HC Deb 28 February 1952 vol 496 cc1473-503

Order for Second Reading read.

4.24 p.m.

The President of the Board of Trade (Mr. Peter Thorneycroft)

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

The purpose of this Bill is to increase by £2 million the right of the National Film Finance Corporation to borrow money. If I may, I will explain shortly the reasons why we ask for that increase, and say something of the background to the situation. The Bill deals with the money which is involved in film making; but, of course, we all recognise that there is much more than money involved in the making of films: there is artistic merit; there is organising ability, and there is technical skill, and the industry with which we are now dealing has, in the number of very good films which it has produced, shown quite clearly that it possesses these qualities to a very great extent.

Very many industries, as hon. Members know, fall within the compass of the Board of Trade, but those in this House who have made a special study of this industry would, I think, agree with me that perhaps few industries would rival it in the complexity of its finances or in the complexity of the organisational set-up which is involved. It is not an unimportant industry, not unimportant to those who go to the cinema, for last year cinema admissions were at 1,350 million; not unimportant to the Chancellor, who draws £37 million in revenue from the Entertainments Duty—

Mr. James Carmichael (Glasgow, Bridgeton)

Will there be any alteration this year?

Mr. Thorneycroft

The hon. Gentleman will not expect me to anticipate my right hon. Friend's Budget.

It is also not unimportant in a way that is sometimes not recognised, in that it brings in exports a sum of between £2 million to £3 million of overseas earnings to this country. By the Bill we are seeking authority for the National Film Finance Corporation to continue its rôle of providing capital for the industry. Therefore, it is perhaps right that I should say something about the history of that Corporation. To those who are very familiar with the history—and I know one or two are—I apologise for having to relate to them information with which they may be familiar, but I think it would be impossible to present this case without setting out shortly at any rate the background to the position.

Government finance for the industry started in September, 1948, with the National Film Finance Company. That Company was set up under the Borrowing (Control and Guarantees) Act, 1946, and the power which was then given was power to borrow £2½ million from its bankers on a Treasury guarantee. But in 1949 the existing Corporation replaced the Company and, as the House will remember, was given power to borrow from the Board of Trade to the extent of £5 million; that was increased in 1950 to the sum of £6 million, which is the situation as it exists about borrowing today.

The object of the National Film Finance Corporation was not to subsidise British film production. Its object was to provide the working capital, and the original intention was that the loan should be made to the distributors, for two reasons: first, because the distributors, by the very fact of their business, had experience of film financing; and second, because as they deal with quite a large number of films it would be possible for them to set off the losses of one film against the profits of another. In 1949, however, that system largely changed, and the Corporation started to make loans, in the main, not to the distributors but to the producers. It is that type of loan which is really the predominant part of the Corporation's business now.

Originally, the Board of Trade laid down certain conditions about the loans that could be made. It was necessary, of course, that a company should undertake to carry out a programme of film production. It was necessary that the Corporation should satisfy itself that the company was equipped with the necessary experience of the relevant type of production; and also that the amount of private investment ranking behind the money loaned by the Corporation or ranking pari passu with it was considered by the Corporation to be adequate.

But as the experience of the Corporation was manifestly growing in these matters these conditions were, quite rightly in my judgment, waived and a continually increasing responsibility for decisions in these matters was placed fairly and squarely upon the shoulders of the Corporation itself.

There is one other development to which the House would expect me to make a reference, a development of what is called the group system. This arrangement was arrived at between the previous Government and the Corporation under which groups of producers were established in order that within each group the profits and losses could be balanced. The first group was in association with the Rank Organisation for production at Pinewood. The second group was in association with Associated British Picture Corporation at Elstree. What was in some way, I thought, the most interesting group, was for young producers to make feature films at modest cost at Southall under the able supervision of Mr. John Grierson.

So much for the background and the type of work that has been so far carried on. Many very good films would not have been produced but for the support and intervention of the National Film Finance Corporation. Those on both sides of the House who have knowledge of its work would wish me to pay a tribute to the work of the staff engaged in it. I need not enlarge upon the matter, but anyone who studies it, or looks at the accounts, can see that this is an organisation which is run with remarkable administrative efficiency.

There is one matter of which I should like to speak, the effect of the National Film Finance Corporation upon costs. The Corporation has made considerable efforts to bring down or to encourage the reduction in the cost of British film making. It maintains direct contact with the producers to whom the loans are given, it scrutinises every budget put forward, it obtains a daily progress report during the time that the work is going on and it gets the weekly costs sheet.

I make no apology for mentioning these matters because when we are considering whether this Corporation should have power to borrow more money it is right to be able to demonstrate, as I think I can, that it has really made considerable efforts to see that money is spent wisely and well.

I should be very unwise to generalise about the question of the cost of film production. It varies so widely between one film and another. I remember reading a book many years ago with which some hon. Members may be familiar, entitled "Nobody ordered wolves," which gave a dramatic and rather highly coloured account—it was a novel, though some used to say that it was true, but it certainly gave a vivid description of some of the practices on all sides of the film industry.

One can say that since the operation of the Corporation a great deal of waste has been cut out. I do not want to recite the figures I am about to give as anything on which one could rely in detail, but the kind of film which previously cost about £250,000 to produce is often being produced for about £200,000 at present. In a world in which prices and costs are rising, that is quite a substantial contribution to the problem.

That brings me to what is the basic problem in the film industry, which is that the income of the film producer has not met the costs of production, and to balance the accounts various efforts have been made by the Corporation and producers in the reduction of costs. Also, of course, there is the interesting and important experiment of siphoning off some of the income of the exhibitors to the producers under what is known as the Eady scheme. I shall not go into detail about that except to say that the estimated receipts of this fund under the enlarged scheme now in operation will amount to about £3 million a year. That enlarged scheme has been in operation for only six months and it will, of course, take time for it to take effect.

The original idea goes back considerably further—

Mr. Glenvil Hall (Colne Valley)

Perhaps we might get the point clear. The £3 million which the right hon. Gentleman mentions is the producers' share; it does not include the exhibitors.

Mr. Thorneycroft

I am much obliged to the right hon. Gentleman. I was restricting myself exclusively to the producers' side of the matter.

It will take time before money which is being siphoned off in that way is reflected in the accounts and balance sheets of the companies concerned. When it is, I think the right, hon. Gentleman will agree that it will make a substantial difference to the commercial standing of companies concerned.

Turning to the present position of the Corporation, it is indebted to the Board of Trade to the extent of £5,200,000 of the total of £6 million which it is allowed to borrow. That £5,200,000 takes account of £1 million—I speak in round figures—which has been repaid from previous loans and partly lent out again.

The Corporation has approved loans amounting to £5,959,000, and there is a balance of £800,000 which is actually available at the moment for borrowing. It is not easy, in an operation of this kind, to assess just how the balance will be struck between the commitments which are to be made on the one hand and the repayments on the other, but I think we should all agree that it is necessary that the Corporation should have a reasonable margin within which to operate if it is to do its job properly. It has to plan ahead, it has to enter into commitments ahead.

That fact was recognised by the previous Government. On 2nd August, 1951, my predecessor in this office made an announcement in the House, in answer to a Question, that with the agreement of the Chancellor of the Exchequer, it was intended to enable the Corporation to borrow a further £2 million. We are carrying out that same intention in this Bill. We have made provision here for the borrowing to take place from non-Governmental sources. I would hasten to say that there is no doctrinaire point in that in any way. I think the aim is generally agreed. The aim should be that, as soon as may be, we should try to get this industry back to a position where it can raise its capital in a normal way.

I do not say that we have arrived at that stage yet. I think it would probably be right for it to begin to make contact with non-Governmental sources in the borrowing of money, and at the same time let me hasten to say that I clearly do not rule out the possibilities of a Government guarantee. As to the precise terms on which the borrowing should take place, clearly one cannot lay down those in advance. They have to be approved both by the Board of Trade and the Treasury, and they will clearly depend upon when the borrowing takes place, upon how much money is borrowed at that time, and upon the financial position of the film industry at that moment.

I should like to say something about what would happen if we did not provide borrowing powers of this character. If the finances of the National Film Finance Corporation dried up, very serious consequences would follow. There would be a sharp decline in British film production, due not only to the fact that the Corporation would have no money but to the drying up of the confidence which has been built up by the operations of the Corporation and the working of the Eady scheme.

Clearly, if this money were not available the quota for British first feature films, which is now 30 per cent., would before long have to be reduced, and either there would be fewer cinema performances or more American films would have to be let in. It has been the policy of both parties in the House of Commons to give encouragement to the British film industry, not solely on economic grounds but also for the intangible benefits which arise from the fact of having British films not only in British cinemas but in cinemas overseas.

There is a special reason for fostering the British film industry at present. If we failed to foster it, not only would the Chancellor lose money but British film production would be prejudiced, and British film production is a dollar saver at this moment. It is for that reason, as well as for the others which I have urged in the course of my remarks, that we make no apology for making these proposals to the House and we invite the House to give the Bill a Second Reading.

4.44 p.m.

Mr. Glenvil Hall (Colne Valley)

First of all, I should like to congratulate the right hon. Gentleman the President of the Board of Trade on being in such good form this afternoon after having been out of bed for the whole of last night. I could not help wishing that he had been as loquacious at the same hour this morning as he has been this afternoon at that Box.

As the House knows, we on this side raise no objection whatever to this Bill. We give it our general approval. But that does not mean that I shall not have to ask the right hon. Gentleman one or two questions before I conclude. As he very rightly said, this Bill stems from an original Act which was passed by the Labour Government in 1949, and was introduced by a previous occupant of the right hon. Gentleman's office, my right hon. Friend the Member for Huyton (Mr. H. Wilson). It is also true that the present Bill was foreshadowed by my right hon. and learned Friend who followed him at the Board of Trade, the Member for St. Helens (Sir H. Shawcross), I think last August.

It is, of course, correct that the original Measure, which was passed in 1949, was necessitated by the conditions which then existed in the British film industry. The industry then was greatly depressed. It was very difficult—indeed, almost impossible—to obtain working capital. Hollywood was in revolt over the 75 per cent. tax on films coming in, and altogether the industry was in the doldrums. I for one am very happy to realise that while the industry has quite a long way yet to go, the situation today has greatly improved. There is today a more hopeful outlook, and I think that the setting up of the National Film Finance Corporation has greatly helped this change, which is extremely gratifying.

As the right hon. Gentleman said with such felicity, this Corporation was set up to provide, not permanent but temporary, Government assistance primarily to independent producers, and they were to receive such assistance either direct from the Corporation or through some distributing company. The assistance was to be by loans on a self-liquidating basis, and the whole thing was, as I say, to be transitional until the industry has had a chance to rehabilitate itself and get back on to its feet.

Mr. Beverley Baxter (Southgate)

Is it not a fact that very little of the money has gone to the independent producer, and that it has gone to the distributor, which leaves him still with the stranglehold on the industry that he has always had?

Mr. Hall

I do not hold that view myself. I was hoping, before I conclude, to mention that point.

It is true that in the early days—in the first year—or so it would appear, so far as its first Report goes, that very few independent producers as such were directly helped by the Corporation. We have yet to have the Report for this year. I think it is likely that the right hon. Gentleman has got figures to which I have not had access, but at any rate, in the second Report that we have, which was produced in the first half of last year and covered the full year to March, 1951, there was evidence that a growing number of independent producers were being directly helped. If my memory serves me, I think at least 29 independent producers are there mentioned as being directly helped. I think that shows that the Corporation is trying to fulfil the function for which it was set up and has been largely successful.

Mr. Baxter

I am sorry to press the point, but were they helped directly or through a distributor? That is an important point, I think.

Mr. Hall

I am ready to be corrected, but my reading of the Report is that they were helped directly by the Corporation. Others were helped through a distributing company and, as far as that goes, if the distributing company has no stranglehold on the producer, in the sense in which I think the hon. Gentleman used that expression, then I see little harm in some producers getting help through a distributing company. At any rate, I think we can congratulate ourselves on the situation as it now exists.

The hope when the Act was passed was that the industry would expand considerably, that it should put itself on a paying basis and should also attract—and this was most important—its own financial backing. I think that from what the right hon. Gentleman has said these objects are in a fair way of being realised. The evidence, as he pointed out, goes to show that there is an increased number of independent producers now being financed and making, in some cases, extremely good films.

Costs generally have gone down, as it is most important they should. The United States is a country large enough to enable a fairly considerable sum to be spent on any one film. Here, we are smaller geographically, and the number of cinemas is relatively small. Therefore, it is quite impossible for a producer to spend up to £250,000 or £300,000 in the ordinary way and expect to see his money back. That being so, it is essential that costs should come down, and in so far as the Corporation has assisted in bringing costs down, I think we can reckon it to the good. Extravagance has, I think, to a large extent now been limited; heaven knows, there was room for a move in that direction.

It is gratifying to notice the number of loans which have already been repaid. These loans under the original Act can be made, I think, for a period up to five years. It is interesting to realise that this answers one of the criticisms made when we debated the Report of the first year's working of the Corporation. From the figures which the right hon. Gentleman gave us repayments are coming in, and are, at any rate for the moment, being used as new loans for the making of other films.

I think, too, that we should pay tribute to the type of films that have been made. I have been looking down the list, and I must admit that most of the titles there were new to me. What has happened to them I do not know. I suppose that they must have been shown in the provinces. At any rate, I think we can agree that many excellent films have been made as a result of the help that has been given by the Corporation. It assisted in the making of "The Third Man," "The Outcast of the Islands," "The Winslow Boy," "Tales of Hoffmann" and, this year, "Laughter in Paradise" and other films which are big box office draws and which, I understand, are making excellent profits.

Before I sit down, may I put one or two queries to the right hon. Gentleman or to the Parliamentary Secretary? I did not quite follow the right hon. Gentleman's reference to a Government guarantee. He certainly mentioned it, and I tried to take down his words. As I understood him, he said that he did not rule out the possibility of a Government guarantee, but I think he went on to say also that such Government guarantee would not cover the whole £2 million and would have to depend entirely on the circumstances surrounding each advance.

I do not think that that is good enough. If the Government were to back this and guarantee the whole £2 million, obviously the money can be borrowed much more easily and at a much cheaper rate in the City than it otherwise can. It may well be that, in spite of the Eady levy, people with fairly long memories in the City may still be a little shy of lending money to the film industry without such guarantee. Therefore, I think that from every point of view we should press the Government to be more explicit on this point and see that a Government guarantee is given, if only to ease things for those who are running the Corporation so successfully.

While I am on that point, perhaps I may draw attention to Clause 2 of the Bill. The right hon. Gentleman made no reference to this link-up between the £2 million envisaged in this Bill and paragraph 8 of the Schedule of the original Act of 1949. I have read paragraph 8 and Clause 2 of the Bill several times, but I must admit quite frankly to the House that I am still in the dark as to what the draftsmen had in mind when they inserted that Clause.

When the £2 million comes to be repaid, how will it rank? The right hon. Gentleman—and I listened very carefully to what he said—made no reference to that. Is it to rank before the £6 million which the Board of Trade has advanced, or is it, when we come to wind up the Corporation, to rank after it? I would, of course, like to feel that the Corporation is to be a permanent thing, although, for my part, not continued with Government money. But I do think it would be a good thing if in some shape or form the Corporation continued to exist.

The Act of 1949 empowers the Board of Trade to make loans for a period of five years. Therefore, the Act comes to an end in 1954, presumably about this time two years hence. That is not a very long period for the film industry to raise, use and repay this £2 million and I think that we must press the Government to give us more details as to what they have in mind about the future of the Corporation.

I repeat the question again to the Parliamentary Secretary for the sake of clarity: Is this £2 million which is to be borrowed from other sources to rank before the £6 million, rank equal with it, or is it to come after? Again, how is the Corporation to be allowed to raise this money? Will it issue debentures; will it have to raise the whole £2 million at once, or can it take advantage of any improvement in interest rates and raise the money as and when it may want it?

I think that it is a little unfair to the Corporation that we have as a House allowed its balance to run so low as it has. Obviously, in an industry of this kind, which is dealing in very large figures, the balance which the right hon. Gentleman indicated to us is not really sufficient working capital for a Corporation of this kind. Therefore, even if it borrowed the whole £2 million at once, that, in my view, would not be an excessive amount to hold if it is to help the industry to expand. So I would like, and I am sure my hon. Friends behind me would like, to have more information on that point.

I think that we are also entitled to ask a few questions on the working of what is known as the Eady levy. The right hon. Gentleman mentioned the sum of £3 million as the producers' share. He has greater access than I have to the figures, but my information is that the producers are now likely to get a good deal more than the £3 million he mentioned.

When this matter was discussed by the House, we were told that about £3 million would accrue yearly and that £1,500,000 of that would go to the exhibitors and £1,500,000 to the producers. I notice from figures that have come my way that in the first year the producers got about £1,250,000, but I am told—it may be that my informant has misled me; and, if not, I am delighted—that the amount now falling as the share of the producers is running much higher than £3 million. If that is so, we can pass the Bill with greater expectations that the money will not be lost, because in the Eady levy we have an additional fund to assist the industry in the months and years that lie ahead.

I have already mentioned that in the view of the Opposition, if the Act has only another two years to run in its present shape, we should begin to make plans for what is to follow it. The industry itself is entitled to know, and we ought not to delay the matter. It may well be that in two years' time or thereabouts we shall be in the throes of a General Election. It may even be that the General Election will have taken place before then, but in political life one never knows what the situation will be. I beg the right hon. Gentleman, therefore, to consider what is to follow the Act when its powers cease in two years' time.

At the risk of being slightly out of order I wish to refer to the Crown Film Unit. We all agree that this organisation has done splendid work for the film industry and for the British way of life. It is now proposed that this poor little child must die. Cannot we save it?

Mr. Joseph Reeves (Greenwich)

It is not so little and not so young. It has existed for many years.

Mr. Hall

I agree with my hon. Friend; it has had a very useful life and it has been allowed to live for a good many years. This adult, then, ought not to be allowed to die. I should like to feel that even at this eleventh hour, we can do something to save it.

I do not really want to make detailed suggestions about this, but I do appeal to the right hon. Gentleman to consider with his hon. Friends, before the Committee stage, if it is not possible to save the Crown Film Unit and associate it—it would only have to be associated for financial purposes—with the Corporation. It could remain a separate unit, receiving, through the Corporation, some of the money which we are now voting.

After all, we find a lot of money for the British Council, and, if we find money for that body to help it present the British way of life to the rest of the world, I cannot see why we should not find money —it is not a great sum—for the Crown Film Unit, for it is doing much the same kind of work as the British Council does.

I heartily agree with the right hon. Gentleman about the importance of this industry. The cinema enters into the life of millions of people. I suppose that in this country there are very few families who do not go to the cinema at least once a week. From the figures given us from time to time, we know that many of them go twice a week. In the nature of things, they must be tremendously influenced by what they see. I am delighted to think that on an occasion like this the House can turn aside from controversial issues and attempt to assist this great industry, which is so important a feature in our national life.

It is essential that the industry should be kept independent. It should be culturally independent; those who make films should have no interference from Government officials. The man who produces a film should also be allowed to decide for himself, within the law, his own treatment of his theme. It would be a bad day for the film industry and our national life if, when passing Bills of this kind and granting money to assist an industry of this sort, we tied up with it restrictions which prevented it from having complete independence on the cultural side.

I join in the expression of appreciation which the right hon. Gentleman has voiced to Mr. Lawrie and those associated with him on the Corporation. We ought not also to forget Sir Michael Balcon. He has not only done a very great deal for British films in his own studios, but he has also been a tower of strength to Mr. Lawrie, and his guidance and expert advice have been of the utmost assistance to the Corporation.

Finally, I want to say, once more, how much we welcome the Bill. We shall do our best to assist the right hon. Gentleman to put the Bill on the Statute Book with the least possible delay.

5.8 p.m.

Mr. Beverley Baxter (Southgate)

I join the right hon. Gentleman the Member for Colne Valley (Mr. Glenvil Hall) in congratulating the President of the Board of Trade upon his youthful and fresh appearance after the long debate that we had last night. I knew him before be became President of the Board of Trade, and I can assure the House that his health is a result of the austere life which he led as a Private Member.

There is a sense of coalition in the air on this subject, but we ought not to be too pleased about everything that is going on. I should like first to support what the right hon. Gentleman the Member for Colne Valley said about the Crown Film Unit. There is a great necessity for intelligent and understandable propaganda abroad, and I believe that the film can do very much more than can be achieved by sending out groups of dancers to teach the Yugoslays to do English folk dances. Anyway, the Yugoslays dance much better than the English do.

Nor do I think we should send out to Jamaica, as the British Council has done, people to stop the Jamaicans singing calypsos and to teach them English folk songs. The British Council has been well-intentioned, but, like the village blacksmith, it has earned its night's repose. On the other hand, the Crown Film Unit always works with a minimum of cost and a maximum of intelligence, and I urge the Chancellor to reconsider this death sentence.

There are one or two things about the film industry which we should keep in mind. The industry is big enough now and it has gone through its period of wild extravagance, and, therefore, it should look forward very soon to handling its own affairs. I think the loans that have been made under this scheme were necessary in very difficult circumstances, but fundamentally it is wrong and it still puts the power in the hands of the distributors at the expense of the producers. In fact, the whole of the film industry in this country was planned in the wrong order. The first thing which the industry had in mind was the cinema houses, which, I agree, were necessary, the next thing the distributors, and the last to be thought of were the producers.

We do not want to try to persuade the industry to make cheap films. What we do want them to do is to use wise economy in making them. There have been pictures, which have cost a great deal of money, and which have got back their money, while in the matter of national propaganda abroad they have played a very big part. I am thinking of pictures like "Hamlet," in which Sir Laurence Olivier starred, and also "Henry V." Those pictures are still playing across the United States. I agree that in many cases they are shown in the smaller theatres, but they will be playing for years to come. In my own native Canada I was delighted to find when I was home at Christmas, the immense popularity of the British film, especially in cities like Toronto. I think that is very important.

There is a big enough public going to the cinema in this country for the industry to be able to make films that will pay their way. I was in the industry for a while, and it was the nearest thing to a nightmare that I have ever experienced. There was unbelievable extravagance, and the absurd feeling that if you paid £50,000 for something it was worth £50,000. Any director who made a film cheaply was never given another chance to make a film again, but one who displayed plenty of temper, tore his hair, walked off the set, did not come back for a week, took one "rush," as they call it, 17 times and then sat down and pretended to judge which was best—all these things stamped him as a genius, and he would be brought back to direct other films at any cost. I believe that that kind of thing has passed.

I have not a great deal more to add to this discussion. I ask my hon. Friend the Parliamentary Secretary to think carefully about the Crown Film Unit. I am sure it could be brought into this scheme and that it is something which should be retained. I would only add that I am certain that we shall not sit up until the early hours of tomorrow morning debating this Bill.

5.14 p.m.

Mr. Julian Snow (Lichfield and Tamworth)

I cannot help feeling that this is an appropriate debate to discuss wider issues than finance. I am not at all well acquainted with the particular relationship between the President of the Board of Trade and the Film Finance Corporation. I think probably there is some scope for ascertaining whether some guidance on the sort of films that are produced would not be desirable. My right hon. Friend the Member for Colne Valley (Mr. Glenvil Hall) said just now that it would not be a good thing if detailed guidance or any form of control were exercised, but I do not go the whole way with him on that.

It seems to me that the past history of this Corporation has shown up one weak- ness at the outset. It is that it tended to give too ready an ear to some rather earnest people who seemed to confuse education and entertainment. These earnest men and women then felt aggrieved when there was no tendency on the part of the Corporation to give them the ready capital with which to produce their films.

On the other side of the picture, I have always felt that in this country, the theatre—I think the term is the "legitimate theatre"—has never been comparable in any way as regards the presentation of national classics with the Continental theatre, more especially in Germany and France. That is why I should have thought there was scope for some tactful guidance of the Corporation.

There are classics of our literature and theatre which should be produced. It is true it would be very difficult to judge what sort of films should be produced, and what should be the yardstick as to whether they should lose or make money. Personally, I have always felt that many of the Shakespearean plays could well be filmed in addition to those mentioned by the hon. Member for Southgate (Mr. Baxter), "Henry V" and "Hamlet." On the other hand, hon. Members will recall that Mr. Orson Welles produced "Macbeth" which, in this country, was a gigantic failure and did not gain the prestige in his own country that the play itself justified.

There are other classics which might be good paying propositions. Perhaps I might carry the hon. Member with me if I suggested some of the more robust of Sir John Vanbrugh's plays, but that brings us to the question of censorship. There are classics which would appeal to the population, and there are classics which the population as a whole should have the opportunity of seeing. The opportunities to see plays on the legitimate stage in this country are very poor. We have no national or municipal theatres, as are found on the Continent. Therefore, some guidance could be given, I think, to the Film Finance Corporation.

I have talked for a few moments about some of the films which I personally think ought to be produced, and now I should like to make a passing reference to the sort of films we do not want, and go on to touch on censorship, which I appreciate is more the responsibility of the Home Office than the Board of Trade. My justification for introducing this matter is that in the post-war period there have been films produced, and more specifically scenes which have been put in films, which are quite deplorable, and which have a bad effect not only on children but on adults as well.

In the course of looking into these matters, I have consulted the British Board of Film Censors, and perhaps I may be permitted to say how much I appreciate the help I have received from that Board. In a publication which they distributed entitled "The British Board of Film Censors," the whole emphasis is on the censorship of films from the children's point of view and the children's interests. Any hon. Member of this House would be the last to say that the children's interest is not the most important. I know it is, but we cannot get away from the fact that there are certain types of scenes in films which have a bad effect on other elements of the population.

There are producers who pander to that sort of taste. There is a big film running in London now which seems to pander to the more nauseating tastes in society. I was very interested to find that, contrary to their established practice, and in conformity with the practice in other countries such as Sweden in this post-war period, the British Board of Film Censors have found it necessary to issue what is virtually a code to certain film producers. This code is entitled, "A Memorandum to Producers on Violence and Brutality in the Films" and it has been issued, the memorandum says, "to producers." My inquiry was: Why has it not been sent to those people who are responsible for film censorship at local authority level?

I would draw the attention of the House to the fact that the local licensing authority can be made up in two entirely different forms. There is the authority made up of a sub-committee of the local authority, for instance the watch committee, and that, in turn, is obviously made up of elected people. Alternatively, the local authority can delegate responsibility to justices of the peace, who are not elected. It is most important that this code should be issued to either the justices of the peace or to the sub-committee of the local authority. Speaking for myself, I think it is a pity that the justices of the peace come into the matter at all, and that it would be far better to have local censorship done by elected representatives, and that the electors should know what sort of code the local licensing authority are attempting to apply.

I am deliberately speaking of this memorandum now in order to draw the attention of the House and of the public at large to its provisions. It includes detailed guidance on such matters as shootings, killings, torture scenes, incidents involving brutality or sadism, scenes in which women are subjected to violence and, lastly, fight scenes and beatings-up. So that the House may get some idea of what this includes, I will, with the permission of hon. Members, read a short section dealing with fight scenes and beatings-up. The memorandum says: The Board objects to fight scenes and beatings up when these are prolonged, when these contain foul or particularly vicious blows, stomach blows, rabbit punches, kicks; when the effect of the blows is emphasised on the sound track; when an opponent or victim is struck when he is defenceless or overpowered. The Board objects to torture scenes or any incidents involving brutality or sadism. The public at large should know what this code includes so that they may judge whether the films which are eventually given the authority of the screen conform with this code. I underline this point because I have been horrified, as I think many other hon. Members must have been, by some of the things that have slipped through. Who, in this House, has not been to a film show on some occasion and heard a frightened child? Who has not come across incidents in the lives of children who have demonstrated fear of scenes which they have seen on the films?

As the lay governor of an institution dealing with social psychiatric problems I know that many of the cases which come before us show that there has been some influence derived from films where unnecessary and violent scenes have been shown. There is a temptation to say that most of this comes from American films, but that is not by any means entirely true. There are some French films which include such scenes.

I want to emphasise the point that in my view this code should be publicized and sent to all members of local licensing authorities, and that the full meaning of the code should be understood by the electors at large.

5.25 p.m.

Mr. R. Maudling (Barnet)

I am sure that everyone will sympathise with the objective which the hon. Member who has just spoken has in view, namely, to raise the general level of films produced and exhibited in this country, but I confess that I would feel a certain apprehension in pursuing that the very desirable objective by exerting pressure through a Government Department. The functions of censorship, especially any sort of censorship of taste, should be exercised by somebody not connected with a Government Department, as indeed it is at present.

Mr. Snow

May I point out that the sort of brutality I was mentioning could hardly be described as a matter of taste, and that the British Board of Film Censors is not a Government Department?

Mr. Maudling

That was exactly my point. I think that is the way the thing should be run, by the British Board of Film Censors and not by the Corporation or by influence applied by the Board of Trade.

Some of these questions are difficult, especially the matter of frightening children. Cartoons designed for children which adults would think rather delightful very often frighten children in an unpredictable way. Most hon. Members who have spoken have mentioned the Crown Film Unit. I should like to mention it briefly. I would not go so far as my hon. Friend the Member for Southgate (Mr. Baxter) in his very lavish praise of the work of the Unit—it seemed to me rather lavish—but I hope it will be possible to maintain a nucleus in existence through the activities of the Film Finance Corporation under the Bill. That will be a very desirable thing to achieve.

I am glad to have an opportunity of intervening shortly in this debate because I have a considerable constituency interest. My constituency includes the Elstree Studio, while M.G.M., and one or two independent producers, are also operating there. I am fortunate in having the chance of catching your eye, Sir, remembering that yesterday we were discussing the public houses in my constituency. The interest taken in films by hon. Members is rather low, as is evidenced by the attendance in the Chamber now. People are beginning to feel that too much attention and assistance have been given to this industry, but it will be a great pity if they should feel that.

The film industry has special claims. It has an unemployment problem among the technicians, and that can be a very serious thing if it persists over a long period. This type of unemployment is particularly difficult, because the film technician gives many years of his life developing a specialised skill and he has great difficulty in finding employment elsewhere.

It is not generally realised how special is the form of competition which the British film industry has to face from the American film industry, based as this is, on the enormous American market. A manufacturer of tinned meat can sell his meat either in America or in Australia, but the manufacturer of a film can sell the same film as many times over as he wants to, which makes it much easier for him to compete in the British market.

The British film industry has been making considerable strides in recent months and bigger progress in economy and efficiency than is often realised by the outside public. There is no doubt that the National Film Finance Corporation has played a considerable part in promoting this advance. Anyone who is concerned for the welfare of the film industry and its employment will express gratitude to the Finance Corporation for their work. It is very desirable that the Government should take steps to enable the Corporation to borrow further money to finance further productions.

I am not altogether in agreement with the right hon. Member on the other side of the House who spoke about the way in which this money should be borrowed. I do not think that the Finance Corporation has any need of working capital and I should not have thought that the issuing of debentures would be a very suitable way of borrowing money for this Corporation.

Mr. Glenvil Hall

If I may interrupt the hon. Gentleman, I did not intend to suggest that was the way in which to borrow the money; I merely inquired how it was visualised that it should be borrowed.

Mr. Maudling

I appreciate that the right hon. Gentleman mentioned that as a possibility, but I should have thought that was a bad way of doing it because the important thing is to get the equity investor interested in film production. I have no doubt that some Treasury guarantee will have to be given to cover part of this additional £2 million if the capital is to be forthcoming from private investors who have been rather badly bitten once or twice in the past in this matter.

I do not think that a Treasury guaranteed loan raised privately by the City is, in normal conditions, a satisfactory arrangement. In that case the Treasury takes the risk but does not hold the equity. Now, however, when we are trying to move from a position where the Government is financing film production to a position where finance will come from normal private sources of capital which, it is agreed on all sides, should provide the risk capital for the industry, some form of Treasury guarantee would probably be satisfactory as a transitional stage.

By this Bill the Government are giving the film industry a further opportunity. I hope that the industry and all the people engaged in it will realise that this is further special assistance being given to the industry out of the public pocket, or at any rate by its assistance, and that they will concentrate as far as possible not on aggravating their internal differences, but in combining to solve the real problems still facing the industry. After all, there is no doubt that in current economic circumstances we shall have to reduce as far as possible the import of dollar films. The opportunities and duties which rest upon the British industry are growing greater and not smaller. It is being given a chance, by this Bill, to stand up in some measure to its duties, and we believe that with good will on all sides the industry shall be able to do that.

5.33 p.m.

Mrs. Eirene White (Flint, East)

We were most gratified on this side of the House to hear the comments of the President of the Board of Trade on the re- markable efficiency of the National Film Finance Corporation. Some of us remember the rather superior, supercilious criticisms that we heard of this organisation from the present Secretary of State for the Colonies when he used to speak from the Opposition Front Bench.

Mr. William Shepherd (Cheadle)

indicated dissent.

Mrs. White

The hon. Member for Cheadle (Mr. Shepherd) shakes his head. I refreshed my own memory only this afternoon of the debate on this organisation which took place in the summer of 1950. If the hon. Gentleman would refresh his memory in the same way, he would realise that what I am saying is correct.

I am sure that we all support the object of this Bill because, as the hon. Member for Barnet (Mr. Maudling) has emphasised, the film industry has been through a difficult period. We are happy to see that there are signs of improvement. For example, in the last quota year the larger circuits showed a marked improvement in their performance over the preceding year. But we cannot be satisfied with the state of the film industry. Out of 14 film studios in this country at present, only four are fully employed, two are only partially occupied and eight are entirely idle. The level of employment in the industry stands at present in the neighbourhood of 3,400 workers, whereas some years ago it was nearly double that number. I do not pretend that the industry can sustain double that number, but the present number does not give us any great grounds for satisfaction.

We support the Bill in principle, but I wish we had received a little more detailed information from the President of the Board of Trade. I am sure that the Parliamentary Secretary will appreciate that we are in a rather difficult position. The last report on the work of the National Film Finance Corporation was for a period now almost 12 months' old. There are other uncertainties in the industry. We are glad to know that the Eady Plan is working out reasonably well, but we are still not quite sure what effect it will have on production. Of course, we do not know yet what will happen to the Wilson-Johnson agreement which comes up for reconsideration in some months' time.

So there are a number of uncertainties which make it a little difficult for us to discuss the matter as intelligently as we should like. I also wish that we had received some more information from the President on how the group system has been working. That is a most interesting development of the work of the Corporation, and since the House is being asked to approve this arrangement for additional finance, it would be more satisfactory if we were told how that interesting experiment has been working out.

Then we ought to hear something more about finances. For example, we are told that approximately £1 million of the funds of the Corporation have been repaid and have been lent out again. Could we be told, for instance, whether any of that sum represents a repayment from British Lion? The major portion of the original funds of the Corporation, namely, £3 million, went to one distributing organisation, British Lion. We want to know whether any of that money has been repaid or whether all the £1 million that has come back for further loan has come from the smaller organisations concerned.

I also hope that we may have some indication of the ideas in the mind of the present Government on the future of this organisation, as was suggested by my right hon. Friend the Member for Colne Valley (Mr. Glenvil Hall). It is true that it was first established largely as an emergency measure, and among the objects set out for the Corporation was that of temporary aid, as it was called by themselves in their first report, "until the confidence of private investors was restored." That is a most important function, towards which this present Bill is of some assistance. We are helping the private investor during an interim stage in his relationship with the film industry.

There were, however, concomitant objects of this organisation, including the maintenance of employment, the earning and saving of dollars, the training of technicians. All that is really included in the general improvement in film production. However, the Corporation went on to say in the first report: It was also felt that it might be possible to establish more economical standards and perhaps in general a higher code of commercial practice in the film industry. From what I as a layman have been able to learn, it seems to me that they have been remarkably successful in improving standards of budgeting, cost control, and so on. The President of the Board of Trade has paid an eloquent tribute to the organisation, to Mr. Lawrie and his colleagues for the admirable work they have done.

Some of my friends and myself, however, are concerned to know how it is envisaged that this kind of function shall be continued. We feel that if the body which we are discussing this afternoon is simply allowed to die in 1954, there is no guarantee that the industry will not fall back into its rather extravagant ways and that much of the admirable work done in the last few years may be wasted. I am not suggesting that the finance should necessarily continue to come from public sources.

The Bill is a very good intermediate step, which might, perhaps, if it proves a successful experiment, be continued with the emphasis gradually being shifted away from direct Treasury money to money borrowed in this manner with, presumably, some type of Treasury guarantee. I should have thought that some Treasury guarantee was inherent in Clause 1 (2), because obviously, if the Treasury are to be responsible eventually for residual liabilities, there must be a Treasury guarantee.

I hope very much that before the matter comes up for final decision the Government will work on the line that this kind of organisation has considerable value in the industry and that they will endeavour to continue it and allow it to proceed with its useful work.

As we have been allowed to go a little wide in the debate, I should like to say a word about the Crown Film Unit. I am delighted to know that this is being regarded, as I very much hoped it would, as a matter of concern to Members on all sides who are interested in films. This organisation survived the economies of 1931—and they were pretty drastic. It would be shameful if in the present situation, needful as economies are, the death blow should be given to an organisation which has done more, probably, for the prestige of British films than any other single body.

I am not suggesting that there should not be a considerable investigation into, and economies in, the running of the Crown Film Unit—I think that there should be; but I hope it may be conveyed to the Chancellor of the Exchequer that the feeling of many of us who have had the opportunity of going into this matter has been that within that organisation over the past few years there have been constant attempts to obtain a reorganisation, but that a deaf ear has been turned to those who have been trying to make these suggestions. There has not been consultation with the staff who could have been consulted. They have been faced with this decision from on high, without being given an opportunity of helping themselves.

I hope very much that the plea which is being made on both sides of the House will be passed on to the proper quarter, so that we shall not have it held up against us that we have tamely agreed to killing this extremely interesting and valuable exponent of our way of life. I ask the Parliamentary Secretary to pass on these words with all the eloquence of which he is capable.

5.43 p.m.

Mr. William Shepherd (Cheadle)

I listened attentively to the hon. Lady the Member for Flint. East (Mrs. White), and I am sorry that she began on a rather critical note. I have the clearest recollections of the discussions we had on the establishment of the National Film Finance Corporation, and I am certainly not conscious of anything supercilious about the attitude of my right hon. Friend. My right hon. Friend is very jocular, and I have no doubt that, reading the reports at some distant date, the hon. Lady has mistaken jocularity for a supercilious approach. I will leave it at that, because I am sure that she did not intend to import a note of acrimony into the debate.

The hon. Lady regretted that the level of employment in the industry is not what it was. That is a point of view which is not put forward very strongly by those in the industry, nor particularly by the trade unions concerned. It is not an unnatural complaint, but we should not take that view at anything like the value at which it is presented.

It is quite wrong to look upon 1947 as being the norm of activity and employment in the industry. We have got to get the industry, as we now have it, on a healthy basis. We have to say that, having knowledge of the limitations of our creative capacity and the existence of skilled writers, producers and directors, we cannot healthily do much more than we are now doing. We must build upon a sound foundation. I hope we shall not have a repetition of looking wistfully to the 1947 level, which is by no means a norm for the film industry in Great Britain.

I share wholeheartedly the regard which is evidenced on both sides of the House for the work of the Crown Film Unit. I think it is true to say that the only substantial contribution to the art in recent times has come from this Unit. Therefore, we look upon it with a good deal of kindliness and enthusiasm. I do not, however, share the view of my hon. Friend the Member for Southgate (Mr. Baxter), who thinks that this Unit has always done its work with a good deal of economy. I do not think that the kindest person, looking at the activities of the Crown Film Unit, would take the view that its activities have been blessed with economy.

The House ought to have some regard to the changed circumstances of our times. The Crown Film Unit was most greatly needed in the last 12 years: that is to say, in times of great social change and impending social change, when it could reflect the turmoils of minds. We have passed through that phase. Whether hon. Members like it or not, we are in a phase of consolidation, and we are wondering whether we have done in all respects the right thing. In those circumstances, there is not quite the urgent social need for the organisation as before.

Mrs. White

Would the hon. Member extend his sentiments to the social needs of the Colonies, for example? He may have seen "Daybreak at Udi," which was shown in Westminster Hall last night, and might agree that there is a social need in this direction.

Mr. Shepherd

I am not denying that a field exists, and I am coming to what is still to be done.

Undoubtedly, there is a social field, but when one considers the changes that have taken place in this country and the fact that the Crown Film Unit did so much, and expanded to such an extent, during the war, one realises that to some extent the urgent social needs which it once met are not today so large or urgent. I take the view that we cannot consider keeping on the Crown Film Unit in its present state.

Let us get this thing down to its barest minimum. I think we could agree, among those who take an interest in this question, that to take six key persons out of the Crown Film Unit and to establish them in some way, perhaps, under Group 3, would save the spirit of the Unit. We cannot save the body of the Crown Film Unit—that will disintegrate and will be duly buried; but we can save the spirit. Six key persons put into the right sort of organisation—perhaps, in Group 3—may well save the spirit and carry it on, and when conditions improve it may well be possible once more to branch out in a more extensive way.

I join in the general welcome to the Bill. I am quite satisfied that it is necessary to give the £2 million to the Film Corporation, and to do so well in advance, because continuity in production is the essence of economy. Some delay by the previous Administration in announcing their intentions caused a certain disorganisation in film production; and we must give the longest possible notice of our intentions to ensure continuity of programmes.

We have a specially urgent need for the Bill if, as my right hon. Friend the Chancellor of the Exchequer announced, we are to try to get a harder bargain with the Americans in September. It is no good, if we are seeking to reduce the American content or American admittances, to try to pinch our own hands; that would be a very foolish policy. I am particularly glad that we have endeavoured on this occasion to get away from the ambit of Government finance and into the ambit of private finance, albeit by Treasury guarantee.

There have been quite a number of speculations about the future of the National Film Finance Corporation. I visualise a permanent need for a film bank of some kind or other because finance in films is not like finance in any other product. One must have a highly specialised knowledge of it. I do not know what money exists or how many institutions or individuals are inclined to lend money to film companies. I should think they are precious few, and it needs to be done with a great deal of control not normally exercised by such institutions. I visualise the need for a permanent film bank, perhaps to take the place of the National Film Finance Corporation when the Corporation comes to an end, so that the industry will always have the backing of an institution able to meet its needs.

The losses of the National Film Finance Corporation have been very much lower than I thought they would be. The organisation has, on the whole, been more successful than anyone believed it would be. It has succeeded in clearing out of the business all, or nearly all, of the undesirable elements. It has put into operation a system of budgetary and employment control and has checked that day by day. I gather that it has not been entirely successful in the case of one organisation, and we await with interest the next report of the Corporation to see whether better behaviour has been indicated.

I think it is a good thing that the National Finance Corporation has been harsh in checking expenditure. Some people say that it has poked its nose in far too much and has not given to individuals the freedom which they desire. I always get suspicious when people making films start talking of freedom, because I think that in their minds freedom means freedom to spend any amount of money without regard to where it comes from or how it is to be paid back. I wholeheartedly support the detailed work of control which the National Film Finance Corporation has put into operation.

I believe that a more positive contribution towards the film industry has been made by the National Film Finance Corporation than has been credited to them in this House, or elsewhere. I am thinking of the effective establishment of the group system. My right hon. Friend said something about the group system, but he limited himself to saying that the group system was a means by which individual producers get together with the idea of safeguarding themselves mutually against loss. That, of course, is a factor in the group system, but to my mind it is perhaps the least important factor. This group system, for all the criticism it has had, is perhaps the most effective way ever devised of reconciling two opposing and conflicting elements in film production.

What are the two opposing elements? On the one hand, there is the desire of the fellow on the financial side to get a return for the money and, on the other hand, the desire of the artistic element to produce something along artistic lines. There is a constant clash in all film companies between the commercial side and the artistic production side. Reconciling that clash is very difficult indeed. If we look at American films, we see how it has been reconciled. In America they say that the fellow who attends to the cash is to have the say, and the result is that we get a whole system of stereotyped, uninteresting films. In individual companies it is extraordinarily difficult to get a balance because there is a dominant personality who may be on the production or the financial side.

In the group system we have done something which to my mind has solved this very difficult problem. If a producer has an idea for a film, he goes to the distribution company, shows them the script and mentions the stars, and gets a distribution guarantee. He goes to the National Film Finance Corporation and they give him the end money if they are fully satisfied. The producer is to some extent independent, but the financial control is safeguarded. There is not a fight inside a single company because the producer, the National Corporation and the distributing company know where they stand and neither is seeking unduly to influence the other.

I am satisfied that in this group system we have made a substantial contribution towards the structure of the industry. I know that my hon. Friend the Member for Southgate said that individual producers are not getting a fair deal and are not getting enough rope, but I am very pleased when I go round studios and producers under this scheme tell me that they have not enough liberty. I say that it is quite easy for them to earn their liberty. All they have to do is to make films for a short period of time consistently and they get all the money they want without restriction. In the present state of the industry, we cannot give producers their head and let them spend what they wish.

I am very pleased to welcome the Bill and to see the progress which the industry has made. I am satisfied that the industry is in a more healthy state today—here I speak about the production industry—than ever it has been. We have reduced costs from the 1947 level of about £250,000 to about £120,000 and we have no false ideas about what we can get. We know that we have to cut our coat according to our cloth, and we know there is not a vast heaven waiting in the United States of America. We know exactly the kind of films we can produce and we are producing them.

If we go on steadily expanding our production as we develop and create the right kind of artistic ability, which is the limiting factor of film production—if anyone can write scripts for films there is a job waiting for him at this moment —and if we go on encouraging and stimulating this talent and build economically on that basis, I am satisfied that in 10 or 20 years the British film industry will be another effective factor in world trade.

5.58 p.m.

Mr. Joseph Reeves (Greenwich)

On the whole, I think I agree with most of the suggestions of the hon. Member for Cheadle (Mr. Shepherd) except with his reference to the political differences. I think that is a matter of no importance in a debate of this kind. As the hon. Member for Southgate (Mr. Baxter) said, there is a sense of coalition on this question of British films. This House has always approached the problems confronting the British film industry in a bi-partisan way because we have always felt it is important from the national point of view that this great industry should be successful and that it should achieve objects which concern the nation as a whole as well as serve its own inherent purposes.

The industry as such not only serves the interest of entertainment but a much wider field which concerns the national interest. It would be a very bad day for this country if we were to lose the industry that has been established over years, with its peculiar characteristics and with its identification, as has been said on so many occasions, with the British way of life.

The only thing that worries me in connection with this Bill is that once again we are approaching the problem of financing this great industry in a piecemeal manner. The prospect, for instance, of the whole scheme terminating in 1954 is one which gives me great concern and I think it is important that we should have in mind the eventual establishment of what the hon. Member for Cheadle has described as a film bank.

I think we can take it for granted that for many years ahead special methods, or special means, must be employed for the financing of this industry which cannot normally enter into the field of competition as an ordinary industry is able to do. We have to make up our minds what are our objectives so far as this industry is concerned. At the moment—

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