HC Deb 20 November 1953 vol 520 cc2023-125

Order for Second Reading read.

11.4 a.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 purposes of the Bill are relatively simple, and I propose to state them shortly and then to describe the merits and the background. Before I do so, perhaps the House will forgive me if I say just a word or two about some of the personalities involved. The National Film Finance Corporation, as I think everyone will agree, have not, at any time, had an easy job to perform, and I think most of us would wish to pay tribute to them for the work they have done; to Lord Reith, who was a very able chairman, Mr. Stopford, his successor, and to Sir Michael Balcon, without whose help we could not have done nearly so well.

I wish to mention one person in particular. Throughout this period we have been fortunate to have the services of Mr. Lawrie as the managing director. He has brought considerable gifts to the task, but, as the House knows, Mr. Lawrie has told me that he wishes to leave the Film Finance Corporation so as to interest himself directly in film production, I wish to say how sorry I am to lose him, and to express the gratitude of the Government for the services he has rendered. I hope to announce soon the name of his successor.

The Bill before the House this morning is of very limited scope, and I do not think any new issue of principle is involved in it. Its first and chief purpose is to extend the present loan-making powers of the Corporation, which would otherwise end in March, 1954. If they did so end, a quite substantial halt would take place in British film production, because a good proportion, about two-thirds, of British film production still looks to the National Film Finance Corporation for at any rate part of its finance.

Clause 1 of the Bill extends the powers to lend until 8th March, 1957—that is, for three years—and I will argue the merits of doing that in a few moments. The second purpose is contained in Clause 2, which deals with the special problem of enabling the Corporation to deal with loans which either cannot be recovered, or cannot be recovered in full, without doing considerable harm to the general run of British film production. Those are the two short purposes of the Bill, and now I want to say just a word about the background to them.

Those who have followed the history of British film production will not need much persuasion to agree that it is a very complex industry, with very tortuous finances in which successive Governments, over a number of years, have become very deeply involved. I hope they will also agree that it is not an unimportant industry. It is certainly an industry in which the public, whom we all represent, take a considerable interest. It is an industry which is capable of having some influence on public opinion, for good or bad. It is also an industry which, last year, made contributions of between£2½million and£3 million to our export earnings and, indeed, has some effect upon our prestige overseas. It is an industry without which we should be entirely dependent upon imported products, and one also which faces a number of rather natural handicaps as, for example, the limited size of the home market.

I do not propose, this morning, to recount all the various emergencies through which the film industry has passed, but the fact is that Government after Government have been compelled to extend to it aid and succour in one form or another. Since 1927, a succession of Acts has established a special quota protection giving a proportion of the market to the home industry, and that particular form of protection is extended to 1958. But not even that protection would have been sufficient by itself, and two further forms of assistance have been devised, one concerning revenue and the other capital.

On the revenue side—that is, the income side—there is the British Film Production Fund, which is more popularly known as the Eady scheme, and the idea of that, as hon. Members know, is to siphon off some of the box office receipts from the exhibitors to the producers. We are not debating that this morning, but I may say this: I am happy to tell the House that a voluntary arrangement, acceptable to all parties, has been reached to carry on a scheme of that kind for a further three years, so I am glad to say that I shall not be bothering the House with legislation on the subject.

We are concerned this morning with the capital side of the accounts. In July, 1948, the film industry was in a condition of crisis. The Rank Organisation and the Associated British Picture Corporation had suffered very heavy losses on their production side and the British Lion Film Corporation was facing collapse. It was quite clear at that point that some action had to be taken, and in fact the policy which was then initiated by the previous Government has, with various more or less minor modifications, been pursued up to the present time. A series of Acts has been passed under which the Corporation was established and under which it was given power to borrow money from the Board of Trade and from outside sources and to lend the money to the film industry on certain terms and conditions; and this it has done.

May I tell the House what the financial position is today? The limit on advances from the Board of Trade is set at£6 million. The amount currently outstanding, in round figures, is£5,700,000. The total of advances to 31st March, 1953, was£7.4 million and the repayments£1.9 million. By an Act approved by the House last year, the Corporation have power at the moment to borrow up to another£2 million from non-Government sources, and up to the present time, as can be seen from the figures, they have not needed to do this. Repayments have been equalling outgoings but, as the figures show, they are up to the limit.

May I say very shortly what all this amounts to, in my judgment? In effect, this Government and the previous Governments have virtually invested£6 million in the film industry, and whether we like it or not, this£6 million now represents a not unimportant part of the working capital of the film industry. Whatever view one may take about that I think it is quite plain that it would be very difficult to withdraw it without violent repercussions on the industry as a whole. Clause 1 recognises that fact by allowing the Corporation to go on for a further three years. The Clause does not authorise additional borrowings by the Corporation, but it does authorise continuing lending out of repayments and it continues the existing borrowing power from non-Governmental sources.

So much for that side of the picture. I want to turn to the other side—the position of the British Lion Film Corporation and Clause 2, which raises what is perhaps a less fundamental but in some ways a more difficult aspect of the matter. In the early days of the National Film Finance Corporation, in 1948 or 1949, a very large loan of£3 million was made at the request of the Board of Trade and the Treasury to the British Lion Film Corporation, and today that£3 million represents more than half the outstanding loans made by the Corporation. There is absolutely no secret as to the original purpose of that loan; it was made to prevent the collapse of the British Lion Film Corporation, and, indeed, that purpose was achieved. Since then the British Lion Corporation has continued to make a substantial and in many cases a distinguished contribution to British film production and it has paid interest on the loan. The amount of interest paid has been a little over£500,000. But it has not repaid the loan or any part of it.

In considering the problem and Clause 2, I ask the House to consider two aspects of the matter. The first is a general point: none of the Acts so far passed on this topic has really faced the possibility that a substantial loan might not be susceptible of repayment in due time or within the Corporation's lending powers and terms, and that for good and sufficient reason the Corporation might not be able to enforce repayment, for example, without disrupting British film production. Until that point is faced, I think we must realise that there is some gap in the legislation.

The second and particular point is this: without any doubt, as far as the British Lion Corporation is concerned, some part of the£3 million is unrecoverable—certainly unrecoverable as capital repayment. Nor perhaps is this altogether surprising, having regard to the circumstances in which the loan was originally made.

In the accounts, the Corporation have made provision for the loss of£1 million of this loan. Clause 2 simply permits the National Film Finance Corporation, with the approval of the Board of Trade, to make such arrangements as a prudent creditor might wish to make to collect money or to make a settlement with a debtor, always of course having regard to the objective of the Act, namely, the furtherance of British film production. What will prove the best arrangement will fall to be decided in the light of the examination which is now proceeding, but it must, of course, be within the terms of the Clause in the Bill and it will require the consent of the Board of Trade and in certain circumstances the Treasury.

Mr. Glenvil Hall (Colne Valley)

The right hon. Gentleman spoke of£3 million having been advanced to the British Lion Corporation, which is common knowledge. Can he tell the House whether any of that£3 million advance over a fairly long period was earmarked against any set production? It was used for the production of certain films. In the books of the Corporation and the books of British Lion, was any of that sum earmarked against certain films? If so, it may well be that some of it may be recovered.

Mr. Thorneycroft

The answer is, none. It was made as and formed part of the revolving capital of British Lion and it is not possible to earmark part of it and say that it could be attributed to any particular film. The object of Clause 2 is to enable the Corporation to make some prudent arrangements with British Lion which would make it possible, either by reorganisation of the capital or something of that kind, to deal with the matter in a realistic way and to see what measures could best be taken to safeguard that public money in the future.

During the past years I think the Film Corporation can show a good record of their commercial administration. They have done much to cut down the cost of film production and they have enabled many films to be made which otherwise would not have started on production. One could produce a long list, including such films as "The Third Man" or "Morning Departure" or "Moulin Rouge," which recently won a Festival award, or one which many of us have seen lately, namely, the Everest film. There is a host of others. Generally speaking, film production in this country is now in a reasonably healthy condition; that is to say, the volume of film production is now certainly as high as, and in some respects higher than, it was last year.

The main purpose of this Bill is, quite simply and shortly, to enable the Corporation to continue their operations for a further three years. It represents half of the policy designed to introduce a measure of stability into the film industry, the other half being represented on the revenue side by the Eady scheme.

To summarise, the Bill does not extend the area of borrowing; it does not enable them to have any more money than they are entitled to borrow under existing legislation. All it does is to enable the Corporation to go on doing the work which they are doing at the present time and to make what may, in the light of experience, prove to be sensible arrangements with at any rate one of the principal debtors at this moment.

11.21 a.m.

Mr. Harold Wilson (Huyton)

I can certainly assure the President of the Board of Trade that as far as I am aware this Bill is not likely to generate any of the controversy that was generated two days ago by another Bill which he saw fit to commend to the House. What it does, in effect, is to continue for a further three years an experimental piece of nationalisation introduced by the Labour Government in an extremely difficult and risky field—the nationalisation of part of film financing. We are very glad to see that this very limited enthusiasm of the Government for one of the smaller Measures of the Labour Government seems to have been shared in a much wider sense by the electors of Holborn and St. Pancras.

The announcement that Government money was to be made available for film financing was made in July, 1948—some months before we were able to introduce the first piece of legislation. That announcement was made against the background of the worst film production crisis since the war. I was immensely relieved when the right hon. Gentleman said that he was not going to give us a list of all the production crises and emergencies in the history of the film industry, because it would have involved him and the House in a very long speech.

I do not think that many who have followed that history would deny that July, 1948, is recognised as the most dangerous period. It followed a very unsettled period in the history of the industry, when there had been a 75 per cent. ad valorem duty and a Hollywood film boycott in this country, when we might have expected British film production to have seized on the opportunities presented by the Hollywood boycott to expand production. On the contrary, those responsible for financing film production were so afraid that many cinemas would close that all confidence in the industry was lost, particularly on the financial side. Every attempt was made to induce private finance to come in, but it was not possible to induce it, even, as in one case, against the offer of 100 per cent. Treasury guarantee.

The then Government accordingly announced that£5 million of Government money would be made available as working capital. The party opposite, who were then in opposition, did not oppose it, although the right hon. Gentleman who is now Secretary of State for the Colonies did go so far as to say that they were in two minds whether or not to vote against it, because they did not think that it was the right answer. I believe that the attitude of the Secretary of State at the time was that the right way of solving the problems of the industry would have been by a sweeping cut in Entertainments Duty. We did not think that that was the right answer, because it would have meant a very big cut in Entertainments Duty for quite a small return to producers, as things were then.

The present Government have now been in office for two years, there have been two Budgets, and Entertainments Duty on the cinema industry is higher than it was when the right hon. Gentleman made his comments. At one stage in the debates on that Bill he also said that we might as well face the fact that the£5 million would be lost; that there was no hope of getting it back. At the time, I had the rather uneasy feeling that he might well be right, but I felt, nevertheless, that even if that turned out to be so it was still essential to take this measure, simply to save the industry.

When one looks back and sees how much Entertainments Duty has rolled into the Treasury as a result of this particular Measure, and how it has strengthened us in our dealings with the United States film industry, one can appreciate what a difficult situation would have been created if we had allowed the film industry to go under.

As the President of the Board of Trade says, as a result of this Measure we have produced some of the finest films in the history of the industry. There have been such films as "The Fallen Idol," "The Winslow Boy," "The Third Man"—which he particularly and rightly mentioned—"Odette," "Tales of Hoffman," and "Morning Departure," which was 100 per cent. financed by the National Film Finance Corporation. Then there was "The African Queen," and now there is the Everest film, produced by Group 3, which is a special creation of the Corporation. As the House knows, these films could not have been made had it not been for the Corporation.

On previous occasions the President of the Board of Trade has recognised the value of the Corporation. He introduced legislation some little time ago to give them powers to borrow against Government guarantee. That was a proposal which, before I left office, I had thought was the right one for the future of the Corporation. The last Annual Report of the Corporation shows that those borrowing powers have, so far, not had to be used, though the Report indicates that their existence enabled the Corporation to continue with their policy of loans to the industry, with some confidence that if they did outrun their previous statutory limit they would be able to raise more finance as a result of the right hon. Gentleman's legislation.

This Measure extends the life of the Corporation. It also sets out, quite rightly, to clear up, or begin to clear up, the situation with regard to the British Lion Film Corporation. If one looks at the figures in the last Report one sees that£1,895,000 was provided against losses. That is a figure of under£2 million over four years. A sum of£341,000 has been written off altogether, and£1,554,000 is held against possible losses. Of that figure,£1 million is held against the danger of losses on the British Lion Film Corporation alone.

It is only right and fair to say that that loan to the British Lion Film Corporation was not the responsibility of the National Film Finance Corporation. It was one of the things which they inherited when they were set up. It was not even the responsibility of the organising or preparatory committee which preceded the passage of the legislation. I take responsibility for the loan to the British Lion Film Corporation. It was a Government decision, and was entered into before the National Film Finance Corporation or the company which preceded them were established.

There are very many aspects of that transaction which we should have liked to have seen done in a different way. It would certainly have been very much better if, in making the loan, we had had time to introduce all the checks, balances and conditions which the National Film Finance Corporation made in further lending to other companies. We should have been glad to have been able to see some of the changes in the British Lion Film Corporation, such as the tighter control of costings, that were introduced as a result of their connection with the National Film Finance Corporation, but in the circumstances mentioned by the right hon. Gentleman there was simply no time to insist on those conditions. Although we recognised that it would have been vastly more desirable to have taken time over it, we had no option in the matter. If we had waited the film industry in this country might well have perished.

I ask the House to consider the position at that time. A good number of the leading producers were already associated with British Lion around Sir Alexander Korda. There were a number of the very best producers, those who had been associated with Mr. Arthur Rank in the Rank Organisation during the period towards the end of the war when Mr. Rank was successful in keeping the British film industry alive and, indeed, in enhancing its prestige during that period. By 1948, however, most of those producers had left the Rank Organisation and were centred around British Lion, and if we had not taken the action we did it is undoubtedly true that most of the films we have produced over the past four or five years would not have been produced.

I think one of the most striking achievements of the National Film Finance Corporation—and this bears very much on the British Lion situation—has been their success in getting costs down. Successive reports have shown in tabular form percentage reductions in costs of film making both as regards British Lion films, at any rate, some of them, and as regards particularly the genuine independent producers. Similarly those reports show an increase in the percentage of films made within the budget. It was a comparatively rare thing five or six years ago for a producer to keep within the budget set for him, but that was pretty rigidly enforced as a result of the activities of the National Film Finance Corporation.

When these advances began we started purely in terms of loans to distribution companies, but, of course, the Act did provide that we should have power to lend direct to independent producers against appropriate safeguards to be approved by the Board of Trade, and I think it has been a very good thing that the National Film Finance Corporation have been able to lend direct to a number of independent producers. One is interested particularly in their activity in lending to a company set up by one of the trade unions in the industry, and one welcomes that as an experiment in a form of co-operative production.

Then, of course, there came the group system, and Group 3, I think we all agree, has been a very interesting and a very successful experiment, culminating in the Everest film. I must tell the House that I myself was never very happy about the proposal of the National Film Finance Corporation to set up the other two groups, the group around the Rank Organisation and the A.B.C. Group. I did not myself feel that the National Film Finance Corporation legislation really was meant for providing finance for the two big exhibiting groups in the industry, and I notice from the National Film Finance Corporation's Report that the scheme for those two groups has now virtually broken down. However, it was not possible, in view of the way the proceedings had gone, to go back on that at the time.

It is very interesting to look at the latest Report of the Corporation referring to Group 3. It says: Group 3 has produced eleven films and has some worthwhile achievements to its credit; in particular, opportunities have been given to young writers, directors and technicians. The big production companies have been quick to recognise the value of this work and have given bigger assignments to some of the people promoted by Group 3. I think that was one of the hopes of the Corporation that Group 3 would act to some extent in assisting young writers, technicians and directors, and one is glad to see their hopes have been realised, but they go on to say: Unfortunately the films have not all been booked on the major cinema circuits, and this is reflected in the financial results. It is hoped that in future better results will be achieved in this direction, both through the merits of the films themselves and through the recognition by the big organisations of the value of Group 3 to their own production activities. I think this reference in the last Report to the major cinema circuits is one the House ought to take rather seriously. One recognises the difficulties that all exhibitors, large and small, are having at the present time in connection with Entertainments Duty, and though from this Box in the debates on the Finance Act I did stress very specially the problem of the smaller cinemas in contrast to the big circuits, one wonders whether the big circuits are doing as well as, perhaps, they did in certain periods of the past; but I do feel that if it is true that films made with Government money are not getting a fair amount of circuit time the Government ought to go into the question in rather more detail.

Mr. William Shepherd (Cheadle)

Surely the right hon. Gentleman is not asking the cinemas to take the view that they should book films made by Group 3, or any other group, on other than purely commercial considerations?

Mr. Wilson

Perhaps, if the hon. Gentleman will wait for a moment he will see what I have in mind. Certainly I think that as long as good films are produced by Group 3 or anyone else the Government obviously could not be very tolerant of any failure to honour the quotas that have been set down. Indeed, I do feel that the major circuits could do a little bit more in the matter of the quotas than they are. I personally think the previous Government and I myself made a mistake in the last quota legislation in accepting an Amendment abolishing the idea of a double quota. We did come forward with a proposal for a higher quota for the big circuits and a lower quota for other cinemas. I think that on the whole we were persuaded too easily that that proposal should be dropped, and if the right hon. Gentleman is at any time considering the quota legislation—and I hope that he is not necessarily going to wait till 1958—I hope he will be guided by our mistake, as I now believe it to have been.

Another thing to which we should pay attention, which we tried to watch very carefully, is the handling of the booking of the Group 3 films and other films on the circuits managed by the Rank Organisation. We were very anxious to ensure that as far as possible those two circuits did operate as separate circuits in their bookings. Perhaps the right hon. Gentleman will tell us whether I am justified or not in thinking that the circuits have acted as one in the matter of bookings and that the opportunities have been cut down for films produced by independent producers. It means that one man, one panjandrum from the Rank Organisation, can take the responsibility of turning down a film not only on behalf of the Odeon circuit but of the Gaumont-British circuit as well. If I am wrong I hope the right hon. Gentleman will put me right about that.

Incidentally, that was why during my time at the Board of Trade I was coming more and more to favour a separate circuit, separate from the Rank Organisation, to have a little more competition in the matter of showing these films, particularly the films of the independent producers. I should have thought that this Government, with their enthusiasm for the recent White Paper about competitive television, would have been more enthusiastic about competitive circuits in the matter of films.

On the question of British Lion, I should like to ask the right hon. Gentleman about the provision that is made for the Corporation to take debentures in British Lion. I wonder if that is really going far enough. Perhaps the right hon. Gentleman has not told us all that is in the mind of the Corporation. What re-organisation is intended within British Lion as a result of this closer direct participation of the State, or State Corporation, in its activities? I believe that it should be possible to use this more intimate connection with British Lion to get a greater control of its resources—or, perhaps, I should say facilities, which is a more appropriate word in connection with a great distribution company, with its studios and its vast outlets and connections—to use them in furtherance of the policy of advancing the interests of British films.

I shall not go into the wider aspects of film policy, such as the problem of Entertainments Duty which we have debated and which I hope we shall soon be debating again, or the question of the film production levy on which the right hon. Gentleman stated the position quite simply. One of the problems that Governments of both parties have been facing in what is, I am sure, the sincere policy of both parties of trying to encourage the interests of British film production, concerns the commitments entered into by both parties with other countries. There are the complications of the General Agreement on Tariffs and Trade—a name which, by this time, I am sure is written on the heart of the right hon. Gentleman, if he has a heart—and certainly I should think that he might feel a little chary about proposing any changes in G.A.T.T. even as regards films. There are also the commitments going back to 1938 in the Anglo-American Finance and Economic Agreement.

I suggest to the right hon. Gentleman that, despite the difficult time he has had at Geneva, he might consider further negotiations with the American film interests on such subjects as renters' quota—I have said many times that I thought we were too hasty in scrapping renters' quota—and even on the subject of a differential tax. The film production levy is going a very long way in discrimination, and it might well be that the purposes of the quota and the levy and the whole problem of aiding the British film industry, while having due regard to the position of exhibitors and overseas producers, could be made very much easier if we were to get the Governments of other countries to agree to make such changes in the commitments that we could introduce a differential tax. There could be a lower tax at the box office in relation to British films. I know that that is bristling with difficulties, but it might remove a lot of other difficulties with which we have been faced.

This Bill is a vote of confidence in the National Film Finance Corporation. The right hon. Gentleman rightly paid every tribute to Lord Reith, who was the first Chairman of the Corporation in its formative period at a very difficult time, and he equally fairly paid tribute to Mr. Stopford who succeeded him and who has carried on the good work, and indeed expanded the work. But I would agree with the right hon. Gentleman that a special tribute is due to Mr. Lawrie for his work as Managing Director. The news that he is leaving the work of the National Film Finance Corporation to go into film production himself is, for many of us who are interested in the future of the National Film Finance Corporation, a state of affairs which we view with some sadness, but I am sure that the good wishes of all of us in this House go to Mr. Lawrie in his new venture in a more risky field than the one he has been in. If he is going to bring to his new job the same ability, courage and wisdom that he has shown in financing individual films over the past four years, he looks like having a very good chance of success in what must always be a very risky field.

The Government are continuing the life of this Corporation, which is running pretty well. Repayments last year, according to the Report, were£860,000. Total repayments of loans made to date amount to about£2 million. The Cor- poration have financed altogether 254 films of varying importance and type. Probably, as I have said, most of these would not have been made but for this assistance. Apart from the British Lion allocation,£895,000 has been set aside for losses over the period of four years—certainly a good deal less than the Secretary of State for the Colonies had expected. The Corporation have done a great job in reducing costs.

The whole House was interested, I am sure, in the figures in the last Report showing the improvement in the number of minutes of shooting time per day at the studios—an index of production efficiency which has often been debated in film debates in this House. One sees the figure rising from 0.92 in 1946–47 to 1.17 minutes per day in 1947–48; 1.18 in the first N.F.F.C. films in 1949–50, 1.66 in 1950–51, and 1.74 minutes per day in 1951–52. If one takes the smaller films costing less than£100,000 it is an average of 2.54 minutes. Those who do not know anything about the film industry will think that this is still a small number of minutes in the whole day's work. There are, however, some very interesting techniques being tried out in this country in which we can give a lead to the United States, by which we can increase in a spectacular fashion the number of minutes of screen time shot per day.

As the right hon. Gentleman has said, the Corporation occupies a central position in the film industry. I recall that when I introduced the original Bill to create it, I described its creation as a regrettable necessity. I have lived long enough with the film industry to alter my opinions about that. The idea of a films bank had been put forward by many experts, by the principal trade unions in the industry, by the Palache Report and others, and three or four years' experience convinced me—indeed, I said from the Box opposite—that the National Film Finance Corporation should be a permanent feature, in one form or another, of the industry. After the experience of a further two years, I am more than ever of that opinion today. This Bill is a recognition that the Government are taking one tentative step, anyway, towards the realisation of that view, and, as I have told the right hon. Gentleman, he can count on the full support of this side of the House in what he is doing.

11.47 a.m.

Mr. Angus Maude (Ealing, South)

I do not propose to detain the House for long in supporting this Bill, to which the right hon. Member for Huyton (Mr. H. Wilson) has already added his support. Most of the general problems have been covered by the right hon. Member for Huyton, who himself bore the full brunt of the major crisis in the film industry, and probably, whether he wanted to or not, got to know more about the film industry than many other people outside the industry.

While it is true, as my right hon. Friend the President of the Board of Trade said, that we are debating today only this Bill, and that the question of the Eady plan and other matters do not properly fall within the scope of this debate, I am sure that he would be the first to admit that the loan powers of the National Film Finance Corporation would provide no sort of solution to the problems of the film industry unless the arrangements for roughly equating income and expenditure were otherwise more or less adequate.

The National Film Finance Corporation, as has already been said, have done an extremely good job. Indeed, it is difficult to see how the industry could have produced the results it has without that assistance. Certain criticisms have been levelled against the Corporation, but I think that any form of organisation created by an Act of Parliament, invariably does receive some criticisms. The Corporation have done extremely good work, and most important studios have been grateful for the assistance which they have received. The studios which form virtually the only industry in my own constituency, which are among the best-managed and probably produce as high a proportion of good films as any other in the country, namely, Ealing Studios, have been able to take advantage of the activities of the Corporation and have been extremely grateful for the assistance.

But I wonder whether the country as a whole realises how extraordinarily difficult it is, even when this finance is provided, for any producer to make both ends meet in conditions as they are. It is true that the producer, who bears virtually the whole burden of the expenditure on the production of his film, is left with about£16 out of every£100 spent by consumers to see his work, a situation which I think exists in no other industry of any kind in this country.

While I have no intention of going into the question of the Entertainments Duty today—I doubt if I should even be in order in doing so—I am very doubtful whether there is any other alternative to the system which we have now, by long and patient experiment, evolved. It seems to me that even a substantial cut in Entertainments Duty, welcome as that might be to distributors and renters, would not in the long run solve the problem of the British film producer, because so much of the money would go to persons other than him.

I should like to put one point about this Bill to my right hon. Friend, and I hope that when the Parliamentary Secretary replies to the debate he will be able to reassure me on this matter. It is clear that, apart from the provisions to extend the Corporation's power, the main provision of the Bill is in Clause 2 (1) and relates to the arrangements for the waiving by the Corporation of payment of interest or for the acceptance by the Corporation of shares or debentures in any company in or towards repayment of the amount of the loan. We all realise what is the major operation for which that provision is probably designed. Nevertheless, it is drawn in very general terms and could be used in respect of any producing company.

I do not believe that there is any very great immediate danger inherent in this provision, nor do I believe that any film producer in the country really feels himself at all alarmed at it or has any objection to it. Yet I think it should be borne in mind, supposing that a major slump were to ensue in the film industry, which we very much hope will not occur, the Corporation might find itself, in certain circumstances, becoming the major holding company in the film production industry in this country. I am not absolutely certain that I should regard that as a good thing in the long run because I am by no means convinced that that was the object for which the Corporation was set up.

Certainly as regards the acquisition of a controlling interest in the equity of a film production company, I should think that this was a power which would need to be handled with some care. Nor am I even certain that the acquisition of first-mortgage debentures representing anything like the whole of the assets of the production company, would be particularly desirable. Perhaps the Parliamentary Secretary will tell us whether it is intended that the power should be exercised in order to secure more than 50 per cent. of the equity in any particular company, or whether it might be so used.

I cannot say that the right, hon. Member for Huyton altogether reassured me when he said that he would like to have gone a little further and have used Clause 2 to get control of the facilities of British Lion Film Corporation. In the interests of British film production, it seems to me that the possible implication of these powers, used as perhaps they might be by the right hon. Gentleman in future years, are such that my right hon. Friend might look at them more carefully to see if there is any way in which we can safeguard the interests of the British film industry against what might in certain circumstances become the first step to virtual nationalisation of the film producing industry.

11.55 a.m.

Mr. T. O'Brien (Nottingham, North West)

Those of us who are directly involved in the film industry in one way or another naturally welcome the extension of the existence of the Corporation in this limited Bill. I would say, in passing, that the President of the Board of Trade has, in a comparatively short space of time, given a most competent analysis and review of the present position of the industry. After the review which he gave, and the equally competent review by my right hon. Friend the Member for Huyton (Mr. H. Wilson), who, as he has said, was at the Board of Trade when many of these difficulties arose, there is little left for anyone else to say.

We do not want to make this a matter of controversy at the moment. There are many things about the Corporation which have been criticised by people within the industry and people who are fitted to know the day-to-day workings of the Corporation, but it would be churlish and mean for anyone to single out any particular incident in the Corporation's life or history merely to attack it here. The criticism has not been very serious. In its early days the Corporation had to shoulder the criticism about the operation of the British Lion Film Corporation loan of£3 million. That has already been explained.

Technicians, artists, craftsmen and other workers and executives in the industry appreciate, as I have said before, the fact that the Film Finance Corporation was brought into existence and that it has done a magnificent job of work; and all those whom I have mentioned, and others, are grateful and appreciative that the Government have decided to extend the life of the Corporation for another three years.

Frankly, I do not see how the production side of the industry could have continued to meet its own difficulties and overcome them and the competition from overseas unless it had been assisted and facilitated by the Corporation and its work. I wish to associate myself with the right hon. Gentleman in the tribute and thanks which he paid to the executives and early founders or directors of the Corporation, and those who are in charge of it today, for what they have done.

We in the industry know only too well the difficulties through which the Corporation is passing; we know the type of problem that it has to deal with—the week-to-week problem, the psychological difficulties, the difficulties on the job; all those come into the work of the Corporation when it is assessing advances and loans. We should not conclude, however, that everything in the British film industry on the production side is in a very happy or healthy state of affairs today.

On the contrary, we must keep in mind that since the Corporation came into existence the industry has lost nearly 7,000 to 8,000 personnel of all kinds. Highly skilled technicians are still out of work, highly competent craftsmen and others are working no longer in the British film industry. There are many artists and actors who, due to their specialised training, find it impossible to have more than one or two engagements per year. That is another side of this picture.

Of course it is not the fault of the Corporation. Indeed I would say, with the experience and knowledge of the industry which I possess, that unless the Corporation had come into existence the situation would be blacker than it is today. Nevertheless, hon. Members should not take it for granted that the Corporation is a sort of fairy godmother. It represents rather a little oil which has been poured on to the hot ball-bearings of a machine which is difficult to operate. We should keep the matter in perspective.

In the last year or two we have had the closing down of the studio at Denham, one of the best in the world. The company concerned found itself quite unable to carry on film production because of the economic conditions in the industry. So there is, not a depressing, but a darker side to the story, and we all hope that it has now been cleared up. We hope, too, that in the next three years the Corporation may continue with its work and assist the industry in the way it is now doing.

I would point out to the right hon. Gentleman that the appointment of any successor to Mr. Lawrie presents a difficult task. Mr. Lawrie did his job extremely well, having regard to all the circumstances, and, what is most important, having regard to the mixed personalities who compose the industry. We do not want to make the Corporation either a board of censors or mere moneylenders. We think it necessary that the applicants, or mendicants, of the industry who are seeking State alms should provide satisfactory bona fides, and that the safeguard should be sufficient. The rôle of moneylender ought not to be emphasised. People do not like moneylenders, least of all those who have to approach them.

If I may do so without impertinence, I would suggest to the right hon. Gentleman that in his choice of a successor to Mr. Lawrie he should select someone who has business accumen and who does not regard himself as having a heavensent inspiration that he is a moral rejuvenator of the world, or a censor. I am not casting reflections on anyone who has acted in the past. On the contrary, I have given sincere and genuine support to the work done by other people. But I suggest that a successor should be selected who can combine practical knowledge of the film industry with experience of the problems of production and the difficulties of script writing. Let me hasten to add that I am not a candidate for the position, but there are several people who have the necessary qualifications. If the right hon. Gentleman selects such a person, I think he will find that during the next three years the Corporation will continue to maintain its present high standard.

As to Clause 2, I do not know whether these very agreeable facilities of waiving loans, etc., are possessed by the Board of Inland Revenue. It would be very welcome to many people were that so. I am not happy about Clause 2. I think it requires more careful thought. I recognise the reasons which prompted the drafting of it. I do not wish to hold an inquest on the matter, but we cannot pour£2 million or£3 million into a bottomless bucket and then find facilities for forgetting all about it.

I appreciate more than anyone the great work done by the British Film Finance Corporation and by British Lion. On the other hand, we cannot allow certain tendencies in this industry to go unchecked. Costs have been reduced and certain extravagances, which were a feature of film production before the war and during it, are now happily eliminated, but the facilities provided in the Bill must be examined more closely.

It should be appreciated that there are difficulties about the repayment of loans and interest even when there is a great willingness to do so. Let us, for example, consider two films recently issued by British Lion. In British Lion, as my right hon. Friend has said, we have a team of producers and directors second to none, and they are doing a fine job of work. Part of the money for the films they produce has come from the National Film Finance Corporation and those films are listed in the report.

Two more competently produced films than "Gilbert and Sullivan" and "The Beggar's Opera" one could not wish for, and they reflect considerable credit on all those concerned. I am using those two films merely as examples of many others which I could quote. They reveal high efficiency in presentation, colour, sound, music and the rest. There is not too much "upstage stuff," what we call "highbrow," and they are first-class films, putting over a story.

I do not know what their full cost will ultimately prove to be; but I do know, and it is generally known throughout the industry, that money advanced by the Corporation to assist in the making of those two films has been lost for ever. Unfortunately there is no possibility of the British film-going public supporting those films even to an extent which would result in the recovery of the production cost. In my view, and in the view of many other people in the industry, those two films will be a dead loss so far as the box office is concerned.

British cinema-goers, alas, feel that these are not the type of films which they wish to support. That is very regrettable, because there is nothing wrong with the films. But it means that another succesful film, or two more successful films, will have to be made by British Lion with profits sufficient to cover the production costs and to make up for the losses on the other two. That is the problem of film production as a whole in this country. I have given those two examples of the loss of money so that the House may appreciate the need for some facilities to be given to the Corporation to meet such difficulties.

I associate myself and those sections of the industry which I represent, which are of course non-financial, with the welcome given to this Bill. I support, not only what was said by the President of the Board of Trade, but also by my right hon. Friend the Member for Huyton. I make this appeal to the Government. We have a sort of dress rehearsal or preliminary rehearsal in the film industry before Budget day, when everyone expresses his difficulties and problems. But it should be remembered that whether or not this£6 million is irretrievably lost, whether or not we get any of the money back from the loans, the Government—and this goes for the last Government as well as this—take through the front door about£40 million a year from this industry and then blazon to the world how generous they are by letting out£6 million through the back door. I am not criticising the President of the Board of Trade. My right hon. Friend the Member for Huyton was just as bad, or as good, as the right hon. Gentleman in this matter.

The Cinematograph Films Council does a good job of work in advising the Minister about affairs within its constitution. I should like the Minister, when he gets representations, to make a strong appeal to the Chancellor about the problems of the industry. The Govern- ment should remember that when we refer to this industry we are referring not only to film production and distribution but to nearly 5,000 cinemas on whose successful existence film production ultimately depends.

The Eady fund plus the Film Finance Corporation have saved British films from complete collapse. We cannot afford to allow the industry to collapse, not only for political reasons but for reasons of international prestige. The Eady fund, with the work of the Film Finance Corporation, is keeping the production side in operation. The exhibitors have their own difficulties. They have difficulties even in finding the levy. I trust that when the time comes for the examination of the wider problems, including the cinemas and their employees, the Government will apply their minds with the same breadth of vision and appreciation as they have shown in this Bill. Lastly, when the Bill becomes law, I hope there will be a close examination of the way in which Clause 2 (1) is applied.

12.12 p.m.

Mr. William Shepherd (Cheadle)

The hon. Member for Nottingham, North-West (Mr. O'Brien) speaks with a good knowledge of the film industry, with which he has a very close association. He spoke in his usual agreeable manner. It would be fitting when we are debating this matter to say how much the film industry appreciates the honour he had of being chairman of the Trades Union Congress. It was a great distinction for a small union like the one he represents to have as its general secretary the chairman of the T.U.C. It was not an uneventful 12 months, but perhaps it was not as eventful as the pessimists feared.

The hon. Gentleman has a marked capacity for getting into trouble—

Mr. O'Brien

And I can get out of it too.

Mr. Shepherd

—and he has almost as marked a capacity for getting out of it. The differential between these two opposites really provides all the fire. Yesterday I was reading the journal of a trade in which I am interested, the "Shoe and Leather Record," and I thought I saw that the hon. Gentleman had got further promotion when I saw a reference to, "his highness, the O'Brien." I looked at the photograph and saw that it was not the hon. Gentleman. There seems to be something almost improper in someone other than the hon. Gentleman having the title of "The O'Brien."

It is a long time since we had a debate upon the film industry. During that absence of debating affairs have gone rather better for the production side of the industry. I do not think that there is necessarily any connection between the two, but it is a factor worthy of note. About 12 months ago in the trade Press I made an appeal for the temporary abolition of politics generally on this matter and for the abolition of internal politics within the trade. However, during the interval, we have made a little progress.

Today we are without our Scottish friends, except for my hon. Friend the Member for Banff (Mr. Duthie), who is the sole survivor of the Scottish contingent. That, I think, is a great advantage, because we cannot rationally discuss the British film industry in the presence of Scottish Members. They are almost pathological about British films. I know that there are many difficulties. In Scotland they have such tiny, ill-kept cinemas which cater for small numbers of people that they have to change the programme three times a week. It is quite wrong that the whole of the industry should be held up because Scotsmen want to change their films more often than they change their shirts.

I have no financial interest in the industry. It is often said that I have, but I assure the House that I have not. I make this reference because of some remarks which I intend to make a little later. Like all hon. Gentlemen, I approve the general purpose of this Measure. I will go so far as to say that I agree with the right hon. Gentleman the Member for Huyton (Mr. H. Wilson) that some sort of institution of a specialised nature seems almost necessary as a permanent feature. I am satisfied from the experience of the N.F.F.C. and the general trend in the industry that some sort of institution is necessary for as far as we can see ahead.

The N.F.F.C. has had a lot of critics. Everybody whose job it is to lend money has plenty of critics, and when it will not lend it, the critics become more vociferous than ever. But, by and large, the organi- sation has served a most useful purpose. It has kept afloat the British film industry at a time when, without it, it would have gone under.

I am appalled that there is such a frightful ignorance of what the industry is and what it does. There are hangovers from the past which colour people's views. We ought to get into our minds something about the production side. The common view is that this is the sort of job which is conducted in an haphazard fashion, intermittently, between long bouts of champagne drinking and always in the company of glamorous women. This is not at all true. It is an industry in which there is a lot of hard work. One gets up at 5.30 or 6 a.m. to start the job. It is not by any means the glamorous occupation people imagine.

But what I want to try to stress more particularly is that this is the most difficult activity in the sense that one has to try to marry art with industry. It is true that one does this in the theatre, but the industrial aspect in the theatre is small compared with the mammoth nature that it takes in films. Enormous numbers of people are employed and stages are used which cost as much as£1,000 a week to rig. These are big industrial undertakings and it is indeed a most difficult problem to get a proper balance between art and industry. To do it one must have executive producers of exceptional ability, and the executive producer in this country is the rarest fruit of the industry.

Many people say that this is a lush industry which has spent a lot of money and ask why anybody should give it any assistance. I shall quote one or two figures to show that the industry itself is making considerable efforts to put its own house in order and to do better than it has done in the past. In 1947 the average cost of producing a film was about£250,000. Today the average cost of a first feature film is about£120,000, which is a substantial reduction. When one bears in mind that in the intervening period there has been a considerable increase in costs generally, probably 25 per cent., one appreciates that the effort by the industry has been significant. I would say to hon. Members who look in a rather superior manner upon the industry and say that it is not trying, to appreciate the significance of these facts and realise that the industry is doing its best.

We ought also to appreciate that the industry is not getting very far financially even with a reduction in average costs from£250,000 to£120,000. As to the estimate of probability of profit, the last report of the N.F.F.C. said that the number of films likely to be profitable in 1952 was 15 and the number likely to be unprofitable was the balance between 15 and the total number produced, which was 34.

Mr. O'Brien

Even with the Eady plan.

Mr. Shepherd

If we leave the Eady plan out of consideration, very few of the films will be profitable. So we face the situation that, apart from the prospects of substantial relief in tax for the industry, the industry has as its target further to reduce costs. Although these have now been reduced from£250,000 to£120,000, the industry must now have as its target£100,000 and, if possible,£80,000 a picture. It is possible to produce quite good films at these lower figures.

If we are to reduce costs, two or three things must be done, some of which will not be welcomed by the hon. Member for Nottingham, North-West. First of all, British films are still taking too long on the floor. By very careful planning, the Americans take less time on the floor than we do. There is scope for better planning of the film before it goes on the set. Secondly, there is room for reduction in the cost of craft labour in the studio. This may not be entirely acceptable. From my own observations in the studios in the last two years I find that labour is working very much better than it did, but there are still too many people employed on certain jobs in the studios, and certainly too many are often employed on location. There is a contribution to be made by craft labour towards reducing costs.

Mr. O'Brien

I cannot let that very rash statement go unchallenged. I should like evidence of that. The hon. Gentleman knows very well that there is an agreement about labour, whether it is craft, technical or otherwise, between the British Film Producers Association and the unions which prevents these alleged practices. Would the hon. Gentleman agree to a target of£80,000 to£100,000 per picture if that means, as it must inevitably do, turning the industry into a second feature one?

Mr. Shepherd

I thought it most unlikely that the hon. Gentleman would not intervene when I made that statement. One can always say that everything is well and that no surplus people are employed. After all, when we were in the Army, did we not send up reports saying that everybody in the unit was employed? We could describe what they all did, and it looked nice on paper. I feel—I shall not go further than this—that there is a contribution to be made by craft labour in the studios towards a reduction in costs. I certainly refute the hon. Gentleman's suggestion that we shall be reduced to second feature films if we bring the cost per picture down to£100,000. Bearing in mind the possibilities of new techniques mentioned by the right hon. Member for Huyton, I am satisfied that it is possible materially to reduce present costs.

I want to say a word about the limits on film production in this country. Many people, including the hon. Member for Newcastle-under-Lyme (Mr. Swingler), have complained about our failure to produce enough films. I sympathise with that view, for I should like a greater number of films to be produced here so that we should be less dependent upon the American source of supply, for many reasons, economic, cultural and others. I urge the hon. Member for Newcastle-under-Lyme, and anyone else who thinks along those lines, to have regard to the real limitation on film production.

The real limitation is not the number of studios available. If lack of studios was the only difficulty about making films, how easy our problems would be. The limitation is the creative one; it is the difficulty of getting writers to provide suitable material. Hon. Members should remember the immense difficulty these days about mechanical entertainment. They should remember the almost insatiable demands of mechanical forms of entertainment for new ideas. There we have the fundamental limitation on film production. If we could get more writers, our problems would be very easy. More films could be produced, for directors are readily available, but the creative side is the big difficulty.

Nothing could be more damaging to British film production than an attempt to push our productive capacity beyond the limits of our creative capacity. We did that in 1947–48, and we then produced a series of films which were not worth looking at. That must be avoided at all costs. I would urge those who take the view of the A.T.C. to look at the dangers which are involved in pushing production beyond the limits of creative capacity, and if they do so, I am sure that they will not continue to advocate that line.

The hon. Member for Nottingham, North-West referred to the Entertainments Duty. It is not in order to deal with that subject now, but I feel that something will have to be done in the next Budget not only to assist the producers but also to assist some of the exhibitors. Their case now deserves and demands attention.

With reference to the British Lion Film Corporation, I was always doubtful about the manner in which the loan was made. I did not accept the view expressed by the right hon. Gentleman that it was necessary to make the loan as free of restriction as it was made. There was no question of urgency which made it inevitable that the loan should be cast into the hands of the British Lion Film Corporation without any requirements about items which have been mentioned this morning. There could have been a better attempt to safeguard the interests of the tax-payers. I am sure the right hon. Gentleman will agree that he and the late Sir Stafford Cripps were lax in this respect and that there ought to have been more proper regard for the tax-payers' money.

Mr. Glenvil Hall

While the hon. Gentleman is on that point, and so that we may not have to return to it later, may I remind him that it came out in the reply to a Question which I put to the President of the Board of Trade that this money was advanced under some kind of limitation in the early days and that it has been advanced under the same terms ever since?

Mr. Shepherd

The right hon. Gentleman is not familiar with the circumstances of what happened in this case. As the right hon. Gentleman the Member for Huyton said, this amount was paid to the British Lion Film Corporation and the loan sanctioned in principle before the organising committee was set up, and certainly before the Corporation itself was set up. If I may make a point further against the manner in which it was done, I would say that the Corporation asked for only£2 million, but£3 million was thrust upon them—a rather new experience in the industry.

Mr. H. Wilson

The hon. Gentleman is really getting all his facts wrong. He has given us a very authoriative lecture on the film industry, about which he does not know half as much as my hon. Friend who preceded him. The hon. Gentleman is really misleading the House. I did not say that the loan was made before the organising committee was set up. I said that we expected to make it£2 million. The conditions and terms were worked out as quickly as possible, and among them were some pretty sweeping changes in the British Lion Film Corporation, including the chairmanship, the relation of Sir Alexander Korda to the Corporation and other things. It is quite obvious that the Finance Corporation came in and loaned the additional capital, which was not thrust upon them against the wishes of British Lion, and that, without that loan, the Corporation would have collapsed and so would British Film Production with it.

Mr. Shepherd

The right hon. Gentleman is full of indignation, but he has not controverted what I said. I said that the loan was agreed in principle before the organising committee was set up. I said that the original amount asked for by the Corporation was£2 million, and that they were offered£3 million ultimately. These facts cannot be denied, and I say that sufficient safeguards of the interests of the taxpayer were not made when this loan was granted.

Mrs. Eirene White (Flint, East)

Would the hon. Gentleman not agree that the original figure of£2 million which was suggested by the British Lion Film Corporation was suggested because British Lion at that time was in such a state of disorganisation that it did not know what it needed, and that it was increased to£3 million later when it was possible to discover what was the true state of affairs?

Mr. Shepherd

That might well be, but the hon. Lady is really supporting my case. If British Lion was in such a state of chaos, then it was all the more necessary that the most stringent steps should have been taken by the then Government to see that the interests of the taxpayer were safeguarded. I think that is a point which cannot be denied.

What is going to happen now? As the right hon. Gentleman opposite said, there is in the British Lion organisation some of the best, if not some of the most difficult, talent in the industry, and, since, after all, the British taxpayer is now a major shareholder in British Lion, I want to ask if the House is satisfied that this talent is being used in the best interests of the country and of the film industry. I am by no means satisfied that the best use is being made of the resources of this organisation. As the hon. Member for Nottingham, North-West said, the indications are that the results of this company for this year's trading will be worse than those of last year, which, I believe, were worse than those of the year before

I have reached the conclusion that it might be well and to the advantage of the British Lion Film Corporation if they had a new executive producer, and that someone other than Sir Alexander Korda should take on that job. Sir Alexander Korda was associated with the lush days of the film industry, and he is not attuned to making films at a cost of£120,000 a time. I understand from his recent public pronouncements that he is very interested or more interested in television, and I think it might be to the advantage of both the Corporation and the country if someone else took over his job. If not, I suggest that someone should take on the job of Mr. Drayton, who is a public-spirited man, who took on the chairmanship of the Corporation at a time when things were very difficult. He is doing a job as a public service, but how can he have effective control over so difficult an organisation as a film company if he has 40 or 50 directorships to look after at the same time? I do not think that the job of containing Sir Alexander Korda can be done as a part-time job, and therefore, I suggest that, if Sir Alexander Korda remains as executive producer, a fulltime Chairman should replace Mr. Drayton.

Mr. Glenvil Hall

On a point of order. May I ask you, Mr. Speaker, whether what the hon. Gentleman is now saying comes within the scope of the Bill?

Mr. Speaker

In so far as reference was made to the British Lion Film Corporation by the right hon. Gentleman the President of the Board of Trade in introducing the Bill, and also by the right hon. Gentleman the Member for Huyton, when he replied, I assume that the affairs of the British Lion Film Corporation were related to the Second Reading of this Bill. Perhaps I am in error about that; I have no knowledge of my own on this matter at all.

Mr. Glenvil Hall

The hon. Member for Cheadle (Mr. Shepherd) has referred to the number of directorships held by one of those associated with the company. As far as I know, it is no part of the functions of the President of the Board of Trade either to interfere with an individual in his capacity as a director of other companies or even to appoint him to British Lion, and, therefore, it seems to me possible that what the hon. Gentleman is now saying is very wide of the Bill.

Mr. Speaker

On that point, possibly, if the prosperity of the British Lion Film Corporation is in order on the Bill, as seems to have been accepted on both sides of the House, and if there is, in the hon. Member's opinion, something about the directorate which, if remedied, would improve its financial standing, I cannot see that it is out of order. I would add that, as a general rule, unless an hon. Member feels strongly on the matter, it is wise to avoid mentioning names of members of the public in criticism as far as possible.

Mr. Shepherd

I am grateful for your Ruling. I would add that the taxpayer is a shareholder in this concern at the present time, so that we really ought to have a duty in this House to see that the results of the company are the best that can possibly be achieved. I believe that the suggestions I am making for the reconstruction of the British Lion Film Corporation are really in the interests of the nation as a whole.

I want to refer now, if I may, to something which hon. Gentlemen opposite may regard as even more doubtful, but to which I feel I ought to refer, and which I have considered very carefully before making reference to it. It concerns something in the film industry which, to my mind, is doing great damage. I am not making this reference to this issue because of any recent publicity and still less am I concerned about attacking any individual or individuals, but I am very concerned about the moral tendency among the acting profession in the film industry—

Mr. Harold Lever (Manchester, Cheetham)

On a point of order. Is it really in order to express an opinion—apparently, the hon. Gentleman intends to enlarge on it—about the moral shortcomings of some of the people engaged in the acting and film industries?

Mr. Speaker

I am sorry, but I did not hear that. My attention was for the moment diverted. The hon. Member must keep within the bounds of the Bill. I should have thought that if, as the hon. Member appeared to be, he is now discussing the moral circumstances of people in the industry, it is has nothing to do with the matter before the House.

Mr. Shepherd

I will, of course, defer to your Ruling, and I will only say this. I am quite satisfied in my own mind that this matter is not unconnected with the financial success of the industry, and that the lack of virility on the British screen, as compared with the American screen, is a damaging thing from the point of view of selling our films in the United States.

Mr. H. Wilson

Further to the point of order raised by my right hon. Friend the Member for Colne Valley (Mr. Glenvil Hall). Without in any way reflecting on what the hon. Gentleman has said about the morals of the American industry, because I think it would be out of order to do so, is it not a fact, Mr. Speaker, that your predecessor ruled that Ministers were not responsible in this House for the actions of the Finance Corporation in making loans in respect of particular films? If that was so, is it not a fact that they were even less responsible for the particular actors associated with the production of a particular film; and, if that is so, are they not still less responsible, and is not this Bill even further remote from, the morals of any actors who may be employed in a particular film?

Mr. Speaker

The morals of people employed in the industry seem to me to be extremely remote from the subject before the House, but, on the question of Ministerial responsibility, I would point out a difference. If it is sought to raise a matter on the Motion for the Adjournment or to ask a Parliamentary Question a direct link with Ministerial responsibility is necessary before the matter is in order. But on the Second Reading of a Bill, it has been customary to allow a somewhat wider discussion, so that all aspects of the problem which are relevant can be brought in. That does not, however, include such matters as the hon. Member for Cheadle (Mr. Shepherd) was proceeding to discuss, and I ask him to confine his remarks more closely to the subject matter of the Motion before the House, which is, "That the Bill be now read a Second time."

Mr. Shepherd

I therefore turn to one other aspect: the question of the assistance that might be given to the dubbing side of the industry. I have had a good deal of correspondence with the Board of Trade on this issue and I do not feel satisfied that all that could be done is being done to assist the dubbing side. We allow films to come here which are dubbed in Italy, France and Germany, whereas we cannot have reciprocal rights in those countries. In effect we do not want them, because it is much better that a film should be dubbed in the country of exhibition; this is much better for artistic as well as commercial reasons. I hope that my hon. and learned Friend, when he replies to the debate, will say whether anything further is to be done to strengthen the position of those who are engaged in dubbing in this country.

I am in favour of the Bill. I am satisfied that it fulfils an essential need. A film bank or something of that nature is essential permanently in this country, and I am satisfied that what is now being done, together with the Eady arrangements, will facilitate production for the next three years.

12.44 p.m.

Mr. Kenneth Robinson (St. Pancras, North)

I do not want to detain the House very long, and for that reason I had better not follow the hon. Member for Cheadle (Mr. Shepherd) into his rather distant wanderings. I do, however, support the last point that he made in favour of those companies which are dubbing films in this country, and which are not at present getting the support that they are entitled to expect from the Board of Trade. I hope that the Parliamentary Secretary will deal with that point in winding up the debate.

It is a matter of some satisfaction to hon. Members on this side of the House to have heard the terms in which the President of the Board of Trade moved the Second Reading of the Bill and, indeed, the general attitude of hon. Members opposite. It is somewhat different from their attitude when my right hon. Friend the Member for Huyton (Mr. H. Wilson) introduced the Bill to set up the National Film Finance Corporation in the first place. Somebody has referred to the "limited enthusiasm" on the benches opposite on that occasion. I remember that the present Secretary of State for the Colonies, if he did not exactly try to "drown the baby" by voting against it, at least poured a dangerous amount of cold water on it in its infancy.

I agree with the President of the Board of Trade and my right hon. Friend that the British film industry would never have survived in the last five years had it not been for the National Film Finance Corporation. I go further and say that as long as the present structure of the industry exists, some form of State subsidy or financing will be necessary as far ahead as one can see. The whole record of the Corporation justifies to the hilt the decision of my right hon. Friend the Member for Huyton to set it up in the first instance.

I echo the tributes that have been paid to Mr. James Lawrie, who is leaving the Corporation. To him must go a very great deal of the credit for the success of the Corporation and of its policy. He came to the job without any special knowledge of the film industry. Indeed, that may have been an advantage: he came to it with no friends and no enemies in the industry. He quickly learned what he needed to know and acquired a remarkable sympathy for the film as a medium. The industry found him always businesslike in his dealings, fair and courageous, and he very soon gained their respect. Indeed, he has learned so much that we are now informed that he is himself launching on the perilous seas of film production. The right hon. Gentleman will not find it easy to find a successor to Mr. Lawrie.

The story of N.F.F.C. is not one of unbroken success. To me, one of the greatest disappointments was the failure of the group scheme—not of Group 3, to which I will refer in a moment, but of the other two groups, which somehow got off on the wrong foot. They were designed to assist independent producers, but almost before they started they became integrated with the two big production companies. Now one cannot distinguish a group production from one of the normal productions of the big companies. I think the only thing to do was to wind up the scheme, and I am glad that this has been done.

Group 3, however, as my right hon. Friend the Member for Huyton has said, has made a considerable success on, admittedly, a modest scale. It made a dozen or so films on specifically British topics. They have been films of fresh, pleasant entertainment and have been made on comparatively small budgets. I agree with the hon. Member for Cheadle that there is still a sense of confusion in the industry as between quality and cost. I do not agree with my hon. Friend the Member for Nottingham, North-West that a film which is made for less than£100,000 is necessarily a "B" quality picture. Anyone who makes such an assertion should be silenced for ever by the reply, "'Bicycle Thieves'," which is probably the best film ever produced and which was made, I believe, for about£20,000.

As well as producing some admirable films—including "Brandy for the Parson," "Laxdale Hall" and "The Brave Don't Cry"—Group 3 has given to new and budding talent an opportunity which, as far as I can see, it would not have had anywhere else in the film industry. Perhaps the greatest achievement of Group 3 is one which has been touched on by both the President and my right hon. Friend—the Everest film. In this instance, the film industry and its normal sources of finance were not prepared to put up the money for the film of Everest on any terms that could possibly be accepted by the Royal Geographical Society. The industry were not prepared to take a chance on the risk of failure to climb the mountain. They were asking for far too generous terms for themselves in the event of success. So the Film Finance Corporation stepped in, and through the medium of Group 3 took a chance, in the national interest, and provided the money.

The result, as hon. Members who have seen it will know, is a first-rate film, and one, incidentally, which will make a lot of money for its sponsors and for the Film Finance Corporation. But for the Corporation, we should either have had no film at all about Everest or a worse type of film, something not more than a glorified newsreel.

The other achievement of the Corporation has been this injecting of a sense of economy into the film industry. Their success in that field shows the wisdom of appointing a managing-director with a knowledge of finance and accountancy rather than of the cinema.

The results which one can see from the figures published in the Annual Reports of the Corporation are not, perhaps, spectacular, but when one remembers the general rise in costs, substantial economies have undoubtedly been made. The increase in screen-time per camera day, which is the only index of efficiency, and one that we know to be fairly accurate, is really remarkable. My right hon. Friend said that since the Corporation came into existence there has been an improvement of something like 50 per cent. over-all, which is very creditable.

I now want to say a word or two about Clause 2 of the Bill. This loan to British Lion has always been a millstone round the Corporation's neck, but as the President of the Board of Trade said, this company was facing collapse and had to be helped. I think it was a pity that a few more strings were not attached to the loan—I will go as far as that with the hon. Member for Cheadle—but, nevertheless, something had to be done quickly.

We must all remember that the Film Finance Corporation has, in fact, been doing the job which it set out to do, not on a capital of£6 million, but one of£3 million, and originally£2 million. Can the Parliamentary Secretary tell us what exactly are the proposals with regard to this loan? If he cannot answer today will he give us an assurance that the House will be informed so that, if necessary, we can arrange for a Parliamentary Question and answer?

Does the Parliamentary Secretary know what is the general attitude of the Film Finance Corporation towards television films? That is rather a difficult problem, because films for commercial television would no doubt be made by the same people as are making films for the cinema. But television, of course, is the greatest menace today to the cinema industry.

I want to know whether the Film Finance Corporation is going to encourage the production of television films or not, and whether it is a fact that Sir Alexander Korda has applied to the Corporation for a loan in order to make a series of commercial television films which he proposes should be distributed by the Associated Broadcasting Development Corporation, of which, I understand, he is a director. If that is so, what is the attitude of the Corporation to that request? Does the hon. Gentleman think that it is the proper function of the Film Finance Corporation to aid the production of commercial television films?

Finally, I wish to repeat that we on this side of the House are glad to see one example at least of public enterprise which has not been jettisoned by the Government. I must say that the uncharitable thought crossed my mind that probably one of the explanations for that was that clearly there is not much profit in it.

12.55 p.m.

Mr. Christopher Hollis (Devizes)

I should be very grateful if my hon. Friend the Parliamentary Secretary could clear up two puzzles which are still in my very inexpert mind on this subject. The first is, was my right hon. Friend the Secretary of State for the Colonies right or wrong? I am still inclined to think that he was right, and his argument seems to me to have been an unanswerable one.

I believe that there are two fines which one could reasonably take about films. One can either say that the cinema is a very bad thing from the point of view of wasting a lot of time and morally, and is a highly proper thing to tax, or that it is a very important part of our national life and that we must keep the British cinema industry in production. I should be quite prepared to take on both those lines under suitable circumstances, but what seems odd to me is to take them both on at once. It seems to have been the policy of both the late Government and the present Government, first to tax the industry out of existence, and then to lend it a lot of money in order to bring it back into existence.

It may be that my hon. Friend was right when he said that if we took off the tax altogether, certain other measures would still have to be taken. Nevertheless, that does not seem to alter the principle that if it is highly desirable to take special measures to keep this industry in existence, it is equally ridiculous to tax it at the same time. I cannot see the sense of that double policy.

That is the first point on which I should like my hon. Friend the Parliamentary Secretary to tell me whether my right hon. Friend the Secretary of State for the Colonies and I are right or wrong. I appreciate what my right hon. Friend the President of the Board of Trade said, that, if we were suddenly to withdraw all these loans, a great disruption of the industry would take place. No hon. Member suggests that that should be done. Nor, I fancy, is there any opposition to the actual proposals in this Bill. But again, I should very much like to have my mind clear on the matter, and I should be very grateful if my hon. Friend could clear it for me regarding the real situation of the film industry.

We have heard a great many remarks about the difficulties of the industry and the reasons for those difficulties, and there is doubtless truth in many of the things that have been said. My hon. Friend the Member for Cheadle (Mr. Shepherd) thought that one of the greatest difficulties was the lack of creative capacity of writers. Part of the answer to that, of course, is that it is not an enormously attractive way for a writer to earn his living. Writers are individual people, and a man who has the capacity to write prefers, as a rule, to do so in some other medium than the cinema, where the story is usually altered before it appears before the public.

Mr. Robinson

Does not the hon. Gentleman think that the increased financial rewards offered by the industry go some way to redress the balance?

Mr. Hollis

I certainly do, and I was coming to that point. I thank the hon. Gentleman for his intervention. The increased financial rewards make the situation much more difficult, and it is necessary to pursue a much more economic policy in the cinema industry. In the lush days, people were attracted by extravagant rewards, but now, as the hon. Gentleman said, we have to inject economy into the industry. I am not quite certain whether the Corporation has injected the economy or whether that has been caused by circumstances. I think that perhaps a little too much credit has been given to the Corporation for certain things that have happened simply when the Corporation have been there. However, that is a secondary point.

There is a really important point that I want my right hon. Friend to tell me about. It is a matter about which I am not confident that I know the answer myself, but I think we should know the answer before making up our minds on public policy. To what extent is it true that the difficulties in the British cinema industry are due to certain temporary problems which can be tided over by a policy of loans, and to what extent is it true that, because of developments in television, or for other reasons, we are moving into a new type of society in which the cinema is definitely less popular than it was some years ago before that invention? My impression is that the second is true. We are told that similar difficulties exist in America and that we are moving, for better or worse, into an age, so to speak, of less cinema than in the past.

If that be true, quite clearly it does not mean that for humanitarian, artistic, or other reasons, we should suddenly wish to bring the British cinema to an end. It does mean that public policy should take into account that this is an industry which, of its nature, is bound slightly to decline over the ages. As the hon. Member for Nottingham, North-West (Mr. O'Brien) has pointed out, the fact that fewer people are being employed in the industry today than in the past may be regrettable from the point of the individual, but it may be part of an inevitable tendency of the times. We must recognise that because there are two quite different things to be considered. Should the Government finance the industry to keep it on its present output, or accept the fact that, in the nature of things, there will be a gradual decrease in film production? I do not pretend to know, for certain, the answer. I rather incline to the second; but if the Parliamentary Secretary can enlighten us, it will be easier for us to form a judgment on the Bill.

1.3 p.m.

Mr. Woodrow Wyatt (Birmingham, Aston)

I think I understand something of the problem troubling the hon. Member for Devizes (Mr. Hollis). It is that the Government are moving steadily towards some form of socialism in the film industry but, owing to their doctrinaire prejudices against Socialism, are not prepared to admit it. It is no wonder that the hon. Member is hankering after the good old days of the present Colonial Secretary, who used to deny that any such instruments were necessary in the film industry.

What we have not so far been told is exactly what the Government are going to do about the British Lion Corporation. There is power in the Bill to waive interest and to make all sorts of arrangements for repayment or non-repayment of loans, and to take over shares and debentures. But what exactly are the Government going to do about the Corporation? Why should they not really set at rest the fears of the hon. Member for Devizes and admit that they are using the Corporation as a State trading corporation? Take them over and appoint a managing director, though I would not suggest trying to get rid of the present managing director, Sir Arthur Jarratt, who is extremely capable.

The Government should set out the salary of the directors and the purposes of the British Lion Corporation and not try to pretend that it is private enterprise. It is nothing of the sort, because the British Government have practically bought the Corporation already, and if they take it a little further they will acquire it completely. They should say so and tell us for what purposes they are doing it. I say that because the interest paid on the loans to British Lion amount to£130,000 a year. It makes a trading loss of about£150,000, and if the Government would take them over and not have to pay interest on what is their own money it would cancel itself out. It would then be a public corporation breaking about even, and after all we do not want national corporations, giving service to the public, to do more than break about even. I do not mind if it loses money, because I think it is almost inevitable that, if the British film industry is to be kept going against the intense competition from America, broadly based on a huge home market, money will be lost.

There are reasons why it is more important to lose money than to lose the film industry. The President said it has an effect on our prestige abroad, and of course it has, and if we lost the British film industry we should be poorer nationally and internationally. Indeed, I am told it has brought about£1½million pounds of hard currency into this country since the National Film Finance Corporation was set up, so even if we do not get back all the money in sterling it must be a good investment to get so much back in hard currency.

I think one might have a brief look at what the National Film Finance Corporation are doing, and how they are working. I was sorry, as no doubt every one will be, that Mr. Lawrie is retiring from the Corporation, because he has done so well and made very many friends and few enemies in the film industry. If I may say so, I never knew an industry where those engaged in it were so much against one another, and so inclined to attribute the worst possible motives to each other's actions. I think it is a tribute to him that he has made so many friends.

We might hear more about Sir Michael Balcon. Much criticism has been made, quite unjustly, about his being honorary adviser to the Corporation. He is certainly honorary adviser, but he is also running the Ealing Studios, which has a financial connection with the Finance Corporation in that it receives money from it to produce its films. It is a little difficult to see how a man can be both a business man, operating in the industry and borrowing money from the Finance Corporation to make films, and then put himself into another position in which he, quite impartially, advises the Corporation to lend or not lend money to his potential rivals in the industry. I would be all in favour of Sir Michael Balcon succeeding Mr. Lawrie as managing director of the Corporation because I think there are few people with greater integrity and ability than he, but his present duties and functions should be clearly set out so that he is not put in a position in which it is difficult for him to divide his mind compartmentally.

Mr. Shepherd

Nobody feels that Sir Michael Balcon is not carrying out his task with the greatest ability, and doing it without any regard to his own personal benefit. I know of no one who has done so much, without reward, for the industry.

Mr. Wyatt

I do not know the purpose of the intervention. The hon. Member gave a very inaccurate lecture on the industry a few moments ago.

I am merely saying that, when we are dealing with a situation in which large sums of public money are being spent, and one of the recipients of public money is himself advising, in an honorary capacity and with the greatest integrity, on the spending of the money, the Government ought to be very careful to set out exactly what he is doing, why he should do it, and why he is to be an honorary adviser. I do not object to his being paid or anything else. If I thought he was doing anything wrong I would not say that it would be a very good thing for him to succeed Mr. Lawrie—I am sure he is doing the job admirably. But it is a rule of the House, and one that applies to Ministers, that they cannot act in a dual capacity; that they cannot spend public money when they may also be the recipients of it. If it applies there I do not see why it should not apply to the Film Finance Corporation. The rule is made, not because it is thought that the Ministers are dishonest but because any suspicion that they are, or might be, or could be dishonest should be removed from the public mind.

Again, I understand that there has been some criticism of the way in which Group 3, this very enterprising organisation, has been operating. I gather that there are two main criticisms—first of all, that British Lion Film Corporation were used as, or have now become, the distributors for these films. It is not the fault of the Corporation that they have to go to the British Lion Film Corporation to do the distributing. This, therefore, is an unfair criticism, because the British Lion Film Corporation were the only people competent to stand up to the other distributing agencies and to the circuits in the business.

Another criticism which is very strange is that Group 3, by making seven or eight films a year—and they have made another one since the Report and have already made 12—are putting too many films on the market. This is a peculiar criticism, because the whole object of the Film Finance Corporation was to make more British films. The whole cry originally was that we should have more films. This is a criticism which arises not because of the successful operation of Group 3, which I hope will continue and widen, but because of the state of the film industry, and I am sure it is something which the Government must look at very closely because, broadly speaking, there is now only one circuit left in this country to which independent producers can go in order to try to sell their films.

If we take A.B.C., which is supposed to be one of the circuits open to buying films, we find that they have a system by which their film-showing allocation is already bespoken before they begin any year. That is the case because they take a fixed percentage of films from M.G.M., and they guarantee to take a fixed percentage of films from Warner Bros., who own A.B.C. anyway or have a controlling interest. Those are American films and this is a number into which they will not dig. They also have their own films, which they themselves make in Britain, which occupy some of the time. They take the barest minimum quota of other British films that they can get away with, and that is all that is available to independent film producers. It does not matter how many more British films are made or how good they are; they will not get into the A.B.C. circuit because there is no room for them, for they have their American commitments and their commitments to their own producers. That circuit is not much use to the independent producer.

There are supposed to be two other circuits—the Gaumont-British circuit and the Odeon circuit. As my right hon. Friend the Member for Huyton (Mr. H. Wilson) hinted this morning, these do not amount to two circuits at all. I gather that some years ago he gave permission for them to be treated as two circuits, on the understanding that they would honestly and fairly be operated as two circuits, which is something they have never done. It cannot be said that there are two circuits if the same man does the booking for both and if this man, when approached in his capacity as booking manager for Gaumont-British, knows perfectly well how much Odeon are prepared to offer for the same film because he will be the man to make the offer if, in his capacity as Gaumont-British, he turns it down.

Any suggestion that there are two circuits operated by Rank is fraudulent, for there are not. Yet they get certain advantages, even I think legal advantages, from having two circuits or, rather, from being allowed to describe themselves as two circuits when in fact they are not. The unfortunate independent producer has either to please this gentleman who has two capacities and books for both Rank circuits or he fails altogether. If we are to be able to help the British Lion Film Corporation to do their job effectively, the Board of Trade must look at this position seriously so as to see that those two circuits are divided and that this form of block booking is stopped. At the same time they might well have a look at A.B.C. and see whether their form of block booking, which is being operated at the present time, should be investigated and stopped, too.

1.15 p.m.

Mr. Beverley Baxter (Southgate)

It is a good thing that periodically we should discuss the affairs of the film industry, especially as the State now participates in it both as a benefactor and as a bandit. I refer to the way it helps the industry, on the one hand, and then, through the Chancellor of the Exchequer, on the other hand, takes far too much tax from the theatres themselves.

Certainly the film industry is going through a difficult transitional period. The days of wild extravagance are over. Those were very extraordinary days. I was mixed up with the industry for a short time and I was glad to escape with my sanity reasonably upon its throne.

Directors would shoot one scene 15 times when it did not make the slightest difference to the film which of the 15 they used. The director did that to show his temperament as a genuis. Without it he would have thought he was a low fellow. The 15 takes were then shown in the rushes and finally, to the admiration of the staff, the director, after seeing the rushes, would say, "Number 7", with a Napoleonic gesture. There is a story that eventually they showed a director 15 which were all exactly the same take—not the slightest difference between them. When he said, "Number 15; that is the one I will use", they fired him. In fact they were all the same and he was merely pretending.

Those days are over and we are now moving into realism, both financially and artistically, which I think is healthy, despite the problems which lie ahead and despite the difficulties of production and distribution.

Nevertheless, hon. Members opposite are wrong when they advocate the cheap film. The public are very conscious of the general elegance and mounting of a film, just as they are equally conscious of a film of ideas and perhaps delicacy in the production of which there was no money in the kitty and it was a "starvation" production. We all like the witty French films which are produced on a shoe-string, where they use their brains because they have no money. They are delightful films, but they will not fill the cinemas of the West End any more than they will fill the cinemas in our provincial towns. People want to be taken from the drabness of their homes into a voluptuous scene of colour and they want to see romance and love in terms which are entirely foreign to those they normally understand. We cannot stop that.

For instance, an American film called "The Robe" has just come here. I cannot guess how many hundreds of thousands of dollars have been spent on the set. The fact is that it remains an extremely dull film—but it is wonderful to the eye. It is eminently satisfying to the eye. We must not give the impression that we are a poor country producing cheap films. That would be a great mistake.

I think the hon. Member for Aston (Mr. Wyatt) is right in emphasising the immense importance to us, as the centre of an Empire and Commonwealth, that the British film should carry prestige value, even if it means spending more money than the market represents. I was touring Canada this summer, and wherever I went "The Cruel Sea" was being shown. That was a film glorifying the struggle of this country at sea in the war. It was a glorification of the Royal Navy and the Mercantile Marine. That film was doing untold good to us. It was reminding the Canadians of our common heritage and common struggle against the Germans, and if it had not been done skilfully and at very great expense, despite the wise assistance of the Royal Navy and other Government Departments it could not have carried through its mission.

I wish we had continued to make our classics into films. The Americans have made "Julius Caesar," and they have made it extremely well. It is a pity that we did not make it. With Sir Laurence Olivier we made "Hamlet" and "Henry V." I do not know whether we ever got back our money for those two films, but it is a matter of indifference from a national standpoint. Those two films were made with one of our finest actors, and gave to the cinema public the rich language of the greatest mind which we have ever developed. That is important, and we must be very careful not to become too worried about the balance sheet, provided that there is no foolish extravagance. We must maintain a high level of production and thinking.

The cinema industry need not worry too much about the new mechanical devices, such as Cinemascope, which gives width, and 3-D, which gives depth. The other morning I went to see a 3-D film in which arrows were thrown at me, and I kept on dodging them, but I cannot see that that sort of thing adds very much to a film. All that Cinemascope does is to make the sets so heavy and ponderous that they lean upon the audience and make it very difficult for the actors to keep their personalities.

We have had various lectures upon the health of the industry, but I want to confine my remarks to the international side of the subject, or the Imperial side, if that word may still be used. I would ask the industry to remember that in countries where English is spoken it is not necessarily spoken in exactly the same manner as it is here. Canada is an example, and Canada is a country which likes British films and spends dollars on them. I wish the industry would look at the matter of enunciation. If hon. Members travelled in Canada they would become accustomed to the Canadian voice and enunciation, and would realise that some of our British actors are very hard to understand until the ear becomes accustomed to them.

It is with some diffidence that I criticise anything English, especially with regard to language or enunciation, but it is a widely recognised characteristic of the Englishman that he loses interest at the end of a sentence. I cannot give an imitation here, but we have all met the man who, on being asked, "Where are you going?" has replied, "I am going to Bla-bla-bla"—it is one word in English. It is a point of honour on the West End stage that the last words of a sentence should never be heard by anybody. It is too late to change that tradition, but I suggest that in the films which we send abroad our actors should enunciate so that the untutored Canadian ear can have some idea of what they are talking about.

I am not an enthusiast for State intervention in the arts. I think it has a bad effect in a great many ways. But I feel that this is a different matter. This is not interference. To some extent this is conscience money—giving a little back to an industry from which we take so much. It has to be done. What is more, I shall send out from this House this word of encouragement—that British films are holding their own surprisingly well. Although it is a different kind of film from the usual one, the magnificent production of "A Queen is Crowned" brought back to this country far more than can be expressed in the realm of money.

We must keep our films going, and the amount involved in this case is a small one. I therefore commend the Government for carrying on the good work which the right hon. Member for Huyton (Mr. H. Wilson) began in his time, in assisting an industry which must survive. Even if the Government allow sponsored television programmes—which seems to be doubtful at the present time—television, with its limitations, particularly its social limitations, will no more kill the film than it will the theatre. I wish the film industry good fortune, and I congratulate my favourite Government.

1.27 p.m.

Mrs. Eirene White (Flint, East)

Every person who has spoken in this debate has supported the Bill which we are now discussing and the general principle that some form of State aid is necessary for this industry. If we are to be favoured by a speech from my hon. Friend the Member for Cheetham (Mr. H. Lever), he may express a contrary view, because when we last debated this matter he thought that the film industry should still be financed by angels or "sugar daddies" and, with his limited experience of life, he did not know which was one and which was t'other.

The hon. Member for Devizes (Mr. Hollis) and the hon. Member for South-gate (Mr. Baxter) asked why the Government should take so much money from this industry by way of tax and then feel themselves constrained to return some small portion of it by means of the National Film Finance Corporation. In discussing the affairs of that Corporation, it is most important that we should look a little more closely at this industry and the way in which it draws its money.

The two main ways in which it has, obtained subvention, apart from the normal transactions of business, are by means of the Eady fund and the loans from the National Film Finance Corporation. The Eady fund is relevant to what we are discussing, because if it did not exist it is quite obvious that the amounts channelled through the Corporation would have to be larger than they are at present. The Eady fund is a voluntary arrangement by which the industry obtains at the moment some£2,700,000 a year. It was intended to produce about£3 million. It is not quite doing that, and the new voluntary agreement just concluded is based on the assumption of there being about£2,300,000 a year.

Not all of this money is available for first-feature production, and Sir Henry French pointed out recently that when we have made allowance for the special arrangements for children's films, which,. I know, we all welcome, and for short: films, and when we have made allowances for the films which are made by Hollywood companies in this country, some of them quite properly under the Anglo-American agreement, some of them, we would think, improperly because of the peculiar definition of what is and what is not a British film, the amount left for first-feature production is at present some£2 million. Obviously it will be a good deal less than that under the new agreement unless the Chancellor of the Exchequer can be prevailed upon to take very strong action on the Entertainments Duty.

The difference, after all, between the money which goes into the industry through this Eady fund and the money which goes through the National Film Finance Corporation is that, with the exception of the special arrangements for children's films, the Eady fund money goes to producers indiscriminately, good, bad or indifferent. The National Flm Finance Corporation, on the other hand, have a very much more positive rôle. They are not merely distributors indiscriminately of money which goes generally into production. They have a positive rôle, not so much on the artistic side, where one would hesitate to encourage too much interference but very much on the business side.

Those of us with only a very slight acquaintance with the industry, and that from without, cannot help being impressed by the different atmosphere in the industry now compared with that of the years immediately after the war. We have come well away from the "Nobody Ordered Wolves" period. It may be, as the hon. Gentleman the Member for Devizes suggested, that circumstances in the industry made certain reforms and economies easier, but I think no one would deny that the thoroughly businesslike attitude of Mr. Lawrie and his associates has had a very great deal to do with the new atmosphere in the industry.

That in itself is a strong argument for continuing this method of financing the industry, whereby one can have some positive influence upon it. It must, of course, be properly exercised, but the influence is valuable, and it cannot be obtained by an extension of financing by the Eady fund method, which does not discriminate between one producer and another, and whereby, whether a man is businesslike or not, he gets just so much.

There are one or two points in the report of which we may well ask for further explanation. All of us who have been encouraged by the work of Group 3, which has been touched on by several hon. Members, have been rather disturbed at what paragraph 10 says of the difficulty of obtaining circuit bookings for some of their films. Perhaps the Parliamentary Secretary will enlighten us on this point. I recall that some years ago a committee was set up at the Board of Trade to which films could be referred if circuit bookings were not available for them and yet they were considered of adequate merit I recognise the difficulties of such arrangements, but, on the other hand, if we have films believed to be films of quality that are not given bookings on any of the major circuits, we should at least know what steps are taken about them.

There has been fairly recently a sharp difference of opinion between Mr. Lawrie and the Cinematograph Exhibitors' Association as to the ratings of films. Some of the films which the exhibitors considered not of the very highest class, Mr. Lawrie has pointed out, have done very good business indeed. One would like to know just what the position is there.

Then there is the question of British Lion. I do not want to go into further detail about that, for we have had a good deal of discussion of it today, but I would observe that although most of us who have been interested in the subject had our own shrewd idea of what was happening about the British Lion loan, the public have not been told until today in any clear terms what the position of that loan was. This report of the Corporation is very much more specific as to the conditions of this loan, and they have been amplified in speeches here today. I am glad that both sides, the present Government and my right hon. Friend the Member for Huyton (Mr. H. Wilson) have come more or less clean, at any rate, in this matter of British Lion. Whether one could go as far as my hon. Friend the Member for Aston (Mr. Wyatt) suggested and take over British Lion entirely is very doubtful, I think; but we are entitled to know from the Parliamentary Secretary what the Government's intentions are under Clause 2 of the Bill, and I hope he will be rather more forthcoming than the President of the Board of Trade himself has been.

As to the general position of the industry, there are some very serious warning words on page 6 of the report of the corporation. Admittedly, these were written some months ago, and I think it is true to say that the latest figures of the Board of Trade of admissions to cinemas and cinema bookings show that the very serious decline that some months ago was expected in some quarters of the industry has not taken place. We are very glad of that. On the other hand, there does seem to be a fairly noticeable downward trend; not as sharp as it might have been, but it does seem to be there.

It is still too soon to know what the final influence of television is going to be upon the attendance at cinemas, but it does seem that it is bound to have some influence on it, and that must be taken into account. Some hon. Members today have been suggesting that the cinema and television are completely separate forms of entertainment, but television may very well consist of film, and we should like to know and are entitled to know, as we are discussing something of importance in the financing of the film industry, what the Government have in mind in relation to films used for television purposes.

My hon. Friend the Member for St. Pancras, North (Mr. K. Robinson) wondered whether the Corporation are to be regarded as being in the field for assisting the production of films which may be used for television. We should like to know what the Government's attitude is, because it will affect the whole financial position of the industry and the production of British films for use in television, not merely for exhibition in cinemas. Television film producers may very well be the same people producing films for cinema exhibition.

Are the Government, presuming the House of Lords does not throw out their proposals—and some of us are rather pleased that the House of Lords has not yet been abolished—giving any thought to this very important matter? In the early days of the cinematograph industry the British film industry, I think it is true to say, had hardly a fair start because the Americans, with their secure home market, got in first. We may find the same kind of thing happening again if we have commercial television in this country. In fact, we are told already that the Americans have fully prepared films ready to put on the market as soon as commercial television becomes possible in this country. Are we going to take any steps at all to make certain that the British film industry has a fair share of the television film market as well as of the cinematograph film market?

We have gone into the most elaborate system of precautions, which, as a member of the Cinematograph Films Council, I know only too well, are extremely difficult to enforce, for the protection of the producer of British cinematograph films. Are we going to do something of the same type for the producer who is interested in showing films on television instead of cinema exhibition?

I have raised all these points because they seem to me to be germane to any discussion on the financing of the British film producing industry, and I hope that we shall have at least some indication of the lines on which the Government are thinking. It is true to say that the British film industry is in a much stronger and healthier position than it was some years ago, but I do not think anyone could pretend that it is yet in a position in which it is going to be able to stand entirely on its own feet unaided. In fact, as the hon. Member for Devizes suggested, that position will probably never be reached. The mere possibility of American production with a safe home market for American producers will always make it difficult for the British film industry to manage without some kind of special help.

We welcome the method of help which is extended by this Bill. We welcome the continuation of the Film Finance Corporation. In fact, many of us when we last debated this subject urged very strongly that the Film Finance Corporation should be continued. But whether three years is a long enough period, I should rather doubt. I should have said that by now, surely, we have sufficient experience of this body to make the period one of five years. It is unsettling to the industry not to know how it is going to be financed, and I should have thought by now that we have enough confidence in this body to make the term five years rather than three. Apart from that, I am sure we are all very glad to know-that this experiment, undertaken in the most difficult days of the industry, has proved its worth.

1.43 p.m.

Mr. Harold Lever (Manchester, Cheetham)

My hon. Friend the Member for Flint, East (Mrs. White) has properly referred to my own inexperience of life, which apparently the last debate on this subject revealed when I was unable to distinguish between the functions of a "sugar daddy" and an angel in relation to the film industry. I have since, however, learned that the two functions can be coincidentally embraced by the one person, with not altogether displeasing results from the non-commercial aspects of film finance.

I must also confess, as I usually do when I speak upon economic matters, that it appears that the great modern concept of finance and industry which has evolved has swept by me and left me in utter ignorance of it. The remarks with which the hon. Lady concluded her speech left me completely bewildered. She laments that the Bill is only for another three years and not five years because it is unsettling for an industry not to know how it is going to be financed. That sort of remark leaves me in a state of complete bafflement.

I ought to say that I am going to oppose this Bill, and that I am sorry to introduce a discordant note into this Front and Back bench unanimity which has so far preceded my remarks, but I feel it my duty to oppose this Bill and to invite the House, for reasons which I shall give possibly at greater length than I would normally do, to reject the Bill.

In view of the nature of the debate, I ought to say that I know nothing at all about the cinema industry. The most I can hope to do, therefore, is to bring a breath of refreshing ignorance to this debate, because everyone else who has spoken seems to have a great deal of intimate knowledge of the personalities, finance and other matters concerning the industry, a matter with which I shall deal in a moment or two when I attempt to show the House the wholly unsatisfactory nature of the method of finance which has been provided to this industry.

I ought to tell the House that while I intend, so far as lies within my powers, to deliver at this Government, and even at those who preceded it, as hard knocks as I can upon this subject, I hope it will be understood that I am not concerned with personalities. I have neither affection nor hatred for the persons engaged in the cinema industry. I hope it will be understood that I am speaking on general principle and without in any sense going into the personalities which have emerged in this debate.

What was arranged in 1949? As I understand it, the situation then was that the Government did not know quite what to do about the film industry in the emergency. They felt that they had to act quickly. They wanted time to think out a plan in order to preserve film production in this country. They therefore came to the House and asked for£5 million. I think they got it with remarkable speed and without any debate worth mentioning, and certainly without troubling to inform the House that£2 million of this had already been spoken for before the House was informed that the money was going to be raised at all.

As I am going to deal with the whole question of film finance, I cannot help going back into past history. I do not feel that I can wholly exculpate my colleagues who were in the Government which started this method of financing film production. But I can defend them, as Montaigne defended his friend who was seen entering a house of ill-repute, by saying that vice consists not in going in, but in failing to come out. As the right hon. Member for Huyton (Mr. H. Wilson) entered into these financial premises of doubt, it is for the Minister who is to wind up for the Government to justify him remaining in these unsavoury premises and even, according to the intention manifested in the Bill, remaining there for a further three years.

In the emergency of 1949 my right hon. Friend set up this Corporation. I was doubtful at the time whether this was the right way of financing film production. I also agree that it is desirable to have a native film production if it is commercially and reasonably possible. If the State takes the view that for artistic reasons, on a non-commercial basis, we ought to have a film industry, it is perfectly in order, so far as I am concerned, for the State to set up a non-profit making artistic film industry. What I do not approve of is this method of a film corporation which finances private producers who, if there is a profit, put it in their pockets, and if there is a loss it is borne by the Film Corporation.

I also wholly disapprove of millions of Government money being committed to private companies without the House knowing anything about it. The House votes the money without being told that part of it is committed in advance. Now, page by page, the whole sordid story is unfolded to us. It is only now that we are told what everybody in the inner circle knew a long time ago—that the money which we voted was as good as lost before it was loaned. It is only now that the House is asked to sanction what any reasonable person might have suspected during the last debate when I spoke—namely, the dissipation of public money under the provisions of Clause 2.

I want hon. Members to tear themselves away from these interesting expressions of generalised propositions about artistic impulses in this country, with which I am in agreement, provided they are not obtained by dubious, unsatisfactory and unstable financial methods. If hon. Members would tear themselves away from those general considerations and come to the Bill we are discussing and ask what it is that we are asked to do today, they would see that we are asked to extend this unsatisfactory method whereby public money is made available to private industry—selected private firms—who for one reason or another satisfy some finance Corporation that they ought to have a loan of public money—not a general financing of the industry, to which nobody could be opposed, but the financing of individual private firms at the discretion of a Government sponsored and financed Corporation which we are asked to extend for three years.

Though the original Corporation came into being to give the Government time to think out a plan for the British film industry, no plan has been forthcoming, only more money every time; and it is reasonable for the British film industry, so far as the Board of Trade is concerned, every time they are at their wits' end to come back with another Bill to the House, which is told that the industry cannot pay any longer, so they come to the House for some more money for the film industry. Before I vote for the Bill, I want to know why the Government have not come with a plan for the permanent establishment of means whereby the film industry can be run without continuing this spur-of-the-moment idea brought forward in 1949 with the aim of salvaging British Lion, though that aim was not disclosed.

Turning to Clause 2 of the Bill, I confess that I never thought I should see a rigmarole of this kind in a Bill which purports to be something for the protection of public money. Clause 2 (1) reads: If at any time the Corporation are satisfied with respect to any loan made by them which has fallen due for repayment that, except with harmful consequences to the production of films, the amount of the loan cannot be recovered in accordance with the terms thereof or by means of the remedies available, the Corporation may with the approval of the Board of Trade enter into any financial arrangements with respect to that loan.… What does that mean? In plain terms it means that if the Corporation think that some harm might result to film production, they can make any arrangements they like for waiving or deferring the payment of interest or accepting worthless shares in respect of the loan, as they wish.

There is no requirement in the provision that the firm should be insolvent before it gets this favour at the public expense, no requirement that the Government should be able to investigate the past or safeguard the future—that is being waived. There is no requirement that the Government should satisfy themselves that the firm cannot pay; no requirement that this action on the part of the Government should be financially advisable in the interest of the taxpayer. For example, it is perfectly feasible, as the Clause stands, for a wealthy private profit-making film finance company to come to the Film Finance Corporation and say, "We cannot pay this£½ million that we borrowed from you without prejudicing"—I have forgotten the choice rigmarole used—

Mr. Stephen Swingler (Newcastle-under-Lyme)

Because they have lost the money.

Mr. Lever

There is no such requirement about them having lost the money before they seek the favour of this Clause. My hon. Friend says that they have to prove to the Government that they have lost the money. That is not what the Clause says. It says that if at any time the Corporation are satisfied that the loan cannot be called in without "harmful consequences" to the production of films, they may make arrangements.

Suppose the firm have the money, but say, "We need this£½million that we ought to be giving you because we have some very amusing films which we intend to produce at the earliest possible moment, and, therefore, it will be harmful to demand repayment of that money" then the Film Finance Corporation agree, and go to the President of the Board of Trade. From what we have heard today from the right hon. Gentleman about this Bill, frankly I consider that he will readily agree without any more ado and£½million of public money will go down the drain to follow that which has already been lost. I emphasise again that there is no requirement under this provision that a company should prove or declare itself to be insolvent.

Mr. Swingler

I should like to get clear the point which my hon. Friend is trying to make. I ask him whether he is opposed in all circumstances to Government subsidies from a public corporation to privately-owned industry, or whether he is only opposed in this case of the film industry, because he must have studied the returns that film producers get for their films and the inevitable losses which they incur. My hon. Friend is making these statements against the background of the financial state of the industry.

Mr. Lever

Let me make it perfectly plain to my hon. Friend—and I apologise if I have not already done so—that I do not object to subsidising industries beneficial to the country. If people could prove to me that it was necessary for a company which has not done so before to breed white elephants, I would provide the necessary subsidy, but I would not provide it in the form in which the film industry is getting it—by the appointing of a finance corporation with a board which can, at discretion, lend to some white elephant breeders and not to others. That does not seem to me to be satisfactory.

It is not for me to explain how I would lend the film industry money or provide finance. There are many ways in which industry can have finance made available without setting up such a body as we have for the film industry. My hon. Friend asks what I am worried about, because the film industry is bound to lose money. I would say that all these companies which raise money to make films do not raise it on the basis of an artistic or an emotional impulse; they want the project to make money. If they fail it is surely not for the House to prop them financially, leaving them the good plums but handing the rotten plums to the taxpayer. I object to that very forcibly.

My hon. Friend says that clearly the only case in which the company will ask for the application of Clause 2 (1) is when it cannot pay the money, where it has lost the money. I do not know what is his authority for saying that, because the plainest possible construction of this outrageous Clause is that no such safeguard is provided for the taxpayer.

As the Clause is drawn it is possible for a wealthy company, well able to meet its obligations to the State, to say, "We would rather you did not insist on our making the payment which is owed for interest, or else take debentures or shares, or we shall be short of money for some interesting endeavours which we have ahead of us." It is monstrous that we should empower the Film Finance Corporation to waive Government claims for Government money without inserting some safeguard. One might think that the Parliamentary draftsman had before him, as he sat down to prepare this provision, a prospectus for the South Sea Bubble rather than a Measure to safeguard public money.

Perhaps the right hon. Gentleman is amused, but I wish to remind him that I threatened on the previous occasion, to divide the House if he brought another such Bill forward. The right hon. Gentleman represents a very old and honourable institution for the safeguarding of public money, the British Treasury. The Board of Trade was there with an apparently related purpose. The Treasury has that specific duty to the public, and I am amazed that someone who, on behalf of the Treasury, must believe in ordinary soundness and sanity in finance is prepared to back a Clause which gives permission to do this thing with public money and makes concessions to people who may not need them financially, advances which could be recovered but which may not be recoverable after the concession has been made. I am amazed that the right hon. Gentleman should come to the House and ask for this concession.

Mr. H. Wilson

Will my hon. Friend consider some of the words he has been using daring his rather amazing speech? I particularly heard him twice say something about which he had given me no notice, namely, that I had been responsible for presenting to this House a Bill involving£5 million of Government money without telling the House that some of it had been committed to the British Lion Corporation. If my hon. Friend had taken the trouble to study my Second Reading speech and other announcements made in the House before that time, he would find, in the OFFICIAL REPORT of 2nd December, 1948, c. 2191, that that was made clear to the House before Members were asked to vote this money. Therefore, I cannot allow his words to go unchallenged, although I can understand him not having been here on the occasion of the Second Reading or when the statement was made.

Mr. Lever

My right hon. Friend may recall that I did say that, so far as I could recall, no disclosure was made to the House. If that observation was incorrect, I should like unreservedly to withdraw it. I withdraw the suggestion that this House voted this money when unaware that half of it had been used, but I do not withdraw the criticism I made of the procedure which has been followed about the form of expenditure, or of the right hon. Gentleman bringing a Bill of this sort before the House and keeping it in being by further facilities from time to time, supported by the Government.

So far as I am concerned, the outrage of the conception is that it is sought, apparently, to be able to abate a loan whether or not the debtors, including British Lion, are in a position to pay. I am amazed that a representative of the Treasury should ask for powers of this kind—for the Government to abate a public claim, legally demandable, on a private individual, not on the grounds of commercial necessity, not because such abatement might not result in the eventual loss of the debt, but because of some vague rigmarole about the Film Finance Corporation being satisfied that if they insisted on their legal rights the consequences would be harmful to the production of films.

If anything would convince me that the method chosen for financing films is unsuitable, it is the insistence on that sort of course, and the fact that we are being treated—let us be frank—to such dishonest euphemisms by the President of the Board of Trade. He said—I hope I have his words correctly; I was present when he said them—"It simply makes such arrangements as a prudent creditor would make with his debtor." If there are any creditors anxious to make a similar arrangement with me, I shall be very happy to accommodate them at any time. This is an astonishing arrangement, that a prudent creditor should tell the debtor in advance that he will not insist on the repayment of a loan, if the debtor satisfies him that to do so would incommode the debtor in his production of films.

If this sort of Clause had appeared in connection with the final winding up of what, so far as I am concerned, is an unattractive operation of the Film Finance Corporation, it would not have been so bad. But it is suggested—and this is where my hon. Friend the Member for Newcastle-under-Lyme may be going astray in his assessment of the position I am adopting—that this should be the permanent and rational basis on which film production should be financed.

Mr. Swingler

What other basis is there?

Mr. Lever

Simply because I cannot formulate a different basis on which to finance the film industry that does not require me to support this operation which is being put forward by the Government.

Mr. Swingler

It does not require my hon. Friend to oppose it either.

Mr. Lever

It is not for me to provide here and now an alternative plan.

Mr. Deputy-Speaker (Mr. Hopkin Morris)

The hon. Gentleman should address his remarks to me instead of having a private conversation with his hon. Friend.

Mr. Lever

I am told that, unless I can formulate a comprehensive plan to rescue this rather amazing industry with all its complicated peculiarities from the morass into which it has fallen, I am obliged not to oppose this Bill. Nothing could be more fantastic. The Government have proposed this Bill and they must justify the disposing of public money without any regard for safeguards. It seems to me a very odd position that I am expected to vote for, or to fail to oppose, any scheme, however, wasteful, however profligate, however improvident, provided that I cannot here and now offer to the House some other scheme for rescuing this industry from its financial troubles.

The President of the Board of Trade has come here—and nobody can admire his courage more than I do—and made the remark which I have quoted, that this is simply making the arrangements which a prudent creditor would make with his debtors. I was saying when I was interrupted—

Mr. Glenvil Hall

I thought my hon. Friend had sat down.

Mr. Lever

I had not resumed my seat. Perhaps it would be a great relief to a number of people if I did. I am determined, rightly or wrongly, that the chorus of interrupted praise which we have heard—and which is perhaps natural when we are dealing with this kind of handling of public funds—is going to be interrupted by at least one back-bencher who is concerned with the expenditure of public money; and if, as a result, this Bill is talked out, I think that would be of benefit to the film industry and the taxpayer.

The President of the Board of Trade has had the effrontery to tell the House that by making the arrangements set out in Clause 2 of this Bill he was simply making such arrangements as a prudent creditor would make with his debtors. I invite the Minister who is to reply to tell me whether it is the view of the Treasury, in 1953, that the arrangement set out in the words of this Clause is the kind of arrangement which should be made by a prudent creditor. If the Treasury of this great country adopt the view of the President of the Board of Trade, that this kind of loose, highfalutin vagueness represents the kind of arrangement a prudent creditor would make with his debtors, then we are truly lost as a country. I say that without any hesitation at all. I cannot believe that that is the sincere and honest view of the Treasury, but if it is I fear for the safety of our finances and of our country.

This is not the winding-up Bill of this unfortunate incident in the history of the British Film Finance Corporation. It is merely an extension, the prolonging of the effectiveness of the instrument. It is going on for another three years. I may appear to be a bit eccentric in adopting the attitude I have taken, but to me this is an outrage on the taxpayers. The lending powers of the Corporation are being prolonged for another three years, and every private company is being told that they need not expect to find the Government a harsh lender. The Government will not press them to repay their debts if they find it difficult to do so, or if it will interfere with their aesthetic or artistic production capacity. They are told that in advance.

I am asking in all seriousness if it is to be regarded as the action of an ordinary prudent creditor to tell the debtor in advance, "Of course, old chap, if things get difficult, and you need money for your other projects, and it would hamper you to pay your lawful debts to the public Treasury, we shall not insist on immediate payment. You can pay a few years later, with or without interest, or we will accept debentures, or perhaps a few shares"—which may or may not be worthless?

I have not said anything today through malice. I am asking the Minister in all sincerity whether he does not think that this is far from being the action of a normal prudent creditor; whether he does not think it is an outrage upon the public finances that he should support such an action? I want him to tell the House whether he approves of the idea of public money being released to private companies without the companies being required to declare that it can be paid back; without any guarantee that such loans will be safeguarded, and without any promise by or restriction on the Minister that he shall not give these facilities or abatements if it will prejudice the recoverability of a debt which is clearly recoverable today but which may be lost if these facilities are imported into the Bill. I want an answer.

I have heard all sorts of arguments saying that really the Government are giving the film industry no more than is due. My hon. Friend the Member for Nottingham, North-West (Mr. O'Brien), or the right hon. Gentleman the Member for Huyton, said that the few paltry millions that the Government give back by this sort of legislation is a mere nothing because the industry has contributed many millions by way of taxation at the box office. I never heard a more amazing argument. I am puzzled. As I see that there is no one person present who shares my view about what constitutes sound finance in the industry, I have the modesty to conceive that it is possible that I may be wrong. But I must express my view.

After all, this is a Friday and we are not altogether representative of a full House. Perhaps when this matter comes to be considered with closer care by people with less knowledge of the industry than those who have spoken today, we may get a more impartial and objective assessment of what is and what is not justifiable with public money.

I was dealing with the extraordinary argument of my right hon. Friend the Member for Huyton who says that the industry has been contributing many millions more by way of taxation at the box office than it has got by way of this loose legislation. He might equally well argue that the champagne parties provided by some of the princelings of the industry contribute a great deal to the revenue with another kind of taxation. That is as relevant as saying that the box office produces the money through taxation. It has nothing to do with the British film industry whether the Entertainments Duty brings in money.

The Entertainments Duty will bring in money as long as the general public have the need to be entertained at prices at which they are entertained in the cinemas. If it is desirable to have a British film industry that is another matter, but it has nothing to do with the amount of Entertainments Duty whether we have a film industry or not. The Entertainments Duty does not derive from the industry but from the taxpayers who go to cinemas to watch films of any nationality.

Mr. Swingler

Mostly American.

Mr. Lever

Exactly. Therefore, that sort of argument for having an irrational, unstable and altogether inadequately safeguarded means of producing finance for the industry will not hold water.

The right hon. Gentleman said that this is an experimental piece of nationalisation. If the Government can sell that sort of argument to hon. Gentlemen on this side of the House so as to pass a Bill filching away millions of public money into the hands of private companies—

Mr. P. Thorneycroft

Read it and see.

Mr. Lever

The right hon. Gentleman says that it is the prudent finance of an ordinary creditor—which it plainly is not, because no ordinary creditor would possibly enter into this sort of arrangement. If any "ordinary creditor" is as prudent as the President of the Board of Trade, I should like to meet him. I assure him that there will be no shortage of potential customers for loans if this is representative of an ordinary prudent creditor.

That is how the matter was sold to the other side of the House. To this side of the House it is to be sold as an experiment in nationalisation. I have never heard anything so staggering or amazing. Let us consider the history of the Film Finance Corporation and how it has nationalised the British Lion Corporation. The British Lion Corporation got heavily into debt. It was on the point of ruin. It could not meet its obligations and it had a vast array of debts. As a result of all this the British film production industry might have suffered damage.

So, as an interesting experiment in film nationalisation, the Government provided£3 million for a bankrupt company to pay its debts. Those debts were incurred in the lush days when film producers lived like Babylonian princes in an Arabian nights kind of dream spending any amount of money on any neurotic or megalomaniac extravagances. We heard from the hon. Member for South-gate (Mr. Baxter) about the 15 takes and the 12 takes of the same scene. That is how the company incurred£2 million or£3 million of debts.

Then the British Government provide, through the taxpayer,£3 million which they will not get back, as we are now told in a casual aside by the President of the Board of Trade. The Minister said that we probably will not get a penny of it back.

Mr. P. Thorneycroft

I did not say that we should not get a penny of it back. I said exactly the same as last year—that£1 million had been written off as a loss.

Mr. Lever

Again I am inaccurate. The Minister merely tossed aside£1 million and not£3 million. As the Minister denies that£3 million has been cast away, I should like him to say honestly and sincerely how much he would give for the other£2 million of the loan which remains, especially if the House passes this Bill in its present form with this fantastic provision in it, the like of which has never been seen before in this House with regard to public funds.

The right hon. Gentleman stays silent, but this is relevant. If it is relevant to deny that£3 million has been cast away, and he says that it is only£1 million, what value does the right hon. Gentleman place on the other£2 million today, and what value does he place on that if the House is foolish enough to give him and the Corporation the power to abate the other£2 million? I am ready to give way to let him say whether I am far wrong in saying that the£3 million has been cast away.

That proposition is sold to the House with talk of it being an experiment in nationalisation. A few more experiments in nationalisation like that will cost a few hundred million pounds and the Government will be operating half the bankrupt companies in the country. That is an interesting idea of Socialism—that every time a capitalist company, by reason of wild extravagances, cannot meet its obligations, the British Government should step forward, pay the debts and get a worthless bag of assets. Even the right hon. Gentleman did not refer to the assets. He referred to the facilities. The debts of the bankrupt company are all thrown on to the back of the taxpayer, and that is called an experiment in nationalisation. If that is nationalisation, or Socialism, it is something I profoundly oppose, because it is beneficial to the bankrupt extravagances of these companies rather than to the taxpayer.

Again, the right hon. Gentleman welcomed the Bill because he said that it begins to clear up the British Lion situation. I must say, even at the risk of offending every hon. Member, that it is time that somebody said something about all this dishonest double-speaking. Clearing up the British Lion situation means getting back the public money that was invested to rescue the Corporation. It does not mean entering into some sort of dishonest wangle to give back to the company any solvency on condition that it gives some worthless script in return to the Treasury.

A fine clearing up of the situation that is. I hope that as a result of my intervention the Minister will be able to give some assurance that not one penny of the assets of British Lion will be released to shareholders until the Government debt is satisfied. I hope that he will be able to say that immediate steps will be taken to secure a charge upon those assets. Have the Film Finance Corporation taken steps to ensure that the£3 million loan by the Government is the first charge on these assets before the shareholders or any other private persons speculating in the company have got anything? If clearing up the British Lion situation or any other debts situation means operating the dubious and unworthy provisions in Clause 2 (1), I should like to see as many situations as possible remain not cleared up.

It is all right to talk, as someone did, about the Bill being a vote of confidence in the National Film Finance Corporation. I have nothing against the Corporation, and nothing even against Mr. Lawrie. I understand that Mr. Lawrie, with the approval and admiration of the President of the Board of Trade, has laid down new standards as to what approved credit is, especially when handling public money. I understand that the right hon. Gentleman has agreed to Mr. Lawrie's laying down his post and going into private industry in the film trade. I have never met Mr. Lawrie, and I have nothing against him, and I do not wish to say anything damaging to individuals in this House, but I am bound to say it is a very good and most advantageous way of fitting oneself for dealing with the assets of a certain industry if for some years before entering the industry one has been able to lend money of the kind the Corporation can lend to the industry, and on the terms that the Corporation will lend it. It is wrong. We have a most ludicrous situation. I could hardly believe my ears when I heard of it.

A note of sanity was struck by my hon. Friend the Member for Aston (Mr. Wyatt). He had the temerity to complain about Sir Michael Balcon—a person whom I do not know, but he is no doubt a worthy, admirable, honest, delightful, witty and talented person—as being, on the one hand, an adviser of some sort to the Corporation and, on the other, a borrower from the Corporation. My hon. Friend the Member for Aston pointed out that this is an absolutely intolerable situation. He commented far too mildly on it, but the mildness of his comment did not prevent some hon. Members on the other side of the House saying what a worthy man Sir Michael was and how wrong it was to criticise the Corporation.

But it is disgraceful and a public outrage that money should be handled in this way, and that on the one hand we should have a man borrowing money from the Corporation, and, on the other, the same man serving the Corporation in an advisory capacity. The Minister representing the Treasury must share my view, and the Treasury must do so also. There has never been anything like it in British history. We have never had public money handled in this way. We have never had a person standing one day as an adviser on the disbursement of public money, the next day borrowing money from the organisation, and the following day again advising the body on the lending of its money. It is a shocking outrage and a shocking descent in British finance. I am glad that the honour has fallen on me of protesting today in the most forcible terms.

I hope that by the time the debate has finished the Government will understand that if they come back again, as I warned them on the last occasion, they will have a very unpleasant reminder of their old-fashioned duties of protecting the public purse, such as does not tend to come out in debates in which only a fraction of the membership of the House takes part. If the Government come again with this sort of thing, I shall be even more vigorous and unpleasant in my opposition, not from personal spite or malice or from personal interest in the industry, because I neither know nor care about the personalities in it, but because I care a great deal that such outrageous statements should not be made about the way in which public finance should be conducted. This method of conducting it should not be passed in a glorified chorus of murmurs of approval from all sections of the House, all of which are highly articulate and all of which seem liable to be biased in their views because some of their expertese in the matter has been gained by contact with the industry which the House is being asked to finance.

This sort of arrangement smacks much more of the kind of finance arranged by Central European Governments, such as in the Weimar Republic and in Austria, before the last war. It was the kind of thing which led to corruption and political scandals, and from every angle it is to be deplored. This is not British finance. It flies in the face of all that is best in British finance.

Mr. Leslie Hale (Oldham, West)

The Weimar Republic?

Mr. Lever

My hon. Friend questions my reference to the Weimar Republic. There is an interesting piece of history there.

Mr. Deputy-Speaker

I doubt whether that interesting piece of history has anything to do with the Bill.

Mr. Lever

I have said, Mr. Deputy-Speaker, that I am not at all loth to talk out the Bill. It may be that my physical capacity to do so may not be adequate, but I submit that it is relevant to criticism of the financial arrangement suggested by the Bill to say that it is very much like the kind of financial arrangement which brought disaster and corruption to other Governments before the war. That is what I am saying. With great respect, if I can satisfy the House that this is precisely the sort of evil, unstable finance which flies in the face of all that is best in the British tradition of finance, by merely echoing what happened and brought about the ruin of Central European Governments, in order to satisfy the curiosity of the House—

Mr. Hale

I thought at first that I was following the argument of my hon. Friend about the British Lion breeding sugar elephants in the South Seas, but between Babylon and Weimar I lost the trend, and if my hon. Friend could bring me back to it I should be grateful.

Mr. Lever

I cannot undertake to bring my hon. Friend back on the trail when he gets lost, although I am ready to do my best. If he wants me to recapitulate, which would be very flattering—

Mr. Deputy-Speaker

Recapitulation is also out of order if it becomes tedious.

Mr. Lever

I am prevented from recapitulating by the rules of the House rather than by any lack of good spirit on my part. This history relating to the Weimar Republic is interesting, and it is relevant to note that this is precisely the kind of finance which was employed in Germany between the wars. The Junkers were financed in some such loose way as this, and in the end they got a vested interest in keeping this type of financing going, and this led to the pollution of German politics. Various industries had a vested interest and the tendency was to have a lobby in the legislature. That is what is likely to happen here.

Why should this be restricted to films when the same Minister who will defend this profligacy will at the time of the next Budget reiterate the demands of the Chancellor for Purchase Tax, which is taxing many of the ancient industrial skills of this country, of which there are examples in my county of Lancashire, out of existence. It is a little odd that we should be spending millions without question in subsidising the film industry in this unsatisfactory way, when an equally valid claim for finance can be made for some of the finer counts of the textile industry which have been ruthlessly squeezed out of existence by Purchase Tax.

For example, the weaving of Sea Island cotton has as much right to be regarded as an artistic and useful industry as is accorded the gentlemen from the British Lion Corporation and Sir Alexander Korda. It is true that those in that industry do not possess yachts in the central Mediterranean where they can ponder on artistic matters and they have no lobby in this House; they have only the views of hon. Members who think that sensible, useful industries which have played a profitable part in our past economy should not be strangled out of existence by the high level of taxation which is necessary because of profligacy in other industries, with the formation of mushroom organisations and inadequate supervision of the way money is, in the first place, spent, and, in the second place, released from debt.

The Bill reveals the depth of insolence to which the Government have descended. The Government are prepared to come to the House and cast the Bill at us. The Government have not looked at the Clause. Certainly the Treasury have not done so. There is not even a safeguard in Clause 2 that when they have released a man from millions of pounds of debt, the Government will not again lend him more money. There is nothing laying down that the debt shall only be released on condition that no further sums shall be loaned in the meantime, and there are no safeguards as to how the company shall conduct its affairs. There is no safeguard as to the grounds on which the money should be released under the terms of the Clause. Of course, the Minister will say "All this is ridiculous; we can rely on the good sense of the Film Finance Corporation and the President of the Board of Trade to issue no fresh money to people who have defaulted." If that is so, why do they not put it in the Bill? Will the Minister, in his reply—if he has time for a reply—

The Parliamentary Secretary to the Board of Trade (Mr. Henry Strauss)

Whether or not I shall have time to reply will depend to some extent on the hon. Member who is now addressing the House.

Mr. Lever

I understand that nobody else is anxious to address the House.

Mr. Glenvil Hall

Oh, no; there are several of my hon. Friends.

Mr. Lever

I did not know that.

Mr. Deputy-Speaker

Is that a private conversation, because, if intended for me, I cannot hear it.

Mr. Lever

I was sincerely under the impression that no, other hon. Member wanted to speak, and, if I saw any possibility of encouraging hon. Members in talking out this Bill, I tell the House quite frankly that I should like to talk it out. I should like to see whether the Government can get 100 hon. Members in order to move the Closure to see the Bill through, because I am not at all anxious to see it go through without a protest being made for the benefit of other hon. Members not at present in the House.

I now understand that certain people are interested in this debate and anxious to speak, and I am not going to adopt the drastic measure of talking the Bill out if by so doing I cut out other people who have valid contributions to make. I would not do that, but it seems to me that the only other person interested in the debate is my right hon. Friend the Member for Colne Valley (Mr. Glenvil Hall). Nevertheless, rather than risk shutting out any other hon. Members, I shall now bring my remarks to a close.

To summarise the points I have made, which may have been lost in indignation, I want to ask the Minister some specific questions. Does he agree with the President of the Board of Trade that the provivisions of Clause 2 as now drafted represent the actions of a normal prudent creditor as described by the President of the Board of Trade? I hope the hon. Gentleman will treat the House to an answer. Does he think that that is the normal prudent action of a creditor, having specific regard to the fact that future loans are in contemplation and that this Bill prolongs the life of the Finance Corporation for another three years?

Does he think it right that Government money should be advanced to private people in profit-making commerce who are able to get advances under Government loans, when power is given to insist on the repayment of the loan, not on grounds of their insolvency, but on the grounds that to insist on repayment of the loan would result in something harmful to British films? Does he think that the Treasury should support the extraordinary arrangement whereby one person acts as adviser to a body handling public money, and, on the other hand, comes in and borrows money for his own firm from that organisation? Does he approve of that? The House is entitled to an answer about it.

Further, I want to ask him this question. Does he think that the paragraph in the Report of the Finance Corporation purporting to deal with the past activities of the Finance Corporation and the millions of Government money involved—the paragraph headed "The Last Lap"—is a satisfactory explanation to the public of what has been the benefit of the millions that have been spent? Does he think that merely to prolong the emergency decision of the then President of the Board of Trade in 1949 to set up an organisation avowedly to cover an emergency, and to deal with the bankruptcy or the impending bankruptcy of the British Lion Film Corporation—to continue that indefinitely—is desirable in the interests of either film production or financing the industry of this country? Does he approve of that emergency being further extended? Will he tell the House when, if ever, the Government will produce a plan, because the original Bill was, as it were, to buy time? Will the Government not produce their own plan for the industry? When, if ever, are they going to produce such a plan, or do they intend to continue the procedure of introducing Bills for the dissipation of public money in this way?

I should like to know what steps the Treasury will take, when these abatements are made and the financial arrangements are carried on in the manner proposed, to safeguard this public money? Are they going to play any part in this matter at all, or, again, have we to rely on the President of the Board of Trade, who expresses somewhat Bohemian views as to what constitutes the actions of a normal prudent creditor?

Finally, I have protested in the manner I have done, and I have never before taken so much of the time of the House, perhaps, so discourteously, because everyone seemed to be so entirely satisfied with the handling of the matter which has caused and still causes me the deepest anxiety on a Bill which, as far as I am concerned, I regard as a piece of Government insolence as produced in the form in which it is now drafted. It is mere pretence for the President to tell us that the Bill is a statutory instrument purporting to protect public funds. I am most dissatisfied with the Government's behaviour in not producing any stable plan for the industry, and I am profoundly alarmed by the habit of the Government, whenever they cannot think of a plan, to assume that the problem can be solved by dissipating public funds in a quite reckless and spectacular manner.

Thus, we have a real problem always being raised, and a fantasy solution put forward. Any solution that costs enough money does not have to be justified. If anybody criticises it, we get people like my right hon. Friend the Member for Colne Valley, who, much as I respect him, says, "You tell us your plan." It is like the Ministry of Transport, who thinks there is no real transport problem in this country, but feels that we can waste a few million pounds of public money in setting up epileptic orange groves in our squares with winking amber beacons, which are a menace to the lives not only of motorists but of pedestrians in the area. That sort of answer will not do at all.

It is for the Government, before they start spending, to see that, not only there is a problem to meet, but that they are meeting it with a solution which is really related to the problem and is not merely a fantasy. When we get a real problem in the film industry, the Government, instead of meeting that real problem, propose to continue for another year what has been done before. Why stop at five? It does not follow that that is a real answer to the problem.

I was moved with deep emotion when the hon. Member for Southgate lauded artistic activity to the skies. This business of raising a problem and then spending money on purported solutions just will not do. As fast as the British public and the overtaxed British taxpayer increase their productivity and achieve, as they think, more prosperity, somebody thinks out these crackpot solutions for various matters, which may have to commend them the one point that they appear to have some relationship to the real problem, but which do nothing towards solving it and involve the expenditure of a few million pounds of public money, without any proved direct connection between the expenditure and the problem which it is sought to solve by that expenditure.

That is why nowadays, as fast as the public tries to raise its standard of life, it finds that the Government, of whichever political complexion, are dissipating that money all over the world and in this country. Therefore, we get the attitude of anybody such as myself, who objects to it but who is criticised on all sides of the House, and who, like myself, does not expect to be popular, either for the length of my speech or for the form which it has taken.

Of course, we have to maintain good relations, as the hon. Member for South- gate said; we must use the films as propaganda. There is a real problem in spreading the good name of the country in other parts of the world. But no attempt is made to study the problem and to find what will solve it. We arrange, on the one hand, for subsidised films, through a wholly unsatisfactory mechanism. On the other hand, we find that allowances of many thousands of pounds are provided by the British public in all sorts of capitals, minor capitals and provincial towns all over the world; and the British public are amazed that, as fast as they work, the Government find their so-called solutions by dissipating more public money.

Again and again there have been appeals for a national theatre, opera or music hall. We can afford to support all kinds of mushroom film companies to produce artistic films of all kinds. I have been reading the list of then. I confess that I have not read all the artistic creations—

Mr. Baxter

The Government do subsidise opera and they do subsidise the theatre. The one thing that has not been subsidised, except by this means, is the films.

Mr. Lever

The hon. Member has a great advantage over many others in that he has not heard the greater part of my speech; he thereby comes freshly to the interchange and to the argument. I do not begrudge him the relaxation that he has enjoyed while others, perhaps, have had my speech forced upon them.

Mr. Baxter

I heard the first three-quarters of an hour of the judgment.

Mr. Lever

It may yet remain to be seen whether there are 100 Members in the House available to the Government to push this most unsatisfactory Measure through, with its repulsive Clause 2, the most unsatisfactory Clause ever to have appeared in a Bill relating to finance which I have seen in the years that I have been in the House or in any accidental contact with matters concerning finance in legislation prior to that time.

The hon. Member for Southgate made the point that the Government do finance other artistic activities, but they do not finance them in this way. The Government do not set up a body possessed of millions of pounds of public money that can go round distributing, at its complete discretion, millions to private profit-making companies, loans which they are told in advance will not be harshly enforced against them. They are now told that in advance, if they had not suspected it before. I must be fair to the Minister, whose ideas of a normal prudent creditor are not mine.

Any film producer with half an eye open must have known when he saw the first Bill that this was easy money and nobody would enforce the repayment of it. But in case there was some naïve fool in the industry who did not realise that repayment of this money would not be enforced in an ordinary, commercial way from him, the Minister has taken good care to bring in another Bill, to be cited if it ever becomes law—which I am sure it will not do in the form in which it has been drafted; I do not believe that when the House examines the nature of Clause 2 it will ever accept it in that form—as the Cinematograph Film Production (Special Loans) Act, 1953.

That is in case any would-be borrower under the Cinematograph Film Production (Special Loans) Act, 1949, held aloof from helping himself to public funds because he thought he might have the funds harshly demanded back of him with prejudice to film production. In case anybody had thought that—admittedly, only a naïve person would have thought it—the Government come forward in 1953 with another Bill saying that they will lend money for another three years, and that borrowers need not worry unduly about it; and that rather than tread on their artistic toes, the Government will take share certificates, debentures or any other attractive or artistic paper which the company can provide—in short, anything other than the payment of its obligation.

I am amazed that the hon. Member for Southgate does not leap to my side, in spite of his interest in artistic matters. I thought that he would at least want these artistic matters to be financed in a sound and reputable way. The Clause does not even provide for declarations of insolvency; no declaration has to be made. On the other hand, a borrower can be rolling in money and the Clause can be operated in his favour. In case any hon. Member says that the Minister will give assurances that no ridiculous use would be made of the Clause, I am reminded of the story of the lover who caught his mistress in the act of infidelity. She leapt at him and said, "You cannot love me any more. You prefer to believe the evidence of your own eyes rather than my assurances." I am in the same position as far as any assurances are to be given here, if there is time to give them. I doubt whether they would be of any value to the House. If any assurances are to be given about the way in which the Clause will be operated, I tell the Minister in advance that I do not give twopence for them, and the House would be most unwise to place the smallest reliance on the general assurances from a Minister who has given the most extraordinary expressions about a normal ordinary creditor-borrower relationship.

If the Minister really meant to safeguard public funds, he should have put some simple wording into the Clause. If the House is foolish enough to give the Bill a Second Reading, I shall help the Minister by giving him Amendments to this dishonest Clause 2. He could put in an Amendment in the third line that the amount should be released provided the debtor satisfies the Treasury or the Board of Trade that the money is not available or would not become available.

That is not the only safeguard that ought to be in the Bill. It is an outrage that it should come in this form. The President of the Board of Trade, because of the Bohemian notions he has expressed on this matter, completely forfeits my confidence as far as protecting the public purse is concerned. The president of the Film Corporation is liable to retire any year, with the plaudits of the Minister concerned, into private industry or into the film industry—apparently, that is a normal and proper thing, and nobody can object to it. He and the Minister between them are given power in the Clause as it stands to give away public money, to waive lawful obligations, without any requirement that the money should not be available by the debtor, without any requirement of an ordinary sensible kind to safeguard the assets. I am not saying that the Government should be any harsher than a normal prudent creditor, although I do not have the same views as the President of the Board of Trade as to what constitutes a normal prudent creditor. I see no reason why the State should not protect its interests in a reasonable way. Nobody suggests that the Film Corporation—

Mr. Deputy-Speaker

I do not wish to interrupt the hon. Member, but he is repeating an argument which I have heard more than once during the course of the afternoon. I must warn him that there is a rule against tedious repetition.

Mr. Lever

I am fortified by the fact that one of my hon. Friends says that it may be repetition but that it is not tedious. Of course, that would not be a view that would commend itself to those who have an interest, for one reason or another, in steam-rolling the Bill through the House and preventing full and proper consideration on Second Reading. Hon. Members are not slow to point out the many admitted deficiencies that I have as a Member of the House. I do not by any means put myself forward as a Member of virtue, but it cannot be claimed that in the past I have been in the habit of tediously taking up the time of the House.

Mr. Deputy-Speaker

That is not what I said. I did not say that the hon. Member was tediously taking up the time of the House. What I am complaining of is tedious repetition.

Mr. Baxter

May I point out, Mr. Deputy-Speaker, that at 25 minutes to three the hon. Gentleman used the word "Finally," and that it is now 10 minutes to three? Is that not misleading the House?

Mr. Deputy-Speaker

That is not a matter for me to decide.

Mr. Lever

The hon. Member for Southgate is the last person who would want to insist on consistency in a political or any other debate. When I used the prefatory word "Finally," I had reason to believe that if I endeavoured to talk out this Bill—as I would very much like to do—before saying "finally," some hon. Members on this side of the House or on the benches opposite would thereby be denied expressions of opinions, ideas and views on this Bill which they would very much like to address to the House, and, rather than suppress their views by any desire on my part to talk out the Bill, I was prepared to sit down as long ago as 25 minutes to three, as the hon. Member for Southgate very rightly said.

But since then much has happened. I have had it brought to my notice that the only injury the House will suffer if I continue speaking until 4 o'clock is that if the Government are unable to muster 100 Members to move the Closure, then they lose the Bill.

Mr. Deputy-Speaker

I have nothing whatever to do with the hon. Member's expression of views. He is now repeating two arguments which I have already heard him repeat, and he must not go on repeating those arguments. The hon. Member is entitled to express any view he likes, but he is not entitled to repeat arguments to the point of becoming tedious, because otherwise I must direct him to resume his seat.

Mr. Hale

On a point of order. Surely, the Rule is that an hon. Member must not be guilty of tedious repetition, so that when an hon. Member at the beginning of his speech outlines the form of argument he proposes to put forward and then proceeds to develop it, there can be no question of tedious repetition.

Mr. Deputy-Speaker

I have listened to the arguments of the hon. Member, and I listened to them before the hon. Member for Oldham, West (Mr. Hale) came into the Chamber, and he is repeating them in the same form as I heard him do earlier.

Mr. Lever

I will, of course, be guided by you, Mr. Deputy-Speaker, but I think I am entitled to pray in aid my former conduct in this House. This is the first time that anyone has suggested that I have been tedious or repetitive. In these circumstances, I hope that I shall be given some warning—

Mr. Deputy-Speaker

That is precisely what I am now doing.

Mr. Lever

Of course, I take it that the warning you have given me, Mr. Deputy-Speaker, is intended to guide me. I understand that there are two operative words. I may be tedious but not repetitive at one and the same time, and I may be repetitive provided that I am not tedious.

Mr. Deputy-Speaker

And the hon. Member must also relate his remarks to the Bill.

Mr. Lever

I am sure the whole House has given great study to this matter of how millions of pounds of public money are being handled, and obviously one of the things of interest to them is the title of some of the films not yet started.

It may be argued, as I am seeking to defeat this Bill, that if I did defeat it no more finance would be available for these titles, and that people like the hon. Member for Southgate would come here complaining that I have been responsible for stifling an artistic-endeavour enterprise. But, in the event of this Bill being defeated, the Government would have to do what they promised to do years ago—produce a plan for the film industry instead of buying time at the expense of the taxpayer.

Look at the films which are being held up. There is, for instance, "The Intruder"—

Mr. H. Wilson

As in the earlier part of his speech my hon. Friend accused me of many misdemeanours which he later withdrew, and as, unfortunately—this is a matter of which I have already given notice to the Government Front Bench—I have to catch an early train, I hope he will acquit me of any discourtesy towards him if I do not wait to hear the end of his speech.

Mr. Baxter

Before the hon. Member proceeds to read out the list of films he has in mind, may I point out to him that "The Intruder" was shown months ago and is finished?

Mr. Lever

I had better deal with my right hon. Friend first. Let me say at once that I will acquit him of discourtesy in all circumstances, and only hope that he will acquit me of being reactionary in the matter of the Film Finance Corporation. I have a great admiration for my right hon. Friend, even though he has to leave before I finish my speech, and if I have wrongly accused him, I will, if he likes, withdraw it; but he did inform the House that he had committed the country to lend£3 million or£4 million to the British Lion Corporation.

Mr. Wilson

I am sorry that in offering to withdraw a previous inaccuracy my hon. Friend should be guilty of another inaccuracy. What I told the House was that we lent British Lion £1 million, and I gave all the circumstances in which that has been done. Therefore, I hope that my hon. Friend will not pursue a new error. Once again, I apologise to my hon. Friend, having listened to the introduction of his speech with great interest, that I shall be unable to hear him develop it until 4 o'clock.

Mr. Glenvil Hall

Before my hon. Friend gets up again, and as it may be quite a time before we see him again in this House, may I correct a further inaccuracy on his part? He is under the impression that the hon. and learned Member for Norwich, South (Mr. H. Strauss) is at the Treasury. May I assure him that he is not?

Mr. Lever

I gather that the purpose of my right hon. Friend's intervention was twofold. In the first place, it was to suggest that after my intervention in this debate today it was unlikely that I should be visible again in the House for some time. I am sure my right hon. Friend is very welcome to whatever pride such an observation gives him. I congratulate him on his wit, and can only say that such interventions will be recognised as valuable and useful.

Secondly, he wished to make it clear that the Treasury are not to be held responsible for the arrangements of the Film Finance Corporation, or anything done under that Corporation. He implied that if I thought that the Minister who was to reply to this debate was from the Treasury, I had obviously not noticed that the hon. and learned Gentleman had been transferred to the Board of Trade.

When I last heard the hon. and learned Gentleman speak, I understood that he was speaking on behalf of the Treasury on a previous Bill dealing with this matter, and which I opposed. If I am wrong, I apologise. Nevertheless, it seems to me that the Treasury ought to, be represented here today, because if they are not, how is the House to be informed about what protection is available to public money? A Lord Commissioner of the Treasury has just left the Chamber as if he had no concern with it.

Mr. Dudley Williams (Exeter)

Is it in order, Mr. Deputy-Speaker, for the Treasurer of Her Majesty's Household himself to be referred to as a Lord Commissioner of the Treasury?

Mr. Deputy-Speaker

I cannot be responsible for whether the titles are correct or not.

Mr. Lever

I understand he is a Lord of the Treasury—that there is a Lord of the Treasury with us, the hon. Gentleman whom I saw earlier in the Chamber. We have two Lords of the Treasury. If I have an assurance that one of the Lords of the Treasury is going to reply, I may well consider the possibility of yielding my place for him to tell us his point of view about the fantastic state of the finances of the Corporation, but not if we are to have something of the kind of Bohemianism to which the President treated us to.

I know that I shall be given full allowance for the difficulties which are placed in my way. I welcome helpful and intelligent interruptions by hon. Members. Many of the interventions are of a helpful character which enable me to elucidate the argument and to clarify the points in dispute, but some of them are calculated to confuse me, and I hope I shall be given full allowance for that when it comes to the question of whether I shall resume my place before 4 o'clock.

I want to review some of the films which, so far as I can see from the report of 8th April, 1953, were then either in production or not yet started. I understand from the hon. Member for South-gate that "The Intruder" has not only been started, but shown and gone away to distant parts of the Empire. I am sure much to his satisfaction. Probably it would be to mine, if I had had the opportunity to see this interesting film, financed by public money, and one, no doubt, of the minority that will, so to speak, be able to look its lender in the face and say that it has paid back the money spent on it.

It seems a little odd that we should be informed in this document, dated 8th April, 1953, that this film was then not even started. If that is the case, I think it reflects very seriously on the nature of the information given to the House, because "The Intruder" is listed, in April, 1953, in the last report of the Film Finance Corporation, as a film not yet started. Now we are told, and I am sure not without reliable evidence—possibly even of the hon. Member's own eyes—that the film has been shown, and has gone away round the world. It must have been very quickly produced. I doubt very much whether a film not yet started in April, 1953, could have been produced, shown, and gone round the world by November, 1953.

Other films impending were, I feel, not altogether inappropriate to the matter we are discussing, and that must be of some interest to the hon. Member for Cheadle (Mr. Shepherd), who was anxious to raise matters connected with public morality. But you will remember, Sir, that I intervened to object to that as being out of order, and having done so it would be hardly becoming were I to embark on any such field of exposition. As I say, other films were "The Rogue's Company," "The Straw Man," "The Angel who Pawned His Harp" and "Puffer."

Mr. Swingler

"Her Harp."

Mr. Lever

"The Angel who Pawned Her Harp." These seem to be extraordinarily relevant titles in connection with a Corporation which conducts its finances as this does.

I understand that the hon. Member for Flint, East drew the attention of the House to my own inexperience of these matters, which made itself so evident in the last debate on the subject, when I revealed that I did not know the difference between an angel and a sugar daddy. I can only wish the hon. Lady would have taken my general education more in hand in the interval since then, and not to have left it to a brief exchange on the Floor of the House in regard to these theatrical matters. I understand that in the days before we had the new views about creditor-debtor relations, as explained by the President of the Board of Trade in a Conservative Government, an angel was the man who put up the risk capital for theatrical and cinematograph enterprises. I am bound to say that that is precisely what I object to in the present Bill and in the present financial organisation of the film industry; the Government step in, or rush in, where the angels fear to tread. It may be said that "The Angel who Pawned Her Harp" is an entirely satisfactory film for such a misguided and misconceived organisation as the Film Finance Corporation to finance.

It is one thing to have private enterprise producing films which may be of positive artistic merit, producing them for gain and backed by another man known, I understand, as an angel, who hopes to gain something himself as a result of the transaction. But it should not be a matter excluded from the consideration of the House, that many of the inducements to the private investor to act as an angel are not available to the State, because some of them are noncommercial and in some way relate to a connection with the cinema entertainments industry which, though it does not produce commercial reward, often promises emotional satisfactions of another character which are available to the private angels but which, in the nature of things, cannot be enjoyed by the State when it rushes in to act where the angels have feared to tread. No one would want any of the representatives of the State to take over the rights which in the past have been enjoyed by private angels, who, when deprived of their financial rewards for their pluck, were tempted to console themselves in other directions.

Let us consider the present situation of the film industry. Either we have to come to a new approach, or we have to continue with the old one. [Laughter.] The House must not with levity assume, and on inadequate evidence and virtually no argument, that the old method, now proposed to be continued by the Bill in even worse circumstances than those of the past, is necessarily the right one. I have been urged to suggest what else could be done. Before we examine what could be done, let us see what is wrong with the present set-up.

Mr. Norman Smith (Nottingham, South)

My hon. Friend refers to the present set-up of the cinematograph industry. Does he think it is the same set-up as that which existed one-and-a-half hours ago?

Mr. Lever

Unfortunately, one of the penalties one pays for attempting to speak in the House for a considerable time is that the events in the world outside may be moving rapidly, so that by the time one has concluded, the speech is out of date. The remedies proposed in all seriousness may have become antiquated with the passing of time before one has finished or the Closure has been moved by the Government Whip.

Mr. J. Langford-Holt (Shrewsbury)

"Puffers" may have finished by now.

Mr. Lever

All sorts of things may have happened in the interval, and it is very useful to think that there are these inducements to brevity on the part of hon. Members. I claim this in all sincerity, however: until I rose, the House was clearly in one union of agreeability, all anxious to dissipate the national funds, and had it not been for that I should not have found it necessary to oppose the Bill in this way today.

If I had seen that there were some critical Members in the House, fulfilling the rôle of watch dogs of public funds, opposing, questioning and demanding to know by what right the Government ask for these most extraordinary powers granted in Clause 2—if one hon. Member had said, "When, in the history of the British Government, has public money been handled under the provisions of a Clause as astounding as Clause 2?" I might not have spoken for so long. I ask hon. Members to look at this Clause before they vote in support of their Whips at 4 o'clock, if I am able to interest the House until that time. I am sure there is no Member who, if he paid due regard to the wording of the Clause, and due regard to the duties of his constituency and the expenditure of public money, would approve this Clause.

I hope the House will believe that it is the necessity of the situation, and my endeavour to achieve a certain objective in respect of this Bill, which compel me to be more diverting than I should normally be, and more lengthy or repetitive than I should want to be. I ask the House to consider the unwisdom of this Bill, the reckless nature of the provisions of Clause 2, and the extraordinary proposals of the President of the Board of Trade about what constitutes normal and creditable behaviour in business. As I said at the beginning of my speech, the reason I am anxious to elaborate until a late hour in the day is to enable the House to come to its senses.

The President of the Board of Trade expounded the history of this matter. It is a history which could not be expounded in a whole day if one wanted to go into the interesting financial detail relevant to it, but in a few casual asides the right hon. Gentleman purported to explain how a few million pounds of public money has gone in this peculiar arrangement with the Corporation, and how the few million pounds still remaining in the coffers will go under the provisions of Clause 2, whereby he and the President of the Corporation will have the power to remit the debt. It is clear that it relieves many private companies from their obligations.

There has been an attempt to camouflage that fact, because the Bill says that shares or debentures may be taken in satisfaction, but the House should not be misled about the values which will attach to shares and debentures thrown to the Board of Trade or the Treasury. As I said, they will get shares in a bankrupt, worthless or un-solvent company.

Clause 2 (1) lays down the provision under which the President of the Board of Trade may authorise the waiving of a claim in respect of public money, but it attempts to camouflage the intention that this operation means accepting these bonds and debentures and abandoning public money. It is camouflaged by much talk of eventual recovery, without harmful consequences, of the whole or part of the amount of any loan. In case anybody should be taken in and suppose that there is really an intention on the part of the Government to behave like the normal prudent creditor, in the sense used by the President of the Board of Trade, subsection (2) gives the game away.

This subsection reads: Where for the time being, under any such arrangements with respect to a loan, the Corporation are receiving no payment or are receiving smaller payments than they were to have received under the terms of the loan, the Board of Trade may with the approval of the Treasury postpone or remit in whole or in part any payments directed by the Board under subsection (2) of section four of the principal Act … and so on. This is a most important point. What happens when this procedure is set up? Subsection (1) gives the Government power to waive certain of the normal creditor rights of the Government or the Corporation in respect of public money. However, all that is hedged around, as I have suggested, by dishonest language talking about the eventual recovery of the loan by the acceptance of shares or debentures and the like.

I would ask the Government, do they really think they are going to get the loan back? The President himself seemed to doubt it. Look at Clause 2 which I just read in part. I am not trying to weary the House by so doing. If I were, I should read the full Clause. I have read only the relevant part of it. Clause 2 allows the Government to throw out money and then this is camouflaged by this language in Clause 2 about their going to get part of it back by and by from the sky or somewhere in the form of paper or debentures. Clause 2 gives the game away, because the National Film Finance Corporation get that money, which the President of the Board of Trade is giving away, from the Board of Trade, and, of course, they owe the President of the Board of Trade that money.

If, however, they lend it to a film producer, and he begins to repay the money, he can go to the President of the Board of Trade, better he can go to our Bohemian President of the Board of Trade, and he can say to him, "Look old chap, I cannot pay back this money. I have got the money in the bank. Oh, yes, I have got the money in the bank. I have tons of assets, but I cannot pay back your money, because if I do that will be harmful to the British film industry, harmful to all my production plans, and I have got the most grandiose schemes of film production."

Then the National Film Finance Corporation can waive the interest. The President says that under the powers conferred by Clause 2 that can be done. At least, he has said those things in the House, and if the House allows him to have the Bill, he will have them, but if for any reason the House does not allow him to have the Bill, he will not be able to say these things and the people who had the money will have to pay it back under the same obligation of repayment that any ordinary, honest debtor has.

However, if the President of the Board of Trade gets the Bill a film producer will be able to say to him or to the National Film Finance Corporation, "I am sorry, old chap, but I cannot pay the money back because if I do that will hamper my artistic film production, so let me leave the money in the bank, where it will be available for future productions." Whereupon the President of the Board of Trade will say, according to the most remarkable views he has expressed in the House today, that will be permitted.

Really, the right hon. Gentleman cannot throw all these public funds down the drain in the sight of everybody, money which is paid out of money obtained by the taxation—and very heavy taxation at that—of our working people in this land, It was all very well before the war, if I may interject this consideration at this point, for it is relevant when we are considering handing over public money in this way, when the Government really ought to have some regard to the financial position of this nation. It was all very well before the war with such generosity to say, "We will do this or that because it is worth while doing and there are a few rich people who can finance it out of Surtax." But that is not so today. All this money that is to be paid out to people in film production with not the slightest intention of paying it back is being dragged out of the pockets of the working people of the country.

No single, solitary Member of the House, apart from myself, has protested against this course, this generosity that I have outlined to the House, this interesting duet in philanthropy played between the President of the Board of Trade and the National Film Finance Corporation. I should say the trio, because, of course, there are three of them. There are the President of the Board of Trade with his peculiar views, the National Film Finance Corporation, and the film producer, who, by virtue of this Measure, were it to become an Act, could say, "Look, old chap, do not have the£500,000 due. Let me use it for films. "The President says," That is all right. You find it very inconvenient, do you not, if we get our money back from you, instead of allowing you to leave it in the bank? If you pay it back it will have harmful consequences on film production?" The Corporation say, of course—

Mr. Glenvil Hall

On a point of order. As you are aware, Mr. Speaker, anyone speaking in this House speaks in the knowledge that he does so with privilege, and can, therefore, say anything that he likes provided it is within the rules of debate. My hon. Friend has made aspersions on quite a number of individuals who will be quite unable to reply for themselves. I wonder if this House, through you, would afford that protection for those individuals?

Mr. Speaker

In reply to the point of order, I had occasion to indicate earlier today that though Members have privilege in this House, there is a deep responsibility upon them not to use it in a way which would injure individuals who are not here to reply for themselves. Beyond that, there is nothing that I can do.

Mrs. White

So far as I am aware, Mr. Speaker, my hon. Friend has not mentioned anybody by name in the way in which the hon. Member for Cheadle (Mr. W. Shepherd) did earlier when he made particular personal references.

Mr. Glenvil Hall

Further to that point of order. I was thinking particularly of the references which my hon. Friend the Member for Cheetham has made to independent producers who, according to him, take this money with no thought of repaying it, even though they have the money wherewith to repay any loans made to them.

Mr. Speaker

I am afraid I cannot intervene. The responsibility is on the hon. Member not to abuse his privilege so as to injure innocent persons outside.

Mr. Lever

The intervention is the more revealing by the fact of its having been made than for any substance in the charge which has been made against me. It will be well within the recollection of everybody that I have not aspersed a single person in any way whatsoever. One of the points which I have yet to deal with, if there is time, is the way in which this Film Finance Corporation has led to this kind of sordid debate in this House, which is no credit to the House of Commons—a matter which I will come to in a moment or two when I have dealt with more material and directly relevant matter.

The Parliamentary Secretary to the Board of Trade is partly responsible for the arrangement for disbursing this money—or does he shrug away all responsibility for it in relation to 1949? I understand that that is the present whisper which goes across the tacitly agreed Front Bench to cover up their own errors in the dissipation of public money. I was interested in the fact that the hon. and learned Gentleman sought on two occasions to introduce into the debate references to the probability or otherwise of my being present in the Chamber, though the precise relevance of that to the matter which is under discussion today is not very obvious.

Mr. Speaker

I agree with the hon. Member that the relevance of what he is now saying to the Motion under discussion is not very obvious. The hon. Member has now addressed the House for quite a long time. As to what he said about the credit of this House, I would recall to him that that rests with every hon. Member. I hope he will now himself address his remarks to the Motion before the House.

Mr. Lever

If you please, Mr. Speaker. As the right hon. Member for Colne Valley (Mr. Glenvil Hall), did raise a point of order and suggest that I have been guilty of abusing the privilege of the House by aspersing individual people, which is the only way of abusing the privilege, and as it was monstrously unjust of him to take that point of order since it is well within the recollection of every impartial hon. Member—

Mr. Speaker

I have dealt with that point of order. The hon. Member is not entitled to go on discussing it.

Mr. Lever

If you please, Mr. Speaker. I will come to the point that I was discussing when I was interrupted, when I was dealing with the arrangements made by this intolerable Clause 2 for the release of debts of film producers who use public money. Mr. Speaker, I am put in a difficult position by the request which you have made. I am placed in the dilemma of wondering whether greater discredit is brought upon the House of Commons by accepting the Second Reading of a Bill in this form, than by listening to a somewhat more extended speech than I would have otherwise have made.

Mr. Speaker

There will be a free vote if a Division is called. The House is not coerced in any way towards approving the Bill. It is a matter for the House. The House is normally permitted to come to a decision on the matter.

Mr. Lever

Then I have been wasting my efforts owing to a misconception. If you had given me your guidance on this matter a little earlier, Mr. Speaker, I might have made my remarks more briefly. As I understand it, if a Member is in his place at 4 o'clock and is still discussing the Bill, the Government will not be able to obtain the Second Reading of the Bill without enforcing a Closure, and for this purpose 100 Members are required. If I have been addressing the House at greater length than would be necessary, being under that misapprehension, and I am now enlightened about it, then I see the point. But, subject to your ruling, Sir, much as I regret having to do it—indeed, I wish there were others prepared to take up the cudgels on behalf of the taxpayer; I hope that at 4 o'clock there will be an hon. Member—

Mr. Hale

If I may be forgiven for intervening, I have listened to this debate for a considerable time, and although I appreciate that my hon. Friend has made many relevant points on the Bill, on which I had no decided views, which is why I am here because I am anxious to make up my mind, my hon. Friend has really proposed no alternative policy at all. This is a major industry which has received assistance that has certainly done good. My hon. Friend has not given any information which he can give, and has a duty to give, on Second Reading about what, in the circumstances, he would do.

Mr. Lever

My hon. Friend is placing an unfair burden on me in view of the limits of time at my disposal. Had he expressed his curiosity earlier, I should have attempted to satisfy it. But I cannot be deflected, though there seems to be great anxiety to deflect me, from the point to which I was directing the attention of the House—this appalling subsection. I will come to the hon. Member's point in a moment. The proof that this subsection is, as I have asserted, merely a camouflage device for the casting away of public money to private persons engaged for profit is to be found in subsection (2), which I have read. I am entitled to make my points without the repeated interruption of people who are anxious not really to make points against me but to destroy the tenor of my speech.

The point about the subsection is that it reveals the intention of the Government to give away public money because the money conceded when the President sanctions the abatement of the Government's claim or the Finance Corporation's claim was borrowed by the Film Finance Corporation from the Board of Trade. In subsection (2) there is no nonsense about getting debentures and shares and entering into any arrangements. All the cackle is cut when it comes to dealings between the Board of Trade and the Finance Corporation. It says: the Board of Trade may with the approval of the Treasury postpone or remit in whole or in part any payments directed by the Board.… So, when subsection (1) has operated and the President of the Board of Trade and the Corporation have made concessions at the expense of the taxpayer but which are camouflaged because the Corporation is getting a large number of paper shares or debentures—the camouflage in that subsection—the Corporation have to go to the Board of Trade and say "We cannot get the money but it is all right." Thus dust is thrown in the eyes of Members when it is desired to get this important provision through on a Friday afternoon.

There is complete understanding between the Board of Trade and the Corporation about what is being done, that is, the abandoning of a claim by the public purse on private speculative industry. That is made clear by subsection (2). Incidentally I understand that a certain amount of supercilious badinage has been going on between the hon. and learned Member who is waiting impatiently to present the Government's case, and the hon. Member for Colne, who has been anxious to make interjections in the debate calculated only to bring my speech to an end.

Mr. Glenvil Hall

The hon. Member for Colne is not in his place.

Mr. Lever

It is very funny but the cap seems to fit even if a geographical location is slightly different.

Mr. Frederick Gough (Horsham)

On a point of order. Is it in order for an hon. Member to put his foot on the seat while addressing the House?

Mr. Speaker

There is no rule against it, but it is very ungainly.

Mr. Lever

One of the penalties one must put up with for adopting this kind of opposition for this kind of legislation when the House is falling from its high state of watchdog of the public purse is that one attracts a certain amount of unattractive adjectives. You will understand, Mr. Speaker, that I did not place my foot on the seat other than in a moment of abstraction, which is understandable in view of the lengthy and involved character of the discourse.

Anxious as I am to complete what I have to say before the clock strikes four in case the Government should not have the necessary Members to enforce the Closure, it is becoming difficult if I cannot do it without frivolous interruptions which have nothing to do with the matter in hand. I was at the point where I was saying that there has been a good deal of supercilious badinage taking place between the right hon. Gentleman, who apparently does not represent Colne but some other constituency in the North, and the Parliamentary Secretary to the Board of Trade to the effect—

Mr. Glenvil Hall

I must intervene and say that I have not spoken to the hon. and learned Gentleman the Parliamentary Secretary to the Board of Trade. I have not referred to him at all today, nor have I corresponded with him.

Mr. H. Strauss

I confirm what the right hon. Gentleman the Member for Colne Valley (Mr. Glenvil Hall) has said. I spoke to another right hon. Gentleman on the Front Bench opposite, not in any frivolous argument, but to inquire whether, in the unlikely event of the hon. Member for Cheetham (Mr. H. Lever) sitting down, he wished to reply from the Front Bench opposite. If I may introduce an unfamiliar notion into the head of the hon. Member for Cheetham, it was a question of courtesy.

Mr. Lever

I have been told, Mr. Deputy-Speaker, that I am in danger of being out of order. I have been told by an hon. Lady that my experience of life is inadequate. I have been told by you that I was in danger of being ungainly, and now, quite the most remarkable of my experiences this afternoon, I am told by the hon. and learned Gentleman that he is going to teach me about courtesy. I must attend any classes he feels himself capable of giving, if he thinks himself suitably qualified to conduct them and that any great number of persons will benefit by them. But he is inaccurate in his recollection, or else I am very inaccurate in my hearing. I heard him saying, in relation to what I was arguing about the Treasury, "What does he know about that?"—[Interruption.]—well, the hon. and learned Gentleman did say it and I did hear it. I did not mean to quote it in detail against him—

Mr. Glenvil Hall

The hon. Gentleman is quite wrong.

Mr. Lever

The right hon. Gentleman is mistaken. But if I can come to the point, it is this. It has been said that there is no one from the Treasury to reply, but if some representative of the Treasury were winding up for the Government, and could explain the whole gist of the Bill, and what safeguards there are of public money—instead of the Lords of the Treasury sitting idly by—I should be quite prepared to give way. But I understand that we are to be treated to a junior version of what has been said by the President of the Board of Trade, and if the master did not give me anything like satisfaction, how can I expect the Parliamentary Secretary to be any more helpful or reassuring?

I am told that this is nothing to do with the Treasury. But Clause 2 (2) of this Bill says: …the Board of Trade may with the approval of the Treasury postpone or remit in whole or in part any payments directed by the Board under subsection (2) of section four of the principal Act.… In effect it amounts to this: that after we have gone through the first stage, whereby the President of the Board of Trade and the Film Finance Corporation throw away public money without any sort of safeguards, as I have already said, the Treasury have to find the money from somewhere. With respect to the President of the Board of Trade and the Film Finance Corporation, the only people who can finance the manifestations of this extraordinary financial set-up are the taxpayers. The money has to come from them.

So the money is borrowed from the Board of Trade. But when the Board of Trade wants its money back it will not get it, because the Film Finance Corporation has given it away to private enterprise in this speculative industry. Therefore, as the Board of Trade will be bound to collect the money from the Finance Corporation, and as the Finance Corporation would not have the money, the Board of Trade will have to bankrupt it, which would be wholly desirable. But this subsection (2) is a guard against any such proceedings. Because when the Board of Trade goes to the Film Finance Corporation asking whether those debtors are solvent or not, the President of the Board of Trade has committed his Department, under subsection (2), not to get back the money which his Department has lent to the Film Finance Corporation.

But the Board of Trade has to get the sanction of the Treasury to the remission of any debts. When the Film Finance Corporation comes with a fait accompli to the Board of Trade and asks for remission, it has to get the permission of the Treasury. But when the Board of Trade and the Film Finance Corporation are dissipating public money, they do not need the permission of the Treasury.

That is not a mere academic point. The public are entitled to rely upon the Treasury in all matters connected with the disbursement of public funds. If it is desirable—and that is admitted by the Government by the wording of this subsection—to have the intervention of the Treasury watchdog between the Corporation and the Board of Trade, where one would think the greatest trust would prevail, why do not we have the Treasury along when the dissipation of the money is taking place? Why are they carefully excluded from the arrangement?

The right hon. Gentleman who thought that I was casting aspersions on independent film producers because I said that they were borrowing money which I did not think they would repay, ought to note that this provision is specifically provided for defaulters. It is to enable people to default on public money without the necessity of proving that they ought to default. It is to enable them to default as soon as they can persuade the President of the Board of Trade and the Corporation that not to default would have harmful consequences on the production of films.

It must be relevant that when the Board of Trade desires to remit from its claims against the Corporation the money which the Corporation has remitted from its claims against private industry, the Board of Trade should get the sanction of the Treasury. The Treasury will want to know what it is all about. Therefore, why have not the Treasury to be consulted when the mischief is done? They are brought in only when the horse has been let out of the stable.

Clause 2 (1), in effect, allows the stable door to be opened and the public horse to bolt without the inspection of the Treasury groom. It is only when the horse has safely bolted off into some private speculative film industrialist's hands that the communal property involved in the communal horse is brought under the guard of the Treasury watchdog. Why are the Treasury brought in when it is least necessary—when the damage has been done? Why do not we have the benefit of Treasury surveillance of the transaction when it is most costly from the public point of view which is, of course, when the money is being lost and when the President, with his novel views, and the Corporation are waiving public claims. That is when the money is lost. It is not when the Board of Trade are waiving their claims on the Corporation. The money has already been lost by then.

Why should we have no Treasury representative? I hope that when I have finished there will be time for further argument and for somebody else to ensure that the debate is carried on satisfactorily. I hope that we shall have more time in which to debate the matter. There is more interest in the debate now than there was when the President of the Board of Trade was outlining the interesting financial history of the Corporation and all the wonderful benevolent actions which it is supposed to have taken for the benefit of British films.

A good deal of the waste of public money derives from a fault of logic. This brings me to another point. I am sorry that my hon. Friend the Member for Oldham, West (Mr. Hale), who asked me to outline my policy in relation to films, is not in the House at the moment. I hope that he will return before I resume my seat. There is a very easy fallacy of logic which, if persisted in, could result literally in the ruin of this country. When it is felt that something ought to be done, one considers it and decides whether it is desirable. One might say that if the answer is "Yes," one ought, therefore, to do it. That is a complete fallacy in logic.

Two questions ought to intervene, and they have not intervened in the case of the National Film Finance Corporation. The first is, "How much would it cost?" Having established what it will cost the public purse, one should then set off the good which is expected to result against the sum which one expects to spend. On the basis, not of some generalised feeling that one is doing good, but that one is doing enough good for the amount of public money involved, one proceeds to the decision whether to undertake the work

There are lots of things which are good. It is like the history book in which events are divided into good events and bad events. Of course it is good to encourage film production. It would also be good to give every lad a champagne supper at the expense of the State the day he reached his majority. It would cost the country several million pounds to do that, but most of us would feel that we should not undertake that good work—some hon. Members may not think it would be good—because we should not be getting value for the money.

That argument can apply to the film industry. I beg hon. Members to ask themselves not merely whether it is a good thing to have British film production and British film exports, but also whether we are getting value for the public money expended in producing the films, whether there is not a better way in which to organise it than the way the Government seek to do it, and whether the way the Government are suggesting in their legislation is consistent with the principles of sound finance and consistent with honest principles as exemplified in the past by the British Treasury or whether it represents waste and corruption in the handling of British funds.

Is it wise to put people in a position where duty and interest conflict? It has never been challenged that gross irregularities have occurred in the past. If I had time, I would deal with them. There are other things which are inevitable also. [Interruption.] I will give way if any hon. Member wishes to say something; I am sure it would be a helpful intervention. It would be improper for me to speak about the political ancestry and traditions of the present occupant of the Chair, but I should have thought that anyone who cherished all that is best in Liberal principles would object most strongly to the ideas and background which have led to the method of handling public money which is contained in the Bill. It is admitted that the most elementary notions on the correct conduct of public finance have been flouted, and when they have been criticised, however mildly, hon. Members have sprung up to criticise the criticism. Some hon. Members attack me bitterly, but they seem to be anxious about their own interests.

There has been too much anxiety to get these proposals sanctioned for my liking. Why was it necessary to steamroller the Bill through? There is no hurry for it. Why has it been introduced now? This is 1953 and we know that the Government have a very heavy legislative programme ahead, having many enterprising and ambitious notions which should finally result in electoral catastrophe. Apart from the need to play safe, why do they produce a Bill of this kind now? There must be some reason for it. Under the old Act, the National Film Finance Corporation could exist for another year, so the Government had plenty of time. Until I came on the scene today, it looked as if the Government had no opposition to the Bill. Why did they therefore bring in the Bill this year? I hope to get an assurance from the Minister. He will not have time to give it to me today, but I hope he will give it to me on another occasion. I want to know why the Government have brought in the Bill now.

This Bill is a waste of public funds. What is the urgency for it? The reason why it is being brought in may well be that there is something urgent contemplated—the kind of thing like the Bill which brought the Finance Corporation into being—or that somebody wants to straighten out its affairs. If the necessary chorus of three which I have already described, and which I cannot repeat without risk of being called tediously repetitive—[Interruption.] I should like to repeat, however, for the benefit of those hon. Members who have not read it, that the Bill is being rushed through—although I hope the House will not allow it—because of party loyalty.

Now, party loyalty is a very fine thing, and the party system is a very fine thing, and, on most occasions, brevity of discussion in this House is also a very fine thing, but there are occasions on which the Government have been trying to rush through a Bill because of the risk that some hon. Member might wish to take his stand on the principles of sound finance, especially when applied to cinema industrialists, which might get support from other hon. Members. I am glad to see that the hon. Member for Devizes (Mr. Hollis) is in his place, because I have a feeling that the hon. Member may be disturbed by the same trouble as I am. I am glad that he alone of those who spoke from that side is unconnected with the film industry, and therefore was not desirous either of obstructing one or other, of various film personalities or patting others on the back.

I am sorry that I have to use these tactics in order to bring home to hon. Members a sense of their duty, because, understandably, hon. Members opposite believed that their Government were not going to spring upon them on a Friday a Bill of any great importance, let alone one which introduces some sudden change into our affairs. They all thought that a Friday was an occasion for some non-controversial Measure, which, today, in fact, it is not. It is up to hon. Members opposite to realise this, and I say to them with great sincerity, that, if my party, instead of giving a tacit understanding not to undertake serious criticism of the Bill, had issued a three-line Whip in support of the Bill, I would not have supported it, but would have voted against it.

The least that hon. Members can do, and I hope they will do it at 4 o'clock, is to realise that they are not obliged by party loyalties, though they may feel compelled and coerced as Lobby fodder, bludgeoned and threatened by the Whips. [An HON. MEMBER: "They are telephoning for them."] I appeal to them not to carry party loyalty too far. When 4 o'clock comes, they will have their opportunity simply by refusing to vote. I do not ask them to vote in my favour, but simply to refuse to vote for an outrageous waste of public money contained in a Bill which has been drawn as no other financial Bill in our history has been drawn. It has never happened in the history of the country that public money has been provided in this way for a Film Finance Corporation, with vested interests all over the place.

I venture to inform the House that, if the closure should be moved before this matter has had ample discussion, hon. Members opposite will be voting to gag discussion on the protection of public funds. I give the assurance to the House that the Bill is bad as an example of conducting this kind of business. It is put forward on the basis that, though we shall lose money on this Bill, it will do a lot of good for the British good name in the film industry all over the world. It may be said that we have Old Testament confirmation of that, in that a good name is beyond rubies, or something like that, and that there are very solid Biblical grounds on why we should provide a certain amount of credit and put up with losses if by that means we can preserve the British good name.

When it is looked at, however, this argument becomes untenable. How does the British good name benefit from setting up, in a major industry in this country, a dubious organisation of this character, without adequate safeguards and with a complete abandonment of everything that meant anything to the Treasury in the olden days in the way of the proper protection of the public purse?

One of the films that is in course of production—"Rogue's Company" or "The Straw Man"—apparently is going to make a tremendous impression on foreign audiences. The price that we pay is not merely money. The price that is paid is that the world knows that all that has been done, organised and arranged in a manner quite out of accord with the British tradition of care and principle in the handling of British money. Neither care nor principle has been applied in the past, nor will it be applied in the future if the House is foolish enough to pass Clause 2 (1).

At no time have I relied on slowness of diction. On the matter on which I have already addressed the House, I could easily have kept the House fully engaged for an hour beyond its time of sitting had I wished to be tedious or to draw out the debate by slow speech and the use of unnecessary elaboration and quotations. I am jealous of the good name of the House and I have said nothing which would qualify as being calculated to bring contempt or criticism upon the House. But what is calculated to bring contempt and criticism upon the House is the passing of things of this sort whereby millions of public money are spent without any critical examination.

The Minister has not even explained Clause 2 to the House; he did not think it necessary to do so. Until I drew attention to the rigmarole of Clause 2 (1) and exposed the fact that the Treasury will be watching where it is least necessary to watch, the House never had any exposition of it. We had a few lofty words and a few airy platitudes from the right hon. Gentleman which cannot be reconciled with reality or with what is conventional.

In the absence of some hon. Members, Mr. Speaker gave a very interesting Ruling when he ruled that it is relevant to the Second Reading debate on the Bill to examine the boards of directors of the individual companies listed in the Finance Corporation's pamphlet or report, because public money is going to finance those companies. Mr. Speaker has ruled that we may, therefore, discuss whether one chairman of directors would be better than another, whether one director of one of these companies is holding too many directorships in other companies, and the like. Equally, because public money is involved, it follows from what Mr. Speaker has said that the whole conduct of these companies comes under the survey of the House.

All that has happened today was that certain individuals were anxious to cast aspersions at others who were helpless. I should never cast aspersions in that manner, but that is not to say that I should not castigate public officers who are supposed to be in charge of the protection of the British public's assets. I should not make aspersions ex parte where no reply was available to unfortunate people outside the House who could not answer back, as has happened today.

We have heard about Sir Michael Balcon and Mr. Drayton, the Chairman of British Lion. If it is said that Mr. Drayton would make a better Chairman than somebody else for the British Lion Company, it must be relevant equally to discuss the actresses in their employ. If we make British Lion the bad debt of the British nation, it becomes relevant to discuss whether the company's administrative servants were as satisfactory as they might be. But a far more interesting examination would be to see whether their artistic servants are as suitable, profitable and successful as we would like them to be.

For my part, I know nothing of Mr. Drayton's financial interests or of his 49 other directorships, about which the hon. Member for Cheadle was a little vexed. I cannot think why he should be. It is not uncommon in financial circles for people to hold 49 or 50 directorships, and it is interesting to note that a Tory Member should resent their doing so whereas no hon. Member on this side of the House was caused any pain or anxiety about it.

I am not qualified to discuss Mr. Drayton in his capacity as a servant of the British Lion Corporation, but now that, against my will, I have been made a creditor of the British Lion Corporation through this monstrous mongrel financial arrangement, I can discuss the financial administration. But I will leave that for the hon. Member for Cheadle.

May I discuss the other side of the business to see whether it is well conducted? Instead of arguing about the directors who are only the servants of the British Lion Corporation, can I have listed the other servants of the Corporation so that the House may have an interesting debate regarding whether there are too many blonde film stars hired and too few brunettes?

The debate today has not been of the kind which reflects credit on the House. It becomes a ridiculous matter when on the Floor of the House we start debating the internal affairs of individual companies which are borrowing money from

the State, but that is what we have got to do while we have the Film Finance Corporation.

Mr. Swingler

What would my hon. Friend's policy be?

Mr. Lever

I am asked what my policy would be. The first thing I would do—

Brigadier F. Medlicott (Norfolk, Central)

May I repeat an historic point of order which has been raised before in this House, Mr. Speaker? May I ask if it is in order for a windmill to go by water?

Mr. Lever

Mr. Speaker will appreciate that I have had to cope with that sort of intervention all the afternoon.

Mr. Swingler

We do not want the hon. Member to waste his time.

Mr. Lever

Hon. Members will shortly be asked, of course, to gag this debate and to bring it to an end. I hope that they will not do so, because party loyalty is one thing and the loyalty of all hon. Members to the people they represent is another. This is a non-party matter. Both Front Benches are thoroughly disgraced in the matter, and both naturally do not want to be criticised by their own back benchers. They want to get the Bill through with the maximum of approbation—

Mr. Swingler

What is the hon. Member's policy?

Mr. Edward Heath (Lord Commissioner of the Treasury)

rose in his place and claimed to move, "That the Question be now put."

Question put, "That the Question be now put."

The House divided: Ayes, 91; Noes, 8.

Division No. 9.] AYES [4.0 p.m.
Allan, R. A. (Paddington, S.) Channon, H. Hall, Rt. Hon. Glenvil (Colne Valley)
Ashton, H. (Chelmsford) Clarke, Brig. Terence (Portsmouth, W.) Hall, John (Wycombe)
Assheton, Rt. Hon. R. (Blackburn, W.) Conant, Maj. R. J. E. Harris, Reader (Heston)
Baxter, A. B. Craddock, Beresford (Spelthorne) Harrison, Col. J. H. (Eye)
Beamish, Maj. Tufton Crookshank, Capt. Rt. Hon. H. F. C. Harvey, Ian (Harrow, E.)
Bell, Ranald (Bucks, S.) Crosthwaite-Eyre, Col. O. E. Hay, John
Bennett, Or. Reginald (Gospert) Crowder, Sir John (Finchley) Heald, Sir Lionel
Bishop, F. P Crowder, Petre (Ruislip—Northwood) Heath, Edward
Boothby, Sir R. J. G. Davies, Rt. Hn. Clement (Montgomery) Hill, Dr. Charles (Luton)
Bossom, Sir A. C. Drewe, Sir C. Hollis, M. C.
Boyd-Carpenter, J. A. Duthie, W. S. Holmes, Sir Stanley (Harwich)
Boyle, Sir Edward Fell, A. Hopkinson, Rt. Hon. Henry
Brooke, Henry (Hampstead) Fleetwood-Hesketh, R. F. Hudson, Sir Austin (Lewisham, N.)
Buchan-Hepburn, Rt. Hon. P. G. T. Fraser, Sir Ian (Morecambe & Lonsdale) Hutchinson, Sir Geoffrey (Ilford, N.)
Burden, F. F. A. Galbraith, Rt. Hon. T. D. (Pollok) Hylton-Foster, H. B. H.
Campbell, Sir David Gough, C. F. H. Jenkins, Robert (Dulwich)
Keeling, Sir Edward Medlicott, Brig. F. Smithers, Sir Waldron (Orpington)
Langford-Holt, J. A. Mellor, Sir John Stanley, Capt. Hon. Richard
Leather, E. H. C. Molson, A. H. E. Stevens, G. P.
Lockwood, Lt.-Col. J. C. Nicolson, Nigel (Bournemouth, E.) Strauss, Henry (Norwich, S.)
Longden, Gilbert (Herts, S. W.) O'Neill, Phelim (Co. Antrim, N.) Thomas, Rt. Hon. J. P. L. (Hereford)
Lucas-Tooth, Sir Hugh Page, R. G. Thompson, Lt.-Cdr. R. (Croydon, W.)
Lyttelton, Rt. Hon. O. Price, Henry (Lewisham, W.) Thorneycroft, R. Hn. Peter (Monmouth)
McAdden, S. J. Raikes, Sir Victor Touche, Sir Gordon
McCallum, Major D. Redmayne, M. Turner, H. F. L.
Macdonald, Sir Peter (I. of Wight) Rees-Davies, W. R. Wade, D. W.
Mackeson, Brig. H. R. Renton, D. L. M. Webbe, Sir H. (London & Westminster)
Macleod, Rt. Hon. Iain (Enfield, W.) Russell, R. S. Wellwood, W.
Marlowe, A. A. H. Ryder, Capt. R. E. D. Williams, R. Dudley (Exeter)
Marples, A. E Shephord, William
Maude, Angus Smithers, Peter (Wincliester) TELLERS FOR THE AYES:
Mr. Studholme and Mr. Vosper.
Acland, Sir Richard Lever, Harold (Cheetham) TELLERS FOR THE NOES:
Allen, Scholefield (Crewe) Morgan, Dr. H. B. W. Mr. Harold Davies and
Hale, Leslie (Oldham, W.) Morley, R. Mr. Delargy.
King, Dr. H. M. Pargiter, G. A.

Whereupon Mr. SPEAKER declared that the Question was not decided in the Affirmative because it was not supported by the majority prescribed by Standing Order No. 30 (Majority for Closure).

It being after Four o'Clock, the debate stood adjourned.

Debate to be resumed upon Monday next.

Mr. Glenvil Hall

May I ask the Leader of the House what the Government now propose to do about this Bill?

The Lord Privy Seal (Mr. Harry Crookshank)

We shall continue it at the next opportunity. I thought I heard "Monday next" given out, but if Monday is not convenient no doubt some arrangement will be made through the usual channels which can be discussed later.

Mr. Hale

On a point of order of some importance. Surely before we depart to our constituencies for the week-end we are entitled to know what the business will be on Monday. The Leader of the House has said that a Bill of some importance will be discussed on Monday, possibly replacing the other business. I ask him to say that it will not be debated on Monday. The House should not be called to assemble on Monday without knowing what the business for the day is to be.

Mr. Crookshank

The House knows perfectly well what the business will be on Monday because it was announced by me yesterday, but it is the normal thing, when Orders are read out, to give a day, and on this occasion it was given as Monday. As I said, whether or not it should be Monday can be discussed through the usual channels.