HC Deb 25 November 1953 vol 521 cc417-57

Order read for resuming adjourned debate on Question [20th November], "That the Bill be now read a Second time."

Question again proposed.

6.37 p.m.

Mr. Harold Lever (Manchester, Cheetham)

As I was saying, the Bill is peculiarly a non-party matter, because we are surely all concerned that there shall be proper examination of the financial proposals. I am fortified that, through the determined action of more than five-sixths of the Members of this House, the House has now an opportunity of reviewing the matter with more consideration than was intended by the Government.

I think it right to commence my remarks, which I hope will be received in a proper frame of mind, by saying that it was never my intention to cripple the time of the House or to obstruct Government business for the sake of obstruction, but merely to achieve the purpose which has been achieved. The Leader of the House, who has been most generous in this matter, is most chivalrous, considering that he was the one most inconvenienced in the matter, in giving us an opportunity now of doing what ought to have been done in the first instance, considering this matter on a proper day of the House of Commons.

In the course of my address to the House on Friday, I observed that there was a growing interest in points of detail, and I was constantly pressed for answers, which I shall do my best to supply in the course of my address tonight; but I should like the House to know that it is not my intention to be in any way tedious in the matter.

It also came to my notice over the weekend that the hon. and learned Member who is to reply for the Government said when this matter was last debated and when I ventured to voice a contribution in criticism of the Bill: The hon. Member for Cheetham (Mr. H. Lever) showed a rather refreshing concern for public money."—[OFFICIAL REPORT, 28th February. 1952; Vol. 496, c. 1524.] I hope that I was at least as refreshing on Friday, but if the hon. and learned Gentleman was refreshed by anything that I said, I am bound to say that he dissembled it very effectively.

I give notice that I shall protest very forcefully if nothing is done about the points I raised. I should also like to say, so that my remarks may be properly understood, that I am not speaking either out of malice or affection for any person, but because I feel now, as I did when it was last debated, that the matter calls for a great deal more careful examination than it has been given on any occasion when it has been discussed.

We seem to have a sort of inter-party Hallelujah Chorus as each side applauds the improvident action of the other. I think we must examine once again what is being done in our name. I have addressed a number of Questions to the Minister, and I hope that he will be able to give the House specific answers to what I consider to be extremely relevant questions.

The first question I have to ask him is what directives at present govern the Film Finance Corporation in the conduct of its business? I have not the faintest idea what principles govern the present operations of the Corporation. Does it depend on the whim of the particular chairman at any given time, or upon some directive concealed from us?

What the House has forgotten is that as each party comes for a further dollop from the public purse hon. Members are told something different from what was said when the Bill was brought in the first time. I will read to the House what was said when this Bill was first brought in. I am certain that it has been forgotten by hon. Members, as otherwise it would have been pressed home upon the Government and Questions would have been asked about it. When permission was obtained in 1948 to set up the Film Finance Corporation, the House was told that there would be a collapse of the film industry in this country unless finance was forthcoming.

Sir William Darling (Edinburgh. South)

By whom?

Mr. Lever

By the Government in the form of the Film Finance Corporation. Some finance had been provided by the then President of the Board of Trade, and that this was a completion of those emergency measures. My right hon. Friend the Member for Huyton (Mr. H. Wilson), the then President of the Board of Trade, after saying: This Bill is a necessity—but, in my view, a regrettable necessity. went on to say: The scheme set out in the Bill starts from three points. First, we consider it essential that working capital must be found to enable the industry to carry out the production programme of which it is capable. Secondly, I think it is necessary to affirm that the industry's financing must be of an entirely self-liquidating basis. There must be no question of a subsidy for film production. The House will observe that all that has been abandoned. All this talk about an emergency, a self-liquidating loan and no subsidy has been abandoned, because this Bill completes the full cycle. First of all, the emergency has become something permanent, and, instead of pretending that the money is going back to the State, we are being asked to make provision for the abatement of Government claims. My right hon. Friend went on to say: Thirdly, that the special emergency arrangements proposed here should be temporary, and that in a reasonable period when the industry has built itself up again, it should be able to float itself free of the special arrangements and revert to more normal methods of financing. What is a temporary period? The then Minister regarded a year as a temporary period, because 18 months later my right hon. Friend said specifically that this was no substitute for a more fundamental solution of the problem. He said that pending the more fundamental attack which would have to be made on the problems of the film industry, it was proposed to limit the additional finance available to the Corporation to £1 million.

There has been no fundamental attack since then except on the taxpayer's pocket, and that was for another £2 million in 1952, an attack which was far more accurately directed than any attack upon the problems of the industry. In case it might be considered that this was an ill-considered word on the part of my right hon. Friend, he went on to say: The film industry is, of course, engaged primarily in the business of popular entertain- ment—and when I say popular entertainment, I am not excluding, of course, the great educational and cultural aims of the film industry; but they are subsidiary to the main business of the industry. That means that the box office is from the point of view of the industry the final judge of art. I know that in saying that I shall be written off as a Philistine. My right hon. Friend may now have qualified himself for a more attractive epithet than the one he justified by his then attitude, but at all events he has changed his tune. He went on to say: The money that is being provided is limited to £5 million, and the duration of the scheme is limited in time. All loans must be repayable within five years"— that is now— and after five years from the passing of this Bill new lending must cease. These limits were, of course, set quite deliberately. The industry must so manage its affairs that in five years' time it can raise money on its own credit in the normal way, just as any other industry needing large-scale finance must do The Government have no intention of subsidising the film industry. I have said that on a number of occasions, and I hope that fact has been well marked in the industry itself.—[OFFICIAL REPORT, 2nd December. 1948; Vol. 458, c. 2183–88.] My right hon. Friend is no longer to blame because he has not the conduct of affairs today. He said that in 1953, had he been President of the Board of Trade, he would have brought the matter to an end, judging by his then expressed intentions. It is to be regretted that he has not complained that his original intentions, which were sound, were not operated by this Government. But as he has not, it has fallen to me to go into the matter perhaps in rather closer detail than I would otherwise have done.

Mr. Harold Wilson (Huyton)

My hon. Friend was good enough to tell me that he intended to proceed on these lines, but as he is suggesting that when I spoke on Friday I did not attack the Government for their failure to bring the Film Finance Corporation to an end after five years, perhaps it would be only fair for my hon. Friend to point out what I said on a subsequent occasion to that from which he has just quoted, when I said that I had come to the conclusion that the Film Finance Corporation should be a permanent part of the financing of the film industry.

Mr. Lever

If that is so, then I am bound to say that I did not hear it, and if it was said, then my right hon. Friend obviously showed on Friday that he does not share the views which he held when he persuaded the House to vote it into existence, and obtained £5 million for the purpose of financing it.

I find myself in a paradoxical situation. I never thought that the time would come when a Labour back bencher would have to stand up and castigate a Tory Minister for unsound finance. But these things happen, because there is a too-ready agreement between the two Front Benches about legislation which has not been adequately considered. When the Bill was first brought in, the present Colonial Secretary, the right hon. Member for Aldershot (Mr. Lyttelton) said: I am very glad that the President of the Board of Trade has in more than one part of his speech expressed himself as being rather shocked that the taxpayers' money should be committed to risks of this kind."—[OFFICIAL REPORT, 2nd December, 1948; Vol. 458, c. 2196.] Of course, the sense of shock departs the more often one is outraged, as I understand it. and perhaps the right hon. Gentleman and the Minister who is to reply tonight will show us that there is some substance in that supposition.

The right hon. Gentleman went on to say, that he did not want to stress the point too much, but that it was very important that the industry should trade at a profit. He said that his hon. Friends were in some doubt whether they should divide against the Second Reading of the Bill. The right hon. Gentleman was in doubt five years ago whether we should have £5 million, but now the Ministers are arm in arm with him in coming to the House, not only to support the use of £8 million, but to support its use for another three years, and to support giving it away to film producers who would find it inconvenient to repay it to the Government.

Anyone who will take the trouble to read the debate on the Bill instituting the Film Finance Corporation will see I, a lone heretic today, am expressing the views universally popular at that time on both sides of the House. I observe that even the then hon. Member for Wood Green, now Wood Vale—I am corrected—Southgate (Mr. Baxter)—made a very interesting speech when the Bill was before the House in 1948. He said: This is a strange Bill.…I agree that this Bill is not big enough to be of any importance I do not like to see the Government entering into the film industry. From this faltering beginning they could find themselves having to go further into it to begin to control production policy, and then on to nationalisation—a rake's progress that will be logical and inevitable. The Government have said many times, 'This is only a small Bill,' which it is, but it travels in the wrong direction. I agree that the industry, with its vast income, ought to be able to finance itself. While the Opposition are not opposing the Bill, I believe it is inadequate, a mistake, that it will not help the really independent director and producer and will certainly result in a loss to the Treasury."—[OFFICIAL REPORT, 2nd December, 1948; Vol. 458. c. 2209 and 2213.] I read that speech, and I read the hon. Member's speech on Friday, and I am bound to tell the House that the hon. Member has been consistent only in his jokes. I notice his jokes are the same though his views are different, and I thought it only fair to say that there is partial consistency on the part of the hon. Member, who ventured to accuse me on Friday, with far less justification, of misleading the House.

That is how the matter stood in 1948, and how the matter was, if I may use the expression, "put over" to the House, but the position in which the House now finds itself is that it has to decide what to do about it. The House was then told that this was a shield under which the Government would prepare a policy which would produce a viable industry in this country. No policy has been produced, except for the Eady Plan, which played a useful part, but even there it is complained that the industry has not been properly self-supporting.

I ask the Minister, in regard to the question, "What is the directive which at present governs the Film Finance Corporation in the conduct of its business?", whether it is the conduct implied in the speech of my right hon. Friend in 1948, and if not, what is it? I also want to ask whether the three years' extension proposed is meant to be final? I ask that because we are constantly put off with further and further extensions, in order to give the Government time to make up their mind, but the Government are not entitled to buy time in this expensive way.

Next, I should like to ask the Minister what is the Government's estimate of the actual cost today of the operation of the National Film Finance Corporation, as opposed to the figures as they appear in the Report? What, in the Government's estimate, is the actual cost—or do not the Government thus deign to estimate what it costs? We are entitled, as the House of Commons, to know what is the benefit. We have had a lot of talk about the benefit. The hon. Member for Wood Vale—Southgate—

Mr. Beverley Baxter (Southgate)

On Friday the hon. Member was good enough to refer to me as the Member for Wood Green, Southgate and then Wood Vale. I do ask him, in order to ease the burden of the reporters upstairs, to note that it is Southgate, as far as I am aware.

Mr. Lever

The hon. Member has so many facets to his personality that perhaps I may be pardoned. He did not always take the humane and artistic approach to industry, but on Friday he said, looking at the illuminated ceiling as if looking towards his ultimate destination, "Why cannot we have the beautiful and artistic productions that are going round the Empire? Never mind the cost." That may have had reference to his special interest in the Empire, which is very understandable, but, however beneficially and however picturesquely the benefit is put, we are entitled to know how much we are to pay for that benefit on which Members tirelessly expatiate.

I should like also to ask the Minister what is the Government's estimate not only of the actual cost, but the future cost, of the concessions that are going to be made if this Bill becomes law. I should like to ask the Minister whether, in his opinion and that of his advisers, the Corporation have the statutory powers to advance money to the film industry without the bona fide expectation that the money can be recovered. In other words, can the Corporation, under the powers governing it—and the Minister must have far better legal opinion than is available to me—deliberately lend money intending to lose it, or knowing that some part of it will be lost? I think it very doubtful.

If the Minister cannot tell me, or has to tell me when he replies, as may well be the case, so far as anyone has told the House, that the Corporation has no statutory right to hand out public money without reasonable expectation of recovering it—and we all know that it has handed out money without the expectation of fully recovering it—then it is very doubtful whether it has even been lawful in doing so. I want the Minister to pay some attention to that point, because the Government are responsible for seeing that its creatures obey the law in this regard. I want to know whether the money, lent without expectation of full recovery, has been lawfully lent, and whether the Minister intends to exercise control over future lending in order to ensure that it is lawfully done.

The Minister has a responsibility to the House. He may not have power over the Corporation but he has a responsibility to the House. I think it was the late Lord Baldwin, when Conservative Prime Minister, who drew attention to the fact that power without responsibility was the privilege of the harlot, but the President of the Board of Trade is in the reverse and less enviable position of having responsibility without power, which, I should have thought, was the privilege of the eunuch, where a certain amount of impotence is regarded as a matter for promotion, rather than for a reduction to the ranks. But, from the public point of view, it is not desirable that we should have a Minister introducing a scheme in which he has a responsibility to the House but no power to see that the money is lawfully expended.

I should like to ask the Minister some more general questions. What is the Government's position so far as the concessions provided in Clause 2 are concerned? Have any tentative arrangements been made for any person to operate those concessions before they are made known to the House of Commons? The reason I ask that question is that after the debate I heard something which indicated that the chairman of British Lion had already been thinking, by a happy coincidence, along the lines on which the Government had been thinking in providing this concession Clause.

I should like to know whether there were any discussions, what they were, and why they were not brought to the attention of the House. The House will realise that if there had been discussions, it is an elementary principle that the President of the Board of Trade shall be as candid with Members of the House of Commons as the chairman of British Lion is with his shareholders. We are entitled to know what, if any, negotiations have been going on to give effect to the concession of public money provided for in Clause 2 (1).

I should like to know whether any general directions have been prepared and given to the Film Finance Corporation on how it is to operate this concession-giving Clause if it is passed into law by the House, which I sincerely hope it will not be, though I gather that the Government presume it will be, not because it will carry the logical support of the House behind it but because, as a famous civil servant in the 18th century used to say when faced with a hopeless case, "We must apply our majority to this question." I am afraid that that is what the Government are relying upon to get this Clause through.

I must ask the Government another question to which I promise I have given my most earnest consideration, and it is this. Does the Minister approve in principle of a person or firm acting in an advisory capacity to the Corporation and also being a borrower from its funds? So that there shall be no misunderstanding, I want to make plain that I refer to Sir Michael Balcon. Far from making any aspersion on that gentleman, although I do not know him personally I am aware that it is the universal opinion in all parts of the House that he is a most distinguished figure in British film production, and, without any doubt whatever, he has done more for the benefit of British films than any other producer in this country. What is more, he shares my own penchant for sound finance in the arrangement of his affairs, unlike some of the more optimistic film producers.

I have not the smallest intention of defaming or denigrating Sir Michael, but I feel it my duty to press the Minister for an answer as to whether he deems it right and proper that a man should occupy the function on the one hand of adviser to the Film Finance Corporation disposing of millions of the public money, and, on the other hand, either personally or through his firm, be a borrower from that fund. It obviously is not to be tolerated that a man should sit in judgment upon his own commercial rivals' work, however honest he may be and however concerned he may be with the artistic side of film production.

It is also obvious that there cannot be in the public mind the feeling that when he comes as a borrower, his applications will receive the same detached consideration as anybody else's application. Sir Michael has done a great service to the industry and the Film Finance Corporation. I have no wish to injure the gentleman's reputation, but I believe the Government should make it plain that he should cease to embarrass himself by continuing in this position.

Do the Government still maintain that the film industry is in a state of temporary financial crisis? This is a complete fallacy which has dominated all the actions of the Government in bringing in this legislation. They always seem to imagine that the industry is about to emerge from a temporary crisis, but the film industry is not in a temporary crisis. It is chronically unable to pay its way unless the Government assist it to do so. So long as the Government go on pretending that these are temporary financial crises, and continue to provide the kind of finance which might be appropriate for temporary financial crises, the film industry will be placed in the situation whereby Ministers in both parties have to come to the House and talk of this industry as if it were a pauper industry.

As long as the industry is financed in this way, it will not only be a pauper industry in which the most efficient producer will not make a claim on public funds, and the less efficient the producer the bigger the claim on public funds, but there will be a great deal of heart-burning among the producers themselves when, for no apparent reason, different concessions are made to different producers.

We do not want a pauper film industry. We want the industry to have a proper basis on which it can permanently establish itself. This sort of basis is admittedly unstable, and it will lead to the kind of debate that we have had over and over again, in which Members are liable to criticise all sorts of aspects of the industry. You have ruled, Mr. Speaker—and far be it from me to question your Ruling—that we all have the right to criticise each and every servant of every company which borrows money from the Corporation. We started on Friday discussing who would make a suitable chairman for British Lion and who would make a suitable chairman of some other company. We can end up by discussing whether the actresses are suitably chosen, whether enough brunettes or blondes are chosen in order to ensure a profitable film.

I am far from wishing to damage the film industry. I wish to put an end to this pauperisation of the industry which the idleness and indifference of the Government are perpetuating. This is only because the Minister cannot get time off to go and see what is happening in the film industry. I do not pretend to be an expert on the film industry. I do not know enough about it. But I do know enough to be convinced that as long as this sort of finance is employed it will continue to be a pauper industry, continually being discussed in this House as it has been on previous occasions. There will be no incentive to the efficient producer because his only reward will be to obtain less from the public funds than the less efficient producer. That is no incentive. The producer should be given a chance to earn a profitable livelihood.

I have been asked what is my solution to the problem. I do not know whether I should be in order in mentioning it, but there are positive measures which could be taken to see that the present distribution monopoly is broken, to see that the producer is given his fair share of the enormous box office receipts even if this meant a concession in Entertainments Duty. We ought to give the producer a chance to survive in a normal way and not in this unseemly and undignified way, which reflects not only on the industry but on the idleness of the President of the Board of Trade and his Parliamentary Secretary, who seem merely to sit here instead of using their brains. They remind me of Lord Chesterfield's famous dictum in another place, when he said "We, my Lords, may thank Heaven that we have got something better to depend upon than our brains." The President of the Board of Trade is in the same unfortunate situation. Neither he nor his Parliamentary Secretary are making a proper and industrious effort to do the job that they were placed in those position to do.

Another thing that the Government must tell us is what is in their minds when they support the film industry. It is all very edifying, although it resembles a chapel service rather than the House of Commons at its brainy best, when we hear on both sides a good deal of talk about lofty artistic impulses and national prestige. It is all very edifying, but it does not get us very far. We ought to know why we are financing the film industry.

I am going to suggest three reasons why we should support the film industry, and we should separate those reasons. There are only three reasons; one is popular entertainment, the second is the cultural value of films, and thirdly the dollar saving aspect of the film industry. It is the confusion of those three reasons with which I am concerned, and the Government must approach this matter in a sensible way. They must not take umbrage if I express myself forcibly. I assure the Minister that I intended no discourtesy to him on Friday and I have not the slightest intention of being discourteous to him now. If I express myself forcibly it is because I wish to drive home points in which I believe, and I have no personal rancour for him or his colleagues who are in a situation which is not altogether of their making.

These are the three reasons for financing the film industry, and nobody has yet attempted to separate them. Let us look at the question of popular entertainment as a reason for supporting the industry. We cannot go about subsidising the industry on that ground alone. At least, there is a great danger in doing so, because it may cease to be one by reason of competition from other and newer industries, such as television.

As one hon. Member pointed out, there was a time when public torture was regarded as popular entertainment, and when a number of men, including incompetent and negligent Ministers, were taken into the market place and tortured. The people who were maltreated by them and who suffered from their negligence and intolerance at least got the satisfaction of hearing the groans of anguish as the torturers performed upon them. I am far from suggesting that we should have a public torturer of the National Film Finance Corporation for the purpose of keeping it in order. By the effluxion of time films may be overridden by more modern entertainment. In subsidising popular entertainment, we must be careful that it is current and popular and is not being driven out by new and better inventions.

Then we are told that we have to subsidise the industry because of its cultural value. I do not know much about the industry or its personnel, but from time to time I have seen them at gatherings to celebrate various trade functions, and nothing has yet occurred to make me regard the personnel of the film industry as I regard professors of Oxford or Cambridge University, for their cultural value.

This policy comes ill from a Government who have disbanded the Crown Film Unit, which has produced many wonderful documentary films which have been regarded as of real cultural value throughout the world. They destroyed that very valuable national asset and they did it ruthlessly, against the protests of their own intelligent Members, including the hon. Member for Southgate—if I have got it right this time. The most impartial and intelligent supporters of the Government begged the Chancellor of the Exchequer not to destroy this national asset and yet, after doing so, the Government have the impertinence and the effrontery to talk of the cultural value of the film industry, and to say that that is the reason for lending £3 million to the British Lion Film Corporation and for producing a Clause to write down and write off the loans made.

Next, we are told that the film industry is a dollar saver. There are a great many other dollar savers, and until we know how many dollars we are saving and how much it costs to save those dollars we are not in a position to judge whether we should go on saving dollars through films, subsidise the television industry, or pass the subsidies to some other industries which are dollar earners.

It is lamentable that the British film industry should not be given the chance to be allowed to find its own feet. I am sure it has values which are worth preserving, but the Government are doing it an ill service by continuing to finance it in this way. It is a breach of faith on their part, when my right hon. Friend, who started this payment, did so with the intention that it should not be a permanent provision.

It is a wrong approach and a piece of muddled thinking on the part of the Government. They fail to realise that there is a limit to the national resources, and that when public money is spent some regard should be had to what benefits are produced and the question whether one is solving the problem which one has set out to solve. We should not deceive ourselves with the comfortable illusion that we can solve the problem by writing out another cheque. That sort of approach has led to the provision of "smog" masks from the National Health Service, instead of an air-purifying scheme; it has led to the provision of the epileptic orange beacons instead of a proper road safety policy. That is why we get this film finance policy instead of an intelligent policy which would put the industry into a viable condition, so that it could earn its own living, honourably and reasonably, without pauperisation under this unsavoury and unattractive scheme.

One of the reasons I find it hard to protest with less than indignation about what is being done is that there are other competitors for the money which the Government are so lightly casting away without adequate safeguards. I think of the slum schools in my constituency which, for the want of a lick of paint, are a disgrace to send children to. I think of the other cause which hon. Members opposite supported yesterday, when we were told that, for the sake of a few hundred thousand pounds, the Government could not do the decent thing for people who had fought for their country.

At the same time, they can lay out these vast sums for the film industry. We ought to have regard to alternative claims for public finance. It is surely wrong and idle on the part of the Government to pauperise an industry, because it leads to a state of chronic uncertainty. The industry will never know where it stands until it is allowed to earn its own living in a reasonable way, instead of by this unsavoury and unsatisfactory method of finance which the Government are seeking to perpetuate in this Bill.

7.17 p.m.

Mr. Stephen Swingler (Newcastle-under-Lyme)

My hon. Friend the Member for Cheetham (Mr. H. Lever) has given a brilliant performance, probably far better than anything produced by the British Lion Film Corporation, and certainly much longer. Although Iwas one of his victims on Friday, I congratulate him most warmly. But I still have one complaint. After he had been speaking long enough to fill 50 columns of Hansard I was able to ask him what was his policy. Thereupon the Deputy Chief Whip moved the Closure, so that my hon. Friend was prevented from outlining his alternative to the policy which he had been analysing for a period of two hours and 20 minutes.

Although my hon. Friend has probably added at least another 15 columns to Hansard, I still cannot discern his alternative to the policy which, as he rightly said, has been so complacently supported by both Front Benches in connection with this Bill. There is a lot in what my hon. Friend has said. I agree with him that on Friday this Bill was received far too complacently. Members on both sides of the House expressed themselves in what I can only regard as a completely defeatist manner in their attitudes towards the financing of the British film industry.

My hon. Friend drew attention to the fact that the Government refused to find money for very many necessary and desirable objects, but are prepared to come forward with a Bill to throw some more money down the film production drain. It seems to me that no vestige of a policy whatsoever was presented to us to meet the parlous situation in which this industry exists. On Friday, one of my hon. Friends drew attention to the summary of the situation in the last Annual Report of the National Film Finance Corporation. All the understatements of that Report could not disguise the fact that the film industry simply staggers from crisis to crisis, and that no solution is being produced, either by the leaders of the industry or by the Government, to meet the basic problems.

The facts are that the market for films is very unsettled and is falling, and the 30 per cent. British quota is increasingly flouted. But the Board of Trade refuses to produce a realistic quota and makes no serious attempt to enforce the quota which it maintains, or, if it does attempt to do so, it gets its fingers badly burnt, so that the quota is largely ineffective.

The production of films is, in any case, quite insufficient to meet the quota, but nobody seems to worry about the situation. We go on year after year accepting a so-called quota for the showing of British films to encourage the British film production industry, but there are just not enough films being produced, in spite of all the loans and subsidies, to enable exhibitors to meet the quota. So, a large number of exhibitors default on the quota; but nobody worries, because no attempt is made to enforce the quota, and so a series of Measures are openly flouted by those concerned, and the industry staggers from crisis to crisis.

The most amazing thing in this Report is the statement of the National Film Finance Corporation about the number of films produced and released that are likely to be profitable. I should like to remind the House that, according to the Corporation's estimate, of the 34 films released in 1952 the number likely to be profitable, that is, likely to pay the producers for what they have laid out, without the Eady plan is eight, and with the Eady plan 15.

That is to say, less than half of the films are likely to get the money back even with the Eady plan, which is becoming increasingly unpopular for reasons well known to the President of the Board of Trade. If we did not have the Eady plan, if we did not have the levy running through the industry, less than a quarter of the films produced and financed by the Corporation could pay their way.

That is the fact that we ought really to be considering in connection with a Bill which is complacently presented as a Measure to tide the industry over for another few years by pouring another few millions of pounds of public money down the drain. I agree with my hon. Friend to this extent, that we ought to face up to one of three alternatives.

First, we could accept openly and honestly that we are nationalising the losses—for that is the position at the moment—and allowing the profits to go to private enterprise by this system of a disguised subsidy, of pumping money into the Corporation which pumps the money out to producing companies, who then make the inevitable losses that everybody knows they are going to make because of the crazy situation in the industry; and we write those losses off.

Secondly, we could nationalise the lot, nationalise the producing industry. If we are nationalising the losses there seems to me to be a good deal to be said for nationalising the industry and running it as a public enterprise, though I know that I shall be unpopular for saying it. That is the implication of the speech on Friday of the hon. Member for South-gate (Mr. Baxter)—I am sorry he has gone away—who said that films should be produced not to pay commercially, not to pay their way, but because they were a good thing for the country and a good thing for the Commonwealth, and that there should be subsidies out of public funds without regard to whether we could gel the money back that was laid out.

If that is to be the policy we should have the courage of our convictions and say that the whole thing should be run as a public enterprise, and the money could be paid over from the Treasury, and then we could run the industry and produce films without regard to whether we were going to get the money back or not, and without making any particular attempt in that direction. However, that, of course, is not honestly admitted. The facts are disguised under a great number of complacent phrases about producing plans for the industry to deal with this crazy set-up.

The third alternative is to do something, if we are not going in for a policy of genuine public enterprise, to promote film production—because we think it a good thing for the country—by trying to make production pay, in order to give the producers of films the chance of getting their money back and give the Corporation the chance of getting its money back. That, in my view, is the policy we ought to adopt, because we are not going to adopt the policy of nationalisation and it is a bad thing to adopt a policy of simply nationalising the losses on film production.

The only way to do that is by discriminatory taxation. The only thing to do is to adopt the sensible policy the Italians have adopted and to make profitable the production and exhibition of British films, which cannot ever be put on the basis of equal competition with American production because of the vast American market, by introducing discriminatory taxation in favour of the exhibition of British films so that the producers of British films may be able to get back more of the money that comes through the box office than they can get back now.

The Board of Trade has had a scheme on those lines submitted to it very recently, and it has passed that scheme on to the Treasury, and all the usual hullabaloo is being raised about this being contrary to G.A.T.T., and all the rest of it. There are many things going on that are contrary to G.A.T.T., and if we are to protect in a special way certain industries in this country, then I believe that of almost all the industries the film production industry has the most powerful claim for this kind of protection because it cannot, owing to the economic facts of life and the state of the British market of cinemagoers compared with the American market of cinemagoers, compete on an equal basis with Hollywood. It is quite impossible.

Therefore, if we seriously want to promote the exhibition and production of British films and give a chance to British film producers to get back the money which this Report shows they cannot get back even with the Eady plan the only way to do it in present circumstances, I believe, is to introduce a lower rate of Entertainments Duty on the exhibition of programmes of British pictures compared with any other kind of pictures. Then the extra profits that would be made at the box office on the showing of British pictures could be divided between the exhibitors and the producers in the industry so as to give some chance to the producers of the pictures, whether good, bad or indifferent, to get their money back.

The fact is that today, however good a large number of the pictures are—and the films listed in the back of the last Annual Report make one proud, to some extent, of what the British film industry has done during the past few years—on some of the very best of those pictures the producers have no hope of getting their money back owing to the division of the spoils within the industry, a very heavy rate of taxation on entertainments, and, I agree, to some of the lavish setups that have existed in some of the film companies. Therefore, I think that it is quite right that some protest should be made about this Bill and the continuance of other expedients without any really serious review being made of all the actions taken in the name of promoting British film production.

Personally, I think that the whole setup is idiotic. The quota does not work. Film production is stagnant. The facts of film production are completely in contradiction to the facts of the quota. We lend money to try to subsidise the production of films, but no measures are taken to try to get the money back from the other end. The State takes an enormous amount of money from the box office end of the business in the form of Entertainments Duty and puts a little back at the other end in the form of the National Film Finance Corporation. There is no rhyme or reason about the whole situation and no kind of a policy for trying to put British film production on its feet.

I want to know, therefore, what is the Government's view of the situation. Is it their view that film production should be permanently subsidised out of public funds without any hope of getting the money back? That is what the presentation of this Bill suggests. Is it the Government's view that there should be more or less public enterprise in the business? We must seriously protest at the idea that the Government are to make up the losses on film production, but are to have no say in any profits which may be made. Is it the Government's view that there should be more public intervention in the film industry or less?

Thirdly, what action, if any, do the Government intend to take to try to make British film production a profitable enterprise—if that is Government policy—instead of an enterprise which is bolstered up by a series of Eady plans and finance corporations and injections of subsidy from year to year, while the State continues to take a huge levy on the industry in the form of Entertainments Duty and while we continue to resist the very sensible idea of discrimination which some countries have instituted? These countries are getting away with it. We continue to resist what could be a really constructive step in favour of the exhibition and production of British films by giving a rebate on the Entertainments Duly, I hope that in his reply the Parliamentary Secretary will be able to give an answer on those points, because it would be shameful for this Bill to go through without an elaboration of a more constructive policy on the part of the Government to promote the production of British films.

7.33 p.m.

Mr. Henry Brooke (Hampstead)

The hon. Member for Cheetham (Mr. H. Lever) started his speech on Friday by saying that he knew nothing at all about the cinema industry and then spoke for nearly three hours. If I were to make the same admission it would be completely true, but it might fill the House with some alarm and despondency, so I want to make it quite clear that while, like the hon. Member for Cheetham, I am no expert about this industry, I intend to detain the House for only a minute or two.

I am concerned about the Reports which the National Film Finance Corporation submits to my right hon. Friend and which he lays before Parliament. It strikes me as thoroughly justified criticism that a body which is entrusted with very large sums of money, and to which we intend to give some unusual powers under Clause 2, should be prepared to furnish the House with considerably more information than was contained, at any rate, in its last Annual Report.

Let me take, for example, the case of British Lion, of which we have heard so much. In paragraph 13 of the last Report of the Corporation it simply states, about the £3 million loan, No repayment has, in fact, been made, nor has it been possible for a programme of repayment to be prepared. That may be perfectly true; I do not doubt that it is, but in most other spheres of activity the House of Commons would demand considerably more explanation than that before it agreed to any talk of writing off £1 million as a loss, or granting these fresh powers in Clause 2 by which some kind of compromise arrangement can be reached if the Corporation is satisfied that the amount of a loan cannot be recovered in accordance with the terms on which it was made.

Mr. Glenvil Hall (Colne Valley)

To be perfectly fair, if the hon. Member reads the rest of the paragraph he will find adequate reason why British Lion was not able to make a start in repaying the Joan.

Mr. Brooke

The right hon. Gentleman and I are not in agreement. I have read the rest of the paragraph, which consists of a number of general statements, and I have never known the House of Commons consent to write off £1 million of public money on the basis of some general statements.

I suggest most strongly, and I trust that the Parliamentary Secretary, if he is to reply, will be able to give the assurance, that the Corporation be asked, if it receives these new powers under Clause 2, to furnish a considerably fuller explanation in its Annual Reports as to the use of these powers, as to the efforts it has made and as to the manner in which circumstances proved unfavourable when questions of repayment were being examined.

Let me pass to a later section of the Report, on page 5, where the Corporation is describing the further losses which have been sustained by a number of other producers on films which it has assisted. That takes nobody by surprise; everybody knows the chances of the industry. But here, in the Bill, we are asked to authorise arrangements whereby these loans may be written off or compromised in some way or other, and before we grant those powers I think we are entitled to ask the Corporation to explain rather more fully its policy in making loans. There are jealousies within the industry; there may be misunderstandings; there is a certain amount of public interest and a considerable lack of public information.

Can we be assured that, if the Corporation finds that one particular producer never seems to be able to make a success of anything, it will be extremely chary of lending any further money in that direction? That would be the act of any prudent man, and I have no doubt it is the attitude of the Corporation. But Parliament is entitled to ask the Corporation to specify the principles on which it is proceeding in these matters. It should inform hon. Members that, in the use of the powers they give it, it intends to husband this money with the utmost care, and, in the light of its over-riding duly to keep the British film industry alive, proceeds with no favouritism whatever, is guided by financial and economic considerations, and is acting throughout as a prudent trustee of public money.

7.39 p.m.

Sir Leslie Plummer (Deptford)

I propose to make my intervention a short one, for I think it is necessary to reduce the average time of speeches as a result of the remarkable performance of my hon. Friend the Member for Cheetham (Mr. H. Lever). I must follow the hon. Member for Hampstead (Mr. H. Brooke) in supporting his plea that the Corporation should be asked to explain more fully its policy in the making of loans. I would ask the Parliamentary Secretary to consider what steps he can take to get the Corporation to explain its policy to him in respect of the documentary films of this country.

The documentary films were the most distinguished films that this country has ever produced. We had a long, important and historical rôleto play in the production and distribution of these pictures. In 1928 or 1929, when Sir Stephen Tallents was at the Empire Marketing Board, and afterwards when he took the film division of that association to the G.P.O. and called it the G.P.O. Film Unit, he took with him the interest of an organisation which succeeded in introducing and distributing into British cinemas and all over the world films that were of extremely high artistic merit, and, at the same time, played a dual rôle in projecting what, for use of a better phrase, I would call the British way of life, to people as no other medium at that time succeeded in doing.

The result of this was that the documentary film productions of this country were regarded as an important contribution to the motion picture industry of the world. Then the war came and despite the fact that the Ministry of Information, when first setup, failed rather badly in the production of its first pictures, the documentary men produced a series of pictures for this country which did an enormous amount to sustain the morale of the people when they were going through an extremely difficult time. As a result of the fact that this nation had accepted the documentary film as a national asset and as a national instrument of policy the industry developed greatly.

I may say that in the travels I made before the war and during the war, and particularly in the United States, I never found that our feature films—and this is one of the claims which I think is made on behalf of the Film Finance Corporation which is not borne out by the fact—were as popular in the United States as some people imagine. In fact, we all know that even today the best feature films produced in this country are very largely shown in the small theatres, known as the art theatres of the United States, for the cinema moguls of that country see to it that our feature films do not appear in the plush and large cinemas of the broadways and main streets of the United States.

But our documentary films, which were cheaper to produce, were, in fact, greatly welcomed and I submit that they could today make as much money for the British film industry by proper distribution to the dollar area as the feature films we are producing. The war ended with the documentary film business of this country established on a considerable scale. After the war, some good pictures were made. Then, with the advent of this Government in 1951, the blow fell on the industry. It was not so much that the Government destroyed the Crown Film Unit but that, at the same time, they destroyed or almost destroyed the whole of the documentary film industry of this country, for this reason.

The previous Government had regarded the documentary film industry as a national asset and an instrument of national policy. In other words, they were using documentary films, and as a result of that they were asking for more films to be produced than the Crown Film Unit could itself produce. So around the Crown Film Unit, ancillary film-producing organisations were set up. When the Crown Film Unit was killed these organisations died, too, because the Government renounced as a method of propaganda the use of documentary films. When they did that the general industry, which had been following the trend of Government publicity and watching the development of the documentary films, decided that it was not interested and the documentary as a method of important commercial propaganda was curtailed. For that reason the industry virtually died.

More serious still, the decision of the Government to wind up the Crown Film Unit, for the quite insignificant saving which resulted, meant that the distributing machinery which the industry had set up throughout the world was destroyed as well. They had built up slowly, painfully and carefully a first-class distributing machine. That is why they were able to get into the theatres of America. That is why they were able to show their films in cinemas almost all over the world. All that has practically gone. All that happens now is that the Central Office of Information produces a trickle of documentary films and for all the use they are to the Government, to the nation and to the film industry they might as well cease. There is no future at all in that scale of production.

I had the honour of showing yesterday in the Grand Committee Room, a documentary film called "World Without End," which was made by the two leading documentary film producers in this country, and in the world—Basil Wright and Paul Rotha. This picture was produced, sponsored and its cost guaranteed by U.N.E.S.C.O. and in so far as we make our contribution towards U.N.E.S.C.O. I am happy to think that this country did pay its share of the guarantee for that picture. When U.N.E.S.C.O. decided that what was necessary was a documentary picture to illustrate the workings of the United Nations' agencies it came automatically to this country to find the men to produce it. It did not go to the United States, to Italy or to France. It came here, to the home of the pioneers of this great intelligent educative movement. They made a picture which is magnificent. It is a superb picture. I know that all my hon. Friends who saw it last night will agree with me. That picture is not to be shown in the cinemas of this country.

Mr. Ellis Smith (Stoke-on-Trent, South)

Who is stopping it?

Sir L. Plummer

The cinema exhibitors, because they havea rule that if a picture is shown on television they will not show it in the cinemas. The television public is by no means 100 per cent. in this country. The cinemas do reach all our people. Yet the people who are getting money through loans from the National Film Finance Corporation are themselves boycotting the documentary picture industry in this country, which ought to be supported.

The effect of this on the future will be very disturbing. I do not know how many hon. Members saw, on Sunday night, the nauseating religious picture on television. It was produced to advance the cause of the Lutheran Church. I have no objection to the cause of that Church being advanced, but it is a dreadful thing that, after 20 years of pioneering which we did in connection with the documentary films, the B.B.C. has to sink to the level of producing a bad American film and to put it on television under the title of "Epilogue." It is a disgraceful and corny picture. This had to be shown to the people who had themselves in their midst the men capable of making a truly great documentary film.

The Canadians, Australians and New Zealanders are protecting and helping their own documentary film industry. Through the National Film Board of Canada they are doing a great job in producing documentary films which we are happy to see in this country. It goes without saying that the Iron Curtain countries know the value of this method of production.

Mr. Ellis Smith

We have had enough of them this afternoon.

Sir L. Plummer

The Government made a grievous error in practically knocking out the documentary film industry. The Government have the chance now to consider the error of their ways and to relent their action. They can still do a great deal to revive the industry by seeing that it gets at least its share of the money that is available for the financing of films in this country.

A little more of this intelligent, educative, interesting form of film production going out from these shores would do a great deal more for this country and contribute a greater amount to its future than "Mother Riley Meets the Vampire," or whatever it is called, and the nonsense of many of the feature films which are now attracting the money that they are getting. I hope, therefore, that the Government will consider doing what they can now—it is the eleventh hour, and it is just not too late—to restore for this country the prestige and value of the documentary film industry.

7.52 p.m.

Mr. Glenvil Hall (Colne Valley)

When the President of the Board of Trade initiated this debate on Friday, he had the temerity to say that the purpose of the Bill was a relatively simple one. As it contains only two operative Clauses, perhaps he thought that it would go through with a minimum of criticism. We have, however, had a debate which, in one direction at least, has been outstanding. My hon. Friend the Member for Cheetham (Mr. H. Lever), in the early sentences of his speech, on Friday, indicated that in view of the nature of the debate he ought to say that he knew nothing whatever about the cinema industry and that the most he could hope to do would be to bring a breath of refreshing ignorance into it.

When we are dealing with a subject of this kind, particularly when firms and individuals are in question, we should be careful that before we speak at large we make sure of the facts.

Mr. H. Lever

Hear, hear.

Mr. Glenvil Hall

I am sorry to say that from my knowledge of the cinema industry, such as it is, many of the things that have been said during this debate have either been misleading or, in some instances, quite definitely erroneous. I must say that I preferred my hon. Friend the Member for Cheetham when he was piloting through the House his Bill on defamation, rather than when he was making his speech in this debate, great though it was as a Parliamentary effort.

After all, this place is a great sounding board. Although legitimate criticism is very desirable, we should be careful that anything we say accords with the facts. I notice that the hon. Member for Cheadle (Mr. Shepherd) is not in his place, but he definitely mentioned certain individuals by name. It ought, therefore, to be said that Sir Alexander Korda is not now an executive producer, whatever he may have been in the early days. For some years now, he has had nothing to do, I understand, with actual production in British Lion. He is only production adviser and has no voting rights whatever in the Corporation. My hon. Friend the Member for Cheetham said tonight that Sir Alexander Korda holds a high and honoured place in the film industry.

Mr. H. Lever

I did not say it, but I gladly agree that it is so. I was speaking of Sir Michael Balcon.

Mr. Glenvil Hall

Well, the same observation applies to Sir Michael Balcon. Although he is the honorary adviser to the National Film Finance Corporation, he does not advise it in any sense or shape on the financial side. He deals, only when his advice is sought, with the cultural and the artistic side. These facts make all the difference when these men and their relationship to the Corporation are considered.

The Bill does two things. It extends the powers, but does not enlarge the financial limits, of the National Film Finance Corporation, and it allows the Corporation to lend for a period of another three years. Secondly—and this is where the main criticism arises—it attempts to close a gap in the earlier legislation and to permit the Corporation to make the best arrangements possible with those concerned where a loan has become irrecoverable.

Why is it essential that the Board of Trade should introduce this Measure now? What is the background for these proposals? First, the Bill continues legislation which was passed by the Labour Government; some of my hon. Friends on the benches behind me are inclined to forget that. It is true that the first Act was passed as a temporary measure for five years only, but as my right hon. Friend the Member for Huyton (Mr. H. Wilson) who introduced the original legislation and has had a great deal to do with this matter throughout, said on Friday and repeated tonight, circumstances have changed and it is now necessary that the powers conferred on the National Film Finance Corporation should be continued.

It may well be that today we may think that certain legislation should be only temporary but that as time goes on experience quite definitely shows that our original conception of the legislation has to be changed. In my view, there is not the slightest doubt that experience shows quite definitely, not only that this legislation should be continued, but that it should presently be made permanent. My hon. Friend the Member for Flint, East (Mrs. White) indicated as much when she spoke last Friday.

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

I may have misheard the right hon. Gentleman, but I think he said that the original intention was for three years.

Mr. Glenvil Hall

Five years.

Mr. Strauss

I am sorry if I misunderstood the right hon. Gentleman. It was for five years.

Mr. Glenvil Hall

My hon. Friend the Member for Cheetham queried the statements that had been made during this debate that in 1948 the film industry was facing collapse.

Mr. H. Lever

I must make it plain that I never queried either that the production industry was then on the point of collapse or that the measures taken by my right hon. Friend the Member for Huyton (Mr. H. Wilson), the then President of the Board of Trade, were entirely justified. I wholly agreed with his taking those measures at the time as a temporary provision.

Mr. Glenvil Hall

I apologise if I misunderstood my hon. Friend. What is quite definitely a fact, and is generally accepted—I am delighted to think that my hon. Friend also accepts it—is that the film industry in 1948 was in great difficulties and something had to be done. It was essential that the Government should come to its assistance. We have to remember that this industry, although not a large one, stands in a very particular and peculiar position in our public life. No Government can afford to ignore that fact.

As I understand them, the critics say that although that may have been true in 1948, the industry by now should have put its house in order, and by now found itself able to raise its own finance. I see that one morning newspaper suggests that the House should reject the Bill so that the industry should be forced to stand on its own feet and find money for its productions.

The short answer to those who say that this Corporation should now be allowed to come to an end is that they are not facing the facts. Neither the Government nor this House can afford to take such a course. As the President of the Board of Trade indicated in his speech on Friday, about two-thirds of British film production is still financed in part at any rate, by the Corporation. That, I must say, carries very great weight with me.

It follows that if the powers to lend money ended next March quite a substantial halt—as I think the President of the Board of Trade himself said—wouldtake place in British film production. We cannot afford to see that happen. Films, whether they are British or American, have a profound effect on the public mind. Millions go each week to see films, and there is not the slightest doubt that they form a major part of the entertainment of the majority of our people.

It is unthinkable that any Government should contemplate such a halt taking place, because that is what it would mean if the Corporation went out of business. Film production here would also pass into other hands. It is therefore essential on cultural grounds alone that the Corporation should continue because, in that way, we both uphold the British way of life and, most important, ensure that the best quality films continue to be made.

We are already threatened by the Government with American television methods, and it would be tragic if, in addition to that, supposing this Bill were not passed, we should have to rely almost entirely on American films. As several of my hon. Friends have said, although we have to contemplate some losses by the Corporation we have also to remember that every year the nation gets a return in Entertainments Duty of something like £40 million, and, in addition, exports earn us between £2½ million to £3 million. These sums, when placed against the £6 million which the National Film Finance Corporation is allowed to handle through the Board of Trade, give us a better picture than that presented to us tonight and on Friday by my hon. Friend the Member for Cheetham.

There is a misconception in the minds of very many people as to who really is helped by the National Film Finance Corporation. It is quite clear that both Groups 1 and 2, the Rank Organisation and the Associated British Picture Corporation, no longer use the facilities which the Corporation offers. They are fortunate in being able to find such moneys as they require from other sources. That means that if, as we are told, two-thirds of present production looks to the Corporation for help, the smaller producers must be using the facilities envisaged by this Bill. If the Corporation went out of business, it would mean that only the big organisations would survive.

I remember that when this Bill was first contemplated there was first a discussion on the advisability of setting up a film bank. Later, it was decided that the National Film Finance Corporation should be brought into being. One of the great arguments for setting it up was that it would help the independent producer, the young script writer, director and producer who were unable, because of the stranglehold of the big circuits, to get their films made, or get them screened once they were made. Remembering that one of its functions was to help people of this kind, we can today congratulate ourselves on the fact that obviously they have been helped.

Undoubtedly, Group 3 is doing an excellent job, and I for one should like to congratulate the managing director, Mr. John Baxter, on getting a very good team together and producing some first-class pictures. The Everest film might have passed into other hands if it had not been for the fact that Group 3 exists. That would indeed have been a tragedy.

Most of the arguments in favour of this Bill as well as most of those against it have been put. We have to remember, however, that the whole purpose of setting up the Corporation was to help producers who could not find anyone else to assist them with finance. It was because we knew that film making meant great risks that we had to setup the Corporation. Financial interests in the City, because of the risk and because there were few fat profits to be made, were chary about advancing money and, this being so, it was quite obvious, if the industry was to continue, that the Government must find some other means. I, for one, think that the Corporation has justified its existence up to the hilt, and, as I have already said, I should like to see it continue and, in fact, be made permanent.

We cannot allow Hollywood to monopolise the film industry even if a scheme such as this costs the British taxpayer some money over a period of years. We get it back overwhelmingly in the prestige of our films abroad, in the fact that our films are able to show the British way of life, and, as has already been said, because some of our films earn dollars abroad.

Hollywood is, at the moment, I believe, extremely anxious to hold its market in this country. It, too, has its difficulties, particularly those connected with television. Our market is very useful to them, I therefore say that we ought to do nothing to cripple the home industry, even temporarily. I can assure the Government that a majority of us on this side of the House support this Measure, and hope it makes a speedy journey to the Statute Book.

8.10 p.m.

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

I thank the right hon. Gentleman the Member for Colne Valley (Mr. Glenvil Hall) for his characteristically brief but comprehensive speech which set out admirably our purpose in bringing forward this Bill, a purpose which has, I think, the sympathy and approval of the House with the exception, I at once admit, of the hon. Member for Cheetham (Mr. H. Lever).

In the continuation of his speech, the hon. Gentleman said that in an intervention on Friday I appeared to accuse him of discourtesy. Let me say at once that I thought I was parrying an accusation of the same kind, but supposing I was mistaken in that, I am happy to withdraw any such implication. Greatly though I differ from most of the things which the hon. Gentleman said, I have no differences with him at all as a Parliamentarian.

It may be convenient if I answer some of the points put by various hon. and right hon. Gentlemen in the course of the debate, and sometimes if a point was put by more than one hon. Member, I may answer it in dealing with the speech, of another.

The right hon. Gentleman the Member for Huyton (Mr. H. Wilson) asked me a not unimportant question, namely, whether the two Rank circuits were really being operated as separate circuits. I know he had in mind some negotiations which passed between the right hon. Gentleman himself, when he held the office of President of the Board of Trade, and the Rank Organisation. As a result of correspondence, that Organisation made it clear that no changes in the booking arrangements designed to increase the effective booking strength of either circuit or to affect adversely the supply of British films to independent exhibitors would result from the arrangements that they were then proposing to make. They were forming a management company to operate both the Odeon and Gaumont circuits.

It was after he had received those assurances that the right hon. Gentleman said that he would not use certain powers which he had under Section 5 (5) of the Cinematograph Films Act, 1948, to oppose the centralised management scheme. He has now asked me whether they are being operated as separate circuits. I think the right hon. Gentleman will agree that, if those undertakings had been disregarded, we should have expected to receive complaints either from the Cinematograph Exhibitors' Association or from the British Film Producers' Association. I am glad to inform him that we have received no representations to the effect that the undertakings he then received have not been observed.

I would also say, in reply to a point made by the right hon. Gentleman himself or by another hon. Member, that no independent producer has applied since 1951 for a direction under Section 5 (2) of the 1948 Act, under which the Board of Trade could in certain circumstances have directed one or other of the circuits to show films.

Mr. H. Wilson

I am sorry to interrupt the hon. and learned Gentleman, but the evidence he has just given in reply to my query about the two Rank circuits is very sketchy. All he has said is that there is no reason to think that there is any change in those arrangements because there has been no complaint either from the exhibitors or the producers. Has not the hon. and learned Gentleman or his right hon. Friend been in contact with the Rank Organisation on this point? Have they asked whether the arrangements are still the same as they were at that time? Has the hon. and learned Gentleman, for instance, ascertained the view of the National Film Finance Corporation? Are they entirely happy about it? Surely the hon. and learned Gentleman should make more thorough inquiries and not merely say that as far as he knows he has received no complaint?

Mr. Strauss

I thought I was answering the point fairly fully. Of course, I did not mean to say that I was relying wholly on that. I am sure that our relations with the National Film Finance Corporation are sufficiently intimate to ensure that, if the Corporation shared that fear, they would have informed us. I will not say that we have made a specific inquiry of the Rank Organisation between the time the right hon. Gentleman made his speech and today, but I am confident that, if the state of affairs I have described did not exist, there would have been complaints.

My hon. Friend the Member for Ealing, South (Mr. Maude) was anxious lest, as a possible result of Clause 2 of this Bill, the National Film Finance Corporation might get the majority shareholding in a company. Certainly there is nothing in the Bill which makes that an impossibility. Certainly it is not the desire either of the Corporation or of the Government that this should be necessary, but it would be wrong to put a limitation in the Bill which would prevent the best arrangement being made in any particular case so that as much as possible of any loan could be recovered.

My hon. Friend the Member for Cheadle (Mr. Shepherd) made certain suggestions about reorganisation of the management of the British Lion Film Corporation. It would be wrong for the Government to set up a body like the National Film Finance Corporation, which can consider with more expert eyes the professional abilities of those to whom they advance money, and then for us to intervene directly. At the time of the original loans to the British Lion Film Corporation, the National Film Finance Corporation insisted on certain conditions which have been substantially observed. Therefore, for the reason given by the right hon. Gentleman the Member for Colne Valley and myself, I do not think it would be appropriate for me to go into any personalities in this connection. I would add a correction already made by the right hon. Gentleman, in order to make it quite clear, that Sir Alexander Korda is not a director of the British Lion Film Corporation. He has advised them on some of the films which the Corporation has helped to finance, but I should say that the record of "The Third Man," "The Fallen Idol" and "The Sound Barrier" is not perhaps too bad.

Mr. M. Follick (Loughborough)

Very good.

Mr. Strauss

Therefore, if I do not go into any further details, I hope it will not be assumed that Her Majesty's Government are agreeing with any of the criticisms that have been made.

The hon. Lady the Member for Flint, East (Mrs. White) asked whether Sir Alexander Korda had applied to the Corporation for a loan in order to make a series of commercial television films. Here again, I should like to make it clear that the Board of Trade do not know normally who have applied to the Corporation for loans. Nor do we intervene one way or the other to encourage the Corporation to make loans in particular cases or to discourage them from making loans in others. I have ascertained by inquiry, however, that no proposal of the kind referred to by the hon. Lady has been received from Sir Alexander Korda.

On the general question of whether any advance could be made for a television film, there is nothing in the principal Act to prevent it. The Corporation financed two such propositions in the very early days, but since then no proposals made for this purpose have seemed to qualify for loans from the Corporation.

My hon. Friend the Member for Devizes (Mr. Hollis) asked whether the Secretary of State for the Colonies had not been right in some of the things he said at the time the Corporation was formed. The answer is, "Yes"; my right hon. Friend has proved in certain respects to have had more foresight than some other people. But in answer to the specific and relevant point put by my hon. Friend, it is the view of all who have studied the question that, whatever might be the Chancellor's policy on Entertainments Duty, which it would clearly be impossible for me to discuss, legislation of the type already on the Statute Book, which we are amending by this Bill, would still be required to provide working capital for British film production.

My hon. Friend the Member for Devizes also said that perhaps too much credit has been given to the Corporation for certain things which have happened simply when the Corporation have been there. He mentioned, in particular, the reduction in costs. I am happy to inform him that the National Film Finance Corporation agrees with that and has no desire whatsoever to be considered the sole cause of the improvement which has taken place. However, I agree with the right hon. Gentleman the Member for Huyton that it has certainly played its part.

The hon. Member for Aston (Mr. Wyatt), the hon. Member for Cheetham and other hon. Members have raised questions about the position of Sir Michael Balcon. I want to say at once that, as the right hon. Gentleman the Member for Colne Valley pointed out, Sir Michael does not advise on the granting of loans; he advises on technical matters. I know that may not completely meet the point which the hon. Member for Cheetham has in mind, but I want that to be clear at the outset.

In all seriousness, if the Corporation is to have first-rate advice on highly technical matters, it must have that advice from someone engaged in the industry. Otherwise the advice will simply not be obtainable. The hon. Member for Cheetham and others are entitled to demand that, if this happens, there shall be no concealment of it and it shall be openly stated. That is precisely what happened before the first loan was made.

In fairness to Sir Michael Balcon, I want to read paragraph 13 of the1952 Annual Report, which said: Amongst the borrowers Ealing Studios Ltd. appears for the first time this year. Because of Sir Michael Balcon's dual position as a director of that company and as honorary adviser to the Corporation, this loan, unlike all others, was specifically referred to, and approved by, the Board of Trade. The Corporation thought it right to secure official confirmation of its own strong view that this loan need not affect in any way Sir Michael's position as adviser. The services he renders are far too valuable to be unnecessarily sacrificed. The hon. Member for Cheetham may not be satisfied with that, but I am sure he will say that, as that is expressly stated in the Report, it completely exonerates Sir Michael Balcon. My right hon. Friend is perfectly prepared to accept full responsibility for that decision, and I believe that the decision is one which the House as a whole approves.

Perhaps it would be convenient for me now to deal with what I believe to be the chief point made by the hon. Member for Cheetham in his not inconsiderable speech. He used some very strong language about Clause 2, and said, in effect, "Can you imagine any prudent lender acting as is suggested in Clause 2 (1)?"He ridiculed the idea that a prudent lender would do anything of the kind. But I must point out to him and to the House that this is a power which any ordinary lender would have without statute. The only reason we need put it in the Measure is that the National Film Finance Corporation is a statutory Corporation. I am certain that in his professional practice the hon. Member would not tell a lender that it should always be his policy to wind up a company which owed him money and not to adopt any alternative remedy. That would be fantastic.

Mr. H. Lever


Mr. Strauss

Although I cannot rival the hon. Member in loquacity, I am entitled to make my point. He has not a monopoly of the time of the House. No ordinary lender would require legislation to give him this power. The hon. Member was wrong in suggesting that this gave notice in advance to any borrower that he had only to say that he wanted to produce some more films and then, however solvent he might be, he could look forward, with this Measure on the Statute Book, to being excused his debt. That is the most preposterous nonsense.

Mr. Lever

The hon. and learned Gentleman is completely avoiding answering the point I made. The President of the Board of Trade said it was the action of a normal prudent creditor to abate his debt in the manner provided here, not on grounds of inability to pay but on the grounds that the production of films would be harmfully affected. In other words I said no ordinary creditor would abate his debt except on the ground of inability to pay; he would not abate it because the debtor's productive capacity would thereby be harmed.

Mr. Strauss

Perhaps, if the hon. Member had made his point a little more briefly, I should have got it better, but I think I have got it substantially correctly. The hon. Gentleman completely misunderstood my right hon. Friend. What my right hon. Friend said, and what the right hon. Gentleman opposite agrees with, is that, when this Corporation has a debt outstanding, it should not have as its sole remedy winding up the borrower.

Mr. Lever

That is not what the Clause says.

Mr. Strauss

I must disagree with the hon. Gentleman. We can say, on looking at this Clause, that one can imagine it being operated by lunatics to produce lunatic results, but there are very few Measures about which that could not be said. When we look at what is actually in the Clause and what are the safeguards, I suggest that the purpose of the Clause is perfectly proper. It is that there should be in the hands of the National Film Finance Corporation some alternative method of recovering a debt without liquidating the borrowing company, which, incidentally, would not enable it to recover the whole of its debt.

The hon. Member asked me certain other questions. I do not know if I have got them all, but I will try to answer some of them. One of these questions was: Is this three-year extension of the borrowing powers intended to be final? I commend this Bill as right today, and I advise the House to give it a Second Reading, because I say that it is right to extend these powers for three years, but the hon. Gentleman knows as well as anybody else that that would not be binding on any future Parliament, or even on this Parliament should it think differently on another occasion. I hope that we shall be realists and see how this thing works out.

Then the hon. Gentleman asked whether the Finance Corporation had statutory powers to lend money otherwise than in the bona fide expectation of fully recovering it. I must ask him to look at the principal Act, and, if he will do so, he will see that Section 1 (1, b) lays down what its purpose is. Leaving out unessential words, it lays down that they shall make— …loans to be employed in financing the production or distribution of cinematograph films to persons who, in the judgment of the Corporation, while having reasonable expectations of being able to arrange for the production or distribution of cinematograph films on a commercially successful basis, are not for the time being in a position otherwise to obtain adequate financial facilities for the purpose on reasonable terms from an appropriate source. In answering that question, I am not going to try to improve on the language of the Act, which governs this matter. I could refer the hon. Gentleman to many other Sections of the Act, and particularly Section 2.

Mr. Swingler

The language of the Act, as the hon. Gentleman has now given it to us, is in striking contradiction to the practice of the Corporation, because it suggests that the money is to go to people who have some prospect of producing films that will be commercially successful. The Corporation has proved that it knows it is lending money to people whom it knows cannot possibly be commercially successful, and there is a very serious contradiction between the practice of the Corporation and the language of the Act, which gives rise to some of these questions, which I think the hon. Gentleman should answer.

Mr. Strauss

I think the industry is such that it is easier to be long-sighted over a series of films than over an individual film, but, unless the Corporation had made a real effort to pay attention to the language of the Act, it would certainly have lost very much more money than it has done. The greater part of its loss was on this single loan to the British Lion Film Corporation.

Mr. H. Lever

Is the hon. and learned Gentleman going to answer my question? I have asked him whether the Corporation has the power to make loans otherwise than bona fide expecting to get them back? Is that legal or not legal? The answer is just "Yes" or "No," and not the recital of all these things.

Mr. Strauss

The hon. Gentleman is once again objecting, after his own unexampled garrulity, to a Minister replying in his own way. He has asked me to define what the Corporation can do, and I say that that is laid down in an Act of Parliament to which the hon. Gentleman did not think fit to refer. I am not going to endeavour to improve upon the language of an Act of Parliament, which is part of the statute law of this country. The hon. Gentleman then asked me a question. [Interruption.] If the hon. Gentleman asks "Are they acting lawfully or unlawfully?" I say that if we thought they were acting unlawfully we should of course take the necessary steps to stop them.

I think the hon. Member for New-castle-under-Lyme (Mr. Swingler) and other hon. Gentlemen made a mistake when they talked about the Corporation losing when a film made no money and not sharing the profit if it succeeded. If the hon. Gentleman will turn to the original Act, and indeed to the practice of the Corporation as revealed in the Annual Reports, he will know that in making a loan they frequently make it a term of that loan that they shall share in the profits. In fact, in one of the Annual Reports they devoted some paragraphs to answering the allegation that they were taking too great a share of the profits.

My hon. Friend the Member for Hampstead (Mr. H. Brooke) had, I think, more quarrel with what he thought the inadequacy of what the Corporation states in the Report than with anything it was either doing or not doing. I do not believe he would have much quarrel with that comment. He said that the Corporation might have made it clearer in its Annual Report just what it was doing, and hoped that in future Annual Reports it will tell us more. I am sure that is a point which it will consider. It is a little difficult to judge just how much to say in an Annual Report without wearying the reader who wishes to get the essential facts and I do not think its task was easy. One has to take a fair view. When its last Report was debated in another place, Members of all parties paid tribute to its clarity. That is said without prejudice to what my hon. Friend has said, which I am certain will be brought to the notice of the Corporation and will be considered by it.

The hon. Member for Deptford (Sir L. Plummer) dealt with a matter which Mr. Speaker last year held to be out of order and which had really nothing to do with the subject either of the principal Act or of any amendment of it, namely, the Crown Film Unit. Whatever the merits of that controversy they do not arise to- day, and all I would say to the hon. Member for Deptford is that many of us on both sides of the House share his admiration for English documentary films. I would make it quite clear that there is nothing to prevent the producer of a documentary film from applying to the Corporation for a loan. Indeed, one very eminent documentary film is the Everest film on which the Corporation advanced the whole of the money. I think it is worth observing that there is no reason at all why these films which enjoy the admiration of both sides of the House should not receive help from this Corporation.

The right hon. Member for Colne Valley who wound up for the Opposition, quite accurately stated the two things which this Bill accomplishes. It extends the borrowing powers for three years; it does not, as has been said quite inaccurately by a number of hon. Members, throw a lot of new money down the drain. It does nothing of the sort. The amount that they are entitled to borrow is in no way affected by this amending Bill. The period during which they lend is extended, and that, as I know, has the approval of all sections of the House.

The second object is to enable the best arrangements to be made with a company which it is not advisable to wind up, but which owes the National Film Finance Corporation substantial sums. Let me make one thing clear, which I do not think is clear to the sole opponent of this Bill. The only way in which any public money could be lost would be under the operation of Subsection (2) of Clause 2. The hon. Member for Cheetham assumes that if there were any action under Subsection (1), that must almost automatically result in a remission under Subsection (2).

Action might be taken under Subsection (1) which would have no consequence under Subsection (2). It is only right, I think, that under Subsection (1) the Board of Trade, as the Department of State directly concerned with the National Film Finance Corporation, should be the Department to give approval. But it is also quite clear that before any public money is written off under Subsection (2), such writing off should have Treasury approval. Those are the grounds for the way in which the Clause is drafted.

I think I have answered the various points raised, and I commend the Bill to the House.

Question put, and agreed to.

Bill accordingly read a Second time.

Committed to a Committee of the whole House.—[Mr. Legh.]

Committee Tomorrow.