FILM QUOTAS (AMENDMENT ORDER)

HC Deb 30 March 1950 vol 473 cc597-633

Question again proposed, 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.

5.10 p.m.

Mr. O'Brien

To resume, may I point out that my right hon. Friend mentioned the quota figures for the preceding three or four years and the number of first features made in that time. What he did not disclose to the House were the figures of those employed in the industry in those years. It is true to say that when the exhibitors' quota was up to 22½ pen cent.—that is, precisely one-halt of what it was in the last quota period, namely, last year—there were over 10,000 people employed in British film production of all kinds. When the exhibitors' quota was doubled, as it was in the last quota period, from 22½ per cent. to 45 per cent., employment in British film studios dropped by at least one-half, from 10,000 to 5,000. Today there are not more than a little over 4,000 people employed in British film studios. The quota therefore has been no help at all to the technicians, employees, artisans, artistes and all that great array of talent and services which are given and go into the production of films. Those are facts which have to be faced.

Much has been said about the memorandum which was circulated yesterday by the Association of Cine-Technicians, an organisation which I helped to form and with which I have a very close business association; I shall come to that briefly in a moment. But in my own organisation which I am privileged to represent, we have an unemployment figure of nearly 4,000 people in film studios alone. We do not weary Members of this House with periodical circulations of our difficulties. We are realists. We know exactly what is the trouble; we are seeking to provide remedies, and remedies that will be lasting.

It is easy to be tempted to find palliatives or to find a remedy of robbing Peter to pay Paul. We could indulge, as some of my friends in the A.C.T. and here indulge, in an anti-exhibitor campaign. That is a very simple thing for us to do, but when we have in cinemas nearly 90,000 employees, men and women who have as much right to live, to have a fair crack of the whip and to have trade union and labour conditions as fair as anyone in the studios or anywhere else, we cannot indulge in the luxury of trying to solve this problem merely on an anti-exhibitor or anti-distributor basis. That does not mean to say that all is well in the exhibiting and distributing worlds. By no means is that so. Those two sections of the industry have their problems.

I come back to the Plant Report. Many recommendations were made, including that of the remission of taxation. These, however, have not yet been debated so far as I know in this House. We should try to solve, therefore, the wider problems of the British film industry, especially in relation to the question of quota, not by digging somebody else's grave. We must look at the whole issue very carefully, and that is why we as a trade union cannot be parties to a hasty solution merely in production when that would cause corresponding difficulties—and, probably, more so—on the exhibiting side. We also have over 5,000 redundancies on the cinema side.

In short, we as a trade union—I do not want to flog my own particular interests here; I am not doing that; I want to deal with the industry as a whole—have had almost 10,000 of our members thrown out of work in studios and cinemas during the past two years or so. We are not complaining about it in that sense. We are as anxious as anyone to bring about a solution which would end that state of affairs. But many of those who have been thrown out of work have found employment elsewhere, and to their great credit they have found employment in some of our exporting industries

While I am not here to criticise another trade union—we have machinery for that purpose in the trade union movement—it is not true, and this House should know it, that all the 800 technicians who have been mentioned are technicians in the sense in which hon. Members understand the definition of this word. A considerable number of those 800 could find employment in the export industries by a little adjustment of their capabilities. On the other hand, many of those 800 could not possibly find employment in any other industry for a considerable time, and it is for this particular element that I feel very concerned.

Mr. Michael Foot (Plymouth, Devonport)

I think that my hon. Friend is slightly unfair to the Association of Cine Technicians in making that statement, because over and above their 800 members who are now unemployed there are many other hundreds of their members who have been driven to find employment in other kinds of jobs.

Mr. O'Brien

I accept the interjection of my hon. Friend. I am not wanting to be unfair at all. Those who know me in the industry would not accuse me of that. The fact is that from the figures which have been circulated, it might be said that these 800 technicians could not possibly find employment elsewhere. That is not true. A considerable number of them, I agree, could not do so: that is the difficulty. A great musical or other artist, for example, cannot be trans-, formed into a laundry worker in five minutes. But the statement that they could not find employment elsewhere is not true of the majority of the unemployed members of the A.C.T., as it is not true of the majority of the 4,000 people whom I have lost in my own organisation, in film production alone.

I have made that point in order to make another. What really matters is not so much that all these employees of my own organisation, of the Electrical Trades Union and of the A.C.T., are becoming unemployed and that many of them are finding work elsewhere. The great tragedy is that the production industry is losing a great deposit of experience and skill. As and when the British film industry comes back to some kind of productive prosperity, we shall not be able to gather and to call on that lost labour and skill. That is really the great tragedy, rather than the difficulties of adjustment by these people from one industry to another.

I should like also to see more co-operation among the unions in the industry. That would help, probably, to meet the requirements of a high quota. It is not for me here to go into detail, but I think it is my duty to the House to mention that the Gater Report is an important report. The Electrical Trades Union, which has a substantial membership in British studios, and ourselves, representing the majority of the other employees and artisans in studios as well as in distribution and exhibition, find that we are handicapped by reason of the failure of the Association of Cine-Technicians, who circulated their document yesterday, to co-operate with us on the problems which are raised in the Gater Report. We have even asked for the guidance and assistance of the General Council of the Trades Union Congress in the finding of solutions for the film problem, and my right hon. Friend has had talks with representatives of the General Council.

We felt that by the establishment of a joint industrial council, which was the idea of the Electrical Trades Union, we could face up to the real problems of working conditions and costs of production in studios as far as they concerned what may be termed the industrial, technical and artistic grades. For two solid years we were working on that and in the end we had an agreement with the employers as well as among the unions on the constitution, but, much to our surprise, and dissatisfaction, at the last moment the Association of Cine-Technicians saw fit to withdraw from the industrial council and leave the whole matter in the air. That is their business, but it is no use asking hon. Members of this House for assistance in certain matters concerning the economics of the industry if the unions concerned fail to take the ordinary elementary step of trying to solve matters among themselves.

There are one or two aspects of current agreements between trade unions and employers which should be faced. I doubt very much whether men like Sir Henry French and the people he represents, Sir Philip Warter or Mr. Arthur Rank and all the others can claim to be fitted to lead this industry in the future because of their failure to solve the glaring inequalities we find in certain trade union agreements dealing with the various sections of the film-producing industry.

That is a factor which I think should be looked at in another place and I hope I shall have the support of many hon. Members in all parts of the House who want to see the industry looked after in the proper way.

We and other bodies in the industry tried our best to maintain renters' quota. We feel that if we had maintained it, the position of the film industry would not be what it is today. We know of the difficulties in connection with international agreements, which prevent the re-establishment or re-introduction of renters' quota in the legal sense, but I beg my right hon Friend, who has given so much time and attention to the affairs of the industry, to help as far as he can in bringing about in some way, the effect of renters' quota and to bring about a policy which would be the same as if renters' quota were actually introduced in the law. I do not think that is beyond the ingenuity of the Board of Trade and of bodies in the industry.

We do not look to any system of quotas now for the success of the film industry, but to the confidence of British cinema-goers to back up British films. We look with confidence to the makers and sponsors of such films as have been mentioned today, and others too. We look with confidence to the City of London and great industrialists to give some kind of financial backing to this industry. We know very well that the time is not ripe for many years to come, without entering the political field, for any State control of the industry as a whole.

Had it not been for the Film Finance Corporation, the state of affairs in the industry would have been worse than it is today. There is no question about that. There we have a pivot on which we can expand. If all parties, irrespective of political colour, could co-operate in this matter of inducing the financial houses and great industrialists to display a little more confidence in our work, there would be no need for technicians and people like myself to make speeches deploring the fate of the industry. Rather we would have an industry which could take a great part as an exporting industry exporting to all parts of the world, through the screen, the message of what this country stands for in its democratic way of life.

5.25 p.m.

Mr. Baker (Norfolk, South)

I crave the indulgence which is usually accorded to those making their first speech in this House. I also apologise because I am rushing into a Debate for which I was not prepared but about which I feel very strongly. Therefore I have not prepared my maiden speech.

It seems to me that in talking of the film industry hon. Members are forgetting the main issues, and that even in the case of the hon. Member for Nottingham, North-West (Mr. O'Brien) there is too much recrimination on all sides. We must maintain a high level of British film production of one kind or another. The quota is only one way of achieving it and the quota will only be maintained if now the British Film Industry gets together, if it gets together also with the right hon. Gentleman, and if not only a solution is worked out and a plan put into operation, but that both are done quickly. It seems to me that we have been talking about the industry's plight for so long that it is being allowed to drift because the trade is waiting for the right hon. Gentleman to do something and the right hon. Gentleman is waiting for the film industry to do something. This is a matter of some urgency considering the number of dollars which it can cost this country if British film production virtually ceases.

Usually two lines of approach are taken. The first is usually taken by hon. Members opposite who say, "Rank's honeymoon is over, let us get rid of Rank"—

Mr. O'Brien

I did not say that.

Mr. Baker

No, the hon. Member did not say that. The other view which is taken is that the Government should not interfere in this case with the private enterprise organisations. But we shall only get a successful industry if the major private enterprise organisations maintain themselves efficiently and the Government intervene and supports them and see that there is a national film policy. It is a matter of great urgency now for the Government to get together with the industry. We may recall that when the industry was divided and distributors and producers could not come together and say they agreed to reducing Entertainments Duty, the right hon. Gentleman suggested that until they could come together there was nothing he could do about it; but when at last they came together, he suggested that there was something sinister in their co-operation. He must have been right on one occasion, but could not be right on both occasions. Here is an opportunity to do something to save film production and dollars.

Rank's honeymoon has been a very expensive honeymoon and probably he has learned a lot—

Mr. Poole (Birmingham, Perry Barr)

One usually does on a honeymoon.

Mr. Baker

I think everyone has learned a lot, and I hope the Government will give a lead and not only give the 30 per cent. quota, but also make a reduction in Entertainments Duty and make money available for production. Then we can get a high level of entertainment in this country, cut down the drag of dollars and show British films in this country as well as throughout the British Commonwealth. If we can get a sufficiently thriving industry, hon. Members on all sides of the House will be able to say that the right hon. Gentleman has done a good job which, although this is a maiden speech and I should not be controversial, I must say I do not think he has done so far.

5.30 p.m.

Earl Winterton (Horsham)

In the course of a very long Parliamentary career it has frequently fallen to my lot to speak after a maiden speech, and I confess at this long distance of time that there have been occasions in the remote past, 30 or 40 years ago, when I found it slightly difficult to pay the accustomed tribute. If I may say so with all sincerity, it gives me the greatest pleasure this afternoon to follow someone who has made his maiden speech, or to use a more correct term, has spoken for the first time in this House. It will be the opinion of every one on both sides of the House that it has been a highly competent and courageous performance. The hon. Member got up and spoke in this very controversial debate, as he has told us, without having intended beforehand to do so. That he should have made the speech which he did may give him every confidence about his future in this House.

In the course of the right hon. Gentleman's interesting dissertation on the film industry he and I got slightly across each other, as we do in every film Debate. I am sure he will agree I am not giving away any confidence improperly in saying that he has since assured me privately that he intended no reflection upon the Rank production organisation by comparing the methods of its preparation of its accounts with that of the Government film organisation which provides the money for certain films. At the same time I must say to him, before I put a few points to the House through you, Mr. Deputy-Speaker, on this very complicated and difficult matter, that although it does me no harm personally, and so far as I am aware does no harm to the organisation with which I am connected, it seems to me rather regrettable, as I think that the hon. Member for Nottingham, North-West (Mr. O'Brien) will probably agree—we agree upon quite a lot of things connected with the film industry—and rather purposeless that in every Debate connected with the film industry many of the speeches, including invariably that of the Minister, centre entirely round the good and bad qualities of the Rank organisation. One would suppose that there is no other large circuit, no such thing as A.B.C., no such person as Sir Alexander Korda, for whom I have a great admiration.

May I say in parenthesis that so far from having any feeling against British Lion, I am delighted that they are producing films, one or two very successful ones. I am not surprised to learn—if I am wrong the right hon. Gentleman will doubtless contradict me when he replies—that they are finding, with the money borrowed from the Film Finance Corporation, the same difficulty in getting an adequate return upon their films as we in the Rank organisation are finding in regard to the films which we produce and which are financed from such resources as we have left. I shall be very interested to look not only at the first report of the Film Finance Corporation but at, as was indicated in a pertinent interruption by one of my hon. Friends, the second and third reports.

I say now—and this is a matter to which I shall return later, because you, Mr. Deputy-Speaker have given us permission to do so by the Ruling you gave in the course of my right hon. Friend's speech—that until there is a reduction in the Entertainments Duty it will, for reasons which I shall give in detail later, be impossible to produce any films at a profit except perhaps one in fifty.

Mr. Wyatt

Will the noble Lord state the profits made by the exhibiting companies of the organisation with which he is connected, because every one of them made a handsome profit, not a loss, and they are the companies which pay the Entertainments Duty?

Earl Winterton

I have not got those figures by me now and I should prefer to give them in detail when we come to the question in our Budget Debates. I can assure the hon. Member that support in this matter is not confined to one side of the House. As the hon. Member for Nottingham, North-West, knows, we shall produce facts and figures which are supported by all sides of the industry including, I think, the union of which the hon. Member is such a distinguished member, to show that the taxation drain on the industry, especially the exhibiting side, is greater than that on any similar entertainment industry in any other country in the world. We shall deal with that aspect when we come to the Budget, though I wish to say a word about it later in my speech.

The right hon. Gentleman the President of the Board of Trade was pleasantly controversial about the Rank organisation and myself, so he will not mind if I am equally pleasantly controversial about his own attitude and that of his distinguished predecessor at the Board of Trade, the present Chancellor of the Exchequer. Although the hon. Member for Nottingham, North-West, is too good a party man to say that he entirely agrees with me, I think he will agree with the analogy which I am about to make. I say that the Board of Trade, under successive Presidents, has treated the cinema industry as a whole, especially on the producing side, as a certain type of pampered lap-dog treats its unhappy owner, at one moment wagging its tail and licking its owner's hand and the next moment, for no apparent reason, barking and growling angrily and trying to bite.

Mr. O'Brien

In the sense that there have been two very distinguished Presidents of the Board of Trade who have been leading lights of the Conservative Party, I will agree with the noble Lord's analysis.

Earl Winterton

The hon. Gentleman will not get out of it quite as easily as that. I am an old bird and I am sometimes caught by "salt on my tail," but I am not to be caught with that particular sort of salt. I shall in a moment give quotations showing how, under the right hon. Gentleman and his predecessor at the Board of Trade, we have been dealt with over the quota during their tenure of office there.

The ad valorem duty on foreign films was imposed on 7th August, 1947. On that date the Americans stopped sending their films to this country and a very serious controversy arose, not only with the film industry in America but with a wider interest, a very powerful interest in American public life which represents the film interests. I am not for a moment suggesting that there was corruption. Everyone knows that as a result of pressure brought to bear on the British Government by American interests, who said, "You cannot treat one of our industries in that way. If you do, you will suffer in other directions"—no one knows this better than the President of the Board of Trade and the Chancellor of the Exchequer—it was announced in Parliament on 11th March, 1948, that the ad valorem duty would be withdrawn, and that this would take effect from 14th June, 1948.

Let the House and even the most bitter opponents of the Rank organisation or any other producing organisations in this country realise what the effect of that was. Let us see what happened as soon as the industry here knew that no American films were to come into this country. I should also point out that they were approached—I cannot explain in detail the extent of that approach without giving away confidences, but it will certainly not be denied by any other Member of the Government. I have heard the Chancellor of the Exchequer make a speech at a public dinner in which he said he had brought every influence to bear on the industry to make as many films as possible. The result was, and it has been admitted by everyone connected with that portion of the industry with which I am connected, that we poured out films which had to be produced in conditions of haste and under contracts which we should never have dreamed of entering into in ordinary times. That was done in order to meet what we believed, and the Government believed, to be the case—that there were no films coming into this country, and in consequence we would have to produce far more films than ever before.

Mr. Wilson

I seem to understand the noble Lord to say that the agreement with Mr. Eric Johnston was the result of strong pressure from American interests. How can the noble Lord account for the fact that the only pressure we experienced in this matter was not from American interests, but from the British Film Producers' Association, of whom at that time Mr. J. Arthur Rank was chairman, and who demanded that this situation be brought to an end, because there was no future in film production so long as it went on?

Earl Winterton

The right hon. Gentleman can say that as often as he likes, but he knows perfectly well that considerable pressure was brought to bear on the Government—perfectly legitimate pressure—by the American Government. That cannot be denied, because it is a matter of common knowledge. At any rate, whatever were the causes of the reversal of policy, and even if the right hon. Gentleman is right and there was no pressure brought to bear by the Americans, that reversal of the policy caused complete chaos in the industry. The industry was told, "You have a whole market entirely to yourself. No foreign films will be brought in." Members of the Government got up in this House and said, "Here is a wonderful opportunity; you will have to do better than you have ever done before."

Then, suddenly, the whole policy is reversed, and in place of it the quota is imposed. But that is not the worst thing. Hon. Members who follow me will indulge in their usual criticism of the Rank organisation. I hope, as I see a director of that organisation in the House, he will say a word of criticism about A.B.C., because they are very naughty too. They are a big organisation and they try to make money. That, in the opinion of the bon. Member for Devonport (Mr. Foot), is a' terrible thing. They make money by private enterprise which, as I say, he considers a terrible thing; so I hope he will save some of his gibes to direct at them.

Let me read out to the House some of the variations in the quota policy. Some of my hon. Friends on this side of the House who are not aware of the extent of the variation will be simply astonished. This happened, not under the Conservative predecessors of the right hon. Gentleman, as has been so very disengenuously suggested; it happened under the present Government. These are the variations in the quota. In 1945–46 it was 15 per cent.; in 1946–47, 17 ½ per cent.; in 1947–48, 20 per cent.; in 1948–49, 45 per cent.; in 1949–50, 40 per cent., and now it is 30 per cent. I am sure that any impartial person, not connected with the industry, will agree that that makes a difficult position both for the producing and the exhibiting side of the industry in this country.

At the risk of repetition or of boring the House, I would say that in my opinion, until there is a let-up in the amount of taxation which is taken from the exhibiting side, there will be no prosperity for the British cinema trade. I have some facts and figures in my possession about the position in foreign countries which I will quote, because I do not think they will be controverted. The American producing industry caters for a cinema-going public at home which is six times larger than that of Great Britain. A 20 per cent. tax is added to the price of the seat, whereas in Great Britain, on the average, the figure is 50 per cent. One can certainly see from that what overweight the British industry, especially the British producing industry, carries, in comparison with the American industry.

Every expert in the industry would agree that the Americans can afford to do things which, because of this overweight, are impossible here. At the risk of getting out of Order by dealing with a wider subject I would say, and this is a matter where there would not be disagreement between the two sides of the House—it only illustrates the point so apparent in all production in this country compared with American production—that the Americans have this enormous home market, which increases the difficulties of producers here, whether they be employers or employees. That is the real basis and the strength of the economic case of the United States cinema industry.

It has been suggested in the course of the Debate that nothing has been done in the way of increasing the productivity or saleability of British films abroad in the last few years. I should like to give figures to controvert that. I believe them to be accurate; they are taken from one of the trade journals. In 1939 there were 59 showings of British films abroad. In 1948, the figure was 567 and in 1949 it was 563. Since there have been references to the Rank organisation, I make no apology for saying that there is now, because of our affiliations abroad, far more showing space for British films than has ever been the case before. We have some of the best films, although we would admit that we have produced some bad ones. But the best films, like "Red Shoes," and three or four others now showing overseas in the Commonwealth countries—where for a variety of reasons they could not be shown before, because American control prevented British films from being shown there previously—are meeting with great success.

I do not agree with everything which has been said by the hon. Member for Nottingham, North-West, but I do agree with him that we should never allow ourselves to be over depressed about this industry. Despite the difficult times through which it is passing, despite the disabilities and the mistakes of direction in this country, which I frankly admit and which the hon. Gentleman, on behalf of his side of the industry, would admit, there is much which is healthy about it. I can pay a tribute to him and to other trade union leaders. I would say that there is a good relationship in the industry, which does not exist in every industry in this country. There are times when the hon. Member and I, both being fierce watchdogs, are prepared to bark and to bite anybody in this House who attacks the industry, and who says that we are incompetent and inefficient. We say that that is not true.

With regard to this particular quota I am in favour of it, as is the majority of the industry. I think that the Government were quite right to bring it forward, but I would say this to the right hon. Gentleman, and also to my right hon. Friends, since I do not expect to be in the next Tory Government which will come into operation very soon. I hope whoever is at the Board of Trade in the next 18 months will not pursue the policy pursued in the immediate past of altering the quota once every year. I hope we shall have something like a firm and consistent policy on the part of the Government towards the British film industry, and then I believe it will have a chance of flourishing as great as that of any other industry.

5.50 p.m.

Mrs. Eirene White (Flint, East)

I am particularly interested in this Debate because I am a member of the Cinematograph Films Council which is supposed to advise the President of the Board of Trade in this matter. When the Council met to discuss these quotas, I was otherwise engaged, as it was six days before polling day, but I have closely studied the records of that meeting.

The first point which strikes any independent member of the Council is the remarkable unanimity displayed by the exhibitors and the producers in the industry. This is something novel and one is perhaps permitted to be a little bit suspicious, because on all previous occasions when I have heard quotas discussed in the Council, there have been considerable diversions, the producers always asking for a very much higher quota and the exhibitors for a very much lower quota. I must confess that the thought entered my mind that those who represented the producers on the Council on this occasion might possibly have been thinking of some of their other interests on the distribution or exhibition side of the industry. One of the difficulties of an independent member of this body is caused by the dual, and sometimes triple, personalities of one's fellow-members of the Council.

If I thought that the only reason for the proposal of 30 per cent. instead of 40 per cent. had been just a ganging-up between producers and exhibitors, or even the defeatism of certain producers. I should not support the lower quota, but I must confess that such little experience of the industry as I have had has led me to believe that a high quota in itself does not automatically lead to increased production or to improved quality—perhaps still less to improved quality—and that a high quota would not, of itself, fill the studios which are now unused, reduce the most regrettable redundancy in the industry among the technicians, or even give what is most desirable of all, an opportunity to the most talented producers in the industry who are at present without employment for their talents. If I thought that a high quota would lead to all the happy results that we would wish for the industry, I should most certainly support it.

It may perhaps have been a coincidence for the noble Lord the Member for Horsham (Earl Winterton) to refer to some of the circumstances connected with film production when the quota was at the high level of 45 per cent. Production was certainly not of the very best quality. I would accept to some extent the reason that he gave for that, but my point is that obviously quality of production—and even quantity of production—is not as closely linked with quotas as one might suppose. On the contrary, I am inclined to believe that a high quota, as with other protective devices, may have the effect of masking some of the fundamental weaknesses in this industry for which reform is overdue.

Therefore, I am prepared, in principle, to support the quota of 30 per cent., though I should like to know from the President of the Board of Trade exactly how he proposes that this quota of 30 per cent. should be administered. We know that with the remissions which are given very considerably under the present Act, the quota which was nominally 45 per cent. was effectively a quota of 37 per cent., and the quota which was nominally 40 per cent. was an effective quota of 33 per cent. I should like to know whether this quota which is nominally to be 30 per cent. will be an effective quota of not more, perhaps, than 24 per cent. or 25 per cent., because when the main quota was reduced by one-ninth from 45 per cent. to 40 per cent., the quota sub-committee of the Films Council, which is responsible for granting remissions under the Act, automatically, or almost automatically, reduced the subsidiary quotas for the cinemas to which remissions were granted.

I should like to know whether it is proposed that the quotas for the cinemas which received remission under the Act will be automatically reduced by one-quarter or whether it is in fact intended that this quota of 30 per cent. this year should be much more nearly a quota of 30 per cent. overall for the entire industry. This is a most important point. If the subsidiary quotas are to be reduced by one-quarter and we reach an effective quota of 24 per cent. or 25 per cent., then it is not a very high quota for the industry.

We must also remember that there is at least the possibility that more blocked American sterling may be used in the future than has been used in the past. That might have the effect of reducing the quota for the British industry, in the full sense of the word, even lower than the nominal quota. I should like the right hon. Gentleman to refer to the principle of the 1948 Act which was that the high quota at first fixed was fixed at a high rate so that the circuit cinemas should be obliged to show a large proportion of British films. But the very complicated series of remissions which are granted under the Act were included in order to temper the wind to the independent exhibitors.

If we lower the quota too far we shall no doubt help the independent exhibitors still further, but we shall make it possible for the circuits to get away with a very small proportion of British films. In the only year of which we have any experience, 1948–49, for which we now have the returns, the main circuits were able to meet their quotas, although a number of the independent exhibitors had great difficulty in doing so. I should be sorry to see a position in which matters were made too easy for the three main circuits. For myself, I agree to this extent with the noble Lord the Member for Horsham. Had there not been this present crisis in the film industry, I should have liked at least one more year's experience of the 40 per cent. quota. It is extremely disturbing if the quota is to be changed year by year. I believe, in fact, that for the current year we have much better information at the disposal of the quota sub-committee than we had in the first year of our operation. One would have liked to gain even more experience with the second year at the same quota level.

I should like, in passing, to pay a tribute to Sir Arthur Jarratt, who is chairman of the quota sub-committee, for the extremely difficult and detailed work which he has undertaken in this matter of going into the question of the remissions afforded to the individual cinemas. There is one difficulty to which the President of the Board of Trade might refer, if it is not out of order. The chief difficulty in imposing this quota has been the position of the independent exhibitors who are not entitled to any relief at all under the terms of the Act. They are the ones who are expected to fulfil the full quota. It was among them that we had 77 per cent. of the defaults during the first year of operation under the new Act. That seems to me something which should be considered in any proposals for amending legislation in future.

Another question is the enforcement of this quota. One of the advantages, we hope, of having a lower quota is that it can be adequately enforced. It is certainly disturbing when we have 1,474 defaults and when we know that the very large majority of them will have to do no more than plead under Section 13 of the Act that they could not fulfil the quota because it was not commercially practical. It would be betraying confidential information if I were to disclose the number likely to be prosecuted, but it is very small indeed, and I should say that, while there might be some justification under the old procedure for not undertaking prosecutions when there was a completely rigid quota, there is far less excuse at the present time and under the present Act when, with the remissions, we have a much more flexible system.

I feel that it is essential that the Board of Trade should be less reluctant than it has been in the past to undertake prosecutions when they are really justified. I would not accuse the members of the Council who advise on this matter of acting with anything but complete integrity, but there is no doubt that the official attitude is that one prosecutes only as an absolutely last resort. Under new legislation and a much more flexible provision, this is an attitude which should not be encouraged. If we have a law; we should secure respect for that law.

I know that it is not possible absolutely to enforce the law in every possible case, for the reason that, when we fix the quota for any year, we cannot precisely estimate the number of British films which will be available to meet the quota requirements, and I think that is just something which we must accept. As the President said, we have been reasonably accurate in the past in estimating the number of films likely to be available, and, if anything, we have erred very much on the side of safety. Therefore, I think it cannot be taken as a reason for allowing the continuation of the present situation in which we have a really shocking number of defaults of this quota.

Finally, we do not wish to fix the quota so high that there will be undue pressure on the Films Council to increase the number of films which have run their four-year period and are then re-issued for the quota, because we ought to cut down very much the number of films which are re-issued for the quota beyond the four-year period. We have tried, indeed, to grant re-issues under the quota rules to a very limited number of films, which I think is the correct policy. I am sure that we have in the last year or two exaggerated the effect of the quota on the industry. In a very complex industry, it is very difficult to disentangle cause and effect, and I think that the present tendency in the industry is, quite rightly, concerned very much more with the fundamental issues of organisation and artistic merit, and regards the quota as some slight help, but no more than that. I hope that before long we shall have another opportunity of going much more deeply into the fundamental issues, but meanwhile I think we should accept the present quota.

6.4 p.m.

Mr. Maudling (Barnet)

I cannot claim any of the personal knowledge or experience of the film industry which has been shown by previous speakers, but I am very glad of the opportunity of speaking in this discussion, because my constituency of Barnet contains Elstree and Boreham Wood, which I think comprise the largest single centre of film production in this country.

I do not think it is generally known outside this House how very bady hit the production side of the film industry is at the present moment. In Boreham Wood, there are four studios, of which the two smaller studios—the Gate and the National—are completely closed. The Associated British Studios have all their four stages in operation, but I do not know how long they will continue in operation. The largest studio is that of M.G.M., which has seven stages, and none of them is at present in operation for film production. There has been some reference to unemployment in the industry, but I do not think it is generally known that in some categories it amounts to over 50 per cent.

I am particularly concerned with the position of the senior technicians, such as cameramen and sound recording experts, who are now unemployed and whose very specialised occupation does not fit them very easily for transfer to other forms of employment. They are also in many cases people who were earning good money and who have entered into personal commitments, such as an insurance policy or house purchase through a building society, and who are today in a particularly difficult position.

I think these are some of the reasons why the Association of Cine-Technicians strongly opposes a reduction in the present quota. They are very concerned about the position, and I think they are right to be concerned, though I do not think they will have been able to draw much consolation from the speech of the President of the Board of Trade today. Last year, when the right hon. Gentleman announced the reduction of the quota from 45 to 40 per cent., he used the phrase, "reculer pour mieux sauter." I imagine that he hoped this year to be able to restore the quota, but I fear that that phrase has become rather like the phrases which appeared in communiqu és during the war about "strategic withdrawals to previously prepared positions," which was simply another way of saying that we were on the retreat.

I think it is sometimes suggested that the film industry is asking for special protection and special treatment that is not accorded to other industries. In this matter of the quota, that is surely right, because the film industry has difficulties which no other productive industry in this country has to face. It is not only a fact that the American film production industry has an immense home market upon which to rely, but the real point is that one can sell a film as many times as one likes. If an American manufacturer is selling motorcars in this country, he can either take a profit on a car sold here or on the same car being sold in Australia, but he could not take that profit twice. The film producer can both sell his film here and in Australia as well, and it is therefore wiser for him to take a small profit in this country rather than no profit at all. That is an argument upon which the Board of Trade itself rested to some extent when the 75 per cent. duty was imposed. It can be driven too far, but it still has considerable validity.

Another reason why film production is in difficulties is because of the attraction of Hollywood to the industry's personnel, and particularly the stars, in this country. As a result, stars have to be paid these very high figures, though I myself could never understand why they should wish for these high salaries, 90 per cent. of which goes to the Chancellor of the Exchequer, but that is perhaps because I never had the chance myself. The fact is that these sums have to be paid to stars, and this sets a standard and creates an atmosphere of extravagance which in itself creates further difficulties.

Finally, there is the fact that film production is more than an industry. There is a national interest in maintaining the artistic quality and prestige of the British film industry. For all these reasons, I think there is a strong case for maintaining the quota if possible. But, on the other hand, we must look at the position of the exhibitors, because the productive end of the industry depends entirely on the money taken into the box office by the exhibiting end. I know that exhibitors have great difficulties and are facing considerable competition. They are, of course, facing competition from live entertainment, with in many cases very much easier tax conditions; they are facing the growing competition of television, which is already making itself felt in the box office receipts, particularly in the London area, and they are also faced with the disinflationary pressure which we are told is growing, and which reflects itself in the falling public expenditure on entertainment. If exhibitors cannot attract sufficient money into the box offices, the producers cannot get an adequate return on their films, and therefore anything that increases the problems of the exhibitors must redound to the disadvantage of the producers.

There is no doubt that the attempt to make too many films resulted in a reduction in the quality of the films made. I think that is stated in a passage quoted by the noble Lord a little earlier this afternoon from the Plant Report. Therefore, if the retention of a quota of 40 per cent. means making films of a lower quality, that may redound to the financial disadvantage of British producers. That being so, I think the balance of argument is on the side of reducing the quota from 40 to the 30 per cent. But can this quota of 30 per cent. be maintained? I think there is some doubt about it, and that doubt was expressed by the hon. Member for Nottingham, North-West (Mr. O'Brien).

There are two points to consider. The first is: have we sufficient directors and producers of adequate quality in this country to make 50 or 60 first feature films? There seems to be some argument about that. The second and more important point is will there be the finance available to maintain a film production of that size? There are two possible sources of finance; first the Film Finance Corporation, and, secondly, the private finance organisations. I was glad to hear from the President of the Board of Trade that we shall soon be receiving the first year's Report of the Film Finance Corporation. I noticed that when referring to the Rank organisation the right hon. Gentleman suggested that the possible tardiness of their accounts had some relation to their accuracy. I hope that the speed with which the Film Finance Corporation's accounts are submitted will bear no relation to theirs. Apparently the Corporation find that the money returns rather more slowly than was at first anticipated.

I looked up the Debate which took place, I think, last March, when the President of the Board of Trade referred to the "angels" who used to provide the finance for film making and quoted from "Hamlet" about angels and ministers of grace defending us. I hope the right hon. Gentleman also remembers the quotation to the effect that fools rush in where angels fear to tread. It will be interesting to see, as soon as possible, what finances are available for film production from the Film Finance Corporation. So far as private finance is concerned, it is surely dear from paragraph 64 of the Plant Report that the return to the producers is not in the normal way adequate to cover production costs, and, as long as that continues, we shall not get people to finance productions. How can anyone expect people to put money into film production when it is certain that they will be faced with a loss?

I have one further point to put to the President of the Board of Trade. As I said earlier, the largest studio in Bore-ham Wood is the Metro-Goldwyn Mayer which, at present, is not being used at all. It has seven stages, and is magnificently equipped. I hope that, as a result of the negotiations which the right hon. Gentleman will have to undertake in the near future with the Americans, we shall get that studio space used. It would certainly be better if every studio could be engaged on productions 100 per cent. British, but if that is not possible, then it is better to have American companies using their blocked sterling for film productions in British studio space. I hope that in the near future the right hon. Gentleman will be able to announce that some progress has been made on that point.

6.15 p.m.

Mr. Edgar Granville (Eye)

The hon. Member for Barnet (Mr. Maulding) has shown a considerable grasp of the problems which concern his constituents, and has painted a very grim picture for the President of the Board of Trade of the position at Boreham Wood. I hope that whoever replies for the Government will give us some information of what they intend to do with regard to the unemployed and redundant staffs in those studios. In the course of his speech, the hon. Member for Nottingham, North-West (Mr. O'Brien) said very modestly that he was in the position of saying to the right hon. Gentleman, "I told you so." I have been re-reading the previous Debate on this subject which took place just before the last Parliament was dissolved. I find that the great majority of those who took part in it took the trouble to warn the right hon. Gentleman that the quota he was then fixing was far too high. Unfortunately, although most of the speakers who took part in that Debate gave that warning to the right hon. Gentleman, his own advisers did not, and consequently he has now to come to the House and ask for another variation of the quota.

I thought that the right hon. Gentleman, who usually speaks with a good deal of optimism about this industry, appeared particularly gloomy when he spoke this afternoon. In fact, the gloom was only relieved by the dialogue or the cross-talk on the Rank organisation which developed. The right hon. and gallant Member for Kelvingrove (Lieut.-Colonel Elliot) offered the President of the Board of Trade the slogan, "Follow Mae West and' do not do your best." I can well understand the right hon. Gentleman's gloom because if we look through the whole story of the cold war, the tax, the quota variations, the provisions for the Finance Corporation introduced into this House, and note the various committees, councils, and what not which have been set up, the net result is, to use American film parlance "an all-time record low" on the production side of this industry, as described by the hon. Member for Barnet.

As one hon. Member after another in varying degrees has said this afternoon, let us not skate over this thing and come here in Debate after Debate to ask for higher or lower quotas and act as though everything in the garden were lovely. The industry will be facing a very acute financial crisis in the immediate future. Indeed, the hon. Member for Nottingham, North-West, went so far as to say that there was no further finance available for film production in this country, and the hon. Member for Barnet said that there were no more "angels" available. What does this mean? It means that the independent production of films here has now reached the point when there is no more capital available anywhere except that which can be advanced by the Film Finance Corporation.

Whatever the President of the Board of Trade has in mind, he must know that if there is no more private capital available in the form of what he referred to as "angels" or otherwise, and if it is going to take a long time to get back the receipts, as hon. Members have suggested, it would be better for him to take this House into his confidence and tell us exactly what he proposes to do, and what hope he thinks there is for financing this industry in the future. What he said this afternoon, and on which hon. Members on all sides have spoken in criticism, is that the production side of the industry has practically closed down, and that the Government can give us no hope at all as to how the industry is to continue the next two or three months. I listened with great interest to the noble Lord the right hon. Member for Horsham (Earl Winterton) on this subject, and I was very glad he intervened. I wish more of his followers had been present to hear his very cogently argued speech on free trade when he was dealing with the effects of a high quota.

I was very interested to hear the Minister's reply with regard to American diplomatic intervention on this matter of the quota. Is the right hon. Gentleman really telling the House of Commons that no representations of any kind were made either by Mr. Eric Johnston or by Hollywood or by the State Department in Washington? Surely, ever since it was first imposed, the whole story of this quota has meant that representations had been made and, as the noble Lord said, the larger background of the relationship between this country and the United States has always been brought in.

In my view the quota is dead, and has been redundant. Why are we not frank about it? The right hon. Gentleman has given figures to the House today and previously on the numbers of cinemas unable to comply with the quota. I think he gave a figure of 1,500 on feature films alone, and 1,200 on supporting films. What kind of law is this, when we say to people they must comply with the quota and they cannot get the films to do it? The Minister knows perfectly well that it is going to be far worse in future and that the cinemas have not the faintest chance of complying with this protective regulation. The Government are not assisting the industry and I do not think there have been any prosecutions at all.

Mr. Wilson

They are being considered.

Mr. Granville

The right hon. Gentleman says they are being considered. I can understand the war-time situation, but here we have the right hon. Gentleman with this film business, the prize baby of the Board of Trade, hitting an all-time low record, or nearly as low as it has ever been before, and the Minister still expects, at any rate in production, the cinemas to fulfil quota obligations of that sort. It would be far better if the right hon. Gentleman, with his political background, scrapped the quota altogether and took the advice of the noble Lord the Member for Horsham who said in effect that the film industry is international. We cannot build a film industry as a national racket behind tariff walls and quota restrictions. The United States has a cinema-going population three times as large as ours. [HON. MEMBERS: "Six times."] Very well, six times. The result is they can spend much more money on the production of their films. In this country, the film industry depends entirely on what it can make on the American market by way of profit if it spends more than £100,000. This has never changed since the days of the Ranks and various people who tried this experiment with far more experience than the right hon. Gentleman and his advisers. Those men failed.

The best way to save dollars would be to try to persuade the United States that we cannot afford to pay the enormous film bill in dollars every year and to invite them to come over here and, instead of making their films in Hollywood, make British films in our studios. Those studios are idle, and we have technicians and electricians and so on unemployed at present. Has this been put to the Americans? I know the Minister has been to America and we have had reports of these discussions in the United States. But has this proposal been put at the right level in America and have they been told that, with Marshall Aid coming to an end, we cannot afford to pay this film dollar bill any more. Let them come over here and, instead of paying their dollar balances to America, use European technicians in This country. Films are international and the best films from Hollywood are full of British names. Let us makes Elstree and Denham and our other film studios world centres for the presentation of international films. It is only by doing so, that we can give the industry a chance.

6.25 p.m.

Mr. Michael Foot (Plymouth, Devonport)

I have a very few minutes in which to speak, but it is only right that at any rate one person in this Debate who is opposed to the Government's proposal should say a word. Other speakers regretted, as the President of the Board of Trade did, that the quota had to be reduced, but they all regarded it as a proper and right action. I take a quite contrary view. I believe that, just as the reduction of the quota has caused very considerable alarm and despondency throughout the producing side of the industry and among the technicians, so this Debate will deepen that alarm and despondency, because this is an indication of another step towards the decline of the industry.

What were the reasons advanced by the Minister? First, he dealt with the advice given him by the Films Council which was referred to by my hon. Friend the Member for Flint, East (Mrs. White), who is a member of that body. I believe the exhibiting interest on that body has been enormously strengthened and that is why one gets that kind of advice from the Films Council. It should be recognised by the House that there was the strongest possible protest made against that recommendation by the Association of Cine-Technicians, which represents not only the technicians but also directors, writers and the whole creative side of the industry. And they have said that there should have been a much fuller inquiry into the films which could be provided during this quota period. The second reason put forward—though I thank the Minister for not putting it forward himself today—is that there is a shortage of talent in the British industry. That is complete rubbish. There is plenty of talent to carry out a bigger production of films, if only it was organised properly.

I want to stress in the few moments available what is the most serious aspect of this whole position. That is the consequences which will follow from this reduction in the quota, and the prophecy of a later reduction made in some quarters. I believe it means that another step is being taken towards the Americanisation—horrible word—of the British film industry. The average quota at present is below 40 per cent. because, taking all theatres into account, the average showing is about 35 per cent. That means that when this reduction is made there will be roughly an average of 25 per cent. British films among all the films shown in British cinemas. When it is remembered that some of these films are made by Americans in this country with frozen sterling, it means that only about one out of five of the films shown on British screens are going to be British films in any real sense of the word.

That is a dangerous situation. It may mean death to the British film industry. It may mean dissipating the talent and destroying this industry which a few years ago was showing great possibilities and promise. I am as much opposed to an American dominated British film industry as I would be to an American dominated British radio industry or an American dominated British newspaper industry. What would be the thoughts of hon. Members if only one out of five of all the newspapers published in this country were British owned and the rest were dominated by the Americans? This policy is wrong not only from the film point of view but from the point of view of the economic interests of this country. Making more films with piled-up frozen sterling—which is one result that must follow—deprives us of a dollar-earning capacity which we would have with more truly made British films. It must also injure the possibility of standing on our feet at the end of the Marshall Aid period.

As to the cultural side, the effect may be disastrous under this system, which is being assisted by the quota arrangement, of piling up frozen sterling and making more films under that arrangement. We are soon, I believe, to have a film with Irene Dunne as Queen Victoria, and also a film about Dunkirk with Gregory Peck featuring as the hero—one of the greatest insults to the British Empire since Errol Flynn captured Burma single-handed. That is not the way to make a real British film industry. Despite all the consultations which the President of the Board of Trade has had, I do not believe that he has really consulted the Association of Cine-Technicians who, as I say, speak for the whole of the creative side of this industry. They have a much better contribution to make towards building up the film industry than the advice from exhibitors whose financial interest is that they should sell many more American films, and the advice from the other sections of the industry which have been referred to.

I hope at least that this quota will be strictly enforced. I hope the President of the Board of Trade will consider not allowing films made by piled up frozen sterling to count as quota films. I hope that as soon as possible he will produce the radical policy for the film industry which can at least give some hope to the hundreds of technicians who are out of employment, and to the thousands of creative artists who have been prevented from making films on anything like the scale they would have done but for the crazy, chaotic failure of private enterprise and private monopoly in this industry.

6.32 p.m.

Mr. Shepherd (Cheadle)

We are approaching the end of yet another Debate on the film industry, and I do not think that any hon. Members who have had the pleasure, or otherwise, of listening to most of them will feel that this one has been any more satisfactory than the Debates in the past have been.

There has been a breath of fresh air from the hon. Member for Devonport (Mr. Foot); I think we all admire his enthusiasm for the British film industry and his desire to establish what is an important national asset in its proper place. But I think the House will feel that he is under-estimating the difficulties which attach to film production. It is not an industry. It is not a matter of putting together capital and labour and turning out a product. It is the wedding of art and industry, and that is a very difficult task. At the other end there is a very critical audience which may not like what has been produced, and one does not even know what has been produced until the very end of the production. It is not so easy, as the hon. Gentleman would have us believe, as simply turning on the production tap and getting the sort of products which this country and the world will accept.

The industry is certainly in a pretty bad way today. Only two years ago the President of the Board of Trade appointed a committee to see whether the Government ought to provide more space for film production. Now the right hon. Gentleman says that the quota should be reduced to 30 per cent. The right hon. Gentleman today made a very agreeable speech, apart from the interchanges he had with my Noble Friend the Member for Horsham (Earl Winterton)—all in good humour, of course. He made a very remarkable speech, but he was less than fair to Mr. Rank and his associates. He is mistaking cause for effect. It is not the capacity of Mr. Rank and his associates or their malpractices which are responsible for the fact that production is going down. They have not sought to reduce production out of some distaste for the right hon. Gentleman. They are the victims of the economic circumstances of the industry.

The right hon. Gentleman should direct his attention not to Mr. Rank and others of his kind, but to the basic economic circumstances of the industry which make it impossible for Mr. Rank to carry on. Indeed, Mr. Rank has sacrificed his personal interest in a manner in which no other person would have done or could have been expected to do. Now it is the duty of the right hon. Gentleman to see that the industry gets into a position in which it can get on to its feet and produce, not merely out of a desire, which Mr. Rank has had, of establishing the film industry on a proper footing, or on the basis of personal sacrifice, but on the basis of creating a product which pleases all tastes.

The right hon. Gentleman said that this is a financial matter. Of course it is. What the House is concerned with today is not this quota of 30 per cent.; we admit that that is something over which we have little or no control. What the House wants to learn from the right hon. Gentleman is whether next year we are to expect a reduction or an increase in this quota. I agree with the hon. Member for Nottingham, North-West (Mr. O'Brien), that if the present tendencies continue and if the right hon. Gentleman, by some misfortune, is still at the Despatch Box next year, he may ask the House to approve a lower quota than the present one. This industry is not on the "up and up"; it is on the downward grade. Mr. Rank's inability to produce films is not a very gratifying fact in the film industry.

What amazes me is that the right hon. Gentleman comes to the House and points proudly to the fact that the National Film Finance Corporation is financing 50 per cent. of our productions. That is a matter for alarm, not for congratulation. It ought to alarm the right hon. Gentleman to think that 50 per cent. of the film production in this country is coming from Government finance. What will happen if Mr. Rank and A.B.C. cannot produce? What is to happen when the money of the National Film Finance Corporation comes to an end? I understand that only half a million of the £5 million is now left. I invite the right hon. Gentleman to tell the House what is going to be done to enable the National Film Finance Corporation to continue financing.

To a man who is out of work it is not much help listening to what the right hon. Gentleman said today. As my hon. Friend the Member for Barnet (Mr. Maudling) said, these men who have spent their lives in a specialised undertaking like the film industry cannot get jobs elsewhere. They want something more positive than what the right hon. Gentleman said today. The right hon. Gentleman said that a film like "Morning Departure" is a magnificent film and cost £100,000, or thereabouts. What he did not tell the House was that unless "Morning Departure" takes a lot of money, there will be a loss on the production. The House has a right to expect that the right hon. Gentleman will say how the film industry can carry on in the existing circumstances. It is no good his telling the industry to make bricks without straw. He has got to tell the industry what it should do in order to exist.

Mr. Sydney Silverman (Nelson and Colne)

I thought the hon. Gentleman believed in private enterprise.

Mr. Shepherd

The hon. Member for Nelson and Colne (Mr. S. Silverman) has made a very unfortunate interjection. I did not wish to attack the Government on the issue of the burden of taxation. Strictly speaking, that would be outside the ambit of today's Debate. It is quite true that it is impossible to conceive of this industry being successful in the manner in which every hon. Member wants it to be successful under the present burden of taxation. All that I invite the right hon. Gentleman to do when he replies, is to show the House and the industry how it is possible with reasonable care and economy for anybody to produce a film in this country which, from the revenue it obtains in this country, will make a profit for the producers. If he does that he will have satisfied this House and, I think, those concerned in the country.

It is true to say that British films today are limited by the inability to have the technicians and directors of the right quality. Despite what the hon. Member for Devonport tried to say, we have not half a dozen Carol Reeds and David Leans, and it is to good pretending that we have. If we are to succeed in this industry, we must revive the flow.

private capital into it, and until the industry is put on a sound basis, there is no hope of reviving that flow.

We have had today a wholly disappointing Debate because the right hon. Gentleman the President of the Board of Trade will not "come clean." I believe he knows as well as anybody else does that the present situation of the industry is impossible under the conditions imposed upon it. He has had so much to do with the film industry in the past four or five years that he must know that, and I ask him urgently to give some message of hope to the producers in this industry, some message of hope to the 50 per cent. of the technicians who are unemployed, and to give some confidence that he will not come to the House in 12 months' time, if he is still occupying his present office, to ask for a further reduction in the quota. The British film industry is a national asset. We can give to the world films of a peculiar quality and of an intellectual quality which no other nation can give. We want to see that asset built up, and we on this side of the House will do anything we can to help the right hon. Gentleman along that line, but we want to see more frankness from him than we have seen up to now.

6.42 p.m.

Mr. H. Wilson

I can reply only by leave of the House, but if I have that leave I should like to deal with one or two of the points which have been raised. [HON. MEMBERS: "Agreed."] The hon. Member for Cheadle (Mr. Shepherd) said it has been a disappointing Debate and the main reason which he gave for that statement was my failure, as he put it, to state what our policy is to lead the industry out of its present difficulties and my failure to "come clean" on the chief difficulties. Since he, the right hon. and gallant Member for Kelvingrove (Lieut.-Colonel Elliot) and the noble Lord the Member for Horsham (Earl Winterton) stressed Entertainments Duty as the principal difficult with which the industry is faced, and since the Tory Party have said time and time again that they do not think this industry can ever build up its production until that tax burden is alleviated.

I do not know how the hon. Member thinks I could come clean on this question or how I could anticipate my right hon. and learned Friend's Budget statement. I do not think he seriously expected for a moment that I could anticipate that statement although I know that the Tory Party have no such inhibitions about anticipating Budgets. We are all familiar with the Budget promises on every conceivable tax which we had during the General Election, and even on the Entertainments Duty right in the middle of the Election. There must have been an attempt on the part of the Conservative Party to get the vote of the cinematograph exhibitors and others by pledging support to the industry's fight for Entertainments Duty relief.

Following a statement sent by one hon. Member, whom I am sorry to say is unable to be here tonight because of illness, through the Conservative Central Office to a very important weekly, the paper came out with a main headline, "Tories pledge support of industry's fight." I do not know whether the Tory Party are now fully committed to that particular change in taxation, but whether they are or not I am sure they will realise that it is absolutely impossible for me to anticipate my right hon. and learned's Friend's Budget statement.

Mr. Shepherd

I do not want to interrupt the right hon. Gentleman, but I must point out that the Tory Party has made no declaration in this issue. All we are asking the right hon. Gentleman is how can the industry continue under the present burden.

Mr. Wilson

The Tory Party may or may not have made any clear declaration on this issue. They have become very accomplished at persuading a lot of people in different sections of the community to believe that they intend to make particular changes in taxation without, however, in every case specifically promising to do so. In many cases, of course, they have made those promises.

The right hon. and gallant Member for Kelvingrove set the form of the main lines of the subsequent Debate by referring to two main points. The first, as he put it, was the failure of the Government to put the industry in such a condition that it could maintain production at a higher level, and the second was the excessive number of changes of quota—and that was a point taken up by the Noble Lord, who gave a lot of statistics this evening. He did not, however, give those requested by my hon. Friend the Member for Aston (Mr. Wyatt), in spite of my offer to help him on that matter, but he gave the quotas over a period of six or seven years.

I must say, and he, having been concerned with films for a long time, will recognise it, that that recital of statistics was completely bogus and misleading because in the middle there was a change of the whole basis of quota which made it absolutely impossible to compare quotas under the old Act with those under the new Act. I recognise that his references to three quotas under the new Act support his case about an excessive number of changes of quota, and he called for a firm and consistent policy under which the industry could be sure that the quota would not be changed from year to year.

I know that the noble Lord felt, as did his right hon. and gallant Friend, that perhaps a little too much has been said about one particular organisation within the film industry but, taking up the right hon. and gallant Gentleman's phrase that it is difficult to conceive a "Hamlet" without the Prince, so it is absolutely impossible to talk about the level of quotas and the volume of film production without taking some account of the production programmes of the major production group within the industry.

Mr. Foot

Mr. Rank is, I suppose, only the Rosencrantz of the industry.

Mr. Wilson

He may have sunk to that level in terms of the number of films being produced, but the noble Lord can hardly speak of the change in the figures of the quotas when I remind him of what Mr. Rank himself said. Of course, he was speaking in a dual capacity in those days, both on behalf of producers as a whole, who were faced with the same difficulties as those facing the Rank organisation, and also on behalf of the Rank organisation.

On that occasion Mr. Rank stated quite definitely that he could guarantee that 60 pictures would be released by his own production companies during the 1948–49 quota year. It does not need even a statistician like the noble Lord to calculate that if we were getting 60 pictures from the Rank organisation this year, then the quota we should be debating tonight would not be 30 per cent. or even 40 per cent. or even 45 per cent.; it would be well over 50 per cent. It is, therefore, impossible to debate these matters without bringing into account the calculations and the production estimates of the Rank organisation.

Earl Winterton

I do not want to interrupt the right hon. Gentleman, because we have had a good natured conflict and I know he is a fair-minded man. I quite agree, of course, that we must bring into account one of the principal producers, one of the principal men in the trade. All I said was that there are other organisations, such as A.B.C. and Alexander Korda, who are our friendly rivals, and who have met exactly the same difficulties.

Mr. Wilson

I quite agree; I was going on to make that point. The problem with which we were faced in the summer of 1948 was the almost total collapse of production in the British film industry, with the possible exception of the Rank group who at that time showed no signs of collapse. They were still maintaining a production programme—and we had not heard anything like so much about the Entertainments Duty from the Rank group in 1948 as we have heard in the past few months. But a considerable number of eminent directors and technicians of the kind mentioned by my hon. Friend the Member for Devonport (Mr. Foot) had already left the Rank group by that time and had gone elsewhere, had gone to the Korda organisation particularly, and that organisation was faced with the complete drying-up of supplies of finance.

When the noble Lord in a good natured way gibes at the fact that the Board of Trade has officially looked after this industry and says the industry is in such difficulties as a consequence, he really must recognise that in spite of all the great help given to the industry by the Board of Trade, both the Government and this House have been let down by the industry over the past two or three years and the industry has not fully seized the opportunities placed before them both in the provision of finance and in other ways. When the noble Lord makes the suggestion that under the present Administration the Board of Trade has done less good for the film industry than previous Administrations have done, he forgets, perhaps, some of the things said officially On behalf of the Film Producers' Association—that for the last few years the Board of Trade has done more for the film industry than has ever been done for it before in its history.

I should like to deal with the point raised by him about the agreement with the United States, particularly as there was some misunderstanding by the hon. Member for Eye (Mr. Granville). The noble Lord suggested that the reason for the agreement of March, 1948, was that American pressure, whether Governmental or private, on the Government forced us to make a sudden reversal in policy; and the hon. Member for Eye was surprised at what I said on that subject, that the Americans had pressed hard on the quota question for some time.

Of course, that is true—ever since the first quota was fixed at 45 per cent.; but the noble Lord was not, I think, referring to quota problems, but referring to the sudden change brought about by the agreement of March, 1948, with Mr. Eric Johnston. It is true that Hollywood was upset by the 75 per cent. tax and instituted a boycott. It is true that the Government pressed the industry to produce more films in this country. It is not true, as the noble Lord said, that we said to the industry, "No more American films will be allowed in. You have now got the market to yourselves." It was not the Government that kept the American films out: it was the American producers.

What weighed most with the Government, leading us to enter into these negotiations with Mr. Eric Johnston, was the fact that one producer after another, and the Producers Association led by Mr. Rank, made it quite clear that the expected increase in production would not be forthcoming so long as the boycott was continued, and that there was a great danger—so they put it to me—that the cinemas would be closed down, and that in those circumstances there would be no need for British film production and certainly no free flow of finance into the industry. It was those facts, and the fears expressed to me by the exhibitors of this country, which led me to enter into the negotiations.

There remain a number of other points that have been raised, and but a few minutes in which to deal with them all. There was a point raised by my hon. Friend the Member for Flint, East (Mrs. White). It is rather difficult to answer. She referred to a point also mentioned by the hon. Member for Eye and others, and that is the number of defaults, exemptions, and so on. She expressed the hope that under the new and lower quota—she will agree that there is no escaping the necessity for it—there will not be the same need for exemptions or special quotas. It is difficult to give a clear assurance on that, but I agree with her that there is no need for any automatic reduction in the position of other theatres, and I would hope that one result of the lower and, in this case, fully realistic quota will be that the position of the other cinemas will be tightened up, and that the law will be much more strictly enforced in the future than it has been under the quota of 45 per cent.

The hon. Member for Cheadle asked me to say what I thought the prospects were, looking ahead to the future of the quota. It is extremely difficult to look ahead in this industry. Many of our hopes have been frustrated, but I did give some reasons in my opening remarks for thinking there are encouraging signs in the industry at the present time in the improvement of quality, and in the much more realistic attack upon production costs, which are being made, not only by the film companies, but also by the N.F.F.C., and the Rank Organisation is taking a leading part as the noble Lord said—

Earl Winterton

I said there were good relations between the employers and the employed.

Mr. Wilson

Yes, an improvement in the relations between the two sides of the industry. The Gater Committee did a good deal to bring that forward. The hon. Gentleman expressed enthusiasm—or excitement—about the fact that the Government, through the N.F.F.C., are financing half the films in the industry. I share the hon. Gentleman's alarm that that should have been necessary, but I think I may be permitted to express some satisfaction that those films—half of the films being made now—which would not have been made if the money for them had been left to be found by private enterprise and private finance, are being made by our intervention through the Finance Corporation.

The hon. Member for Barnet (Mr. Maudling) talked about rushing in where angels fear to tread. I am quite certain that he himself, like others of his party, would have supported intervention by a Government of his party in this case, and would have rushed in where private finance feared to tread; otherwise there would have been a total collapse of film production in this country. I am sure he would not like to go back to Barnet to say to his film workers there that the Government are wrong in stepping in and saving film production in this country through the N.F.F.C.

As to the future, I am sure we all agree that whatever changes there have been we hope the position will be held and stabilised. Many of the hopes that all of us had in the Debates on the original Act have been frustrated, for reasons about which hon. Members on one side of the House may differ from hon. Members on the other. However, those hopes have been frustrated. Now we look forward, with the fixing of this lower and realistic quota, to the beginning of a new era in British film production.

Question put, and agreed to.

Resolved: 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.