes. Some 3,300 have three-day bookings and what they require is not merely an assortment of first feature films, but a choice of first feature films. It is not possible to absorb 100 per cent. of the output.
It is not alone that there is an artistic difference in the demands of the cinema-goers between one part of the country and another. The dockside of Glasgow is by no means the same as the suburban areas of some of the Thames-side towns. The dock populations do enjoy films more closely of the nature of the Wild West than they do of very artistic and interesting films of a mild character such as "Brief Encounter." Frankly, they are not interested in that kind of thing. One must allow a certain amount of latitude, which it has been found, under this high quota, impossible to provide.
The President of the Board of Trade gave very interesting figures about the number of first feature films which are likely to be produced at some time. They brought out vividly the impossibility of maintaining the quota as it has previously been set forth—I will not say enforced—and the great necessity of some such step as is now taking place. It will be necessary to allow the consuming public a greater choice in the fare which is being provided for it. That does mean, I fear, whether we like it or not, that out of the money paid by the consuming public a greater amount must be ploughed back into the industry and not removed in taxation.
I have had a long experience and a long connection with the non-profit-making side of entertainment. Believe me, it is almost impossible to forecast what the public will or will not absorb. I have had experience which runs back first to the year 1910, which is longer than I like to think about now, with the Repertory Theatre in Glasgow. Subsequently I had quite a considerable experience with John Grierson and Stephen Tallents in the early stages of British Documentary Films, and later with the Citizens' Theatre in Glasgow, which is still running.
We cannot forecast by committees, or in any other way than by the box office, 592 what the public will enjoy. Time and again the public have accepted high-brow productions on which we all expected we should suffer a heavy loss, and have rejected popular stuff which we thought was the sort of thing which was much more to the public taste. I stil remember our sup-prise in the Repertory Theatre with John Masefield's play "The Tragedy of Nan," which suddenly turned out to be a box office rocket and which began to make money on a scale to which, up to that time, we had been total strangers. Quite recently, the Edinburgh Festival, as a matter of duty, put on a mediaeval morality play "The Three Estates." To their astonishment it became a best seller, partly due to its vigour and, one might say, to the somewhat bawdy nature of its language. The Renaissance or Middle Ages morality plays were often expressed in terms which would lead to the censor's coming down with a pretty heavy hand on them if they were written today.
I remember the films that we put on. There was one with John Grierson, who went down to a sheep farm which I know very well, and in a fortnight took a documentary. Under the title of "Shepherd's Spring" it was most popular and was eventually sold for £ 8,000, which was about half the value of the whole farm. I remember also how we tried out another film, "One Family," which had words by Rudyard Kipling and Buckingham Palace in its scenery. It was the greatest flop that you ever saw in your life. I do not believe that anybody ever looked at it twice.
We have to allow latitude and a margin in these things, and that cannot be done as long as working capital is continually removed for the benefit of the tax collector. The Plant Report indeed said all that, and more. They said about British first feature films:Most exhibitors find themselves compelled to book almost all the British films, good, bad and indifferent, which are offered to them, if they are to comply with their statutory obligations. The public are not, however, compelled to go to see them, and box office takings record their discrimination.This is the fundamental difficulty with which we are faced, and the difficulty which it is impossible to discuss at length this afternoon, but it should be referred to. I certainly consider that the attitude of the technicians is really defeatist. To say that we can only make the thing work 593 if the quota is not only maintained but is screwed up to yet higher levels is not in accordance with the facts, or with the facts as they should be.
Unless the entertainments industry is subject to the breath of competition from outside it will not progress and develop. The Russian Ballet ran for many years in this country before we were able to put on the British ballets which are now receiving the appreciation of artists all over the world. Russian films used to be one of the glories of the film industry. Deprived of competition from outside, it has steadily declined until, as we all know, a Russian film nowadays is not by any means an entertaining way of spending an afternoon. We must accept the provisions which the President of the Board of Trade puts before us now, but I still think that for a 2s. football seat to pay a 2d. tax and for a 2s. cinema seat to pay a 10½d. tax is not the sort of balance which will enable the industry to turn into the strong, flourishing and cultural, as well as entertaining, enterprise which we all desire.
The British film industry is sick. We are today discussing palliatives, but the radical remedy still has to be found. It cannot now be discussed, but it will have to be discussed, and soon, or else it will be found that in all these things we are merely throwing good money after bad.
§ 4.48 p.m.
§ Mr. O'Brien (Nottingham, North-West)
I think the House shares with the President of the Board of Trade his regret that this Order is necessary. I am not one of those who tell their friends, "I told you so," but let me tell the House something about a matter which should now be discussed. I was rebuked by my right hon. Friend for mentioning this matter in the previous Debate. Lord Drogheda the chairman of the Cinematograph Films Council, and I, were the only people on that council who supported a lower quota at the rather full meeting we had at that time, that is to say from 45 per cent. as it then was, to a lower figure. We were defeated, and 40 per cent. was agreed.
I warned the Board of Trade and other Members of the industry that a high quota could not be operated. Unlike many of those inside and outside this House who state cases in one form or another about the British film industry, I gave my reasons for my views and produced 594 arguments to support them. The brutal fact is that the entire system of quota has completely broken down in the British film industry. I will go so far as to say that a year from the operation of the proposed new Order even a 30 per cent. quota will not be attained. I agree with the President of the Board of Trade that there was a time when Mr. Rank, Sir Alexander Korda and all the others were vying with each other on the Films Council and protesting against any comment or criticism that other than a 50 per cent. quota could be worked.
I recall the discussions within the industry and in the councils and the various committees we have in the industry. I recall that they were most enthusiastic and most optimistic that they could fulfil even a 50 per cent. quota. There were two or three of us, whose sanity at this late stage may be questioned because of our many years of service in the industry, who knew that such a quota could not be operated. We did not share the optimism of Mr. Rank and Sir Alexander Korda and all the others both in the trade and in this House.
It is a very serious matter for men who have claimed to be the leaders of a very great industry to have propounded policies in recent years—not remote years—and to have found those policies go awry and break down completely in the face of repeated warnings backed by substantial evidence and facts. One questions whether the industry is really in competent hands when we find that the Government have been recommended in the last two or three years certain courses of action which have proved to be abortive.
As to the question of quota, in previous Debates we have said all that there is to say. I agreed with the implication of the right hon. and gallant Member for Kelvingrove (Lieut-Colonel Elliot) that we are putting the cart before the horse in this Debate. I am not criticising my right hon. Friend, because I know his difficulties in this matter, but how we can discuss the quota without dealing with the recommendations of the Plant and Gater Reports I do not know. Probably many of the speakers in this Debate will skate around matters which have already been discussed by those committees.
The Plant Committee has taken evidence from every organisation in the industry. The Gater Committee dealt with 595 the very thorny point of cost of production. Those reports have been published and are before the various Government Departments. It is therefore clear that until the Board of Trade makes up its mind what to do with the recommendations in those reports the arguments about the quota or any other individual or specific aspects of the film industry will be practically a waste of time.
I shall not follow the right hon. and gallant Gentleman into the field of Entertainments Duty. I could say quite a lot about it. However, I want the House to know that I agree with what he said about it. An opportunity to discuss that matter will probably arise from the Report of the Film Finance Corporation, and the forthcoming Budget may give many hon. Members on both sides of the House an opportunity to introduce their views. The right hon. and gallant Gentleman showed a realistic view of the trade's problems as a whole when he pointed to the fact that Entertainments Duty in its present form and in its present sum is a definite and very serious contributory factor to those problems. Until that is looked at I cannot see any hope of those problems being solved. What is more, I and everyone in the industry agree heartily that a percentage of revenues coming into the box offices should be ploughed back into production. There can be no disagreement on that.
I want to take up one or two points about the quota. What is largely forgotten or ignored is this. Why is it that a high quota cannot be fulfilled? Why is it that any quota cannot be fulfilled? When the quota was 45 per cent. the Rank organisation was in its heyday, enjoying an almost perpetual honeymoon, and a number of other entrepreneurs in the industry were also in a very happy position. It can no longer be argued that the Rank organisation or any other entrepreneur is enjoying a honeymoon of any kind.
The question which should therefore be posed is: Why is it that even a 30 per cent. quota cannot be fulfilled? I said that a 50 per cent. quota would not be fulfilled, that a quota of 45, 40 or 35 per cent. would not, and I now say that even a 30 per cent. quota cannot be fulfilled.
596 The reason is very simple. One need not be a statistician or a genius to discover it. The simple reason is that there is no money available anywhere to back a quota. There is no money in the country other than what may be left of the dwindling funds of the Film Finance Corporation. There is not even enough money left in the country—I challenge my right hon. Friend to disprove it—to back 5 per cent. of British films.
Hon. Members are very often baffled as to why there is a breakdown in the film industry and why a quota cannot be established. They ask what is wrong and why the industry cannot get on with the job, but there is no capital available to make the films. Solutions are proposed, but the remedies are numerous and there are so many disagreements about them. It would take the Royal College of Surgeons and everyone else to perform the operation, and probably during the operating process the body would become a corpse. If my right hon. Friend can only provide some extension of the Film Finance Corporation so that there is an equilibrium between the loans administered by the Corporation and whatever the quota figure is, we may get out of our difficulties.
The sum of £5 million lent to the Corporation will not finance a quota of 30 per cent., let alone one of 40 per cent. More money than that will be required. Where is the money coming from? If the Government do not find the money to back their own legally sanctioned quota, the only other way of dealing with it is an impracticable one, and even then we should probably not secure sufficient money to enforce the 30 per cent. quota. The method is to take all the profits from the exhibitors and put them back into a pool. That may be a very desirable thing to do, but whether it can be done is not for me to determine. Nevertheless, even if we took all the profits of exhibitors for showing American films as well as British films, I doubt very much whether there would be sufficient money in the "kitty" consistently to back a 30 per cent. quota for 4,500 cinemas.
I do not want to enter into an argument with many of my colleagues whose views are known to be different from mine about certain aspects of this matter—