§ Motion made, and Question proposed, "That the Clause stand part of the Bill."
§ Mr. Glenvil Hall (Colne Valley)
I have no desire to keep the Committee for more than a brief moment. Although the Amendment standing in the name of my hon. Friend the Member for 2704 Huddersfield, East (Mr. J. P. W. Mallalieu) and myself has not been called, we can, I think, conveniently raise the point we had in mind at this stage.
The point that we and other hon. Members have in mind is that it is desirable to ensure that a Treasury guarantee, both as to interest and principal, can be given when loans are raised under this Bill by the Corporation from other sources than the Board of Trade. The reason, of course, is that money can be borrowed very much cheaper if there is a Treasury guarantee than on the open market.
We had no indication on Second Reading that the Bank rate was about to be raised to 4 per cent. It has now been so raised and that must make it, in our submission, more difficult for the Corporation to raise money at a reasonable rate. As they in turn will have to charge those who borrow from them a higher rate still, it may well be that presently, so far as moneys coming from this £2 million are concerned, borrowers from the Corporation may be asked to pay rates that are crippling to them.
I understand from the Parliamentary Secretary to the Board of Trade that under the Borrowing (Control and Guarantees) Act, 1946, it is possible for the Treasury to give such guarantees and, of course, I do not quarrel with that. All I am doing is to ask whether the hon. and learned Gentleman will indicate to us before we pass this Clause that if the situation is such that money has to be borrowed at a much higher rate than we have visualised in the past, the Treasury will be asked to give the necessary guarantees so that those thinking of using the facilities provided by the Bill will not find it is quite impossible to take up loans because of the interest which on a commercial basis and in the nature of things will have to be charged. If we can have that assurance from him it will, I think, satisfy us on this side of the Committee and we shall be willing to allow the Clause to go through without pressing it to a Division.
§ Mr. T. O'Brien (Nottingham, North-West)
The President of the Board of Trade was kind enough to receive me and colleagues from the executive council of my union for an interview on this subject on 14th January. Among other 2705 things, we stressed the desirability and necessity of giving further credit or authority to raise a loan to the National Film Finance Corporation. It is only fair for me to say the President received us with sympathy and displayed a great deal of constructive knowledge of such a complex industry as the film industry. He promised very favourable consideration of the factors we put forward and he has carried out that promise.
In a reply to me the other day, he said the Government would provide facilities for raising a further credit of £2 million. It is true that was not the amount for which we asked. The authority given in the Bill is limited as to both amount and guarantee. Unlike its predecessors, this loan of £2 million is not to be backed by Treasury guarantee. Since the proposed Amendment has been ruled out of order, I can only support the plea of my right hon. Friend the Member for Colne Valley (Mr. Glenvil Hall) that that aspect of the matter should be considered favourably.
Unfortunately, Ministry of Labour and trade union business prevented my being present at the Second Reading debate, but I have read the OFFICIAL REPORT. One or two points need emphasis. We asked the President of the Board of Trade to use his influence with his right hon. Friend the Chancellor of the Exchequer to grant a credit or loan of £10 million to the Corporation, spread over three years. In round figures, that meant £3,500,000 this year and again in 1953 and 1954. Some of my hon. Friends thought I was rather cheeky in asking for such substantial sums.
To anyone who does not know all the facts about film production it might appear to be a tall order to ask for £10 million in these days. But on the contrary if there is any "cheek" at all it is on the part of this Government and the last Government in taking large sums of money out of the industry every year and giving so little in return. As the President of the Board of Trade himself mentioned on Second Reading, there is about £37 million to £40 million coming into the Treasury by way of entertainments tax. My organisation's plea was that less than one-third of the amount the Treasury takes in one year by way of entertainments tax should be ploughed back into film production over three 2706 years, or from another point of view, we ask that the loan should be of £3,500,000 annually for three years, which is less than one-twelfth of the money which comes from the film industry by way of entertainments tax.
With these figures in mind, I think our request, and my constant and continued plea to the Government of the day for further credits, is most reasonable and modest. We know from previous discussions in the House and in Committee what the position is, and we are all agreed on the valuable work done by the Corporation since its inception.
I have from time to time been one of the most constructive critics of the activities of the Corporation in my capacity as a trade union leader in the industry. That criticism has not been directed to its management or particular functions, but rather to the major lines of policy that from time to time the Corporation has been obliged to pursue.
But I have also made it clear, especially after a recent meeting with the directors of the Corporation, that I personally am satisfied—for what it is worth, but, nevertheless, it is of material value—that the Corporation is doing a first-class job of work, and I want to associate myself with the testimony from both sides of the House to the work of the Corporation. Indeed, were it not for the existence of the Corporation and its work over the past years I would hesitate to believe there was any reasonably good future for British films at all.
As a trade union we have suffered considerable unemployment and loss of membership because of insufficient credits for producers. Since 1947 my organisation alone has lost nearly 6,000 employees of all grades, in unemployment. Fortunately, they have not all sat in the corner moping and groaning. No one likes losing a job to which he has been accustomed for years. Most of them have been able to find employment in other occupations, and some are taking part in the re-armament programme. Others, of course, sat down and bemoaned their lot, but we cannot help it. Production has reached rock bottom and we must do our best to improve it.
Today, out of 12 million employed in film production four years ago there are now fewer than 4,000. [HON. MEMBERS: "Twelve thousand"] The financial state 2707 of the industry goes into such astronomical figures that one is tempted to believe that the labour supply is in the same category. I should have said 12,000. Today, the figure is less than 4,000, of which over three-quarters of those employed are members of my own organisation. We are in a position to assess the value of the assistance by this and previous Governments to the industry.
I hope that the President of the Board of Trade will use his influence with the Chancellor of the Exchequer so that the Clause may be backed by Government guarantees on the lines indicated by my right hon. Friend the Member for Colne Valley. What is the use of giving this aid, on paper, to an industry which is struggling to work on an economic basis unless there are guarantees? The industry has cut out the extravagance of the past and is trying to do a first-class job. I think all will agree that the good British films made in recent years—and which are still being made—are second to none in the world.
Like other main film producing countries, our main problem is to make sufficient good films. We cannot guarantee that every film will be a winner, but those which have reached the top can stand up to world criticism and, indeed, are the admiration of the world. We want that to continue and we want practical help in seeing that it does continue. That help can be given by backing this loan by Treasury guarantees.
The President of the Board of Trade made it clear on Second Reading that it does not necessarily follow that there will be no Treasury guarantee for loans given under the Clause but, as my right hon. Friend said, it would give more confidence to private banking circles and to others who might be prepared to lend money if they thought the Government continued to have confidence in the British film industry, as it has in the last year or two.
It will be another year or two before the Eady fund is established, and the President should not overlook the fact that there are strong interests in the film industry today who advocate that the Eady levy should come to an end in another two years. Should their advocacy succeed, the British film production industry would be bereft of any practical 2708 kind of revenue to support future production. The Corporation is due to end its activities in 1954, unless measures are taken to continue it in existence. It is, therefore, unwise for the previous guarantees, even under the other Acts, to be withdrawn at this stage, or for there to be any doubt about their existence.
I beg the right hon. Gentleman to consider the matter very carefully and to make it known that guarantees will be given for the £2 million loans under the Clause, and thus to make certain that the whole world realises that the present Conservative Government are as sympathetic and as constructive towards the problem of British films as were the previous Government.
May I express the appreciation of the thousands of members I represent, as a trade union official, for what the Government are trying to do to continue the policy of the previous Government? We are anxious to go on doing a first-class job. British films are dollar earners and dollar savers at one and the same time. We want all the constructive encouragement we can get, for we have a difficult task ahead. There are many divisions in the industry, and we are trying to bring them together so that they can speak with one voice and so that there can be a coherent approach. We wish to do all we can to eliminate those factors which caused criticism in the past and we hope we shall have the support of the Committee in our efforts and that the Committee will support the plea made by my right hon. Friend.
We can be a source of considerable revenue to the Treasury in other directions. The British films that are successful have turned over considerable amounts in entertainments tax, and we feel that we are doing a good job of work, not only with regard to finance in assisting the country, but also as the industry did during the war in maintaining the morale of the people and giving them relaxation during difficult times.
§ 11.15 p.m.
§ Mr. William Shepherd (Cheadle)
I am sure the intentions of the right hon. Gentleman the Member for Colne Valley (Mr. Glenvil Hall) were good in relation to this guarantee, but I wonder whether they were wise. It is clear that the Corporation can obtain a Treasury guarantee 2709 if it so wants. It may be very much better in many circumstances that it should obtain such additional finance as it requires without a guarantee. If the story goes round that the industry has the Treasury at its beck and call, it will be difficult for those who run the business to get a loan without it.
It is not as simple as the right hon. Gentleman thinks. It is not merely a matter of borrowing at x per cent. and lending at x plus y. It may well be that the Corporation will accumulate funds of its own, and will be able to raise funds without Treasury support. I want to see this Corporation grow from being a Government-sponsored one to being an independent organisation. We should not stress too much the Treasury guarantee of the loan, because it ought to be the aim of the Corporation in the future to operate without it and put itself on a commercial basis.
§ The Parliamentary Secretary to the Board of Trade (Mr. Henry Strauss)
I am very grateful for the friendly reception this Bill has had, both on Second Reading and today. I was sorry that the hon. Member for Nottingham, North-West (Mr. O'Brien), who invariably intervenes with great experience of the industry, was unable, for the reasons he stated, to be present on Second Reading, which, naturally, made him more eager to give his views tonight.
It is important that we should not exaggerate the slight difference there is between the two sides of the Committee on the one point that has been raised. I suggest to hon. Members opposite—as was suggested by the hon. Member for Cheadle (Mr. Shepherd)—that in the interests of the industry, which we all wish to promote, the line chosen by the Government in this Bill is preferable to the line embodied in the Amendment, which was out of order.
There is, as was explained on Second Reading, full power for the Government to give a guarantee under Section 2 of the Borrowing (Control and Guarantees) Act, 1946. The sole question between us is whether it should be laid down in the Bill that it is compulsory for the Government to give that guarantee, or whether that should be a power in reserve, to be used only if necessary. That is a fair statement of the extent of any difference there may be between us.
2710 Her Majesty's Government hold the view—which I explained on Second Reading—that it is desirable, if it is possible, that the Corporation should raise such funds as are necessary, and as are made possible under this Measure, without a Government guarantee. I know that hon. Members opposite will agree that we ultimately look forward to a time when this industry will be able to stand on its own feet. That is the common desire, so it is surely right that when we pass a new statute we should take the first step in that direction.
I may be able to relieve hon. Gentlemen opposite of some anxieties if I remind them of certain facts. The hon. Member for Nottingham, North-West, had in mind that the period up to which advances could be made under the statutes would end in March, 1954. But the borrowing can continue to that date. Even if the view were correct—I hope that it may not be—that today a Government guarantee might be required, I am sure the hon. Gentleman did not wish to say that at no time before 1954 would it be possible for the industry to borrow without a Government guarantee.
The hon. Member spoke of the Government's showing confidence in the industry. I feel great sympathy with him on that, but surely we show much greater confidence if we leave the Bill as it now stands, rather than make the guarantee obligatory. He spoke not quite accurately of our withdrawing some guarantee. That is not the position. Under the previous statutes the Corporation was entitled to borrow from the Board of Trade. The present Bill enables it to borrow from sources other than the Board of Trade, but it can so borrow only with the consent of the Board of Trade and the Treasury. That gives the Government complete power to do what is necessary and desirable.
I suggest that it may be possible for the Corporation to borrow from time to time from outside sources without a Treasury guarantee. But if it proved at present impracticable without a Treasury guarantee, or possible only on unduly onerous terms in the absence of a guarantee, then the Government could provide a guarantee under the 1946 Act I have mentioned.
In putting forward this Measure Her Majesty's Government have every intention that it shall prove effective for 2711 the purposes for which it is designed, which have the approval of both sides of the Committee. The Clause now under discussion is the sole operative Clause of the Bill. The Bill received a welcome from the whole House on Second Reading and I trust that, with this explanation, right hon. and hon. Members opposite may be satisfied that their fears are really groundless and that, on the small point of difference which has been disclosed between us, Her Majesty's Government are right in suggesting that the scheme put forward is that which shows greater confidence in the future of this industry.
§ Mr. Glenvil Hall
I have listened carefully to what the hon. and learned Gentleman has said and I think that he has come more than half way to meeting the point of view we have endeavoured to put forward tonight. He has gone further this time than he did on Second Reading and further, too, than his right hon. Friend the President did on that occasion.
We are well aware that there is the 1946 Act on the Statute Book. Some of us were here then and helped to speed its passage through the House. It is a useful Measure and, obviously, can be used in this direction and, in our view, should be used.
We shall have this extra £2 million allocated to the Film Finance Corporation when the Bill goes through, and it would be absurd to put the Bill through the House unless we use the powers conferred by it and the money visualised in it is raised. We are fearful that, as the Corporation will have to obtain that money in the City and then, in turn, re-lend it to borrowers, by the time it reaches the ultimate user the terms may be 6, 7 or possibly 8 per cent.
What we want—and perhaps we have it from what the hon. and learned Gentleman has said—is an assurance that when rates reach that height, he and his right hon. Friend will not hesitate to make this Act workable and of use, to go to the Treasury and get it to under-write such loans as may be necessary at that moment to under-write, to make financial assistance available to this great industry.
§ Mr. H. Strauss
Perhaps I may, out of courtesy to the right hon. Gentleman, speak again. As he knows, in these 2712 matters the Corporation remains in touch with the Board of Trade throughout, and relations are close and friendly. Under the terms of this Bill it can only raise money from outside sources with the consent both of the Board of Trade and of the right hon. Gentleman's own former Department, with which he is so familiar.
As it is the determination of Her Majesty's Government that this Bill shall be effective for the purpose for which it was introduced, it is obvious that they will use that power, should it be desirable, to avoid the dangers that I described just now. But I am sure it would be undesirable, in the interests of this industry itself, that I should announce from this Box that I think it impossible for the Corporation to raise finance on terms without a guarantee.
Let us wait and see. But in the general spirit of what the right hon. Gentleman has said, that we wish this Bill to be wholly effective for its object and should not ignore any powers that are necessary for this purpose, I agree and think I can give him that assurance.
§ Question put, and agreed to.
§ Clause ordered to stand part of the Bill.
§ Clause 2 ordered to stand part of the Bill.
§ Bill reported, without Amendment; to be read the Third time To-morrow.