§ Mr. Speaker
It may be for the convenience of the House if I say a word about the debate about to take place. I propose to call the Motion in the name of the hon. Member for Govan (Mr. Rankin) and when that has been moved and seconded I shall call the Amendment in the name of the hon. Member for Shipley (Mr. Hirst), and I shall then propose to the House the Question, "That the words proposed to be left out stand part of the Question". That will leave the terms of both the Motion and of the Amendment before the House, and the debate will in every way be unrestricted, which, I understand, is what the House desires.
§ 11.6 a.m.
§ Mr. John Rankin (Glasgow, Govan)
I beg to move,That this House views with concern the present state of the film industry and trade and calls upon Her Majesty's Government to take action to redress the present unfair incidence of entertainments duty and to institute an independent inquiry into the organisation and problems of the industry.This is the first occasion, I think, in more than six years that the House has had an opportunity of examining the state of the film industry in all its aspects, and I trust that today we shall have a dispassionate and comprehensive review of all aspects of this important industry. It is true that two years ago, in November, 1953, we had a debate about the industry on the Second Reading of a Bill, but, in view of the restricted terms of that Bill, the debate was somewhat limited—although one of my hon. Friends 1946 took the occasion to make a speech of somewhat remarkable length. Naturally, it is not my purpose today to try to emulate that performance, because I am very anxious to hear expressions of views from all parts of the Chamber.
I should like to deal in some detail with the exhibiting side of the industry and later to consider what is happening on the production side, but first I want to offer some observations of a general nature. Every day of the week there are on average about 3¾ million admissions to the 4,500 cinemas in Great Britain, which is roughly equivalent to each person in the country attending a cinema 27 times per year. Not everyone, of course, goes, but four out of 10 adults and five out of 10 children do so at least once a week. That second figure is one of great significance, because it indicates the influence which this important industry can have in shaping the thoughts of our young folk today.
In all, the British public spends over £100 million annually on cinema-going, which is twice as much as the total amount spent on dance halls, skating rinks and all other places of amusement. In recent years three influences have impressed themselves very strongly on the industry. They have been decisive in determining the conditions in which it now operates. The first of these influences is the growth of large, integrated groups within the industry, that is groups which combine the functions of production, exhibition and distribution.
The largest two groups own roughly 20 per cent. of the cinemas in the country, with one-third of the total seating capacity. These cinemas take between them more than two-fifths of the gross box-office receipts. I suppose that their growth today would be taken as an example of the tendency towards monopoly in the industry.
The second influence is the extent of American interests in the British film industry and its home market. The greater proportion of films shown in British cinemas during the last 30 years have been American and this has given the American industry a dominant position in the British market for films. The third influence is the extent to which all Governments have found themselves obliged to take a hand in the affairs of the industry. Government intervention 1947 through the Eady scheme and the National Film Finance Corporation has in recent years sustained the industry in time of crisis and kept British film production alive.
I should like to refer in a little more detail to the second of the influences which I have mentioned. The world of films is dominated by the power of the American production industry in Hollywood. Its power is based upon the size of the American home market, with nearly 20,000 cinemas and a weekly rate of admission of 70 million. It allows the average Hollywood film to recoup its production costs domestically and then earn its profits overseas. By contrast, the British first feature which recovers its production costs at home without Government help is a rare exception to the general rule. This is due partly to present levels of taxation—particularly Entertainments Duty, which takes over 35 per cent. of gross box-office receipts and which it can be argued, of course, is strongly influenced by the desire to raise the maximum revenue, largely from American films—and partly by the division of net revenue between exhibitor, renter and producer.
The power of Hollywood has given the American film industry virtual control of world markets. This control means that the production industries of Great Britain, France, Italy and other countries—for this is a world problem—have become dependent on some form of Government assistance in order to survive at all. It might be observed that the American attitude towards G.A.T.T. is much more tenderly applied in the case of Italy than it is at the moment in the case of Great Britain, but to examine that aspect might lead me into the assessment of problems and difficulties which it is not our proper function to examine this morning.
Hollywood, with an entertainments tax of 10 per cent., has yet to earn more than 50 per cent. of its revenue abroad, with the United Kingdom as its largest single market. Against that, the foreign earnings of British films, at £4 million, represent only 28 per cent. of the total earnings which come from our British films.
I should like to look in detail at the exhibiting side of the industry. The first thing that presents itself to us is an arresting picture of a continuing decline in the number of cinemas and in the public at- 1948 tending them. This, of course, does not necessarily mean poverty among all cinema owners. As we all know, in certain groups there is evident affluence. Nevertheless, the introduction of devices like sound, followed by colour, then Cinemascope and now Cinerama, means that the small man is placed at tremendous disadvantage in competing with the largest cinemas. To equip a cinema with Cinemascope demands an outlay of anything from £1,500 to £5,000, depending upon the type and nature of the structural alterations. To equip a cinema with Cinerama involves an outlay of £62,000. It is obvious that the onus of these capital outlays places too heavy a burden upon the small owner.
We are faced, therefore, with the fact that the big cinemas are fairly prosperous and the small man is being driven to the wall. In 1946, admissions to British cinemas were 1,635 million. By 1954 the figure had dropped to £1,282 million. I am sure that in all parts of the House there will be concern about the dramatic fall.
§ The Parliamentary Secretary to the Board of Trade (Mr. Derek Walker-Smith)
The hon. Member said "pounds." He meant "persons."
§ Mr. Rankin
I said "admissions" the first time. I am sorry if I said "pounds" the second time. I meant to say 1,282 million persons. One cannot always avoid mixing up persons with pounds in this context. As I was trying to show earlier, all the persons in the industry do not have sufficient of these pounds, because the Chancellor takes them away.
The decline continues because, if we take the first six months of 1954 admissions were 647 million and in the comparable period of 1955 those numbers had dropped by 30 million to 617 million. The decrease covers all regions in the United Kingdom, and I think I am safe in saying that in more or less degree all cinema groups are affected. There is no sign of any arrestment in this serious decline.
While admissions fall, the tax position remains unchanged. In 1952 £38 million were extracted from the industry. The present amount is £35 million. I took the trouble to find out the value of the £ as it stands at the moment. According to a December estimate, which is the 1949 latest I could get, the £ is worth 17s. l1d. So that the £38 million of 1952 determined in present day values is worth £34 million odd. So it is correct to observe that while the amount which has been extracted from the industry in those three years has grown in respect of present day values, the sources from which that money has been extracted have decreased to the extent of 88 million admissions in the same period.
If we look at the employment side, we find that in distribution the numbers employed were 5,579 in 1953. By 1955 that had decreased to 5,201, showing a fall of 379. On the exhibiting side, the full-time workers in the industry in 1953 were 46,356 and the part-time 35,681. In 1955 the full-time workers were 44,665 and the part-time showed an increase of 36,629, but there is an overall decrease of 743. However, the part-time increase is not something we can note with optimism, because it emphasises the decline that is going on in the industry. This is because the part-time increase is due to the fact that many cinemas owned by small proprietors have had to shorten their showing time to 27½ hours per week, and consequently they have had to put people formerly in full employment on to part-time work.
The third aspect, production, showed 8,400 employees at the end of December, 1953, and 9,100 at the end of November, 1955. This is not really an increase but a reduction, because half of those 9,100 have had to seek employment in the production of T.V. films because of the decline on the production side. Some of my hon. Friends may have something to say about the closing down of Ealing studios in that regard. So the actual number on the production side has fallen to 4,550, and when we add up these decreases in the industry on the employment side the total reduction in two years comes to 4,972. At the same time fifty-three cinemas have ceased to operate in the last two years from 1953 to 1955. That is a net reduction, including those cinemas which closed and reopened in the same period. The number of admissions per seat fell from 328 in 1950 to 307 in 1954.
The figures I have submitted—box office and employment in all aspects—emphasise the serious decline taking place within the industry. Earlier I observed that the poverty—if we may call it such— 1950 is not being fairly shared, and so largely my plea this morning on the exhibiting side is for the small owner who is suffering most, as I shall now try to show.
In the Board of Trade Journal for 10th November, 1955, tables are given on page 1108 covering the period from 27th March to 27th June, 1955. In the case of cinemas seating more than 2,000, 208 show net takings of £1,805,000, giving an average per cinema of £8,700 for the quarter. Cinemas with a seating capacity of 250 and less, of which 148 made returns, show net takings of £76,000 and an average per cinema for the quarter of £500.
Another group, cinemas with a seating capacity of 250 to 500, of which 893 are listed, show net takings of £915,000 and an average per cinema of £1,000. From these average incomes we must deduct on-costs, maintenance of seating, wages and on on. This emphasises a story I heard about a cinema manager who was asked when dealing with the maintenance of his theatre, where the seats were rather decayed, what he wanted to cover his seats with, and he replied, "Bottoms." I am sure that the fundamental problem on the exhibiting side today is the lack of proper coverage for the seating capacity, but the figures that I have given indicate that the problem is located largely among small cinema owners, who are suffering very severely.
I now call in aid one of the most distinguished men in the industry. Sir Michael Balcon, writing in the Financial Times of 8th June, 1955, had this to say to the Chancellor of the Exchequer. I am sure that the Parliamentary Secretary will convey these words to his right hon. Friend, particularly at this very opportune moment. Sir Michael said:Modest tax reliefs provide hopelessly insufficient help, for out of every extra million pounds British producers would receive only £68,000 to cover both short and feature films.I must confess that it was alarming to me to discover how £1 million could so quickly disappear. Sir Michael continues:The Eady Plan alone enables film production to stay alive, and even the fund this provides for has never reached the official estimate of £3½ million per annum; some exhibitors do not pay the levy at all, and others pay less than the proper rates. Moreover, the estimated amount, if it were realised, would not be sufficient to keep British film production on its feet, because producers are being 1951 compelled to adopt new techniques which are swelling their production budgets even more than before, without increasing their returns.I should like to have the Parliamentary Secretary's very close attention here. Sir Michael said:Only a very large reduction in the rate of entertainments tax enabling a much larger proportion of box office receipts than at present to be paid as film rentals will enable British film makers to continue in production.I can support my argument in other ways, and I shall do so briefly. The Daily Telegraph of 16th January, 1956, told us that prospective buyers can take their choice from cinemas seating 450 at £1,500. One can now get a cinema much cheaper than one can get a house. For an audience capacity of 600, one is required to pay only £4,000.
The Times of 17th January last emphasised that:The appearance on the market of more than 20 small Lancashire cinemas is a sign of the difficulties that have been troubling what are called 'subsequent-run' theatres for several years.The Evening Standard of the same date used these words:Mr. Macmillan should make up his mind now to cut the entertainment duty in his Budget.I trust that the Parliamentary Secretary will convey that message to his right hon. Friend in due course.
I now want to look, via the Anglo-American Film Agreement, at the productive side. The Agreement was signed in 1948 and was the direct result of the convertibility crisis of 1947 which led the Government to impose a heavy duty on imported films. The American companies reacted by placing an embargo on the export of films from this country to the United States which was intended to last until our duty was removed. The Agreement reached in March, 1948, eventually broke the deadlock. The British Government undertook to lift the duty, while the Americans consented to having a limit of 17 million dollars set on their remittances from this country.
Another clause in the Agreement was meant to help the distribution of British pictures in the United States by allowing American companies in this country to remit an additional sum equivalent to the earnings of British films in the United 1952 States. I hope to deal with that clause a little more fully later on.
A further clause was intended to stimulate employment in British studios by enabling Americans to invest their frozen earnings in British production. Since the Agreement was signed, there has been little amendment of substance, and I think that the only variation has been the voluntary waiving by the Americans of their right to remit to America the earnings of their films under the Eady Fund. I think we should all agree that this is desirable and proper, but it is of little practical importance because in any case the Americans have been able to use up by means of one or other of the permitted uses all the funds which have not been transmitted.
The time has come when consideration should be given to more substantial revision of the Agreement with two purposes in view, first, to help Britain generally with her balance of payments problem, and, secondly, to amend the Agreement in such a way as to encourage the production and exhibition of more British films. First, the Agreement should be varied to restrict still further the amount of remittances which can be made direct. Second, consideration should be given to reducing the number of American films allowed into this country. I would emphasise that this is an attempt not to keep out the best foreign films but to make film importation into the United Kingdom more discriminatory. Third, a restriction on the number of second feature and short films to be imported would stimulate British production in these two fields and lead to a further reduction in the amount of foreign exchange leaving this country.
Now I know that America has much to say in a critical way about the reasons why British distributors find it difficult to get British films into the American circuits. I have in my hand a questionnaire undertaken by Theatre Owners of America and published in December, 1955, to try to find out why it was difficult to get British films into the major circuits in America. Both the questions and answers on the questionnaire are interesting. As it is long, I shall concentrate on only one part of it. Two questions were:What do you feel should be done by British producers to make their product more 1953 acceptable to American patrons? What do you feel should be done by British producers and by the distributors of British films to get you more interested in playing British pictures in the theatres you operate?The first answer was:There should be a build-up of English stars—I do not know where the Scots come in there; I imagine that they mean English-speaking stars——at the American national level through:This infers that that is not happening.
- (a) personal tours of stars; and,
- (b) advertising and exploitation in magazines, in trade papers, on television, on radio, etc. The stars should be sold to the American public."Noel Coward and Alec Guinness are given as the only two British stars who have actually reached the American patrons. Most of those answering, give the lack of advertising, public relations and exploitation, as the major reasons why British pictures did no better in this country.A further reply is of even greater interest:The greatest single complaint about the pictures themselves, is the use of the 'heavy' English accent.Is it not remarkable that I, a Scotsman, accused occasionally of having a somewhat heavy accent because I linger rather long perhaps on certain letters of the alphabet—though my retort to English colleagues when they make those criticisms in the most friendly spirit is that while we may dwell on certain consonants, occasionally they keep some of theirs in a state of unemployment—should now have to defend the "heavy" English accent from attack? Other complaints were:lack of action, too little universality, too much drawing room and not enough outdoor action, lack of humour that Americans understand and enjoy, and poor sound.If we want to put our films across to the American public, we have to note those reasons and offer some reply to them. We will, therefore, all appreciate the effort of the Rank Organisation to meet this criticism. As hon. Members will be aware, at the beginning of this year, the Rank Organisation made its challenge to this attack with a full page advertisement in the New York Times International and Financial Review. I have a copy of that advertisement which was reproduced in the Kinematograph Weekly of 5th January.
1954 Dealing with accent, the Rank advertisement said:Every big United States film producer uses British stars or those who got their start in Britain, stars who are among the most popular favourites of American audiences.The advertisement lists stars like Richard Burton, James Mason, Charles Laughton, Stewart Granger and Edward Purdom. Many hon. Members could add to that list of distinguished film artists who have captured the imagination and affection of American audiences.
The advertisement then refers to the accusation that British films lack action. In reply it quotes "Simba," "The Purple Plain," "The Cruel Sea." All of us who saw the last picture in the Grand Committee Room in Westminster Hall will realise that it is a film about which the accusation of lack of action would be completely false. Rank goes on to say:Thousands of Americans see British movies every year, but millions don't.The whole purpose of the advertisement is to try to show that British films are kept off the American market despite the second Clause of the Anglo-American Film Agreement which I quoted. They are kept off by the deliberate action of American exhibitors.
The fact that the Rank Organisation found it necessary to publish that advertisement in the American Press in January this year leads one to wonder what the President of the Board of Trade was doing for British films when he negotiated the Anglo-American Film Agreement in the autumn of last year. I must emphasise the Rank Organisation's attitude by asking the President of the Board of Trade, through the Parliamentary Secretary, whether it is not the case that the latest and, perhaps, the finest of British films, "Richard III," is up against the same American ban as has been imposed on the pictures which Rank indicated.
Is that film getting bookings on the American circuits? It has a script written by the greatest dramatist of all time, William Shakespeare, and has one of our most distinguished actors in the leading part. Yet, is it not true that we now find it difficult to get that film into American cinemas?
§ Mr. William Shepherd (Cheadle)
I quite agree with the hon. Member's view on the difficulty of getting films into America. But to be fair to the Americans, is it not a fact that "Richard III" was sold to the entire American television hook-up? Had it been sold to British television it would not have had a booking here.
§ Mr. Rankin
The hon. Gentleman knows perfectly well that that is not the point I am raising. Admittedly it has received a lucrative booking on TV in America, but what is happening about bookings on the great American film circuits? Is "Richard III" to be shown in the little, specialist, art theatres of America and barred, as so many of our finest films have been barred, by the American film magnates?
What did the President of the Board of Trade do about that last autumn? Did he do anything? Perhaps during the debate he may be able to enlighten us on his attitude on that occasion. As the Agreement is now on a year-to-year basis, perhaps his attitude next autumn will be a little more vigorous than that which, at least to the outside observer, he seemed to display when the last Agreement was negotiated.
I hope that I have managed to indicate the serious nature of the problem which confronts the House in respect of both the productive and the exhibiting side of the industry. It is in a serious condition. Its best friends, of whom there are many on both sides of the House, will agree that there is no real sign of betterment. That is the alarming feature.
Therefore, I want to look briefly and in conclusion at what we may be able to do. When we come to deal with what should be done we are confronted with three broad schools of thought. First, there are those who may be put into the laissez-faire class; that is, those who say, "Leave bad alone, and somehow or other things will come all right." The second group might be dubbed the "reformers." They see defects which we all see and they believe that those defects could be righted by altering existing arrangements.
However, there is a third and increasing group of people who are beginning to look for more radical treatment of the disease. There is a growing demand for 1956 public ownership, in one form or another, of at least part of the industry. I do not intend to develop that theme this morning in asking for an independent inquiry. My view is that the proposal of the President of the Board of Trade which he made on 2nd February is not sufficient. I want to see the producer, the distributor and the exhibitor represented on any committee of inquiry which may be formed, but I also want the trade unions represented and the consumer who, in the last resort, pays the piper: he should have something to say about the tune.
We recognise, of course, that the silent Caesar who in the long run will have the final word in the outcome of today's clash in the arena is the Chancellor of the Exchequer. I trust that today both sides of the House will unite in urging the President of the Board of Trade to exert his full influence to see that when Caesar delivers his judgment it will be "thumbs up" for the British film industry.
§ 11.55 a.m.
§ Mr. Stephen Swingler (Newcastle-under-Lyme)
I beg to second the Motion.
I am sure that the House generally will be grateful to my hon. Friend the Member for Govan (Mr. Rankin) for choosing this subject for discussion today. We are also indebted to him for a comprehensive survey of many of the problems of the industry. As he said, it is a long time since we discussed films at all, and it is a very long time since we had any general discussion on national film policy. In the interval there have been, in my opinion, some most serious developments in the film and cinema industry. We in this House have a grave responsibility in relation to those developments.
The core of the Motion is the demand for an independent inquiry into the state of the industry. It is obvious that some form of inquiry must take place. My hon. Friend the Member for Govan moved his Motion at an opportune time, with one eye on the coming Budget and the other on the expiry of legislation, such as the quotas legislation, and the run-out of the National Film Finance Corporation. It is obvious that in view of those considerations we were bound to face the facts and the problems of the industry.
1957 The question is, what soft of inquiry should take place? Not long ago, Mr. Rank's mouthpiece suggested that there should be an inquiry inside the industry. It seems to be implied in the Amendment on the Notice Paper in the name of several hon. Gentlemen opposite that that would be a satisfactory form of inquiry. I believe that that suggestion completely misses the point, and that such an inquiry would lead to totally unsatisfactory results. It is no use setting the oligarchs to investigate oligarchy. This is a matter of national film policy. Just as much concerned in facing the implications of a national film policy as the representatives of the sections of the industry, of the cinemas and the film makers, are the members of the public who pay the Entertainments Duty and the tax-paying citizens who may be called upon to support an expanding British film industry. Therefore, I submit that an independent form of inquiry by a body of people generally representative of the nation as a whole is essential, indeed crucial.
It seems to me that the existence of a 30 per cent. quota for British pictures in British cinemas constitutes a prima facie case for an independent inquiry. It is an outrageous libel to suggest that we have not in this country the talent, skill and resources to provide more than one-third of our cinematograph entertainment. If Miss Monroe chooses a British actor as her idol, who are we to say that we have not got the talent here to build up a bigger and more attractive film-making industry?
The point is—and always has been—that these resources do not spontaneously arise. I do not want to go into all the history of how the industry has arisen, and the predominance of Hollywood, in order to show that, because all who are acquainted with the details know that these resources do not just spontaneously arise. They have to be cultivated and nurtured. I believe that the State has to play a leading part in cultivating and nurturing those resources, and that that should be the essential element of national policy.
I was rather astonished to find that in some high circles it is a question of whether we should have an expanding film industry at all. It was astonishing to read, in the leading article in The Times, on 28th December last, the following 1958 paragraph. The Times, after dealing with Mr. John Davis's suggestion about an inquiry into the film industry, stated:The starting point in Government policymaking must surely be the judgment whether for aesthetic, social, trade, or political reasons, it will be essential in future conditions to have a large British film producing industry. This is not a question that can be left to the industry itself. It is not so easy a matter to decide as the practical ways in which the industry might be helped. But until it has been decided no one can really say what help, if any, should be given.I had assumed that that question had been decided—that it was part of our policy to cultivate an expanding British film producing industry. But what, I think, are not always faced are the implications of that policy. It is easy enough to say that we ought in general to pursue the aim of making more British pictures and having a higher quota and having healthier conditions for the cinema industry. But we ought also to face the implication that if that is to be done, the State must take a hand in seeing that there are present the physical facilities and scope for an expanding film producing industry in Britain.
Secondly, as has been said by my hon. Friend, the State must see that there exist reasonable conditions—not necessarily preferential but reasonable conditions—for showing British pictures, once they have been produced, and back the film industry in the export of those products and in getting reasonable conditions for exporting them. In that respect I believe that here is a case where the needs of national recreation and entertainment go together with the need for dollar saving.
We wish to save dollars, of which fairly considerable sums have been spent year after year on the import of American pictures. The only way to do that is by having a greater production of British films to be shown in British cinemas, and thereby getting rid of the need to buy such a large proportion—more than 70 per cent. of the films shown—of American productions. The first fact to be faced is that there are just not enough British productions to support even a 30 per cent. quota in the cinemas. That is a proven fact. I take the figures of quota reports, a matter which I have raised in the House from time to time, as proof of the fact that we have not even enough British films to get a one-third showing through 1959 the cinemas of this country. In 1951, for example, the Board of Trade granted 185 exemptions from the quota to big cinemas, and gave 1,300 reliefs from the quota. In 1952, the Board granted 172 exemptions and gave 1,400 reliefs, which shows that the Board of Trade itself was convinced that a large number of cinemas in the country could not be expected to observe the 30 per cent. quota.
I am happy to see that the figures of defaults on the first-feature quota of 30 per cent. have dropped in the last few years. Perhaps that is not unconnected with the fact that there has been a little agitation about quota defaults, in an attempt to persuade the President of the Board of Trade to take the matter more seriously. Even so, in the last quota year for which we have figures, 1953–54, there were 734 first-feature quota defaults, compared with 880 the year before and over 1,000 in the quota year 1951–52: there were 734 cases out of the 4,000 cinemas in this country in which cinemas could not show even a 30 per cent. quota of British pictures.
I accept the fact that for quite a proportion of these defaulters the fulfilment of the quota was impossible and impracticable because the films were just not available. A day or two ago, I heard of the case of a picture house which in the last quota year had not shown one single British picture. I believe that the Board of Trade dared not prosecute that cinema proprietor, because it believed that he would be able to show to the courts that it was impossible, in competition with two big circuit cinemas, for him to show any British pictures throughout that quota year. That is a deplorable situation, and one arising from the sheer inadequacy of production.
What is also deplorable is that the level of production has fallen in the last few years. In 1948, there were 72 British first-feature pictures released to the major circuits in this country. In 1950, two years later, the figure had fallen to 52. In 1952, the figure was 58 and in 1954 it was 57. Those are the figures of British first-feature pictures released to the major circuits in those years, and it is easy for any hon. Member to calculate that those figures are quite insufficient to allow the maintenance of a reasonable quota of British exhibitions, let alone any scope 1960 for choice on the part of the cinema proprietors in this country.
I assert that the first major fact to be faced is the inadequate level of British film production in order to maintain even the present meagre quota. What is happening in that field? What steps are being taken to stimulate a higher level of production for the purpose of supporting a higher quota? Far from any steps having been taken in the last few years to obtain expanding production, we find, year by year in the last few years, that studio after studio has gone out of production altogether.
What a terribly tragic list it is—Islington, Teddington, Denham, Riverside, Welwyn, and now Ealing—perhaps the most famous British film studios in the world. And the Board of Trade stood idly by and allowed these world-famous studios to go out of the British filmmaking industry. The inadequate level of production and the falling level of British film production is of course based on the fact that the physical facilities for British film making have been contracting year by year.
When the President of the Board of Trade has been challenged about that fact, what has he answered? His reply has been—as it was to a recent deputation that went to see him about saving Ealing Studios—that he had no evidence of a demand for more studio space. He had no evidence that there were even people wanting to use those studios, and so he has allowed them to be sold out of the industry.
We do not find a tremendous queue of people wanting to make films unless special steps are taken to provide the capital resources to enable them to do so. Unless the Board of Trade is constantly taking steps to stimulate the industry and to provide the capital resources, all we shall get is a continuous contraction of film making. This process has naturally been greatly accelerated in the last two years by the competition of the B.B.C., and now the I.T.A. contractors, for studio space.
We, of course, want the B.B.C. and the programme contractors of commercial television to have studio space to enable them to carry out what this House desires, namely, the object of having predominantly British programmes on television, but surely we do not want that 1961 at the expense of the British film-making industry which already has little enough physical resources. I believe that the Board of Trade has the responsibility to see that the physical assets of the British film industry, such as studio space, are preserved and expanded in order that opportunities may exist for a higher level of production so that we can get a higher proportion of its films actually shown.
The second factor is the continued resistance and reluctance in some quarters to the exhibition of those British films which are produced and to providing the proper financial return to the producer which would enable the productive side of the industry to be put on a proper economic basis. While I have said that there is a good excuse and reason why there should be quite a large number of defaulters even in respect of a 30 per cent. quota, there are also many other cases in which there is no such excuse, and that is proved by some of the successful prosecutions brought by the Board of Trade. It is quite clear that, for one reason or another, psychological conditioning, etc., exhibitors have refused to give British pictures a fair crack of the whip.
In boom conditions, or under the patriotic pressures of wartime, it is easy enough to have a big promotion campaign for British firms, but when the profit motive is uppermost, when conditions are more stringent and when cinema attendances are falling, the exhibitors and a large number of proprietors go for sheer cheapness, and that means buying American pictures. The American pictures can naturally be sold more cheaply in this country than British pictures because they have already made a good profit in the American market.
There is a tendency to prefer the exhibition of American pictures, whatever the level of the quota may be, under these economic conditions. Indeed, that is borne out by Paragraph 35 of the Annual Report of the National Film Finance Corporation, of which, I hope, the Financial Secretary to the Treasury will take careful note. It says:Profitability depends, inter alia, upon maintaining attendance figures in spite of competition from television, maintaining or improving the terms of film hire, the further development of overseas markets, and an increase in the producers' revenues from the British Film Production Fund. If British film production is to 1962 stand on its own feet financially it would appear essential that producers should receive, through this Fund, a materially larger share of any future benefit to the industry from a reduction in Entertainment Tax than they received in the year under review.That situation is due not only to the continued unprofitability caused, partly, by declining attendances at the cinemas, but also to the fact that producers still get an inadequate share of the receipts. What they get from the Eady levy is also quite inadequate. These are some of the reasons why production is stagnant, and why, therefore, we continue to have to spend such large numbers of dollars.
§ Mr. John Howard (Southampton, Test)
The hon. Gentleman has quoted from the Annual Report of the National Film Finance Corporation in support of his allegations that British exhibitors are going for cheapness and prefer American films. I do not think that anything which the hon. Gentleman has read out from the Report proves that the hire charges are affected by the choice of American as against British films.
§ Mr. Swingler
My point is that in conditions of general economic stringency the preference of the hirer is for the American product because it is cheaper. That, I think, is indisputable. That makes profitability for the British producers particularly difficult in conditions of declining cinema attendances and in all the other circumstances that I have mentioned.
I am not saying that my assertion about the preference of the exhibitors for the cheaper American product is borne out by this Report, but the Report does bear out my assertion about the inadequacy of the return received by the British film producer, because it says:If British film production is to stand on its own feet financially it would appear essential that producers should receive, through this Fund, a materially larger share of any future benefits to the industry from a reduction in Entertainment Tax than they received in the year under review.The Report clearly comes to the conclusion that the producers are not receiving from the concessions given an adequate share of the benefits. This, therefore, is one of the reasons why production is not financially stimulated.
§ Mr. Howard
The hon. Gentleman will be aware that film hire is charged as a percentage on the takings of the theatre, and, therefore, there is little difference 1963 between hiring a British or an American film. The hire is geared to the takings at the box office. That means that if the American film is a good film, notwithstanding the fact that the hire charge might be slightly lower, the overall amount paid in film hire may be greater than that paid for a poorer British film.
§ Mr. Swingler
Without claiming to be an expert on the subject, that is not the story I have been told by many exhibitors about the real reasons which more often than not impel them to prefer, in spite of any other ideas which they may have on the subject, American films as against British films.
There has been and still is this bias against British pictures on the part of large numbers of exhibitors, and I am saying that it should be the responsibility of the Board of Trade to counter that bias. Apart from enforcing a greater observance of the quota and taking action against those deliberately resisting the reasonable acceptance of British films, the Board of Trade should see that films made in this country are protected on the home market. If what I have said is true about the home market, it is doubly true about the foreign markets.
My hon. Friend drew attention to the highly significant advertisement inserted in the first week of this year by the Rank Organisation in a prominent United States journal. It is really extraordinary that, only two or three months after the British Government have been in official negotiation with representatives of the American film industry about the renewal of the Anglo-American Film Agreement, one of the most powerful organisations in the film industry in this country should feel impelled to advertise in the columns of an American journal accusing the Americans of exercising an unfair bias against the showing of British pictures. It shows an amazing situation.
We want to know what consultations the representatives of the Board of Trade have had about this matter and what representations they made at the time of the negotiations last October, or since, about the fact that these prominent British pictures, which have had good showings and such a good reception in this country, have not had circuit bookings in America—in fact, that so few British pictures at all have received good 1964 circuit bookings in America in spite of the large market that we continue to provide for the products of Hollywood.
That is a very important question, because the Board of Trade is bound to be involved in these negotiations, and therefore it has the opportunity to challenge the representatives of the United States on whether they are really providing reasonable conditions for showing British films in America.
§ Mr. Walker-Smith
Of course, the hon. Gentleman appreciates that the Anglo-American Film Agreement is not made with the American exhibitors, whose conduct seems to be called in question on this matter.
§ Mr. Swingler
I agree, but nevertheless the refusal by the British Government to renew that Agreement would involve the British Government in negotiations with the United States Government and certainly with representatives of all sections of the American film industry.
I think the Parliamentary Secretary will also agree that it is assumed, in the making of that Anglo-American Film Agreement, that fair and reasonable conditions will be provided on both sides, that there will not be discrimination, and that, therefore, it would be quite appropriate to use the opportunity of those negotiations to take up with the producers in America, who are not totally unconnected with the exhibiting interests in the United States, the fact that there appears to be unfair discrimination against British films.
§ Mr. Walker-Smith
I think there is some misunderstanding about this matter. The motion picture industry, with which the agreement is made, is quite separate from the exhibiting side. The hon. Gentleman will appreciate that what he is now suggesting is a radical deviation from the form that the agreement took when his right hon. Friend the Member for Huyton (Mr. H. Wilson) was responsible for it in 1948, and subsequently in 1950.
§ Mr. Harold Wilson (Huyton)
The Parliamentary Secretary to the Board of Trade is quite correct, but of course the real problem arises from this fact: when the agreement was negotiated on 12th March, 1948, it was decided to provide an incentive by pushing British films in America because at that time there was 1965 no divorcement between the production and the exhibiting sides. Since then, by law of the land in the United States, there has been this divorcement, which creates the difficulties to which the Parliamentary Secretary refers.
§ Mr. Swingler
I do not wish to pursue that point any further, but I think it will be agreed by the Government that this is an important matter to be taken up, not with the motion picture industry in Hollywood, but with the United States Government. I merely drew attention to the fact that there are annually these negotiations, and that they might provide the opportunity.
If the view is taken that these negotiations would not be appropriate, there is still the important point that if the Rank Organisation believes that there is discrimination against it by the circuits in America, and that, therefore, it is not getting a fair crack of the whip, something should be done. We should soon hear something from the United States Government if it were thought in Hollywood that there was that kind of discrimination in Britain against the showing of the principal products of Hollywood. There would be a tremendous fuss about it.
We are entitled, surely, at Government level to take up this matter with the United States. The Government have a major responsibility in all these respects. Once we have decided that it is national film policy to have a steadily expanding film-producing industry and to create healthy economic conditions for the cinema, the Government have a major responsibility to see that the physical facilities and resources are available, and to protect, conserve and stimulate, both at home and abroad, markets for the showing of British pictures.
The Government have a major responsibility because they take 36 per cent. of the box office takings, and therefore they impose on the industry a heavy burden of tax, which bears heavily on the exhibitors and the producers because it reduces their returns. The Government should operate at once. They must take some action in regard to tax. On one side, this would relieve the desperate plight of the small cinema proprietors, who are being driven to the wall—I am sure the Parliamentary Secretary will not deny that, for the figures of bankruptcy of small cinema proprietors have been 1966 well publicised recently—and, on the other side, the Government must ensure a greater return to the British film industry.
I have continually stated in this House that we in this country should seriously consider adopting something on the lines of the Italian scheme. I still do not see why we in this country should not adopt a policy of ensuring a financial incentive as well as a quota scheme for both exhibitor and producer in favour of the exhibition of British pictures.
I see no reason why there should not be tax reliefs for the showing of British pictures in preference to others. The Italians have done it, and Italy is also a market for Hollywood films. Nobody seems to have raised his hands in horror about the Italians breaking one of the provisions of G.A.T.T. This matter should be inquired into and taken seriously by the President of the Board of Trade, because this would be the best possible way of stimulating the exhibition and production of British pictures and of ensuring a better kind of return.
I have felt all along that so many of the measures which have been taken over the years on behalf of this industry have been negative measures—measures to prevent people from doing things or interfering in the industry in a negative way by quotas, subsidies, etc. More positive measures of promotion and encouragement are needed. That is why I support my hon. Friend the Member for Govan when he says that there would be great support for some Government action in the form of a State circuit of British cinemas or the State production of films if the industry were allowed to decline. There must be some positive public action to ensure that British films are produced and shown. At any rate, I submit that the case is fully made out for a thoroughly independent inquiry into all aspects of this situation, and I trust that the Government will accept the Motion.
§ 12.29 p.m.
§ Mr. Geoffrey Hirst (Shipley)
I beg to move to leave out from "House" to the end of the Question and to add instead thereof:welcomes the statement made by the President of the Board of Trade, on 2nd February, and the opportunity which will be given to 1967 all sections of the film industry to express their views on future film policy.I do not think that in principle there is anything dividing us on this matter. The wording of this Amendment occurs to me to be more convenient, for the President of the Board of Trade has so very recently—in fact, only a few days ago—indicated his willingness to have conversations with various bodies in the industry, and there is an increased opportunity for representations on film policy to be made by bodies representing the industry, as well as the representations that we in this House can make, to the Chancellor of the Exchequer. I do not want to press the matter, and if, in the general unanimity which I hope will be discovered in the debate, the hon. Member for Govan (Mr. Rankin) indicates that he is willing to withdraw his Motion because we have achieved the main purpose of discussing the matter fully and bringing it very much to the attention of the Board of Trade and the Exchequer, I shall be equally ready to withdraw my Amendment.
I want at the outset to refer to the remarks of the hon. Member for New-castle-under-Lyme (Mr. Swingler) about studio space. I deprecate the reduction in studio space; that, of course, is part of the ill to which he and the hon. Member for Govan referred, and to which I shall refer. Nevertheless, I want to put the situation in some perspective. According to my information, while the ill may exist and while we may agree that there should be more use for the studios, the President of the Board of Trade was quite correct in saying that within those circumstances—and I am not saying that I agree with the circumstances—space was available elsewhere for the production of films at the rate at which they have recently been desired and available. Although the situation is not healthy, nobody has been seriously unemployed because of it—there has been no significant unemployment; people have been taken up in television. Nevertheless, from the film industry's point of view it is an unhappy state of affairs.
The number of long films produced—6,500 feet and longer—has not been falling. In 1951, according to my information, 67 were produced; in 1952, 81; in 1953, 85; in 1954, 94; and in 1955, I 1968 gather, the figure will be slightly higher than last year, which is at least some comfort. This has been done within the framework of the studio space still available, although I am not saying that it is enough.
§ Mrs. Eirene White (Flint, East)
Is the hon. Member referring to the number of British films registered in those years? Those figures are very different from those given to me recently by the Board of Trade.
§ Mr. Walker-Smith
I do not want to take up time unnecessarily, but those are the figures of the films over 6,500 feet which are registered—that is to say, the long films. Whether a long film becomes a first-feature film is not a matter for the Board of Trade.
§ Mr. Hirst
I prefaced my remarks by saying that they were films of 6,500 feet and longer.
I think we are agreed, and I certainly confirm, that the film industry continues to face a far from happy situation. The hon. Member for Govan is right to draw attention to the box office attendance figures, because it is from the box office that the money comes. I have reduced them, for convenience—because these are easier figures to handle—to weekly attendances. I do not quarrel with the hon. Gentleman's figures; it is only that it is a little easier to deal with them in this way.
The highlight since the war was 1946, and in 1946 there were 31¼ million attendances per week. In 1953 there were 25¼ million, in 1954 there were 24½ million and in 1955 it is estimated that there were 23½ million. That is a fall of 1¾ million since as recently as 1953 and compared with the highlight of 1946 it is a reduction of 7¾ million per week. These are big figures. The hon. Gentleman was right to put them before the House as he did.
The fact remains that the total number of attendances—and I am taking his figure now, because I had it down, too—was 1,200 million individual attendances 1969 for the year. That is a decline, as he showed, but it is still quite an impressive figure. I am quoting it and emphasising it because it indicates that the film industry, taken as a whole, is a very substantial industry doing a very important job. Even if it is reduced from what it was once before, it would not attract that size of attendances unless it was a substantial industry and something about which we in the House should very much concern ourselves.
That fall in attendances is immediately reflected in the box office receipts. There are two or three reasons for the decline. I will not touch on them all, but one of them is the increased competition from other forms of entertainment which do not carry the same Entertainments Duty or from commercial television or B.B.C. television, which do not carry Entertainments Duty at all.
I know that my hon. and learned Friend cannot deal with tax questions today; no Minister could anticipate the Budget. Nevertheless, taxation is so fundamental a reason for the decline that I must deal with it. In my submission the main cause is the Entertainments Duty. Some costs in the cinema industry and film industry generally have increased by as much as 400 per cent. since the war, and all costs have increased very materially, if not as much as that; yet the real price of cinema seats, after deduction of Entertainments Duty, has hardly risen at all. As the hon. Member for Govan said, the Entertainments Duty takes about 35 per cent. of the gross takings compared with 20 per cent. in America until recently and, as he said, 10 per cent. in America now.
As a result of this fall in box office attendances and receipts, it has been impossible for many cinemas to meet their costs in the normal business way. There is no doubt about that. I believe that there are about 4,500 cinemas in the country and I am informed and have reason to believe that about 500 of them are very near the edge of bankruptcy. I have had one or two in great difficulty in my constituency.
Apart from that, quite a few of the smaller cinemas which are still being kept alive are run as appendages to somebody else's business, for often we find that a group of local business men who run a hotel or some other business also run 1970 the local cinemas. That is the case in my constituency. I know that if it were not for the prosperity of those other interests some of the cinemas would have been closed long ago. This cannot go on for ever; it is not good or sound business, and it is not possible to go on for ever subsidising the cinemas from other interests.
I therefore make, as I have always made in these debates, a very strong plea for the small cinema, and I hope that one or two of my hon. Friends will be able to develop the point a little more in the debate. In my opinion the position is more serious than appears on the surface—and that is bad enough. The closure of cinemas not only reduces the Exchequer grab through loss of Entertainments Duty but must also lower returns to the film producers. Because of this, national prestige and dollar earnings, and especially the dollar saving capacity of British films, are substantially undermined.
That is why I feel the Government must consider this situation and provide substantial relief. I am prepared to argue that the type of relief which I believe is in the minds of hon. Members opposite, as much as in my mind, is not seriously inflationary and certainly is not wildly inflationary. It would not affect the price of the cinema seats on the whole; there is no case as yet for that. It would merely be a question of a greater share of the money which the public are paying for films going to benefit films instead of into the Exchequer's pocket.
I think it is important, because a firm home base is absolutely essential. It does not matter whether it is the film industry or any other industry, a firm base at home is necessary and absolutely essential to develop the export trade. I will quote the President of the Board of Trade on 20th November, 1953, in this House. The right hon. Gentleman said:It is also an industry which, last year, made contributions of between £2½ million and £3 million to our export earnings and, indeed, has some effect upon our prestige overseas. It is an industry without which we should be entirely dependent upon imported products."—[OFFICIAL REPORT, 20th November, 1953; Vol. 520, c. 2024–5]That was in spite of the limited size of the home market. Since that date, in spite of difficulties, the industry has made 1971 superhuman strides and exports now are comfortably over the £4 million mark.
As I have indicated, a healthy British film production industry can only exist if the domestic side of the industry is financially sound and not tax-raided to the extreme and damaging limits of today. Falling attendances and the high Entertainments Duty are eating the lives out of many cinemas, and many more cannot make provision for depreciation. That must act unfavourably on film production. Fewer admissions mean less revenue available to producers through the Film Production Fund—the "Eady money" to which the hon. Member for Newcastle-under-Lyme called attention.
In the critical position about 1950. at the instigation of the Government then in power, the fund was created with the full support of producers, distributors and exhibitors. The purpose was to provide for the support and encouragement of British films. Although the scheme was revised in 1951 and reconfirmed a year ago, it has always been the idea that there would be something of the order of £3 million to £4 million available. In fact, it has never reached £3 million.
It will be seen that in spite of difficulties in regard to tax and shortcomings in the Film Production Fund, the industry, through generating great energy, introducing immense economies and general rationalisation, has held the fort pretty well and increased exports. But the erosion is still there and the spilling of the life-blood of the industry is so great that, unless there is some relief, I do not think it can go on indefinitely.
I deprecate any idea of subsidies, and I do not feel that they are in the minds of those in the industry. A fair share of its own finance from box offices appears to be irresistible and nothing less than common justice. The President of the Board of Trade said that he recognises the limited size of the market. It is indeed limited. Then there is the increased Entertainments Duty compared with that in America. To give the House an example, a major film drawing £800,000 in box office receipts in Great Britain pays about £280,000 Entertainments Duty. In America it would pay only £80,000—a difference of £200,000. On the ordinary percentage basis that means some £50,000 to £60,000 more 1972 being available to the American film producer to produce a film than to his English counterpart, although the box office receipts may be the same in each case. Surely that points a very severe lesson.
There is not only a limited market here, but there is a limited market, for many reasons, abroad. I do not think we get "fair do's" in the American market. I think we should be a little more "sticky" and aggressive. As we provide a large market for American films, surely we are in a position to be a little more "sticky" in our bargaining than we have been. I am prepared to be told that that is impossible, but I should like to know. In the case of other countries, such as Japan, which has an outstanding interest and an insatiable desire for British films, America fixes the quota. We could not get the number of films we might legitimately send there. That factor apart, even with the small quota we get it is practically impossible to get any of the money back as it is substantially, if not entirely, blocked.
Those are some of the points which I am sure the Parliamentary Secretary would be willing to convey to his right hon. Friend and to discuss with him to see whether something can be done to help the valuable export side of the industry. That is not only helpful from the cultural and propaganda point of view—which is important enough—but it is important from the point of view of a high ratio of exports. Not very much materials are involved, but very considerable returns can be got from it.
New techniques have been referred to by the mover and seconder of the Motion. They are the answer to the competition from new elements of entertainment, such as television, but they add very materially to the cost of production of films—£35,000 to £50,000 would be the addition on a major film. They are also a great charge on the exhibitor because additional screens, projectors and so on are needed and cost a great deal of money. We cannot honestly hope that any industry can compete with these things' when new techniques and great rationalisation are necessary and a ridiculous amount of money is taken in taxation. The industry is kept down in difficulties, then 1973 has to be baled out as has been done through the organisation of which we know. Probably that would not have been necessary if it had been allowed to stand on its own feet and get on with the job in its own way without intervention.
I do not think an inquiry is in the least necessary. It is that part of the Motion to which I object, and because of that I tabled the Amendment. As I said when the hon. Member for Govan was temporarily out of the Chamber, I am not pressing the Amendment particularly. If in the course of the debate he indicates that because of the advantages of the discussion and the general unanimity in the House on this question he feels inclined to withdraw his Motion, we having achieved our object by rubbing in our views, I should be prepared to withdraw the Amendment.
One point which has not been made so far is the question of an all-industry tax committee, Those of us who have had something to do with this industry are satisfied that there has been a greater degree of unanimity recently than has ever been possible before. I think that is a great advantage. The industry has got together and ungainly squabbling behind the scenes is not now going on. It is a great advantage that the industry has got together and recognised that the Eady money, or production fund, in the set-up must be protected. I do not think that is in jeopardy under the new arrangements. I do not think I should go further than that today, but getting that unanimity has been a great advance.
I will conclude by referring to—but naturally not quoting—some remarks by Lord Mancroft when introducing the Cinematograph Film Production Bill, 1954, in another place on 21st January of that year. The noble Lord indicated that the Government hoped that in the near future the British film industry would be able to stand on its own feet without intervention by the Government. I believe the industry desires to do exactly that. It does not require intervention nor desire it, either in the form of subsidies or inquiries, which might waste time. There may be certain technical aspects of the problem, as was indicated by part of the speech of the hon. Member for New-castle-under-Lyme, which need some inquiry, but, broadly speaking, we all 1974 know the problem. What we want to do is to try to solve it, and I do not think we need an inquiry for that.
In his peroration, the hon. Member for Govan talked about people being in three groups—the laissez faire, the reformers and those who require some form of public ownership, which is a kind of new fancy name for nationalisation. The hon. Member needs to be extremely careful. I have no doubt that he would get free tickets for the local cinema from his right hon. Friend the Member for Ebbw Vale (Mr. Bevan), but he must be careful if he wants to keep in with his right hon. Friend the Leader of the Opposition.
§ Mr. Rankin
The hon. Member will realise that in using the phrase "public ownership", I had in mind the fact that it manifests itself in many different ways and that while nationalisation, certainly in one form, as interpreted by the hon. Member, is correct, there is also municipalisation.
§ Mr. Hirst
Indeed there is. We will not get on to that one, although the hon. Member's arguments also manifest themselves in different ways.
What we are joined about completely—I hope we are—is in uniting together in urging a kind of fresh look at this problem. I do not think it needs deep inquiry, but it does need considerable study and co-operation to ensure that we really get for the British film industry the chance that it wants. That chance must materially come, and can come, from the very resources that the public provides.
I do not think there is so much to be said on the inflationary angle by chipping off a certain amount of the tax and ensuring it for the increased possibilities that British film production can give, with the increased box office receipts, from which the Government would get back what it has temporarily, we might say, advanced to achieve, not only that advantage to itself but, obviously, a much more happy and healthy industry.
§ 12.52 p.m.
§ Mr. John Hall (Wycombe)
I beg to second the Amendment.
It is perhaps fitting that I should second the Amendment of my hon. Friend the Member for Shipley (Mr. Hirst), because I represent that large and important section of the British public with which the 1975 film industry is very much concerned and which has a great influence on the film industry's finances. I refer to that large section of the British public which rarely, if ever, goes to a cinema and the section to which the film industry wishes to make a particular appeal.
I have listened with great attention to the admirable speeches which have been made, and I must confess I got the impression that the industry was in a rather parlous state. Perhaps I placed too much emphasis on the expressions of gloom which came up from time to time in some of the speeches and which are reflected in the Motion, which was moved so eloquently by the hon. Member for Govan (Mr. Rankin), in which he uses the words:That this House views with concern the present state of the film industry and trade …I agree that there is much to be done and that the industry finds itself facing many problems, but we should not exaggerate them too much.
I should like to quote from a speech made by a gentleman who was described by the hon. Member for Newcastle-under-Lyme (Mr. Swingler) as the mouthpiece of the Rank Organisation and to whom I prefer to refer to as the managing director of the Rank Organisation. In making a speech in December, he said:In my view, at the present time there is too much talk by people within the industry about bad business, the impact of television, and about the future being obscure, dark and so on. I know there are problems ahead of us—serious problems. But what industry is not faced with serious problems? In our case, because we are a glamorous industry, we secure much publicity, too much to my way of thinking about our troubles and not enough about our successes.He went on to say that he believed in the future of the industry and thought it would continue to play a very important part in the economic life of the country, both at home and abroad.
My hon. Friend the Member for Shipley referred to the success of the film industry over the last few years in maintaining a fairly steady rate of long film production—that is, films of over 6,500 ft. in length—of typically British films. I am informed by my friends— I have to take my information from those who go to the cinema and perhaps I am, therefore, able to bring to bear a more objective view, because I get a lot of criticisms from people who go to see 1976 films; not having seen them myself, my judgment is not prejudiced—that there are at present two main trends in the film world. By "film world" I think of Hollywood, which, after all, dominates the film scene, as we have heard today.
Those two main trends are these. First, there is a return to the old silent film days of the epic film—the stupendous, the magnificent and all the other superlatives which are used to describe them. We have, for example, seen a recent attempt by Cecil B. de Mille to re-write "The Ten Commandments." There has been an equally successful attempt, I am told, to re-write the story of "Genghis Khan." "Alexander the Great" is now to appear, with the help of some 10,000"supers,"to show to us what a magnificent man he was, as we all agree, but also to point out to us that he was a starry-eyed idealist. This is a return to the kind of films that we remember seeing as small boys. I remember jumping about in my seat when "Ben Hur," "Quo Vadis," and so on were shown.
On the other hand, there is the other class of film which, so I am told, is meeting with great success. That is the psychiatric study of juvenile delinquency, of drug addicts, and of the mental reactions and the complexes of street walkers and people of that kind, dwelling upon the gloomy side of life. These seem to be largely the two types of film that are coming from America at the present time if the market and films shown in this country are any guide.
Britain, on the other hand, as we have heard, is producing some really first-class films. We are not keeping largely to our traditional type of film. We have had the output of Shakespeare-Marlow-Bacon plays like "Hamlet", "Henry V", and that first-class film "Richard III". We are extremely good at producing the gentle comedy type of film like "Genevieve" and some of the earlier productions from the Ealing Studios, which were so extremely good but which did not go down quite so well abroad as here because of their typically British humour.
We excel in the production of the semi-documentary type of film, like "The Colditz Story", "The Dam Busters" and "The Cruel Sea", which in itself is a form of semi-documentary. Perhaps the 1977 failure overseas of a film like "The Cruel Sea", which was a first-class film and full of action, despite criticism to the contrary which is levelled against British films in America—perhaps one of the reasons for its failure to get as good a showing throughout the United States as we might think it was entitled to have is that it shows the British Navy playing its part in winning the war. Whereas we are quite prepared and happy in this country to watch films showing the Americans winning the war, there is, apparently, a much stronger nationalistic feeling throughout America which does not take so kindly to films showing the part we played ourselves. That is perhaps understandable.
There is no doubt that in terms of competition, there should be a first-class export market for our films. Their quality, class and standard of production is as high as that of any other country's film-producing industry. Given conditions of fair competition, I am certain that we should do far better than the £4 million worth of exports that we had in the last complete year.
I think we ought to do better. For this reason, I am delighted to find that British Lion has now formed the export company, Lion International Films, and Rank's have developed their Rank Overseas Organisation especially to carry out research and development in overseas markets wherever they can be developed. I hope that much can come out of that.
I think it is important for this reason. It is important not only in relation to the dollar earning—which is very important indeed—but because films, perhaps better than any other form of propaganda, portray the way of life of the nation from which they emanate. I know that it can be dangerous to rely upon films as evidence of a nation's way of life. Some curious impressions were created in this country, and no doubt in other countries, too, of the American way of life by American films. One had the impression until one went to America oneself and was thus able to correct it that the Americans on the whole were tough, rough and extravagant.
No doubt, on the other hand, people seeing British films, apart from films of historical subjects, may have the impression that England is peopled by the type of individual whom we may 1978 describe as "a terribly decent sort of chap," who is constantly facing the most depressing or alarming situations with the stiffest of upper lips. Alternatively, people abroad may have the impression that the English are rather phoney, self-conscious Cockneys.
So there can be a certain amount of danger in relying for impressions of other peoples upon their films. Nevertheless, the film industry can do great service in illustrating to other nations in a way in which no other medium can what the way of life of a people is and how the people of that nation react. In so far as the National Film Corporation can help to finance the producing industry, to keep it alive and to help it to flourish so as to develop for export truly informative films of that kind, I think it is obvious that it should be encouraged.
I do not pretend to any great knowledge of the exhibiting side of the business, or of whether the exhibitors make a great deal of money or very little, but I do know something of the difficulties of the little man in the business because, like most hon. Members, there are little men in the business in my constituency. Because so much of the little man's revenue is taken in Entertainments Duty he is not able to do much more than to make a bare living, and he is not able to accumulate savings to plough back into the business, to develop his cinema, to keep up with modern technicological advances so as to be able to compete with TV and the chain cinemas round about.
Wycombe, in my constituency, is an industrial town, a large one for that area, containing 50 per cent. of the population of the area, and round about it are some smaller towns and some villages. In the small towns round about are one or two very small cinemas, whose proprietors can only just manage to keep them going. The hon. Member for Kensington, North (Mr. G. H. R. Rogers) will know I have in mind such a town as Princes Risborough, which is a small town but developing quite rapidly, where there could be a flourishing even though a small cinema if the cinema owner could raise enough capital or save enough capital from the proceeds of his normal operation to develop his cinema to meet the requirements of the town's increasing population. He cannot do that because 1979 the taxation is so burdensome, so penal, that he cannot do more than pay his way, and cannot set aside enough money to bring his cinema up to date with a wide screen, and so on, to help him to compete with the attractions of TV. I would reinforce the pleas which have already been made from both sides of the House that the tax should be carefully examined to see if the industry could be allowed to keep a much greater proportion of its income, as, I think, it must do if it is to survive.
I agree with the hon. Member for Newcastle-under-Lyme who said that it is no good reducing the Entertainments Duty unless the producing side can obtain a much bigger share of the benefits. I think that that is true. I do not think a reduction of Entertainments Duty by itself will add to the number of people attending cinemas. It would, however, be an advantage in enabling more money to be put back into the producing industry so that it could produce more films of the type we require not only for filling the quota in this country but to send overseas. That is a matter about which an inquiry within the industry itself, in conjunction with the President of the Board of Trade, might help.
As I said at the beginning, I have no claims to any great knowledge of this subject and speak only as an impartial outside observer taking his views very largely from those who patronise the cinema industry, but I would draw attention to what the public, ignorant of the industry as they may be, feel when they see attempts made to help the industry with public finance when, on the other hand, they also see what they regard as extravagance in the film industry. I know that the amount paid in salaries, as a proportion of the total costs of producing films, is comparatively small, but I often wonder why it is that the industry pays such colossal salaries to stars when so much of that money goes into other people's pockets. So much of a star's salary goes in agent's fees, publicity, or on the large numbers of dresses that apparently an actress must have. By the time all those expenses have been met there can be very little left of the salary, and I wonder whether it would not be better if the stars were paid rather less—even though that might be to the detriment of the Chancellor of the Exchequer, 1980 who might thereby lose a certain amount of revenue.
Again, when I have been to film studios here in this country and in the United States of America I have been impressed by the large number of people who seem to be standing around when a film is being made and, to my lay and ignorant mind, doing nothing. I am told by trade union organisers that that is a completely false conception that I have, but I wonder whether there are, perhaps, some restrictive practices in the film industry as there may be in some other industries, and whether ways and means could be found of saving production costs by dealing with them. This is a consideration in the mind of the ordinary man in the street when he considers the finances of the film industry.
An hon. Member opposite spoke of public ownership in the industry, and I was interested in that and was visualising what exactly would happen. Would there be a public board set up to control the industry? If so, what would its chairman be paid? Stars, I think, earn £75,000 to £100,000 in a year. Could the chairman of the board be paid less than any of its employees? The hon. Member's proposition would raise some very nice problems. The payment of the chairman of such a board in this industry would set a very attractive precedent for the remuneration of the heads of other public boards and boards of nationalised industries, and we could look forward, perhaps, to paying the men who control those great industries salaries appropriate to their real worth. After all, as was pointed out in answer to a Question yesterday, £75,000 today is worth only £5,000 pre-war. The hon. Member's proposition looks attractive as a precedent, and I am not sure that we should not encourage him to pursue his idea of the film industry's being brought into public ownership.
§ Mr. Hall
I do not think the industry is in quite such a parlous state as, perhaps, may be thought from some of the remarks which have been made, and I think that if it is given a fair chance it can put its own house in order and make itself prosperous again. On the other hand, I think it must have assistance by being allowed to keep more of the revenue it earns, so that more of its 1981 revenue could go back into the producing industry, as it must if it is to survive successfully. It is obvious, too, that the burden of taxation falls most heavily upon the small man, and if we drive him out of the business by making it impossible for him to continue to earn a living in it, by making it impossible for him to compete with other forms of entertainment, we shall deprive ourselves of points of exhibition of the films which are made, to the disadvantage of the producing side.
§ Mr. A. E. Hunter (Feltham)
The hon. Gentleman seems to be unaware that these cinemas are too small for the putting in of 3-D screens, Cinerama, and so on.
§ Mr. Hall
I think the hon. Gentleman and I are at cross purposes. I was not thinking of the very minute cinemas. There are cinemas in my constituency—at Princes Risborough—which are at the present moment not able to do more than pay their way but which, if their proprietors could plough back more money into the business, could be expanded, to meet the requirements of increasing populations in their neighbourhoods. I accept the hon. Member's point of view that there are some cinemas with which one can do nothing in that way. It is almost impossible to bring them up to date, but I was not thinking particularly of the very small cinemas.
I hope that my right hon. Friend will look at this problem very carefully. I am sure that it does not require a committee of inquiry set up by the House or by anybody else. The industry itself can make all the representations necessary to the President of the Board of Trade. The facts are very well known. We know the troubles that are besetting the industry and we do not require any more information than we have already. The main trouble is the Entertainments Duty. That is one thing to go for, and if we could have that reduced to reasonable proportions, perhaps in line with that borne by the American industry, we should go a long way towards solving these problems.
§ 1.12 p.m.
§ Mr. Joseph Reeves (Greenwich)
I have listened to the debate with a good deal of interest. I think that one can say that there is not a great deal of difference between the points of view which 1982 have been expressed on either side of the House. Perhaps the main point is the question of the nature of the inquiry which is proposed. The Motion suggests that there should be an independent inquiry. I believe it to be absolutely essential that it should be independent. I know that the industry itself has always been concerned with these problems, but some of them are almost insuperable.
As my hon. Friend the Member for Govan (Mr. Rankin) has said, the greatest problem of all is that there is so much unfair competition in the film world. We have to compete with films which are produced in America in conditions entirely different from those which prevail over here. We know that when a film has run its course in America it has paid its way, and distribution in other parts of the world represents its accumulated profits. We cannot do that. Our home market is so much smaller than the market in America is to American producers. That is the basic problem all the time. That is why Governments have, from time to time, given aid of different kinds to the industry.
The film industry has never been able to solve its own problems. It is not a satisfactory proposition from our point of view as a people that considerably less than one-third of the films shown in British cinemas are produced in British studios. Whether we like it or not, the State has to play an important part in the industry.
Unless the implication in The Times that we are not, as a nation, interested in this industry is to be taken for granted, the Government must play their part. Very large sums of public money have already been devoted to subsidising the industry. Even though the industry declares that it does not want subsidies, if the nation feels that, for a variety of reasons, the industry is necessary, then, as in the case of the aircraft industry and of agriculture, the nation must come to its aid. We have to decide what form that assistance should take. Over the years, we have had quota Acts, the establishment of the National Film Finance Corporation and the Eady Scheme, all of which have contributed to the support of the industry.
There is no reason basically why the film industry should be in the doldrums. I do not say that it is, but it is certainly always struggling to survive, and an 1983 analysis of the number of British films produced each year since the war, compared with the number produced pre-war, shows that the position is unquestionably becoming worse. This industry, far from being a dollar earner, is in a sense a dollar-paying industry, which must cause the Chancellor of the Exchequer a certain amount of perturbation from time to time. It is true that the Chancellor collects a large sum of money in the form of Entertainments Duty, which may ease his conscience, but the problem of the balance of payments is extremely important, and the more we sustain the film industry, boost its achievements and widen the scope of its influence, the less danger there will be to our balance of payments.
There are those who think that television will supersede the film as a means of public entertainment. But while films are shown to the public we should strive to obtain the exhibition of British films on the screens of the world. It should be a national responsibility. We should feel that our prestige is involved. The United States obtains enormous advantage from the fact that American films are exhibited in every part of the world. If we could achieve that by inquiring into the whole problem very carefully there is no reason why our products, our engineering and inventive genius and our achievements in science should not be displayed visually for all to see.
We have produced first-class films in the past. There have been difficulties in getting them exhibited on foreign screens, but where they have been seen abroad they have been admired. An analysis of films produced in this country shows that on the whole they are a credit to us and, although they are different in character, compare very favourably with the films of Hollywood. What prompted this debate was the sad news that Ealing Studios were to be closed down. We all know of the work of those studios under the inspiring leadership of Sir Michael Balcon. He put British films on a higher plane, succeeding where others failed.
If, as an industrial people, we were to hear of steel works being closed or of machine tool factories being shut down, we should be much concerned. Yet films are part of our industrial life, and can act as our advocates in all parts of the world. There is no doubt that America 1984 gains enormously because in matters of fashion and design her standards are before people day in and day out. In the same way we should reap many benefits if we could get a similar advantage on the screens of the world.
Unfortunately we have done foolish things in the past. I always deplored the fact that the Government set a bad example by closing down the Crown Film Unit. That Unit was doing a first-class piece of work in making documentary films, in which we were supreme. No nation could challenge us there, and the volume of work done by that Unit, as well as the inspiration which it gave to other producing organisations, was of great advantage to us. Yet merely for purposes of economy, and small economies at that, the Government decided to close the unit. Thus the great work of the pioneers—John Greerson, Paul Rotha and Cavalcanti—was brought to an end. I regretted that at the time, and I am sure that the industry is now feeling the results of that retrograde policy.
The closing of the Colonial Film Unit was still worse, because that was performing a unique job. I remember, amongst other friends of mine, dear old George Pearson, who devoted the whole of his time to the production of films designed to teach people in backward countries not only the way of life over here but how the way of life in their own areas could be improved. I have seen many of that Unit's films, as I have seen those of the Crown Film Unit. I was amazed at the care with which the technique of production was developed for that specialised work, which was magnificently done.
All that has gone. We have lost all the advantages of that kind of work, and nothing has been put in its place. So that with the closing of those two Units and of Ealing Studios, our position as a film-producing country is getting worse and worse. In 1937, 21 studios in this country produced 225 films. I know that was a special year and that there were reasons why the output was so great, but today the position is frightening. We have had only five major studios producing fifty-seven first feature films but, with the closing of Ealing Studios, there are only four major British studios left—Pinewood, Elstree, Shepperton and 1985 another at Elstree under American control.
I feel that we should have an independent inquiry rather than one left to the industry. Of course the industry knows its problems, it cannot help but know them, but we want to find out the best way of overcoming the difficulties which confront it. Such an inquiry as I suggest might produce proposals which would put the industry on its feet in a way that it has never experienced before. The hon. Member for Shipley (Mr. Hirst) has said that he would be delighted to withdraw the Amendment if we would withdraw our Motion. I do not know what will be done eventually but I hope that the Minister whose responsibility it is to reply this afternoon, will take into consideration the need for us to have a high-class film industry and all the problems involved. If the right hon. Gentleman can agree to the promotion of an independent inquiry, I am sure that the benefit to the industry would be enormous.
§ 1.28 p.m.
§ Mr. Paul Bryan (Howden)
The number of well-informed speeches which we have already heard shows that the debate has been well worth while. It also shows that there is not a great deal of disagreement between the two sides of the House. We all agree with the first sentence of the Motion which calls attention to the state of the film industry. Even if all were well with it instead of there being the troubles which we have heard about this morning, it would still be worth while to call attention to the state of the industry because it is an important one.
It is important to us here as legislators, first because the Government have about £6 million invested in the industry, and to that extent we are its fairy godmother. Secondly, we draw £38 million from it in the form of Entertainments Duty, which is a large revenue, and in that way we are the robbers of the industry. Thirdly, as Members of Parliament, it is important that we should keep our eyes on it because there is the 30 per cent. quota.
However much the industry may or may not deserve such preferential treatment, there are few of our industries which enjoy a quota of any kind. I suppose it could be said that the pig industry enjoys what is almost a quota 1986 because with the last vestige of bulk buying the Government can control how many pigs come into the country; but I cannot think of any other industry which enjoys a quota to the extent of 30 per cent. Therefore, whether or not the industry deserves such protection, it is clearly our duty, as Members of Parliament, constantly to look at the industry and consider whether it is deserving of the quota.
There is another reason why it is an important industry, and important to a degree well above that represented by the figures of its turnover. The reason is that given by the hon. Member for Greenwich (Mr. Reeves)—the tremendous value of the film industry as a shop window for our country. Any hon. Member who has travelled abroad will have encountered the phenomenon of the extraordinary influence of the American films.
When I was in South America in December I was told a dozen times by English businessmen that the Americans had a very great advantage in that their products, styles, makes of cars, refrigerators, washing machines, etc., were unobtrusively shown in American films. That is all the more effective in that it is not straight advertising. It means that the films are a very powerful advertising medium. The strength of the film also lies in the fact that it crosses language frontiers. Many people in obscure villages all over the world see American films, and, although they do not understand the language, are acclimatised to American goods.
Rather on the same lines but at a higher level, there is the great value of the film as a national prestige agent. We spend much money on such things as the British Council, and they do good, but I am sure that for value for money we do very much better with films like "The Cruel Sea" and "A Queen is Crowned". Such films do more for the name of Britain and the Commonwealth than any amount of money spent on organised propaganda designed to raise our prestige.
Having said that about the importance of the industry, I must now say a word or two about the one thing upon which there appears to be disagreement, and that is why there should or should not be an inquiry. The industry has been 1987 talked about and investigated for a long time, and I see no reason for having an inquiry unless an absolutely new factor has arisen. I am not aware of any completely new factor in the situation having arisen during the last year or two unless it be the advent of T.V. That could have a great influence on the film for reasons which we all understand.
It seems to me that the advent of T.V. has not worried the film industry in this country to the same extent as it has troubled the American film industry. Sir Philip Warter, Chairman of A.B.C., the film circuit, has said:Commercial television is a family entertainment too. We think we have broadened the basis of our business. But we do not think for one moment that it is going to displace the cinema.That is a declaration of confidence in the cinema. It is a fairly bold statement to make, especially when the figures for closed cinemas in America since 1948 represent nearly one in four, a very high proportion, and suggests that T.V. has made a significant difference to cinema attendances there. During the last five years only about one in sixty of the cinemas in this country have closed, and from that point of view it does not appear as though T.V. has yet had a disastrous effect here.
It seems to me that, as Sir Philip said, there is a good hope of a broadening of the basis. It appears that the film industry is to a great degree co-operating with the television industry, and they may well help each other. Mr. Bernstein, the head of Granada Cinemas, has become a programme contractor in the North of England. It is true that he is not competing with his own cinemas, which are in the south, but there is cooperation in that way. Sir Philip Warter is also a programme contractor. Mr. Rank is not actually in the programme contracting business, but his film advertising company is making T.V. commercials, and his organisation also owns Bush Radio. The interesting fact is that these big operators are not going out of film showing into television; they are buying more cinemas. Mr. Sheckman the head of Essoldo, is not interested in T.V., but he also is buying more cinemas.
Many of the figures that we have heard today are alarming, but I have shown 1988 that the big operators are giving the industry a substantial vote of confidence. They would not be buying new cinemas if they had not faith in the industry. I am sure we shall be told by hon. Members who know more about the industry than I do why there should be that confidence, but I suggest that these people are not as frightened of T.V. as they thought at first they would be.
T.V. has already shown one of its great weaknesses. I remember a T.V. interview about two years ago, when Sam Goldwyn pointed out that T.V.'s tremendous weakness was its voracious appetite for talent. In America, where about fifteen programmes are running all the time, T.V. used up talent so quickly that before long there was a great shortage of original material. We also are seeing that problem here. A comedian can use the same gags at the Palladium week after week, but after one show on television they are used up for ever. Television is the greediest of all forms of entertainment. That is a direction in which the cinema can beat television. The cinema has also had considerable success in fighting television with the new wider screen techniques.
As a result of these developments it is not, after all, such a great tragedy if some technicians are leaving the film industry, for it is probable that they will be employed in the making of TV. films. They will at least be in their own trade, and using the skills which they have acquired, and that is a considerable virtue.
I should have thought that Britain was peculiarly fitted for making the short film which is required for television programmes. As the hon. Member for Greenwich said, we have excelled in the past with the John Grierson type of documentary. That type of film is surely just the thing for the television medium, and that could give us an advantage in television films. In view of television's tremendous appetite for programme matter, I imagine that in future we shall be seeing more and more films on television, and that looks like an opportunity for our industry.
I also want to say something about the small cinema. In my rural constituency of Howden we have no big towns and no circuit cinemas. The cinema means a great deal in the countryside. This 1989 country is spending a great deal in trying to stop the drift from the land. With the provision of electricity, water, drainage and housing, conditions in the countryside are gradually improving, and on the entertainment side it is pleasing to see television masts above lonely farms, for they mean far more there than they do in the towns. Of course, one of the regular entertainments in the country is the trip to a market town and the cinema, and if these cinemas are to start closing down, a great amenity will be lost.
The figures which the hon. Member for Govan (Mr. Rankin) gave about small cinemas were very alarming. The only figures I have are of cinemas closing down. I was surprised to see that from 1950 to 1954, that is five years, of the cinemas that seat fewer than 250, there were 167 such cinemas in 1950 and 153 in 1954, that is only 14 fewer of these very small cinemas; of cinemas seating 251 to 500, there were 889 in 1950 and 894 in 1954; in other words, there were actually five more cinemas of that size.
I do not quote those figures with any complacency, because from talking to managers of cinemas of that sort of size I gather that their problems are very large, and possibly, as has been suggested, they are just holding on and may go at any minute. However, their actual figures do not appear to be critical. I hope that the Parliamentary Secretary will pay particular attention to the rural and small cinemas when he sums up the debate.
We have heard something of the problems of the small cinema and the fact that because of its cost and size such cinemas cannot install CinemaScope and that kind of thing. They are also affected by questions of cost more than are the big operators. I was looking at some of the costs that a cinema operator has to face, and on the whole, comparing prewar with now, the figures are not particularly different from those of every commodity. Electricity is up 200 per cent., projector maintenance 200 to 400 per cent., screen maintenance 200 to 250 per cent., transport of films 400 per cent., fittings and repairs 200 per cent. and re-decoration 350 per cent. Those figures are more or less normal for the general run of things. However, the point is the fact that basic prices for seats have 1990 scarcely altered at all since 1939, and it is that fact which makes the costs for the small cinema so much more impressive.
Another factor which I notice and which makes a slightly bigger burden for the small cinema operator is that he pays a subscription to the British Film Production Fund of three farthings on a Is. 6d. seat and three farthings on a 4s. seat, while the big cinema operator in London still pays only three farthings on a 12s. 6d. seat. The subscription oh every seat costing more than a shilling is exactly the same for the small proprietor as for the owner of the bigger cinema with more expensive and more numerous seats.
I wish to conclude by referring to the immense importance to our industry of the size of the market. It would be a tragedy if the smaller cinemas started to close down, because that would reduce the market; but the greatest hope of our industry is to try to enlarge its markets abroad. One can see that our trouble, as compared with the Americans, is that we cannot hope to recover in the home market the costs of making a film. That is established and I need not argue it. We must therefore try to enlarge the foreign market.
We have heard of some of the difficulties of getting into the American market and I shall not enlarge on that. One hon. Member referred to Japan, where dollar aid is such an enormous factor that the Americans have the advantage of us. The figures I have for Japan are that 149 licences were allowed for American films as against 16 for United Kingdom films, an enormous disparity and a very hard thing to fight in view of the domination of the dollar. In Australia there is another problem, which has to be, if not overcome, certainly fought. It is that dollar balances there are mounting and the Americans are buying cinemas. As soon as they own the cinemas, it is naturally very much harder for us to get our films into them.
Another interesting factor showing the advantage that Americans have over us is that of Entertainments Duty. If the American industry gets £800,000 in box office takings for the showing of a film, it has been worked out that the industry in fact receives £50,000 more than its British counterpart would receive from showing a film for which the box office 1991 receipts were the same. There again one can see one more advantage which the Americans have over our industry.
I shall not detain the House longer, because this is a debate which has already revealed considerable unanimity in our views.
§ 1.46 p.m.
§ Mrs. Eirene White (Flint, East)
I should start by making an apology, in his absence, to the hon. Member for Shipley (Mr. Hirst) for having interrupted him because, as the Parliamentary Secretary said, I was thinking of first-feature films and not of registrations, although in most contexts it is first-feature films more than registrations about which one gets excited.
I want to make one or two points about the Motion, but in so doing I have certain inhibitions, because the President of the Board of Trade has already said that he is proposing that there should be some form of inquiry into the film industry and that among other things which he has in mind is that he will consult the Cinematograph Films Council of which I am and have been for some years an independent member. Therefore I want to observe the proprieties in the matter and do not wish to enter the more controversial subjects of film politics, which on another occasion I might enjoy discussing.
However, I should like to make this point very strongly indeed. It is that I believe there is a case for some kind of independent inquiry into the film industry, and I should be very sorry if the President of the Board of Trade used the Cinematograph Films Council as an excuse for not having a different form of independent inquiry. There are admittedly five independent members on the Cinematograph Films Council, and some, like Sir Arnold Plant, have very long experience. But the fact that there are five independent members among a galaxy of trade members of every description is not sufficient to give the Council the kind of independence which is necessary, if there is to be public satisfaction on a matter of this sort.
Of course, if the President of the Board of Trade asked the Council or certain members of it to investigate the industry and gave a remit to them—as was done to Sir Arnold Plant and Mr. Pallache— 1992 when they made an investigation into the monopolistic practices in the industry, that would be a very different story.
We want nothing on so vast a scale as a Royal Commission. There is no call for that. I would be perfectly prepared to agree that a great deal of information is available in the way of facts, figures, statistics and so forth, and I do not think that one wants to set up a top-heavy body that will take years to gather its information and then produce ponderous reports with so many contradictions and minority reports that it had no value. That would be completely mistaken. If Mr. John Davis in his objections to an independent inquiry was objecting to that sort of inquiry, I would entirely agree. On the other hand, I do not think that the House or the public should be satisfied with what the President of the Board of Trade has so far announced, which is just that he is to ask different sections of the trade to present their views individually as particular bodies and then, presumably, collectively through the Films Council, because that in practice is what would happen.
Unless they are given a specific remit, the independent members of the Films Council are not in a position to obtain information other than what is supplied by the trade or by the Board of Trade, which the President can get anyway without troubling us. I think, however, that there is a very strong case for not merely taking all the different sections of the trade. Anyone who has had any experience of dealing with this highly complex industry knows—how shall I put it; I do not wish to be unkind; I am on the friendliest terms with the persons who sit with me on the Films Council, but I have found myself, from long experience, that one cannot take any statement they make without weighting it in some way or another according to the source from which it emanates. In other words, to get the plain unvarnished truth is very difficult indeed. I do not say that it is necessarily more difficult in this trade than in any other industry, but it is very difficult, and more particularly when we have complex dual or triple personalities, with men who have an interest in production and distribution or exhibition at the same time.
Therefore it is not an easy industry in which one can find out the truth. I am 1993 not speaking now of statistics, but of the truth in relation to policy, trends in the industry, and so on. I should have thought that there was a very good case for an investigation—not necessarily with just the same terms of reference as were given to Sir Arnold Plant—a two or three man, or woman, investigation into the industry by persons who could take a genuinely independent view and who could be given the necessary facilities.
I repeat that if the President thinks, to use a colloquialism, that he can "get away with it" by sheltering behind the Cinematograph Films Council and saying," I am therefore getting independent advice", he is deluding possibly himself and certainly the public. I feel very strongly on this. I speak, naturally, only for myself and not for the other independent members. I have not consulted them and I do not know what their views might be, but apart from Sir Arnold Plant I think that I have had as long an experience as any independent member of the Council. My feeling is that some kind of investigation is required.
It is necessary in more than one respect. It is necessary in the legalistic sense, because the Cinematograph Films Act is due to expire before very long, and one has to look at the legal points which will arise, including such knotty problems as, "What is a British film?" which is a question which has never been satisfactorily settled. There are various points of that kind about how the Act has worked. For that purpose I should be perfectly prepared to accept the machinery of the Films Council and the Board of Trade.
It is when one comes to any wider question as to what is the policy to be adopted towards the industry, in more general terms, that I feel uneasy. I know that one can say that film production figures—either registrations or first features—are not too bad. We all know that there was that possibly abnormal peak figure soon after the war. That was not necessarily a healthy condition for the industry, and one can fairly say that since then the production figures have not been too bad.
However, I am not at all certain that the quality has been all that one could wish. I am thinking perhaps not so much of first features as of that sort of middle region of the second features. One 1994 of the complaints that reaches me from people in the industry is of the great difficulty of obtaining better quality with second-feature production. That is important for the younger director and producer. They can go in for specialised shorts, documentary or quasi-documentary films, and now of course a good many of them will go into television, though that is not quite the same art form as the cinema. It is difficult, however, for a promising, intelligent young man to jump from that kind of film making into full first-feature production.
I find that there is a considerable uneasiness among the independent producers, although it is hard to prove it if one is asked for chapter and verse. I spoke to one only a fortnight ago who was complaining to me about it. I asked him about the machinery set up to safeguard the independent producers when there were difficulties. I believe that there is still in existence this panel of people to whom they can refer a film for circuit booking if the circuits will not book it. This independent producer looked at me, with a cynical smile, and said, "If we used that we might get one film shown that way but we would have signed our professional death warrant in doing it. We are just too frightened to use that machinery, and that is why it is a dead letter."
That kind of statement, from a most reputable person, is something which makes one uneasy. It is the kind of thing which makes one feel that there is a case for some investigation and that one should not merely take the word of Mr. John Davis, or anybody else, that the state of the industry is all that it should be.
The hon. Member for Howden (Mr. Bryan) got some of his facts right and some of his inferencies quite wrong, but he was right when he said that the big people in the industry were getting along quite nicely, buying up cinemas and so on. All I would say, and I repeat that I do not want to venture too far into controversial matters, is that there is a strong case for looking at what one might call the "monopolistic tendencies" which still persist. Perhaps I had better leave it at that.
I should like to turn to another quite different subject which is very important. I believe that my hon. Friend the Member 1995 for Greenwich (Mr. Reeves) touched on it. The hon. Member for Howden made a rather disparaging remark about the British Council. He said that the Council could not do anything like as much for British prestige abroad as the showing of British films. But if the Council were enabled to show more British films overseas the two might well be combined.
I have been seriously disturbed at information which I have obtained recently about what is happening to British films abroad. I am not now speaking for the moment of the American market. I fully recognise the importance of that market and of dollar earnings, and so on, but I am speaking of countries outside the North American Continent. I am referring to those in the Commonwealth particularly, and also to a lesser degree perhaps to other countries abroad. If we mean anything by being a leading nation and believing in our democratic, British way of life, it seems to me of the utmost importance that our films should be treated seriously and as a medium for purveying our ideas to other people both in the Commonwealth and elsewhere.
I ask the Parliamentary Secretary to look at what is done in his Department and also to consult the Foreign Office, the Commonwealth Relations Office and, to some extent, the Colonial Office, about the showing of British films. I will give him one instance. A couple of months ago there was a children's film festival in Bombay. India is an extremely important member of the Commonwealth. India is also an extremely important country in Asia, and if we are at all serious in standing for what we call, in brief, Western ideals, what is happening to the minds of the younger generation in India is, in my opinion, something of supreme importance. What happened at the film festival in Bombay, where we were dealing with the younger generation in India?
Because our policy is, as usual, laissez faire—we hope that everything will come out all right if we leave it alone—we managed to show there, with great effort and due to the great devotion of the Children's Film Foundation in this country—it was not its job, but the Foundation felt it was so important that it did it—we managed, I understand, to show three feature films. The French showed one and the Italians showed one. 1996 There were a number of United States cartoon films. I am told that one United States feature film, which was really designed for adults, was shown as it was thought to be suitable for a child audience. But from Russia, China, Poland, Czechoslovakia and East Germany—I have not the precise figures, but I could obtain them for the Parliamentary Secretary—I am told that there were twenty or more feature films provided free through their Government agencies.
I give that one example, but I am told that this kind of thing could be multiplied. I chose the children's film festival in Bombay because that seemed typical of the point I am making. India is an important country where, surely, we should be trying to hold our own. As is quite evident from the information which I have, we are not doing so, and incidentally, the British Council—which is once more being maligned in this Chamber—has not the funds and cannot do what it would otherwise no doubt have been most anxious to do, supply British films.
That is one example on the children's side, and I mention it because I think we all recognise the very fine work being done in children's films in this country. Having said a few hard words about the trade, I should like to say a word of warmest appreciation about what first the Rank Organisation—and since it became a matter for the whole trade, other organisations—have done in supporting the Children's Film Foundation. I think that they give £125,000 a year from the Film Production Fund, for which they get little direct financial return, and they have done a really excellent job of work. But I do not think that the full results are being obtained in the Commonwealth.
I wish to turn to another example regarding adult films. I understand that there is to be a British film month in Belgrade, I think it is next month. This is following a Russian film month where, as one might suppose, all facilities have been provided at no cost, presumably, to the Jugoslavs. Again, what are we proposing to do? Well, we are sending some films, most of them I believe very good films. But I am told that, so parsimonious are the British Government in this sort of thing, that a number of the films will go without any sub-titles.
1997 We all realise that where children's films are concerned it is possible to get by—pretty successfully as a matter of fact—by having a commentary. Most children's films are action films, and a great deal of dialogue and sub-titling is unnecessary. But adult films cannot be shown satisfactorily in a foreign country unless recourse is had to the very expensive process of dubbing or, what is obviously very much cheaper, sub-titling. We cannot expect the trade to go to great expense in these matters. I believe that they are sub-titling "Richard III," which is one of the films chosen; but I am told that there will be several other films without sub-titles, although the cost would be only about £80 a film.
Again, no money is provided for prints. If the prints do not happen to be available, and the trade is not in a position to supply them, there is no money for making fresh prints instead of using old ones which would do us no credit. Prints must be used which give a poor impression of British technique or alternatively, one must say, "We should have liked to show such and such a film because it would have made a better balanced programme," or "We are leaving out some producer. We cannot show an example of his work, because there is no print available." I am told that for about £500 we could have had a much better programme. I grant that to some extent it is a matter of taste, but because the money is not available, there is not really a free choice in compiling what would be the best programme of films to send to a country where, again, we are on the borderline in the battle of minds. It seems to me that this is something which this House and the Government ought to take seriously.
The Parliamentary Secretary has not had very much time to acquaint himself with all the aspects of these matters. But I am quite sure that, with his own interest, that, particularly in the Commonwealth, and, I hope, also in foreign countries where our influence is important, he will make a point of taking up this matter personally to see what can be done with his own Department taking the initiative but working together with the Foreign Office and the Commonwealth Relations Office. The two examples which I have given are pretty convincing, and I hope, therefore, that that is one of the things which will emerge from this debate.
§ 2.7 p.m.
§ Commander C. E. M. Donaldson (Roxburgh, Selkirk and Peebles)
Although there is a Motion on the Order Paper and an Amendment to it, there has been a great deal of agreement expressed in the debate, and a basic desire for the well-being of the film industry. I am not equipped to follow the observations of the hon. Member for Flint, East (Mrs. White). She has the advantage, which I have not, of being on the Film Council. My main objective in speaking at all in the debate is to try to emphasise a phase of the distributive side of the industry as it affects my constituency.
My constituency encompasses three whole counties in Scotland, and the population is reasonably equally divided between the burghs or towns and the countryside. My hon. Friend the Member for Howden (Mr. Bryan) referred to the effect on a cinema in a small burgh or town surrounded by a large area of countryside. That is the aspect which I should like to draw to the attention of my hon. Friend, and I trust that he in turn will be able to draw the attention of the Chancellor of the Exchequer to the difficulties experienced by those running small theatres in country areas.
For the last three or four years I have from time to time made submissions to the Treasury about the almost penal effect of taxation on such theatres. Kelso, in Roxburghshire, is one example. I am sure that the theatre there, and those in other burghs in my constituency, are in serious danger of having to close down altogether. It has been said that a number of theatres which have had to close down have been bought up by the large circuits, but I do not think the figure is quite so high as some people have indicated.
I understand that of 4,507 cinemas, the three major circuits, Odeon, Gaumont and A.B.C., account for only 913. My information is that in the last twelve months their holdings have increased by only thirty small cinemas. So of the 4,507 cinemas in the country, there is a total of 943 in the big groups. Therefore, the large preponderance of the cinemas are small ones and a large number of them are in the country areas.
My hon. and gallant Friend the Member for South Angus (Captain Duncan), 1999 hoped to speak in this debate, but he has to keep an appointment with his dentist. I do not know whether he is having an extraction, but it is the extraction which the Treasury is making by way of taxation that would have been the subject of his speech. I understand from my hon. and gallant Friend that he has recently submitted a proposal to the Treasury which might well, if considered worthy and if at some future stage of its budgetary arrangements the Treasury should make a change in its system of taxation, save many of the smaller theatres in Britain, particularly those in the countryside in which he and I are interested.
Briefly, my hon. and gallant Friend's proposal is to eradicate the present form of taxation on the cinema ticket, and to allow relief to the smaller theatres by making the first £100 of takings each week tax free. Up to £110, the whole of the takings would then pay a tax at the rate of 1 per cent., from £111 to £120 a tax of 2 per cent., gradually rising to the present level, which the hon. Member for Govan (Mr. Rankin) mentioned as being 33 or 35 per cent., on takings of £450 and over.
My hon. and gallant Friend has as yet received no reply to his letter, and I trust that that is an indication that serious consideration is being given to his proposal. The tax would be applied to the admission ticket only. No tax relief is asked for on the sale of ice-cream and other refreshments sold in the theatres. I am informed that if this proposal were adopted it would give relief to the very small theatres of about £2 million a year, which might be recouped in the form of higher taxation on the receipts of the more affluent and wealthy cinemas commanding higher prices and larger audiences.
It would, of course, be in the Chancellor's discretion from time to time to give relief to the larger cinemas, should that be expedient and necessary for the film industry as a whole, by adjusting the application of the tax scale. The hon. Member for Govan spoke in his Scottish tongue, but did not present a particularly Scottish argument. Nor do I, except in relation to my own constituency. The hon. Member for Govan will know, as I do, Sir Alexander King, who is the film 2000 authority in Scotland and who is resident in Glasgow. On more than one occasion, Sir Alexander King has told me that but for the fact that some relief was given last year to the theatres, some of the smaller ones, and even some of the large ones, would not have been able to carry on had it not been for the profit which they made on the sale of ice-cream, chocolates and other refreshments sold in them.
While I speak mainly on behalf of the rural cinemas, I am not unmindful of those belonging to the larger organisations. I hope that my hon. Friend the Parliamentary Secretary will make some reference to the small country theatres which provide amenities so vitally important to the people in the countryside, and that he will make his observations known to the Chancellor of the Exchequer. Should we divide at the end of this debate—I doubt if we shall—I shall certainly support the Amendment moved by my hon. Friend the Member for Shipley (Mr. Hirst).
My right hon. Friend the President of the Board of Trade has broadcast his intention to the country. I believe that the film industry, with the assistance, understanding and co-operation of the Board of Trade, is quite capable of setting its own affairs in order and of bringing about increased welfare in the industry. I do not necessarily agree with what the hon. Member for Newcastle-under-Lyme (Mr. Swingler) implied in his speech, that if his ideas were put into operation we might be inserting the thin end of the wedge of Government control over an industry which, I believe, can best be operated and more effectively resuscitated and strengthened by private enterprise. I fear that the hon. Gentleman's implication about an inquiry and the things that would follow from it might lead to some form of State control over the film industry. Of course, the hon. Gentleman may not have intended to give that impression, but that is how it sounded to me. I would certainly rather support the Amendment than the Motion.
§ Mr. Swingler
My argument about whether or not there should be public ownership was a separate argument. I also argued that we had already established State interference in the form of the quota, the National Film Finance Corporation, and so on, and that therefore, 2001 we could not get away from the fact that these matters affected more than the industry itself. That is why I disagree with the hon. and gallant Gentleman when he says that the industry can put its own affairs in order. The State is already involved in the industry, as is this House, because we have established systems of quota, special finance, etc. That is why I think that the taxpayers and the citizens generally must be represented in any inquiry carried out for the purpose of putting the industry in order.
§ Commander Donaldson
I thank the hon. Gentleman for making his point clear, but I think that he and his hon. Friend the Member for Govan put forward the idea that the 30 per cent. quota was not being adhered to, in many cases could not be adhered to, and that the Board of Trade knew why this was so. Therefore, it followed that perhaps the application of the quota was not a good thing and that interference was not a good thing. I think that these things are inclined to run together.
It was not my intention to start an acrimonious argument on the subject. I have spoken of the difficulties experienced by the theatres in the three counties in Scotland which I represent, and I ask that some consideration may be given to them. I am glad that they, through their proper instruments, will be able to put forward their point of view about their difficulties because I fear a further drift from the countryside if any of the amenities are removed from those three counties.
§ 2.19 p.m.
§ Mr. A. E. Hunter (Feltham)
I have great pleasure in supporting the Motion of my hon. Friend the Member for Govan (Mr. Rankin). The film industry is an important industry, and I am not optimistic concerning its future. Hon. Members on both sides of the House have asked for a reduction in the Entertainments Duty. I support that plea, but I believe that the problems of the film industry are far deeper than any lowering of the Entertainments Duty could solve.
I saw the film industry grow, and I witnessed the great boom of the cinema industry between 1924 and 1938. During that period, some 4,000 cinemas were built in Great Britain, an average of 250 a year. Originally the money came mainly from the United States of 2002 America. The film industry was well established in America. Chains of cinemas had been built, and the film producers there were anxious to find a further outlet for their films. I have often heard it said that in those days the American cinemas paid the overheads of the films and the British market provided the profit. It was in those days that the Astorias and the Paramounts were built, mainly with American capital. In addition, large insurance companies helped to finance some of the combines.
Until the outbreak of the war there was a rapid growth in the development of the cinema. During that period the big combines grew. Also to some extent the small individual cinema owner disappeared and his place was taken by the combines. There have been big profits made by the exhibitors, but on the whole there have not been big profits on the film production side. We all know of the great losses that the Rank Organisation made, in spite of its millions of capital, and, although it has made some recovery in recent years, its film production has been cut down considerably.
We are now in a period when very few cinemas are built. As one of my hon. Friends has said, about a dozen cinemas are being built in this country since the end of the war. When we consider that before the war about 250 cinemas were built each year, we can see what sort of decline there has been in cinema building. In these days, of course, there is no difficulty such as used to exist, of obtaining building licences, which are not now required. I believe that great difficulty has been experienced in getting cinemas built in some of the new towns. It is easy to understand why the cost of building a new cinema is so great, with the cost of seating, carpets, curtains, projectors and all the other equipment. In fact, a cinema which cost £50,000 to build before the war would cost nearly £250,000 today. Unless the price of admission were so high that the ordinary members of the public could not afford to pay it, it is not possible to build new cinemas and make a profit.
Reference has been made to buying up new cinemas, but it is mainly the old ones that have been bought up by the combines. A lot has been said about the small cinema proprietor. He is handicapped and cannot compete with the 2003 combines. The combines have got the buying organisations. They buy their own materials and do their own maintenance. They are in a far better position than the small cinema proprietor ever was.
It has been suggested that the small cinema might be brought up to date by means of new techniques, such as CinemaScope, three dimensional films, Cinerama and so on, but the old cinemas are far too small for this purpose and therefore these improvements would not be technically possible.
The problems of the cinema industry may be very great in the future. A solution to its difficulties may be found in co-operation with television. Television is the great competitor of the cinema today. After all, television is a home cinema. If a man can see the news, plays and films at home, he is not likely to go to the cinema as he used to go before 1939. The Government should consider the problem on these lines. There will not be any considerable expansion of new cinemas in the future. The small cinema, especially if it is uncomfortable and not well ventilated, heated and decorated, will suffer first. Television is growing in popularity every year; more people are having television sets in their homes, and this will be the great competitor of the cinema. We have unfortunately seen the passing of the music hall, and, although I trust there will always be a live theatre in this country, we must not lose sight of the fact that television is a home cinema, and therefore the problems of the cinema industry will grow.
The Government should look even further than is suggested in the Motion. They should think not of next year and the year after, but of 1960 and 1965. An hon. Member has said that the cinemas do not fear television competition, and that, apart from exceptional circumstances, they will not allow films to be shown on television unless they are 30 years old. The Government should recognise that the cinema and film industry will not grow. The reduction of the Entertainments Duty, which I would support, would help the industry, but I do not believe that the British film will ever capture the American market. Therefore, since television will continue 2004 to grow, with the introduction of colour and other technical improvements, the Government should give some thought to the possibility of co-operation between the film industry and television with a view to linking both industries into one.
§ 2.27 p.m.
§ Mr. Peter Rawlinson (Epsom)
I certainly have not the qualifications which the hon. Lady the Member for Flint, East (Mrs. White) possesses. In fact, my only qualification to speak in this debate is that I was once a technical adviser to a film when Sir Patrick Hastings' play was made into a film and he insisted that a practising barrister should attend as technical adviser to see that the actors did not shout. My duties were to see that the wigs were not worn too rakishly and that the judge did not smoke. I certainly had better recompense on that occasion than I would have had if I had been spending my first year in chambers.
I should like to refer to the independent producers, for they, much more than the small exhibitors, are the really small men in the industry. The small companies which make second-feature films are being squeezed out of business at the moment. I have heard of five companies recently which have had to close down because they had been unable to make second-feature films at a profit.
In this country, as opposed to other markets abroad, there is a demand for the double-feature bill, and the exhibitors find that the public want not only the "big" picture but also another film. The public want two films for their money. The trouble is that the really big renters—and some of these are people about whom I complain as being far too greedy—insist that they must have 50 per cent. of the takings from any exhibitor who shows any of their pictures.
Very often, after a large renter has taken 50 per cent. of the takings, there is nothing left with which the exhibitor can hire a second-feature film. Of course a large renter may say, "With my big picture I will throw in an American television film or some other short film," but generally speaking if the exhibitor wants to hire a second-feature film he has not got the money to pay for it. As a result the second-feature makers have been in difficulty. I agree with the hon. Lady the Member for Flint, East 2005 that the second feature is a training ground and a breeding ground for the young men coming up in the industry, where they may learn how to make films and how to do all the technical processes. They cannot get that experience from shorts and documentaries.
The cost of a second feature today, even at its lowest, must be about £15,000. Every day, production costs are mounting. In addition, there is the problem of finance—at 6 per cent. from the Film Finance Corporation—and of the distributors' commission. The makers of second features rent or sell at a flat price; they do not use the percentage basis used by the big renters. As a result of all these difficulties they are being driven out of business. I am told that with the honourable exception of the A.B.C. company, who dip into their own pockets to help these people, many of these large companies are far too greedy in demanding their full 50 per cent. and not allowing enough money for the second-feature industry.
I agree that only within the film industry itself can a solution be found. One suggestion which I would make is that the major renters should allow, out of their share of the takings, one-and-a-half times the cost of the second-feature film. I appreciate that this is not something which can be done by Government action, but I should have thought that the industry itself, with its good sense and its realisation of the difficulties which it will face in the future, would be prepared to take such action.
It seems to me that the industry is in an extremely unhealthy condition. Although the industry can speak for itself, there has always been the difficulty that those within all speak with different voices, and sometimes with very different and odd accents. The hon. Member for Govan (Mr. Rankin) referred to the difficulties which Americans have in understanding the English accent. I am reminded of the lady from Vermont who married a Frenchman. The only way I could make myself understood to her was to speak French to the husband, who translated it into broken English to his wife.
I am sure that it is a grave disadvantage and hinders the success of English films abroad if it is found extremely difficult to understand English—perhaps not that spoken so eloquently by the hon.
2006 Member for Govan but the English sometimes spoken south of the Border.
These are problems which must, however, be left to the trade. It is a commentary upon the extraordinary position in which economists have landed us in 1956—now that the economists have taken over the mantle of the lawyers—that public money is poured into the industry by way of help towards film finance and the Eady Fund and is then taken out with the other hand by the Treasury as Entertainments Duty. That is an utterly absurd position and is the reason the industry is in difficulties. I agree, however, that this is a matter which I hope the industry itself will sort out, and I cannot at this stage see that a great deal could be done by an independent inquiry.
§ 2.34 p.m.
§ Mr. John Cronin (Loughborough)
I should like to congratulate my hon. Friend the Member for Govan (Mr. Rankin) on having taken this opportunity to bring this very important subject to the attention of the House. It is a long time since it was discussed, and it clearly is of the very first importance.
The film industry occupies an age-long social function; it is the people's storyteller. It takes the part of the medieval minstrel; it has the same function as the raconteur in the Greek market place who delighted his audience with classic tales; it takes over, perhaps, the function of the more loquacious cave men who gave "fabulous" and "stupendous" accounts of encounters with mammoth and carnivora in prehistoric times. There are other aspects which the House must consider, too—for instance its educational and economic value and the importance of it as propaganda, as a way of bringing the British way of life and British ideas to the rest of the world.
When we consider the problem of the film industry it seems that there are four principal difficulties. Hon. Members have dealt with them, but perhaps I may be allowed to enumerate them. First, there is competition from television; secondly, there is the rather unfair competition from the United States; thirdly, there is the difficulty of increasing production; and, fourthly, there are the number of small exhibitors who have been and are being driven out of business. Those are the 2007 four principal difficulties, and the question is how the industry is to cope with them. To provide the answer, would, I think, be the function of the independent inquiry which I hope will arise as a result of the Motion.
We must face the fact that television has come to stay. There is no possibility of the film industry being able to rid itself of that competitive incubus. Television obviously has great conveniences. The film industry consists essentially of producing shadows on the screen for people to look at, and people are more content to look at shadows on the screens in their own homes rather than in the cinemas. It is clearly more convenient.
My hon. Friend the Member for Govan has drawn attention to the difficulties of the industry, and has produced some helpful statistics, but I would suggest that the difficulties of the industry are only just beginning and will grow progressively worse. It might be helpful if I were to direct attention to the difficulties of the film industry in the United States, where in some ways the television network is considerably more advanced than our own. As a result, the film industry in America faces much more severe conditions.
I am sorry if the debate has taken on rather a statistical aspect, but one cannot escape that in dealing with a subject of this type, and perhaps I might quote some American figures. The average weekly attendances at films in the United States in 1945 was 90 million. In 1954 it was 45 million—it had dropped to half—and in 1955 it is estimated to have been 37–38 million. In the United States television revenue was 403 million dollars in 1952, 900 million dollars in 1954 and, according to estimate, 1,300 million dollars in 1955.
That shows fairly conclusively that the film industry in the United States is being driven almost out of business by the television network. The industry has, of course, made a heavy counter-attack. In the United States it has, to a large extent, abolished what it calls B films—films of a minor nature. It has introduced all kinds of optical innovations, such as Cinerama, 3-D, Cinemascope and Vistavision, and has used various trade tactics.
2008 In the last year various film producers in the United States have been driven to come to terms with television. The Disney studios have been driven to making films for television, while Warner Brothers and Twentieth Century Fox have been shooting for television remakes of old films and showing on television scenes from studios when they are at work. The United States has also seen the introduction of toll television, a system of putting money into a television set to see films shown at a nearby cinema. The position in the United States is that the cinema industry is being rapidly and seriously depressed, and that television is gaining a mounting ascendancy.
The second principal difficulty is the rather unfair competition which we are having from the United States. The hon. Member for Wycombe (Mr. John Hall) suggested that we ought to be able to increase our exports of films. I suggest that we should have great difficulty in doing so because in Australia, Canada, New Zealand and South Africa, United States films occupy 70 per cent. to 80 per cent. of total screening time, and so have a tremendous ascendancy in the Commonwealth. If we look to our neighbours, we find that in Belgium, the Netherlands and Italy, American films also occupy 70 per cent. to 80 per cent. of screening time. The advantage to the United States in the export market is quite overwhelming.
The third difficulty for our film industry is production weakness. We all know that not sufficient films are produced. Several hon. Members have drawn attention to the circumstance that quota obligations have not been fulfilled. We know it is very difficult to obtain money to finance production because the City has been severely bitten before, and very heavy sums have been lost. The fourth, and I think a very important source, of the trouble is the comparatively helpless victims of the present situation, the smaller exhibitors, who gradually are being forced out of business. Only last month more than twenty cinemas have been for sale in the Lancashire area and cannot be sold. Last month the biggest film organisation in the country bought up a new circuit of twelve cinemas. That is a sign of the times, and requires very serious inquiry.
2009 Let us see what remedies can be adopted. My hon. Friend the Member for Govan suggested that Entertainments Duty should be substantially reduced or certainly adjusted so as to be less unfavourable in its consequences. We ought to look at that suggestion very carefully and make sure who is to derive benefit from any reduction of Entertainments Duty. A selective reduction to benefit the small cinema obviously would be very desirable, but how much would it help producers? Producers receive 2s. l1d. in every £ of gross box office takings. We should not forget that that includes American producers, and as American producers occupy two-thirds at least of our screening time, it is quite clear that the gain in every £ for an English producer would be but a few pence.
We must make sure that any change in Entertainments Duty shall be of a selective nature. It is rather doubtful whether any of the big organisations require help. I was looking at the annual report of the largest film organisation in the country, and saw its announced profits for the last year. After tax, the net profits were £2,953,173. Lest the shareholders should feel despondent, the chairman announced that that was a big improvement on the previous year, when the profits were merely £2,264,000.
It has been suggested that there should be some revision of the Anglo-American Film Agreement, but there one would be up against some very big difficulties. The Motion Pictures Association of America has very great bargaining power. One would sympathise with the President of the Board of Trade in any difficulties which he has on that aspect of the subject because hon. Members will remember that when we introduced a 75 per cent. duty on films some years ago that organisation threatened to stop all American films coming to England. With our production weakness, it would have meant that a large proportion of our cinemas would have had to close down. I think that any negotiations with the United States will be difficult, but there is no reason why they should not be tried.
Another suggestion is to increase the amount of finance for production. Already we have the National Film Finance Corporation, which has dispensed £12 million of public money. Of that £12 million, £4 million has so far been 2010 received back and £3½ million has been written off as completely unobtainable. That, again, is a remedy which requires considerable reservation. I think the President and the Parliamentary Secretary should direct attention to the very large integrated groups which are gradually swallowing up the whole of this industry. Gradually they are developing what amounts to a monopoly, and already we have some doubts whether that is healthy in the film industry.
When my right hon. Friend the Member for Huyton (Mr. H. Wilson) was President of the Board of Trade he came to the rescue of the film industry, which then was in grievous difficulties. He picked up the members of the industry and put them into his lifeboat, so to speak. I am afraid the present President of the Board of Trade and the present Government are being selective in whom they are keeping in the lifeboat. They are throwing some of the survivors overboard, after first emptying their pockets. That is a responsibility with which the President will himself have to cope.
A very interesting aspect of the problem is the question of production finance, the finance of most film producers is very intricate and complicated. They have to produce certain sums of money themselves, obtain a guarantee from the circuits so that they can obtain money from the banks and from the National Film Finance Corporation, and obtain insurance so that they can be sure of completing the film. The Gater Report gave a very interesting analysis of the production and finance of films. It examined fifteen films the production of which cost, per film, amounts varying from £109,000 to £316,000. It assessed the percentage of the total cost which each aspect of production involves.
We find that two stars in the films obtained between them 8.4 per cent. to 9.2 per cent. of production costs. That seems a very large amount of money. I think the hon. Member for Wycombe has drawn attention to stars drawing excessive incomes, but he suggested that taxation took back a large part of the income. I beg to disagree with him there, because film stars receive very special treatment from the Inland Revenue authorities which most of us less fortunate people cannot obtain. For them, the luxuries of life are regarded as essential expenses. 2011 and are largely excluded for the purposes of Income Tax.
§ Mr. John Hall
I agree with what the hon. Member has said, but I suggested that a lot of the money went into the hands of publicity agents and on dress allowances, etc.
§ Mr. Cronin
I am more concerned with the large amounts which are spent, for instance, on half a dozen mink coats or on large cars, and numerous other extravagant luxuries in which they indulge, but I accept the point made by the hon. Member. It is not only the film stars who do rather well. Directors and producers apparently receive 8 per cent. to 10 per cent. of total production costs. That suggests that such things should be inquired into.
Some film stars receive £2,000 a week. I hope that the Parliamentary Secretary will forgive the allusion if I compare that with the salary of a junior Minister, which is £2,000 a year. I am quite prepared to accept that a film star is fifty times more beautiful than a junior Minister——
§ Mr. Cronin
—but I do not think any of us would accept that they are fifty times as intelligent or as good as a junior Minister. There seems to be a considerable discrepancy between what film stars should reasonably earn and what they can in practice obtain. When we consider the wages of the average working man, we find that the film star has the advantage of two hundred times his purchasing power. That is clearly an anomalous position which I think an independent inquiry should investigate.
I propose to truncate my speech somewhat to ensure that other hon. Members are able to enter this interesting debate. In concluding, I would say that it is most important, first, that the film industry should help itself. The industry must save itself to a very large extent by its own efforts. It cannot rely exclusively on public funds and help from various Governments. Nevertheless, there is a heavy responsibility upon the President of the Board of Trade, the Parliamentary Secretary and the Government to ensure that the film industry works in a manner consistent with the public interest, and that it is given such help as it needs in 2012 appropriate negotiations with the United States. Above all, the interests of the British producer and the small cinema exhibitor should be given really careful. favourable and effective consideration.
§ 2.52 p.m.
§ Mr. William Shepherd (Cheadle)
I shall have to truncate my speech even more markedly than was done by the hon. Member for Loughborough (Mr. Cronin). I have listened to the whole of the debate and I feel that the air of pessimism has gone a little too far. It is true that there are difficulties in this industry, as in most industries, but I should not like to say that things are quite as bad as most hon. Members have tried to make out. We must try to get a sense of proportion and realise that in relation to before the war this industry is doing extraordinarily well At a time when there is an increase in the competitive nature of entertainment, the cinema industry has put up its weekly attendance figure from 15 million in 1938 to 23½ million today. It is these two figures we ought to look at rather than the figures relating to the abnormal year of 1946. There are many factors about the present situation which are encouraging. One of the most encouraging is the new unity within the industry itself, and I hope that this will continue. A second encouraging feature is the success of British films, which now are the top takers at the box office almost every year.
We have heard a lot of dispute about the question of studio space, but we must face the reality that studio space is not the limiting factor in the production of films. The one limiting factor is the creative talent to produce them. It has nothing to do with studios. If we could get two or three brilliant directors or producers coming on to the scene who would produce winners, I am quite certain that the space in which to produce the films would be readily available. But we have a long way to go.
One of the things that disturbs me about the industry at present is that the three prominent executive producers in this country are about to retire or will retire very shortly, and at the moment one does not see continuity of ability in that direction. We must get clearly in our minds that it is not a question of bricks and mortar; it is not even a question of money, because I do not think 2013 that even a great deal of money would make a successful British musical at the present time. It is a question of creative talent, and particularly of getting satisfactory stories and script writers.
I do not think that the idea contained in the Motion is a good one. I have looked up four or five of the reports on the industry in recent years, and I do not think the idea of my right hon. Friend the President of the Board of Trade is a good one to draw from the opinions of the Cinematograph Films Council, while the N.F.F.C. is far too narrow a body. In many respects, the Cinematograph Films Council is not a very suitable body. Neither am I entirely impressed by the arguments of Mr. John Davis.
My view is that we should not waste time. The President of the Board of Trade should invite the opinions of all the representative bodies—not only the Cinematograph Films Council and the N.F.F.C, but the renters, the British Film Producers Association and the C.E.A.—and then he can decide as a result of those opinions what he should do. This is essentially a matter for the Government to decide and we do not want a long inquiry to find out what, in the main, we already know.
I have to cut my remarks very short, but I should like to make this point. The industry faces a difficulty in that the run-of-the-mill type of film takes less money today than ever before. People will not go out for the ordinary film, but they come out in increased numbers for the better film. Today, the winner takes more money than ever, and the ordinary run of film takes very little indeed. To anybody who knows the film business this presents great difficulty, because getting the winner is by no means an easy matter.
I hope I will be permitted to say something about the monopoly question. One or two hon. Members opposite have attacked the Rank Organisation in what, I think, is a rather unfair manner. I am not here as a defender of monopoly—I am against monopoly in general—but I think that some of the allegations have been quite unfair to an organisation which has done an immense amount for the British industry.
As far as I am aware, the Rank Organisation has not exceeded its quota of 607 cinemas. Of course, it is buying some and 2014 selling some, but that is bound to happen, because populations change. It may be that when a cinema is needed in a new town or estate, the Rank Organisation is the best placed to provide it. It might well be that that organisation can provide a cinema which gives a better social service to the people of the community than any other organisation. If so, surely it is in the public interest that that organisation should provide the cinema and not be debarred from doing so. I understand, in fact, that many local authorities press this organisation to put up cinemas in their areas.
There is another argument which I hear about circuit management. My information is that there is no double booking on these circuits. If any hon. Member can produce one shred of evidence to show that these bookings are not done separately—that is to say, if films are booked upon the Gaumont circuit and upon the Odeon circuit together—the House would be very interested in such information. As far as I know, the only film ever to fall into this category was the Coronation film, and I am sure that hon. Members do not object to that. The Rank Organisation does not discriminate against independent producers. In fact, if we look at its record of bookings last year, we find that it booked 21 independent films as against 19 of its own. This cannot be said to be excluding the independent producer.
The House ought not to lose sight of what the Rank Organisation has done for the film industry. Arthur J. Rank went into the business for the benefit of this community and he has rendered very great service in so doing. He has opened up film houses and bought cinemas in almost every Commonwealth country. Groups of cinemas otherwise would have gone into American ownership. He has safeguarded markets in those Commonwealth countries for British films, and is carrying out ambitious programmes in South America to try to do a similar job there.
I think we owe a great deal to Mr. Arthur J. Rank and his Organisation. He is really providing a base from which we can operate against the big American companies. He is fighting the big American combines for the British people, and I think we ought to congratulate him on that. No individual has made so generous a gesture as has Arthur J. Rank 2015 in handing over his shares in this most powerful and wealthy company to a trust for all time for the British people. That is a remarkable gesture.
I hope that the right hon. Gentleman the Member for Huyton (Mr. H. Wilson) who, I know, has some doubts about the monopoly question in the film industry, will appreciate the spirit in which Arthur J. Rank has acted in this business, the contribution he has made to the industry, and the generosity he has shown in handing over his share to the trust so that it can be a safeguard for the British people for all time, from which he himself will not benefit in future. I hope the right hon. Gentleman will bear that in mind in any criticisms he may make.
§ 3.0 p.m.
§ Mr. Harold Wilson (Huyton)
For one who speaks with such passion in defence of the Rank Organisation, I was a little surprised to hear the hon. Member for Cheadle (Mr. Shepherd) erroneously refer, to Arthur J. Rank and not to J. Arthur Rank, which is, I believe his name. I shall come in a few moments to the question of monopoly to which the hon. Gentleman referred. I wish to associate myself with much of the tribute the hon. Gentleman paid to what has been done by the Rank Organisation for film production in this country during the war, and the efforts it made, with some unfortunate financial results to itself, immediately after the war. I certainly pay tribute also, as the hon. Gentleman did, to what the Organisation is attempting to do in securing outlets for British films in many other parts of the world.
The debate has certainly ranged very widely, and I could not, and nor could the Parliamentary Secretary, hope to deal with all the matters raised. I do not myself, for example, intend to follow the interesting question posed by my hon. Friend the Member for Loughborough (Mr. Cronin), who invited the House to make an appraisal of the relative virtues, curvaceous and otherwise, of Miss Monroe and the Parliamentary Secretary to the Board of Trade. It would be interesting to go into the subject further, but I am afraid there will not be much time to do so today, though I would say that, despite all the criticisms I have of the Parliamentary Secretary and of present Ministers generally—I think we 2016 would all agree that if they were paid by results they would get even less than they do at present—I agree with my hon. Friend the Member for Loughborough that there is some degree of unbalance, some lack of perspective, in the relative payments to Ministers and to film stars, and not only to film stars but to many other people in the film industry.
The House owes a debt of gratitude to my hon. Friend the Member for Govan (Mr. Rankin) for having chosen this subject for debate today and for giving us so comprehensive an introduction to it. I do not intend to say very much about the present state of production because facts and figures have been given by several hon. Members, but I think it is true to say of the state of film production today, and especially of independent film production, that it is probably at a lower ebb than at any other time since the war.
There is clearly not time to trace the history of the industry since the war. Reference has already been made to the fact that in 1948 the industry was faced with imminent collapse on the production side, and the independent producers were especially, and I think we may claim on this side of the House that the Labour Government saved the industry from complete disaster by the establishment of the National Film Finance Corporation and by the film production levy. I think every tribute is due to Lord Reith and Mr. Stopford, successive chairmen of the National Film Finance Corporation in those days, and to Mr. Lawrie, the managing director, and to other members of the Corporation. It is fair to say that the losses of the Corporation were no greater than many hon. Members expected when the Corporation was set up, though it is my view—though I do not ask the Parliamentary Secretary to comment on this today—that the present Government could have reduced the losses in that very bad year from 1953 to 1954 if they had taken action earlier, as they were pressed to do by the Corporation, in relation to British Lion. They could have cut down the losses and even, perhaps, avoided the liquidation, if they had acted earlier.
I would ask the Parliamentary Secretary, however, to make a statement about the Government's intentions for the future 2017 of the Corporation. Is it their intention to keep it in being? I warn him right away that if they get rid of the Corporation at the present, the already difficult situation for the film industry—though I agree that we do not want to exaggerate the difficulties—will become very much worse, and we shall be faced with total disaster in the industry.
I would also ask the hon. Gentleman to deal with a matter which is the subject of much gossip and rumour, and that is whether there is any intention in the mind of the Government to get rid of British Lion, which, of course, they hold as a result of the liquidation procedure of June, 1954.
There are rumours that the Government, perhaps for political reasons under pressure from certain political and perhaps financial interests, are trying to get rid of their commitments in the industry. One understands that there might be more than one potential buyer who would be glad to have British Lion for the sake of the tax losses which it has incurred. That would be a fantastic position when one remembers that those losses have been incurred by British Lion at the expense of the taxpayer. I hope that the Parliamentary Secretary will say that there is no truth in this story. If it were true, the Chancellor would also suffer a further loss because of the offsetting of past losses against the profits of the company which bought British Lion.
Hon. Members in all parts of the House have referred to the Entertainments Duty. This is undoubtedly a heavy burden. Emphasis has been rightly laid on the dire position of most of the smaller cinemas and those cinemas which are mainly dependent on the cheaper seats. The House may recall that in June, 1954, some of my hon. Friends and I placed a Motion on the Order Paper. We were allowed to move new Clauses and things of that kind in debate on the Finance Bill that year. We were, of course, not allowed to do that last year. Our 1954 Motion would have given a special measure of relief to the cheaper seats and, therefore, particularly to those cinemas which mainly cater for cinema-goers who occupy those seats. We did not move an Amendment in Committee because at that time the industry was torn apart in disagreement over the Eady levy and other matters.
2018 There is a scheme before the Treasury at the moment which has been submitted by a tax committee representing all the industry. Since that is regarded as a highly secret document, though most people in the industry know what it contains, it would be improper for me to comment on it now. I understand that it would mean a considerable reduction in tax and therefore a considerable loss to the Treasury. It is a matter which no doubt the Chancellor will consider between now and Budget day.
There is one point which should be made to the Chancellor. It appeared in a slightly different form in the speech of the hon. and gallant Member for Roxburgh, Selkirk and Peebles (Commander Donaldson). I gather that one part of the proposal before the Chancellor is that there should be a rebate scheme in the smaller cinemas. Whether it is to be a percentage rebate for the first £100 or £150 of takings or complete freedom from tax up to £100 takings and a sliding scale thereafter is a matter for consideration. I think that the House will agree that if the Chancellor can find the money—and it would be a smaller amount than anything connected with a general scheme—it would be of great assistance to the smaller cinemas. It might keep some of them in being. But we must await the Budget.
In such a year as this, and in such an economic situation as we are now experiencing, I do not think that many in the industry have high hopes of what the Chancellor will do. If the right hon. Gentleman is going to do anything at all, it is vital that a substantial part must be syphoned back by the Eady scheme for the benefit of film production. Last year, the Eady scheme provided £2.2 million against an estimate of £3 million on which the amendment to the scheme has been based. This reflects a drop in cinema attendances of recent years. As a number of hon. Members have made plain, the answer to film production does not lie in any straight reduction of tax.
As we know, of £100 taken at the box office today £32 goes in tax and of the £68 left a proportion, estimated differently by different people—say 65 per cent.— goes for the total cost of exhibition, leaving £24 to the producer, which includes such costs of distribution as prints. The best estimate I have seen suggests that the producer gets a bare £15 out of the 2019 £100 at the most, plus whatever he gets from the film production levy.
Therefore if the Chancellor of the Exchequer were to reduce Entertainments Duty by, say, £5 million—I do not know what is in his mind, and I do not suppose he does—[Laughter.] I am assuming that the Chancellor of the Exchequer will not make up his mind until he has heard the debate—I think £750,000 would come to the producer. So that if the right hon. Gentleman makes a reduction this year, or at any other time, it is vital that some part of it must be piped off via the film production levy to irrigate the arid and thirsty wastes of British film production.
Now I want to refer to a grave matter mentioned by the hon. Gentleman the Member for Cheadle, the further development of monopoly in the industry. My hon. Friend the Member for Flint, East (Mrs. White) has an unrivalled knowledge of the problems of the industry, and she said that this was condemned by the Plant-Palache Report during the war. In the further Plant Committee Report that followed the war an attempt was made, some of us thought rather tortuously, to make competition in the industry more effective.
The House will recall that in the 1948 Films Act special powers were taken both to limit the growth of monopoly and to mitigate the worst effects. The latest figures I have seen suggest that of just over 4,500 cinemas in this country, the two Rank circuits, Odeon and Gaumont, have about 570 cinemas and A.B.C. about 386. That was before the most recent purchases by the Rank Organisation. Then there are the smaller groups referred to—Essoldo. Star, Granada and the King cinemas, but the two big groups between them account for 1,000 cinemas—less than one-quarter of the total cinemas in the country it is true, but they represent the main booking power. It is broadly true to say that no one can make a major film in this country with any hope of recovering his costs unless he is sure of a booking by one or other of the two circuits.
I agree with the point about booking mentioned by the hon. Member for Cheadle. I do not think there is any evidence of joint booking in the sense of a film being booked by the two circuits for showing on the two circuits. Now I want to come to another problem with which the hon. Gentleman was concerned.
2020 Eight years ago the most solemn and categorical assurances were given to the then Government that Odeon and Gaumont, for booking purposes, would be run as separate circuits. If it had not been for those assurances I would certainly have recommended Parliament to take much stiffer legislative action against the circuits. Indeed, that was recognised by the predecessor of the Parliamentary Secretary who, in an argument on this two years ago, himself said that I had withdrawn certain tough powers proposed in the 1948 Bill because of those assurances. Indeed, without those assurances I would have recommended the House to agree to legislation to divorce those two circuits one from another so that there would have been three separate circuits in the country.
In a debate in November, 1953, I said that those assurances had been flagrantly broken. Everyone knew that was true. I shall not make any attacks on the previous Parliamentary Secretary, because he is not here to defend himself, but the hon. Gentleman denied what I said with great heat; indeed, I thought with unexpected and sensitive indignation. One always gets this from the Board of Trade when anyone mentions the Rank Organisation, and I hope that the new Parliamentary Secretary will be immune from that. However, the then Parliamentary Secretary agreed that, because of the assurances I had been given, we did not use certain powers under Section 5 (5) of the 1948 Act. Yet certain of the things he said were so inaccurate, and he misled the House so seriously, that he had to come along to the House later and apologise for the wrong information given.
Does anyone seriously pretend that there are separate booking systems for Gaumont and Odeon? The booking is done by one man, a gentleman called Mr. Hamer. I will not say whether he is a good man or a bad man for choosing a film, but it is very serious that the whole future of the film industry and the prospects of a film made by an independent producer should rest on the decision of one man, so far as these two major circuits are concerned.
No one will imagine for a moment that if Mr. Hamer were to turn down a film for Odeon it would have a chance with Gaumont. Of course not. Mr. Hamer's 2021 fiat runs throughout C.M.A., which is the Rank circuit. I would urge the Minister to ask any independent producer—I hope he will do it quickly before they all die out—whether he considers there is, or is not, joint booking in accordance with the definition which I have just used. As I have said, I agree with what the hon. Member for Cheadle said earlier.
What this means is that we have in this country, for all practical purposes, not three circuits, but two. Let us take a situation which occurs fairly often—I consider that the quotas are far too low for these circuits—where, say, A.B.C. is well booked up with British films for some months ahead, as it sometimes is. When that situation arises, the two Rank circuits, Gaumont and Odeon—the C.M.A. circuit—have a virtual monopoly and can beat down any producer who comes along. They do beat him down and force him to accept terms which I do not think he would have to accept if there were genuine competition between the circuits. I will give my suggestions about that a little later.
I want to ask the Minister—I told him last night that I intended to put the point to him—about the Government's policy of allowing circuits to expand their ownership of cinemas. Here we have a sudden and complete reversal of the policy followed for several years. The reversal took place some time between late 1954 and early 1955. Let us look at the position.
In 1944 certain assurances were given by Mr. Rank to my right hon. Friend the Member for Bishop Auckland (Mr. Dalton), who was then President of the Board of Trade. I agree with what has sometimes been said from the Government Front Bench in recent months. What is at present being proposed and pursued does not go beyond the assurances given to my right hon. Friend in 1944. I know it is the Government's stock reply that it does not go beyond the figure of 607 fixed in 1944.
However, that entirely ignores the policy laid down by Sir Stafford Cripps as President of the Board of Trade in 1946, which I continued. In announcing to the House certain undertakings given by Mr. Rank and A.B.C., Sir Stafford Cripps said:These undertakings freeze the status quo as respects the control of the major vertical combines, preclude any unauthorised expan- 2022 sion of any of the three major circuits and prevent Mr. Rank's organisation from acquiring control of additional studios. An opportunity for more formal and more permanent measures to take care of these points, in so far as further measures may be necessary, will be afforded by the new legislation."—[OFFICIAL REPORT, 18th March, 1946; Vol. 420. c. 1536.]The 1948 Act provided the powers to which Sir Stafford Cripps referred. It was said in the Act that no acquisition of cinemas could take place without the permission of the Board of Trade. The Parliamentary Secretary will probably have a small piece of paper before him to say that during the Committee stage I staled that these powers would not be used restrictively. However, if he turns up the debates, he will find that I was referring to an amendment of the powers and not the powers themselves. Furthermore, I prefaced that by saying that there was no change in policy from that announced by Sir Stafford Cripps, which meant no more cinemas.
That was the position until a year ago when the President of the Board of Trade abruptly reversed the policy and allowed new acquisitions up to a figure of 607. He did not inform the House. One would have thought that with a major statement of policy there would have been a statement in the House. It was only the vigilance of hon. Members on this side which managed to winkle out this information. He did not consult the Films Council. One would have thought that he would have consulted the Films Council on a major change of this kind.
The decision has disheartened the independent producers. It alarmed the Exhibitors Association, at any rate at that time when it was not dominated by the Rank Organisation. It put out an alarm call and was very anxious and worried about this. Of course, now that the Rank Organisation is back in the Cinematograph Exhibitors Association, the Association is changing its tune about it, but after all an annual subscription of £11,000 is rather a lot of money. Nevertheless, there is the view of the independent exhibitors who dominated the C.E.A. at that time.
Why did it happen? It was not expected by the Rank Organisation. I am sure of that. In September, 1954, the Rank Organisation was informing prospective sellers of cinemas that it was not allowed to increase its holdings because 2023 of Board of Trade control. By January last year it was launched on a big campaign of acquisition of cinemas, so that this decision must have been taken somewhere between September, 1954, and January, 1955. How was it taken? Why was it taken? I hope that the Parliamentary Secretary will answer those questions. I hope that he will tell us whether it was done as a result of proper consideration of the matter. Obviously there was no consultation. Was it just done around a lunch table in a private room on the sixth floor of the Dorchester Hotel? That is what we must know from the Parliamentary Secretary.
Last year we were told that the large circuits—and that is mainly the Rank Organisation—had added 64 cinemas to its list, excluding the 12 additional cinemas in Northern Ireland to which the Act does not apply and which give it a virtual monopoly in Northern Ireland. I do not know whether any Northern Ireland Members are present, but Belfast is now completely within the Rank empire. Cinemas have been bought in towns like Harlow, Doncaster, Glasgow, Burton, Lincoln, Wembley, Carlisle, Dudley and Crewe. I could give the Parliamentary Secretary a list of other cinemas controlled by the Rank Organisation and the dates at which they were acquired, but no doubt he has it himself. Those figures exclude rebuilt cinemas and those which are now being built or restored. There is a considerable number, far more than the former Chancellor of the Exchequer told the House when we asked them about them.
One wonders how it can be in a time of cuts in capital investment, when the housing programme has been savagely reduced, when local authority building has been savagely reduced, that new cinemas are being built. This is the Tory system working and we are seeing an extension of monopoly in the industry, not, apparently, just because the Board of Trade is allowing it to happen, but because it is actively promoting it and has changed its policy to let it happen. That seems to be the deliberate policy of this St. George who will slay the dragon of monopoly, so we are told, when we see the Monopolies Bill in a week or two.
Many cinema owners are glad to sell. They have been forced into a difficult 2024 position over the last year or so. They could not make a living from then-cinemas and they were only too glad to sell to Mr. Rank and collect tax-free capital gains, which they get when they sell. The C.M.A. gets a nice theatre in a nice situation, sometimes with tax losses as well which it can use for other purposes. How does it get the money? There is supposed to be a credit squeeze on at present. Hon. Members in all parts of the House know that small businesses in all parts of the country are being squeezed into a difficult position by the credit squeeze. They are being forced to restrict employment, restrict production and restrict training, and yet, as I said last week, the credit squeeze does not affect the industrial giants, the great combines, the big oil companies, and it does not affect Mr. Rank.
Here we have a company which I understand to have a £5 million overdraft in the bank. If any hon. Member tried to get an overdraft of anything like that size, there would be trouble, yet Mr. Rank had no difficulty raising capital to buy up 50 or 60 cinemas, or whatever it was, last year and that makes one wonder how the credit squeeze is working. At any rate, I should like to make some suggestions to the hon. Gentleman.
Firstly, I suggest that he stops further acquisitions of the circuits. Secondly, he should consider legislation to divorce the Gaumont from the Odeon circuit. Let us have three circuits in active competition. Speaking for myself, I am not sure that I would not like to go further and some day see legislation to prevent anyone having a circuit of more than 100 cinemas. It would be very healthy to have ten or a dozen circuits of not more than 100 cinemas each competing with one another for the productions of the British and the American film industries. On quota legislation, I think I made a mistake in 1948 in recommending the House to drop the provision in the Bill as introduced which provided for a differential quota, a higher quota for the circuits than that which applied to the independent cinemas. I think that that was a mistake and that we ought to go back to a differential quota as long as these circuits exist with anything like their present power.
Finally, with regard to the proposed inquiry, the Minister knows that a new Act will be required in 1958. A new survey of the problems of production, 2025 marketing and, above all, of monopoly, is required. He could consider, for instance, the proposals which I have just put before the House in relation to new legislation on the subject of circuits. The President of the Board of Trade appeared willing to have an inquiry a few weeks ago. Now he has suddenly changed his mind again. Why has he changed his mind? Where did he change his mind? Under what pressure has he been?
He says that he has taken the views of the industry. I will tell him what answer he will get from the industry. The B.F.P.A. has Mr. John Davis as its chairman. I think that the B.F.P.A. has done a great job in the international sphere but I do not think that that organisation will give him any other answer than that which the Rank Organisation gives. In the C.E.A. here we find him again, like the Marquis of Carabas in the fairy story. The Rank Organisation will now dominate the C.E.A. The hon. Member for Cheadle talks about new-found unity in the industry, but I would remind him that we always find unity where there is monopoly, and the monopoly is growing.
Then there are the renters and the unions. I do not know what answer he will get from them. Mr. Davis recently said in Birmingham that the industry should do its own inquiring. I suggest, in support of what was said by my hon. Friend the Member for Flint, East, that the public concern in this industry is such that any investigation in advance of new legislation should be conducted by a small impartial inquiry. The fact that an industry needs legislation means that there is public concern, and there is a public right of investigation.
There is Government money in it. There is the problem of the Entertainments Duty, there is the dollar situation and there is the position of the cinemagoer, and the question of the growth of the monopoly in the industry. For all these reasons, I hope that the Minister will agree to appoint an independent inquiry in advance of the legislation which will be necessary before very long. I know that there are powerful forces at work in the industry putting pressure on the Minister not to have an independent inquiry. One is bound to ask why are they against it. What have they to hide? What do they fear? Do they fear a probe into the monopoly in the industry? I do 2026 not know. I warn the Minister—and I am sure that I am speaking for most hon. Members in all parts of the House—that he must not give way to the pressure but must appoint an inquiry as suggested in the Motion.
§ 3.28 p.m.
§ The Parliamentary Secretary to the Board of Trade (Mr. Derek Walker-Smith)
The House will agree that we have had an interesting and informative debate on the initiative of the hon. Member for Govan (Mr. Rankin). As the right hon. Member for Huyton (Mr. H. Wilson) said, the debate has indeed ranged wide, extending even, as he observed, to comparisons between the respective merits and appearance of Miss Monroe and myself and our respective remuneration. I understand from the newspapers that we are likely to have a visit to these shores from this lady, and from what I am told she will be a very visible import indeed, so we may have some further opportunity of testing these matters.
The hon. Member for Govan began by saying that he was glad to have an opportunity for a full debate because there had not been one for some time. I am sure he will agree that the film industry commands a substantial proportion of the time of the House, and of public attention generally—perhaps out of proportion to its precise economic place in the life of the community.
I do not begrudge it that large amount of Parliamentary and public attention, because there are, of course, as the House is aware, certain aspects of this industry of an idiosyncratic character. There is, for example, the social and cultural significance of the industry, referred to by the hon. Member for Loughborough (Mr. Cronin) and the hon. Member for Flint, East (Mrs. White). I would say at once that I will certainly look at the matter which the hon. Lady raised regarding the position of film exhibits in the circumstances which she mentioned.
Then there is another distinct feature which has been referred to in the debate, the unique, or possibly unique, position of the industry in regard to American competition. In the First World War the American film industry secured, and has retained, a preponderant position in the amount of British screen time occupied 2027 by American films. They have the advantage, which was referred to, that as they are able to recover a large proportion of their production costs in their own home market, they are in a favourable position to satisfy the market here at a reasonable cost.
In those circumstances, I make no criticism of the hon. Gentleman's choice of subject, in fact the reverse. I cannot go quite so far, as he will appreciate, regarding the precise terms of the Motion or even the timing. Though it has been suggested today that this is a convenient time for the discussion of such matters as Entertainments Duty, that places, as was recognised by the right hon. Member for Huyton, an obvious and severe inhibition on any reply by anyone speaking from this Bench.
The Motion is divided into three parts. There is the part which views with concern the state of the industry; there is a suggestion that the Entertainments Duty is too high; and, thirdly, there is a demand for an inquiry. I shall seek to deal with all those aspects in my speech, so far as time allows, and also to make some attempt at a dispassionate and comprehensive review, which was what the hon. Member for Govan asked for at the beginning of his speech. But, as the right hon. Gentleman indicated, it is obvious that so many points have been raised in this debate, all of an interesting nature, that it will not be possible for me to reply to them all in detail; though I will gladly follow up afterwards with hon. Members, as opportunity affords, any which lack of time prevents me from dealing with.
I agree with my hon. Friend the Member for Cheadle (Mr. Shepherd), who made such a constructive speech in so short a space of time, that we should not be too pessimistic about the state of the film industry, and that there are encouraging features. The hon. Member for Govan asked the House to view the industry with concern. I consider that phraseology too strong. We should certainly not view it with complacency, but neither should we view it with concern, and certainly not with any sort of despair. I am glad to say that no one has gone so far as to suggest that. It should be viewed constructively and with sympathetic objectivity.
2028 The attention of the House has been drawn to a number of matters by which it is possible for the House to make this sort of objective test of the present position of the film industry. Among them are the number of films produced and the trend of production—referred to by the hon. Member for Newcastle-under-Lyme (Mr. Swingler), among others—the export position of British films; the showing of our films here in relation to the quota system; and also the trend of cinema attendances and receipts which the hon. Member for Govan dealt with in a good deal of statistical detail in his speech. Indeed, further tests have been applied, which I should also like to look at, so far as time permits, such as the test of studio space, which again the hon. Gentleman gave some figures about in his opening speech.
It is true, as the hon. Member for Loughborough has said, that this has been a very statistical debate, and I shall have to refer to one or two figures myself in order to seek to get these matters into perspective. I will come straight to the question of the trend of film production, to which reference was made by both the hon. Member for Govan and the hon. Member for Newcastle-under-Lyme. Over the past five years, the average yearly production of British long films, that is to say, films of over 6,500 feet which, broadly speaking, become the first-feature films, as the hon. Lady the Member for Flint, East said, is sixty-five to seventy, with thirty second-feature films and 300 or so documentaries or shorts. That compares with imports from the United States of 300 to 350 first- and second-feature films and 350 shorts and documentaries.
I must part company with the hon. Member for Govan when he suggests that there is a discouraging trend in production at the present time. In the film year ended September, 1955, 89 British long films were registered as compared with 81 in 1950 and only 65 in 1951. The Films Council's forward estimate for 1956–57—and this is an encouraging feature—is higher than that for any year since 1948–49. I ask the House to accept, on the test of the trend of production, that there is no case for viewing the state of the industry with concern.
I come now to the question of the overseas aspects of British film production, and wish particularly to say a word 2029 with regard to the vexed and rather complicated question of the Anglo-American Film Agreement to which reference has been made in the debate. The overseas earnings of British films are estimated at between £4 million and £5. million. That is an increasing figure, because, as the House is aware, British films are achieving a considerable prestige success at the Venice Film Festival, etc.
The United States is a proverbially difficult and somewhat unpredictable market for British films. I do not think that we can seek any solution of this problem, which, in essence, is a commercial one, through the machinery of the Anglo-American Film Agreement. It is not an agreement with the American Government. It is not even an agreement with that part of the American industry which is concerned with exhibiting films in the United States. It is an agreement with the producers' side of the motion picture industry in the United States.
The hon. Member for Loughborough, in his well informed speech, very fairly pointed out the difficulties in regard to seeking an amelioration of this situation through the mechanism of the Anglo-American Film Agreement. There are no Governmental inhibitions upon the showing of British films in the United States, and I should not like the House to think that it is possible to do much in that respect through that Agreement or Governmental negotiation.
With regard to the other matters with which the Agreement deals—that is to say, with the remittances of dollar earnings to the United States—that has, as the hon. Gentleman pointed out, now become in effect an annual review for the extension of the Agreement, and when the next time for negotiations comes round we, on our side, will look at the matter in the context of the economic position as it is at that time.
I will now pass to the question of the showing of British films at home, with particular relation to the points raised by the hon. Member for Newcastle-under-Lyme and other hon. Members about the working of the quota system. Two questions suggest themselves initially in this context. First, is the correct quota prescribed? Secondly, is the prescribed quota in fact maintained, and, if not, why not?
2030 As the House will be aware, the quota for the year September, 1956, to September, 1957—the next quota year—has recently been fixed at 30 per cent. for first features and 25 per cent. for supporting programmes. The figure of 30 per cent. is the same percentage as has ruled since 1950, and the advice of the Films Council, as the hon. Lady the Member for Flint, East will know, was that the quota should remain unchanged. It is, of course, unwise to fix a quota which is higher than the expected productive potential of the industry, for it leads to inevitable defaulting on a large scale, and brings the general system into disrepute.
In reference to the maintenance of the quota, an hon. Member referred to the quota exemptions. There are, of course, certain quota exemptions and reliefs given for good reason to small independent concerns, as the House may be aware, but, taking account of those exemptions, I must say that for 1954—the last full statistical year to which the hon. Member referred—the average quota achieved was in fact higher than the quota prescribed because of the exemptions. Allowing for exemptions, the average quota prescribed for first feature films in that year was 25.2 per cent. and the average quota achieved was 29.4 per cent.
§ Mr. Swingler
I am sorry to interrupt the hon. and learned Gentleman, but surely he will agree that in this field the average figure means nothing at all. All that it tends to show is that the quota was too low for the circuits and too high for the small cinemas. There were 730 defaulters in that year and there were 1,500 reliefs given by the Board of Trade. Those are the really important matters.
§ Mr. Walker-Smith
I differ with the hon. Gentleman to this extent, that I think that the figures that I was giving were at least equally significant. But if he prefers to rest upon the position of the number of defaulters, I am happy to tell him that, albeit the figures for the year ended September, 1955, are not yet quite complete, it appears, from the figures which we have, that there will be a material diminution in the number of defaulters in this last year.
I now turn to the question of what is shown by the trend of attendances and receipts. The hon. Member for Govan, in picturesque language, referred to an 2031 arresting picture of continuing decline, but I think he was a little selective in the way in which he painted his picture, because he gave as the starting figure that of 1946.
§ Mr. Rankin
I agree about that, but I think the hon. and learned Member will agree that in later figures I confined myself to 1953 and 1955.
§ Mr. Walker-Smith
Yes, but the figures which evoked that picturesque language were those which started with 1946, and my hon. Friend the Member for Cheadle has pointed out that 1946 was far from a typical year because of the artificial circumstances of that time—the pent-up demand and difficulties in finding other outlets for consumer expenditure. In fact, the biggest annual percentage decrease which has taken place was that which took place in 1947.
There is still this substantial number of people going to the cinema—twenty-four visits per head of the population per year. The total number of cinemas shows some diminution, but not the sort of diminution which should give rise, in my submission, to alarm and concern; the total diminution over this period is from 4,759 to 4,507. The hon. Gentleman pointed, as he was entitled to do, to the accentuation of the slight downward gradient which took place in 1955, but again I ask the House to say that in retrospect 1955 will probably turn out not to have been a representative year. That is because of the special competition of television in the course of the year, coupled with an exceptionally good summer, which must have affected the takings at cinemas.
Several hon. Members have referred to the problem created for the cinema by television. The hon. Member for Loughborough and my hon. Friend the Member for Howden (Mr. Bryan) both referred to this, as did the hon. Member for Feltham (Mr. Hunter) in a very interesting speech on long-term possibilities. All I would say at this juncture is that there is no evidence that television in this country is making the same extensive inroads into cinemas patronage as it has done in the United States, and it might turn out that that is not a continuing process when the novelty of television has to some extent worn off.
§ Mr. Hirst
I am not sure what my hon. and learned Friend is getting at, but he is worrying me a little because he appears to be trying to minimise this argument about cinema attendances. I cannot accept that argument, because in the last few years there has been a drop of 7½ per cent, on top of the earlier decline. I do not think that that is something to be ignored, nor is the fact that many cinemas are carried as sideshows to other businesses and can be carried only in that way.
§ Mr. Walker-Smith
I am not trying to belittle the significance of the drop in cinema attendances and receipts. I am merely trying to assist the House to get them into perspective. That is why I was dealing with the special considerations attaching in this context to 1955.
I pass from the question of admissions and receipts to make a reference to the question of studio space. I agree with my hon. Friend the Member for Shipley (Mr. Hirst) and my hon. Friend the Member for Cheadle that studio space is not m itself a particularly good test. The real test is whether there is any evidence that producers cannot get sufficient studio space. There is no evidence, in fact, that they are not able to do so. As I have told the House, the trend of British film production is relatively stable, and even slightly improving at present.
I do not think that time will permit me to go into the particular question of Ealing Studios because I want to go on to the more general question, also raised by the hon. Member for Govan, of the trend of employment in the cinema industry. On that, the hon. Member produced some figures which I think were not derived directly from any known public statistics. I have the numbers of personnel employed in feature-film producing companies. The figures for the year ended 30th September, 1955, are very similar, and in some cases slightly higher, than those for the preceding three years.
§ Mr. Rankinrose——
§ Mr. Walker-Smith
Time is running short and I must make these points quickly.
It is true that there has been some drop in employment for people actually 2033 in cinemas, but, although the hon. Member gave one interpretation, that drop may also reflect the competition of other attractive employment in a period of very full employment.
On the question of Entertainments Duty, my right hon. Friend will, of course, take note of all that has been said in that context in the debate. I make only one or two brief references to it. I think that the hon. Member for Govan, inadvertently, slightly exaggerated the incidence when he put it at 35 per cent. Since the 1954 reduction of Duty it is, in fact, running at about 31 per cent. The House will recall that there was a reduction of Duty in 1954, which resulted in £3½ million benefit to the industry, which was retained within the industry.
I come to the third part of the Motion, the question of an independent inquiry into the problems of the film industry. Of course there are problems and these problems arise not least because of the near expiry of a great deal of the legislation which is at the basis of the support of the film industry. The Cinematograph Films Acts, 1938 and 1948, which provide machinery for the quota system, are due to expire in September, 1958, and the Cinematograph Film Production (Special Loans) Acts, which set up the National Film Finance Corporation, are to expire on 8th March. 1957, in addition to which the Agreement of the British Film Production Fund—the Eady Fund—also expires in 1957. It is quite clear that all those matters require consideration in view of that timetable of events.
The right hon. Member for Huyton asked me about the future of the National Film Finance Corporation and the British Lion Film Corporation Ltd. The future of the Corporation is one of the things which falls to be considered in relation to the expiry of the Act under which it was set up. So far as British Lion is concerned, that is, as the right hon. Gentleman knows, a wholly-owned subsidiary of the Corporation. In both cases, it would be inappropriate for me at this stage to make any prognostications about the future of these bodies until we have received and considered the advice which my right hon. Friend has invited interested parties to give, and weighed it, together with advice received from any other quarters and with opinions expressed in this House.
2034 Time will not allow me to make a detailed reply to what the right hon. Gentleman said on the question of monopoly. In regard to the particular point of circuit bookings, I have no evidence that the Circuits Management Association has broken any undertaking which it has given in regard to this matter. On the other aspect of the monopoly suggestions, we are, as the right hon. Gentleman has already said, still adhering to the maxima prescribed by the right hon. Member for Bishop Auckland (Mr. Dalton) in 1943 and 1944.
So far as Sir Stafford Cripps's statement is concerned, that referred to future legislation. That legislation has now come about. Careful consideration was given in 1954 to the matter in the light of that, and it was then decided that there was no case for preventing the Rank Organisation or A.B.C. from acquiring additional cinemas. On the general question of monopoly, these two circuits together now have 943 cinemas out of 4,500, against a figure of 972 in 1944. which of itself would appear to be some retreat from monopoly.
I have not dealt with all the points but I have dealt with those which time has permitted. In view of the useful and constructive debate that we have had, and the fact that my right hon. Friend is considering the representations in regard to Entertainments Duty, perhaps the hon. Member for Govan will think that his purpose has been served, and he and my hon. Friend the Member for Shipley can withdraw the Motion and the Amendment.
§ Amendment, by leave, withdrawn.
§ Main Question again proposed.
§ Mr. Rankin
In view of the statement by the Parliamentary Secretary, and in view also of the fact that I agree—and, I think, most of my hon. Friends agree—that we have had a useful debate, and because of the assurances which we have received from the hon. and learned Gentleman, I beg to ask leave to withdraw the Motion.
§ Motion, by leave, withdrawn.