HC Deb 24 June 1954 vol 529 cc753-62

Motion made, and Question proposed, "That this House do now adjourn."—[Mr. T. G. D. Galbraith.]

11.43 p.m.

Mr. John Rodgers (Sevenoaks)

In common with manufacturers of most goods and producers of most services, the publishers of this country, those people who are responsible for the production of books, are finding that their overheads have gone up considerably since the end of the war. Union rates of wages have gone up, the costs of electricity, gas, rent, transport, paper and printing, building and so on have gone up. It would be generally conceded that the conventional published price of most books has not increased in the same proportion as the labour, materials and overheads of British publishers. Indeed, the Publishers' Association maintain that, whereas before the war the ratio of manufacturing costs to published price was 1 to 5, it is now 1 to 3½.

The Publishers' Association maintains, therefore, that the margin is today not sufficient for its members to make general publishing commercially remunerative, thought it is true that that does not apply to those firms which are lucky enough to possess printing or binding plants and the like.

The Publishers' Association, therefore, is faced with the problem of how to remunerate itself to make up for this increase in overheads. Its members have considered various solutions. They have rejected the possible solution of raising the published price of books, the possibility of reducing the retail margin on books, and of reducing royalties. They have come down in favour of a fourth solution which will get them out of their alleged difficulty, namely to take a higher share of the profits which the author, and in particular the new author, receives from the subsidiary rights in his books, that is film, radio and television rights, serial and anthology rights and the like.

It is not for me to say in this Adjournment debate whether or not the case presented by the publishers is correct. It is not for me to say whether or not the publishers are entitled to a part of the author's remuneration in respect of subsidiary rights in books. But I do most strongly protest against the method adopted by the publishers in trying to enforce this and secure this greater remuneration.

On 21st January, the Council of the Publishers' Association resolved, in order to maintain the maximum earning power of authors for authors and the financial stability of publishers of works of fiction and general literature, certain steps should be taken. I must say that it is the most ingenious argument I have ever heard, that to increase the earning powers of authors the publishers should take away part of their subsidiary rights.

The publishers passed the following resolution, that they: Insist on the under-mentioned minimum percentages when making contracts with new, unknown authors, whether through agents or direct, the publishers share in each case representing the reward to which he is entitled for his part in creating or adding to the value of the named rights. There followed two other parts of the resolution, which would enable the publisher to demand a minimum share for himself of certain subsidiary rights, whether the author was a new one, or, had an already established reputation.

In other words, the publishers have drawn up a standard contract for all authors which all the leading publishers have indicated their intention of adopting and which should have come into force this year. I say "should have" because, so far as I am informed, this has not come into force because the moment it became public knowledge that the publishers intended to make a standard contract there was an outcry from all authors and the people interested in the future of literature. The response from the public was clear, forthright and immediate.

On 14th April, "The Times" published a letter on behalf of the Society of Authors. Perhaps I should say that I am, in a very humble way, an author myself, but / am not very interested in subsidiary rights—I cannot see any books of mine being filmed—and I am a member of the managing committee of the Society of Authors. But my relationship with my publishers is extremely cordial and extremely friendly. I have nothing against the publishers of this country, and a great many of them are among my friends.

This letter was signed by the Poet Laureate, Somerset Maugham, Sir Osbert Sitwell, Mr. J. B. Priestley, Sir Walter de la Mare and other very distinguished people. It called attention to the injustice of confining the new terms to the new author and extracting from him a substantial share of rights, the value of which the publisher does nothing to enhance, and then went on: The method adopted by the Publishers' Association for effecting its end strikes at the root of the author's freedom of contracting. Instead of dealing freely with an individual publisher who treats every work individually, the new author is to deal with what will virtually be a publishing cartel which will refuse to publish his work unless he agrees to surrender a share in earnings only remotely derived from book publication and under the terms of a rigid universal contract from which there is to be no appeal to any other publisher. The effect of this would be to end the independence, not only of British authors, but of British publishers. A monopoly of all publishing by the Stationery Office could not much more effectively subject literature and the creators of literature to a single authoritarian control. The letter went on to admit that there were probably cases in which the authors could rightly take a share of authors' earnings and subsidiary rights, but definitely rejected participation in those rights as a universal right of all publishers.

Since if the Publishers' Association persist in their endeavour to insist on a standard contract for new authors, this move will probably affect the supply of books—which are goods under the Monopolies and Restrictive Practices (Inquiry and Control) Act—it is possible this might justify reference to the Monopolies Commission. Under Section (3) of that Act it is stated that the Act would apply in respect of the supplying any products, in this case new books, if at least one-third of all the goods of that description which are supplied in the United Kingdom or any substantial part thereof are supplied by or to any one person, or by or to any two or more persons, being interconnected bodies corporate… and in Section 3 (2) it is stated: The two or more persons referred to in subsection (1) of this section are any two or more persons who, whether voluntarily or not, and whether by agreement or not, so conduct their respective affairs as in any way to prevent or restrict competition in connection with the production or supply of goods… I do not think for one moment that it can be contended that the 35 firms which already signified that they intend to act in accordance with the resolution passed by the Publishers' Association do not control far more than one-third of the supply of new books of a general character and, since I believe this attempt to enforce a standard contract will react unfavourably on the production of new books and constitute a grave injustice to struggling new authors who will have a substantial share of their earnings arbitrarily confiscated by the publishers of their books, whether or not the publishers have done anything to contribute to the subsidiary earnings beyond the initial publication of their books, I hope the Publishers' Association will desist in their attempts to impose a standard contract.

If they do not, I hope that the Parliamentary Secretary will say that should they persist he will give earnest consideration to whether or not he should remit the whole question of the production of books to the attention of the Monopolies Commission. Since I have the highest regard for the publishers of this country, and since I am privileged to enjoy the friendship of a good many of them, I hope that this course may not be necessary and that the Publishers' Association will have second thoughts on the matter. I am not saying that the Publishers' Association claims for participation in subsidiary rights is necessarily wrong. What I do say is that the method they have adopted for collective enforcement is unwise and certainly unworthy of the great traditions of the publishers of this country and, moreover, will to my mind undermine one of the bastions of a free society.

11.54 p.m.

Mr. John Strachey (Dundee, West)

I wish to add one or two words to the speech of the hon. Member for Sevenoaks (Mr. Rodgers) who raised this matter so ably. I also have to disclose an interest as an author and a member of the board of management of the Society of Authors. It is well known from the letters which appeared in "The Times" and which the hon. Member has quoted that the Society of Authors is very openly, publicly and deeply concerned in this matter.

So far as this Society is concerned, I think that there is only one issue which is of interest for us here. That is the one to which the hon. Member referred throughout his speech and which is raised by the words in the resolution of the Council of the Publishers' Association in which that Association ask members of the Association—requires members to insist—I emphasise the word "insist": on the undermentioned minimum percentages when making contracts with new unknown authors. It is not for us in this House to say whether it is right or wrong for a publisher to receive 50 per cent., as is suggested here, in the anthology rights of an author. It may well be in a particular case it is perfectly right for the publisher to receive 50 per cent. of anthology rights. That is not something in which this House could possibly interfere. What does become a matter of which this House could take cognizance is when practically the whole of the publishers of this country attempt to lay down a rigid standard below which no author is allowed to contract with his publisher at all.

If this proposal is carried into effect, we submit that the publishers, to all intents and purposes, become a cartel. They become one organisation with which all authors will have to deal in respect of these particular subsidiary rights. The publishers would, therefore, assume many of the aspects of a monopoly. We think, and the House thought when it passed the Monopolies Act, that a private monopoly is a bad thing for industry. The Monopolies Commission has done good work in its reports in that field. I would submit that if monopoly is bad in the production of boots and shoes, of material objects, machinery or electric lamps, it is far worse when applied to the publishing of literature and the production of books.

In this field, above all, there ought to be the utmost flexibility; the utmost possibility for the greatest variation in the terms of contract between authors and publishers. It would be a sorry day for English letters if the publishers of Britain became, in effect, a unified organisation with which the author would have to deal on a standard contract over a larger and larger field. The circumstances of book publication vary enormously from author to author, from book to book, from time to time. What is fair and right in one case is certain to be wrong in another.

Therefore, I would support the submission of the hon. Member for Sevenoaks that the Parliamentary Secretary ought seriously to consider whether the attempt by the Publishers' Association to begin a process of making the publishing firms of this country into an all-inclusive cartel is not a matter to which the attention of the Monopolies Commission may properly be drawn. That does not pre-judge the matter. The Commission might report that our fears are groundless, in which case the Publishers' Association would have great support. If, as I believe, this is a step towards monopoly in a particularly sensitive field, the application of the Monopolies Commission procedure to the matter would be of the utmost importance.

I say this in no spirit of hostility to the publishers. They are valuable citizens carrying on an indispensable work, but they have, we believe, taken a false step here. It will do them the greatest possible injury, and no sums of money which they manage to transfer from the authors' pockets to their own will compensate them for the loss of public esteem they will suffer if they go ahead with the proposal.

12 midnight.

Mr. Nigel Nicolson (Bournemouth, East and Christchurch)

If what the right hon. Member for Dundee, West (Mr. Strachey) and my hon. Friend the Member for Sevenoaks (Mr. Rodgers) has said were true, I would agree that a case had been made out for the Monopolies Commission to intervene. I speak as a publisher, not one who signed this letter, but one who does not find himself so horrified by its contents as the previous speakers.

Publishing is an industry which is the most competitive in the country. A simple proof of that is that there is a higher bankruptcy rate in the publishing business than in any other. It is the worst risk in the City of London. It is a risky business and the publisher is obliged to try to recoup losses, which he may make with his eyes open upon books which he thinks worthy of publication for their literary or intrinsic merit, upon books which are not so valuable, but which sell in larger quantities to the public.

There is no question at all that these 30 publishers do not represent the only market to which a young author can take his wares. He can take them to some 100 others, and wherever a good author appears with a good manuscript there is no question of him failing to find a publisher simply because he refuses to sign this document. One of the most successful of the younger publishers who have emerged since the war stated in a recent book that he lost money on three out of every five books which he published—and he is ranked among the most successful.

The days of literary patronage have gone. The publisher is now the patron of literature. Does the right hon. Member for Dundee, West imagine that the amount of poetry which is published would be published were it not for the fact that publishers are willing to lose their own money on producing what they consider to be a contribution to the literature of this country?

But when a young author comes to them with, for example, a novel which has possibilities of being turned into a film—and only one in 500 have that possibility—surely the publisher is entitled to say to the author, "I will take the risk of publishing your novel on which I am almost certain to lose, except that there is a faint chance that it may be turned into a film or serialised on the B.B.C." Surely the publisher can say. "I am therefore entitled to share with you the profits of these subsidiary rights." That is all. If the author does not like that arrangement he can take his manuscript anywhere else he likes.

Mr. Strachey

Would not the hon. Member agree that the purpose of this is to prevent an author from finding another publisher to whom he can take his manuscript?

Mr. Nicolson

If that were the purpose, which I deny, it would be impossible to implement it, because 30 publishers have signed this document out of at least 170 publishers.

Mr. J. Enoch Powell (Wolverhampton, South-West)

My hon. Friend has maintained that no cartel exists unless it is a complete cartel and that no monopoly exists unless it is a complete monopoly. But there are varying degrees of monopoly, as the Monopolies Commission recognises. A condition of monopoly may exist where only one-third of the trade is governed by a particular agreement. There is no question of this agreement embracing the whole of the publishing business. The point is that it embraces part of it.

12.5 a.m.

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

I am grateful to the right hon. Gentleman and to my hon. Friends who have spoken for giving me sufficient time to say a few words on this controversy. I was glad that my hon. Friend the Member for Bournemouth, East and Christchurch (Mr. Nicolson) intervened briefly in order that there should be one representative, at any rate, of the other of the principal parties who recently had so vigorous a controversy in "The Times," starting on 14th April and lasting until 22nd May—which is long, even for "The Times," for a correspondence of this character. I cannot help being reminded by seeing the right hon. Gentleman (Mr. Strachey) opposite, and hearing him tonight, that I knew him as a talented writer before I ever met him as a politician.

I think those who read that correspondence and controversy in "The Times" realise that it was by no means one-sided. I do not ask the House necessarily to agree with "The Times," in what it said in a leader published at the end of the controversy, apart from the Poet Laureate's final letter. "The Times" said: Publishers have had to stand up to severe punishment lately from the heavyweights of the writing world, who have been attacking them in these columns. But they have certainly not been knocked out, and the reading public, which owes a debt of gratitude to publishers as well as to authors, may award a victory on points to the former. At any rate the controversy was by no means one-sided. I have no desire to go into the merits of that controversy tonight. Indeed, those who have spoken have not invited me to do so. By the very suggestion that in certain circumstances the Board of Trade should consider whether this matter should not come in some form or other before the Monopolies Commission, they suggest that I should not now express a view on the merits.

Let me remind the House what it is that we can refer to the Monopolies Commission. The operative words for this purpose are found in Section 2 (1): Where it appears to the Board of Trade that it is or may be the fact that conditions to which this Act applies prevail as respects either (a) the supply of goods of any description; or (b) the application of any process to goods of any description; or (c) exports of goods of any description from the United Kingdom, either generally or to any particular market, the Board may, if they think fit, refer the matter to the Commission for investigation and report. The material words for the present purpose are "the supply of goods of any description."

The conditions to which the Act applies are defined in Section 3, which was quoted by the hon. Member for Sevenoaks. What the Board of Trade could refer, if there appeared to be a good case for making such a reference, would be the supply of books. If such a reference were made, what the Commission would then consider would be within the control of the Commission, and not of the Board of Trade. What is clear is that this contract is not a matter which could be referred to the Commission. Whether, if the supply of books were referred, the terms of this contract would then be considered would be a matter for the Commission and not for the Board of Trade. The contract deals with copyright, with the right to publish the work of another person, which, of course, is not a dealing in goods.

I believe that I should be expressing the view not only of a large part of the public but of all hon. Members who have spoken if I expressed the desire that what should emerge from all this discussion is something satisfactory to all parties. After all, there are very able men devoted to the high interest of their calling both among authors and publishers. I expect that we all have friends in each category. I certainly have, and I still hope that an agreed solution may be reached.

Indeed, such friendly relations exist generally between authors and their publishers that perhaps that hope is not unduly optimistic, but I do not think that we should bring agreement nearer if we denied the reality of the problem. That is why I welcome what was said by my hon. Friend the Member for Sevenoaks who stated that there was a real problem to be met.

There is the problem of increased costs. I think that it is in the interests of publishers, of authors and of readers of fiction and general literature that this real problem should be considered by all and that, if at all possible, an agreed solution should be reached.

Adjourned accordingly at Twelve Minutes past Twelve o'Clock.