HC Deb 02 April 1957 vol 568 cc275-302
Sir D. Eccles

I beg to move, in page 9, line 4, to leave out "sixty-eight" and insert "sixty".

This Amendment, I am happy to say, has the full support of the Front Bench opposite, and it carries out the undertaking which I gave in Committee that we would bring forward as far as we could the final date by which the quota legislation must be brought in. As a result of putting 1960 into this Bill, the legislation to extend the quota provisions beyond September of that year will have to be introduced not later than the 1959–60 Session.

As hon. and right hon. Gentlemen opposite know, we intend to have the discussions with the industry on this new legislation when we have finished the discussions on the regulations to be brought in under this Bill, and that means in the autumn at the latest. I hope that it will not be too long after those talks that the Bill can be introduced.

Mrs. White

We on this side of the House are also much gratified to find the President's mind working in the same way as ours for once, but there was, in fact, no collusion between us in arriving at this date of 1960. We had originally proposed 1959, but we recognise the force of the argument in Committee that it might be difficult to have statutory sanction for that date, and therefore we felt that one more year, perhaps, might be permissible.

I think that putting this firm date in the Bill is a very great advantage, because it means that the film industry has every reason to believe that the complicated quota legislation, about which there has been a great deal of anxiety, will now be tackled energetically. The Government, both in this Bill and in dealing with the quota legislation, have frankly not been as up-to-date as we would have wished. As we said in the Committee stage, it has been perfectly well-known from as far back as 1948 that this legislation would be needed in due time, and it is indeed very regrettable that we should have to wait even two extra years, though two years is certainly better than ten. I hope that we can now accept the proposal made by the President, which accords completely with our own, that this date should now be inserted.

I had some representations made to me, as a matter of fact, by certain interests in the film industry, which still apparently have little confidence in the capacity of the Board of Trade to produce legislation even by 1960, and have asked for some undertaking that if, by any unhappy chance, this should prove to be correct, at least some action would then be taken to prolong the quota legislation as it now stands, if by that time legislation for its emendation is not ready. I do not think we need be as pessimistic as all that. The President has now given a specific undertaking that the legislation will be introduced in the Session of 1959, and that seems to me to be an adequate safeguard in the circumstances.

It would be very much better to do what we are now proposing from both sides of the House to do and have a definite date of 1960 in the Bill and follow the timetable as proposed by the President. We are very glad that, owing to the force of our arguments in Committee, we have attained a signal victory in this matter of the date by which the quota legislation must be introduced.

Mr. Geoffrey Hirst (Shipley)

If I may make the shortest speech which I have ever made in this House, I should like to say that, since the representations to my right hon. Friend were not made entirely from one side, I am grateful for the step which he has now taken.

Mr. Swingler

I think it is grossly incompetent on the part of the administration in the Board of Trade that we have to accept this Amendment. There is really no excuse for it. Over twelve months ago we on this side proposed a committee of inquiry on the film industry. Had that proposal been accepted, there would have been a valid reason for this postponement of the production of the new quota legislation.

However, the President of the Board of Trade at that time resisted this request which was put forward by my hon. Friend the Member for Govan (Mr. Rankin) and myself and very strongly supported by my right hon. Friend the Member for Huyton (Mr. H. Wilson). Instead of that, the Board of Trade resorted to the channel of the National Film Finance Corporation itself. All the inquiries were carried out, all the documents were produced, arid the Cinematograph Exhibitors' Association, the Film Producers' Association and the six trade unions concerned were consulted, and all their recommendations about the future of the film quota were in the possession of the Board of Trade last September or October. The months passed by, and then we had the production of this Bill, with a completely unamended quota system, which is proposed to be extended for a period of ten years.

There is no excuse for such incompetence. There is no reason why negotiations should not have been started many months ago. The bodies concerned had made their views plain, and the Board of Trade had six months in which to consider them. They need not have waited for entering into discussions with them on the various defects and anomalies that have appeared in the quota system in the last ten or twenty years. However, we find that the Board of Trade requires another three years, and we are now asked to accept this Amendment to prolong the existing system, with all its faults, until 1960, and to consider either in the next of the following Parliamentary Session an amending Bill.

5.30 p.m.

We must censure the Board of Trade for that incompetence while expressing our gratitude to the right hon. Gentleman that he has been prepared to abandon the ten-year proposal and to produce this more reasonable extension merely for the period of two years. That ensures that we shall be able to consider some improvement very rapidly.

It is on that basis that my hon. Friends and myself have agreed to withdraw the further Amendments that we have on the Paper. As I said in Committee, we put those Amendments down, a few among many which had been pressed upon us by people and associations in the trade, because we felt that we had to insist upon detailed discussion of the quota system if we were being asked to give the Government power to carry on an unamended quota for a further ten years, and, at any rate to test the opinion of the House upon a number of constructive suggestions put forward in the industry for the purpose of amending the quota.

On considering the fact that the President of the Board of Trade has now agreed to reduce the period of extension from ten years to two, we feel agreeable to postponing detailed discussion of these suggestions until after the Ministers have entered into consultation with the representatives of the trade and are thus in a position to produce an amending Bill. I express the hope that these discussions and negotiations will be speeded up.

I am not satisfied with the kind of reply that was given by the Minister in Committee and which suggested that it was all right to leave these things until the autumn of this year, which would be twelve months after the associations had sent their original documents through the N.F.F.C. to the Board of Trade.

I cannot see why this discussion cannot begin immediately, so that the President of the Board of Trade can be in a position to give an assurance that a Bill to amend the quota could be produced next year. He will find when he enters into discussion with some people in the industry that they regard amendment of the quota as a matter of urgency, because several gross anomalies have appeared in the administration of the quota in the last ten years.

Many people in the trade feel that a fundamental alteration should be made in the incidence of the quota, and that one of the improvements we should make in the first place is to make the quota system more enforceable in practice. The Minister will have seen the tremendous gulf that exists between the defaults or failures, or whatever we call them, in the Board of Trade's statistical analyses of the enforcement actions. I hope that he will have noticed that enforcement actions are usually taken against the very small cinematograph exhibitors and that very few actions have been taken to enforce the quota system upon the much bigger fish in the cinema industry. These have often failed to show even 25 per cent. or 30 per cent. of British pictures in a quota year.

It would be far better to substitute for the present system of exemption a dual-quota system, being one quota for the major circuits, which are in quite a different position in relation to the British pictures available to them and commercially practicable for them to show, and a second quota for the small fellows in the back streets, the very small proprietors, or those who are independent of the major circuits. That would enable us to have a much more effective quota system and enable us to see much more realistically the results of the system when the analyses are produced.

I understand that it is in order to refer to other Amendments. On the production side, there is a whole series of suggestions for amending the definition of "British pictures" for the purpose of promoting quota exhibition. This is one of those questions which are open to wide controversy. The President of the Board of Trade will find himself involved in fierce argument in the industry about amending this definition, from the point of view of promoting the exhibition of British pictures and of those who should benefit from the levy included in the Bill.

Legislation for a British film quota should be designed, and can only be designed, to affect what happens in Great Britain. We cannot legislate here for Commonwealth countries, let alone for what goes on outside Commonwealth countries. The quota was introduced and invented for the stimulation of the British film industry, that is to say of film producing in the British Isles. Therefore, the definition of "British film" should be tightened up in the legislation so that it includes only films that are initiated and, generally speaking, made by British labour in this country, that promote the employment of film technicians from Great Britain and the employment of facilities here.

That is not to say that we do not want to encourage the making of British films in Colonial Territories and in Commonwealth countries. It would be quite wrong to say that those who favour such Amendments are opposed to the making of films in the Commonwealth or in colonial countries, or are opposed to Americans coming here and making films. I welcome the fact that Americans make films in this country and employ British labour and talent to do so, and that British films are made in Commonwealth countries. The point is that we cannot apply the quota system in the Commonwealth countries any more than we can enforce it in any way on the circuits in the United States to show any proportion of British-made films.

Therefore, it seems unreasonable that the makers of these films, which are made for their own purposes, should benefit from the special levy that we have introduced or the special quota in Great Britain for the encouragement of British films. If international arrangements were made on a reciprocal basis for the showing of a proportion of British films, say, between this country and Commonwealth countries or ourselves and the United States, that would be a different matter. So long as no such reciprocal arrangements exist, we should confine the benefits of the quota system, like the other advantages that we are giving in this legislation, to the makers of films who are British and that make films in the British Isles.

We should enforce on the makers of such films that they accept the title "British". One of the great criticisms about Anglo-American films benefiting from the quota and levy is the fact that the custom has arisen for certain films to appear on this side of the Atlantic as British films and on the other side of the Atlantic as American films. An attempt is made to have it both ways, to benefit from the existence of a 30 per cent. quota on the existence of British films here and to parade as American films for the purpose of getting a circuit booking in the United States.

That is entirely wrong, and it would be entirely reasonable for us to enforce as one of the qualifications for registration under quota for British film makers that they show on their films that they are British products. That is why I and some of my hon. Friends have suggested an Amendment which would add to the definitions in Section 25 of the 1938 Act that every British film registered as a British film under the quota should have on the title the fact that it is a British film and the makers should have the obligation of putting that trade mark on the film itself.

These are all matters which we hope very soon the President will discuss with the associations in the industry. Having discussed them, very soon, I hope, in the next Parliamentary Session— without waiting for 1959—he will produce a new quota Bill so that we in this House can have a detailed discussion upon it.

Mr. Rankin

The fact that we are discussing this Measure today and these Amendments is proof that we want not merely a British film industry in this country but an expanding industry which, with our help and the injections put into it, will expand to such an extent that the bulk of films shown in our cinemas will be British films. Only when we reach that position will some reality attach to the quota system. As my hon. Friend the Member for Newcastle-under-Lyme (Mr. Swingler) has indicated, there is no reality in the quota system at present. During the next 12 or 18 months the Minister will have ample proof of that fact.

I want to direct the right hon. Gentleman's attention to two particular problems which will face him when he considers his amending legislation. The first is the problem of the small exhibitor, which was referred to by my hon. Friend.

We can all think of small exhibitors who have to change their programme three times a week. They cannot afford to show their pictures for more than two evenings at a time. Consequently, they have three changes of programme. To apply a 30 per cent. quota to them is quite useless.

The Board of Trade knows that and, therefore, in practice it does not really apply the quota. It knows that British film production is not meeting their needs. They are dependent on what we might call foreign productions to maintain their three-change programme during the week because they cannot get the British films to meet their quota. Therefore, they become what is called technical defaulters through a system being imposed on them which the Minister knows they cannot operate.

5.45 p.m.

It is no use ignoring that. It is up to the Minister to try to meet the situation. I feel that the suggestion my hon. Friend has made about a dual quota system is one which the Minister cannot afford to ignore. There is another class of exhibitor about whom the Minister will be hearing during the period of adjustment which I hope is to take place. That is the independent exhibitor who is not what one would call a small cinema proprietor, but who has a reasonably-sized hall and operates often in competition with Odeon, Gaumont and A.B.C. I gave an actual example of this in Committee. That exhibitor has three major circuits to compete against in a town of, say, 40,000 to 50,000 population.

He is in a hopeless position, because the vertical monopolies show their own productions in their own cinema houses. The independent exhibitor, unable to get British productions, has to ignore the quota and the Minister and his Department wisely connive at that system. They know that it would be a real injustice to fine that individual. In my view, the Board of Trade exercises a very wise discrimination in the matter, and calls such an exhibitor merely a technical defaulter. He goes on ignoring the quota. These are not extreme instances, as the Minister will realise when he considers the whole system of the quota and the need for the creation of a system of dual quota.

I wish the Minister well in this. I congratulate him on what he has done. It would have been wrong, in those circumstances, to have left the quota unamended for ten years. The right hon. Gentleman has done a very wise thing in deciding that within the next two years he will have the matter rectified. I am sure that when he starts to adjust it he will realise that the suggestions made from this side of the House are good ones. If he cannot accept them as they have been put forward, I think that he will find himself compelled to act along lines similar to those advanced by my hon. Friend and myself.

Sir D. Eccles

I wish to thank the hon. Member for Newcastle-under-Lyme (Mr. Swingler) and the hon. Member for Govan (Mr. Rankin) for the interesting points they have raised, and to assure them that these points will be taken into full consideration when we come to discussions with the industry. From what I have learned so far about the quota system, I have no doubt that it can be substantially improved.

Amendment agreed to.

5.50 p.m.

Sir D. Eccles

I beg to move, That the Bill be now read the Third time.

As we have just seen on the last Amendment, the Bill has been substantially improved, and I should like to thank hon. Members on both sides of the House for their help. We agreed, in principle, that what we are trying to do is to give a ten-year period of stability to the producers of films in this country. It is, of course, a producers' Bill, and it is from their point of view that we have mostly looked at the Bill, though we have had in mind the interests of the exhibitors and distributors.

In the next ten years, when the Bill is operating, there may well be many changes, both technical changes in the way in which pictures are made and changes in the way in which they are shown, but I have no doubt that the British industry will adapt itself to them. Indeed, I think that with the aid given under the Bill there is a good chance that our films may make real headway both at home and overseas. We are particularly concerned with overseas earnings. I think we feel that British films do not get their fair share of overseas earnings today, but it is no good just wringing our hands over that. What is required is the right article to sell, and vigorous salesmanship.

It may also be that, as a result of such agreement as we might make in Europe, the market for our films will be extended. We hope it will. Anyway, the best information I have is that the general health of the film production industry is good and better than it has been for a considerable time, and I am sure we wish it well.

Under the Bill we have to make Regulations, and our principle will be to keep as close to the existing system of the voluntary levy as we can. It has worked well, considering the fact that it is voluntary, and I do not think we should be right to depart much from the general practice which has been followed in the last three or four years. The point of having the levy is that it is a convenient way to transfer money direct from the box office to the producer. If that money were left in the box office the producer would get a little of it, but the distributor and the exhibitor would also get their cut. As a result of having a statutory levy, the money will be collected from all the films shown in the country and then distributed only in respect of those made in the country. That is an arrangement which the exhibitors and the producers find mutually satisfactory.

We had a word about the Children's Film Foundation during the Report stage and I will only repeat that we shall see that their work is carried on successfully. The Agency will have a responsible job, and, in spite of the arguments we had about its composition, I still feel that the placing of this responsibility outside my Department itself is a wise move.

May I say a word about Part II, which deals with the National Film Finance Corporation? There has been a very understandable anxiety on both sides of the House that the Corporation's lending policy when Part II becomes law, if Parliament gives us the Bill, may be changed. I want once more to assure the House that there is no intention of changing its policy. The Corporation has already brought a stricter financial control into its business, not, I understand, to the detriment of those who are perhaps seeking finance for the first time; I get no complaints about that. The Corporation will carry on in that way and, judging from the list of producers who either now have agreements with the Corporation or are in the process of making agreements with it, I should say that this is a well-conducted and flourishing business and that we are fortunate in the chairman and the directors of the Corporation, who understand it so well.

The only other point which arises is that which was raised on the last Amendment. I repeat that I am quite certain that changes in the quota provisions are needed, but, as I think the hon. Member for Glasgow, Govan (Mr. Rankin) said, the way in which we administer the system now, though not strictly according to the letter of the law, is sympathetic; and the fact that the number of prosecutions compared with the number of technical defaulters is so small is, I think, proof that the Board of Trade understands the difficulties of the smaller exhibitors and will see that they do not come to any harm.

In commending the Bill to the House I should say once more that we must take care of the interests of the British film industry. I think the industry deserves the exceptional help which it gets. With the quota system, with the levy and with the National Film Finance Corporation, the industry has a very substantial measure of help and protection, but it needs it, and it has a future. It remains to wish it well and to encourage it to take advantage in every possible way of overseas markets.

5.58 p.m.

Mr. Jay

I can advise the House to give a Third Reading to the Bill with more enthusiasm than that with which I spoke on Second Reading. What we all wish to do, I am sure, is to give the British film producing industry a fair chance. The truth is that our film production industry is in a weak economic position, for various reasons which we all understand, but I believe that, given the assistance of this Bill and in other ways, as some compensation for that weak economic position, there is no reason that it should not be highly successful both at home and abroad.

I thank the President of the Board of Trade for meeting us in at least some of the Amendments which we have suggested to him. We have made two definite improvements. First, we have ensured that the quota provisions will be extended only to 1960 instead of 1968 and that there is, therefore, an absolute obligation on the Government to make improvements in its provisions before 1960 and also to consult the industry in doing so. There is no doubt that there are blemishes in the quota system as it now works. The industry believes that there are and it wishes to be consulted. It has a grievance because it was not consulted last year, but we have an assurance from the Government that it will be consulted, at any rate, in the course of the present year.

The President of the Board of Trade has also assured us that legislation will be brought forward—I think that he said in the 1959 Session. Of course, the present Governemnt will not be in power in 1959, but since it is also our intention to legislate in the same sense that is, perhaps, of no very great moment.

Secondly, between us, we have managed to go some little way to provide against the danger of the Film Finance Corporation being sold out of the country. The right hon. Gentleman said that he recognised that about this there were anxieties on both sides. There are naturally anxieties—or, rather, there were—in view of the fact that the Bill as introduced by the Government would have made it possible for this Corporation, with such assets as it has, to be sold to anyone, in any part of the world whatever.

Indeed, the present Government have such passion both for selling public property to private owners and selling British property to Americans that we almost expect to hear any day that they have sold Buckingham Palace—or even Hatfield House— to an overseas purchaser for ever. We have done what we can to provide against this danger. Parliament has made it quite clear that it does not want the Corporation sold overseas, and we on this side have made it quite clear that we do not want it sold to private owners at all.

The President of the Board of Trade also said that there had been uneasiness about the lending policy of the Corporation. We discussed that in Committee, and he did not wholly satisfy me there by saying once again— although he wobbled a bit that he had no intention of making any change in this policy. Since that discussion in Committee, Mr. Laurie, the previous managing director of the Corporation, has written a letter to the Minister, of which he kindly sent me a copy as there had been in Committee public controversy about the Corporation's financial policy.

I shall not read that letter at length, but Mr. Laurie's view, if I may summarise it, comes to this: that the present policy of the Corporation is, first, to make fixed interest loans in the normal banking sense for which, of course, it has absolute security. Secondly, to take a profits-sharing interest in certain films. Thirdly, in addition to all that, its policy is, if one film makes a loss, to claim to recoup itself for that loss on subsequent films. If that is a fair picture of the present policy of the Corporation it seems to us to be unduly harsh to the independent film producer.

We cannot carry on this discussion in very great financial detail at this stage, and I would only say to the right hon. Gentleman that I hope the Corporation will so operate as to give the independent and the less-financially-supported producers a real chance to experiment and progress, and to make the sort of films which we should all like to see them make. I conclude by saying that we wish the Bill and the industry, well, and that we all confidently expect a reduction in Entertainment Duty next week.

6.4 p.m.

Mr. William Shepherd (Cheadle)

I agree with both the right hon. Gentlemen that some improvements have been made in the Bill during its passage and that it should commend itself more to the trade than it did originally. I hope that we shall satisfy the trade that the statutory levy in its present form is an acceptable thing, and that everyone will co-operate to make it work. I feel satisfied that with the pattern already set by the existing voluntary organisation there will be none of the difficulties which hon. Members were apt to envisage in Committee. Because of the previous experience, I think that the whole thing will work smoothly.

There is one point about the levy I should like to stress. I hope that the President will see that the annual report is a proper one. Exhibitors have some pretty bitter experience of money being taken from their pockets. The Sunday levy has done that, and, in some instances, exhibitors have been refused by local authorities details of how that money has been spent for charitable purposes. That is a bitter experience for exhibitors, and I hope that my right hon. Friend will see that they do not have a similar experience in respect of the statutory levy.

Perhaps I may just say a word about the N.F.F.C. I wish that I could share the anxiety of hon. Members opposite about the transfer of this wonderful national asset. I do not think that, in the period covered by this Measure, there is any danger of this organisation acquiring such financial lustre as to attract the vultures of the City of London. I do not think that the industry is advantaged by having the National Film Finance Corporation, because in lending money the tendency of a specific organisation of this kind—especially a statutory one—is to try to exert too much control over the artistic conduct of the film business.

The judgment of those running the Corporation may not always be right. If one looks at the history of the dictatorship of this Corporation, and at subsequent events, one will see that that judgment is not necessarily right. If because of the stability of the organisation we had freedom to borrow money anywhere, it would be on the artistic good of the industry. Some hon. Members this afternoon have spoken as if the whole of the industry were financed by the Finance Corporation, but, of course, it finances much less than half of first-feature films. We must not, therefore, exaggerate its part in financing the industry.

I referred on Second Reading to overseas sales, which, I think, remain one of the most important aspects of British films, particularly for the independent producer. On that occasion, because I wished to be brief, I did not pay due regard to the activities of British Lion International Ltd., which was formed on the initiative of several gentlemen in the trade and of the National Film Finance Corporation. It is perfectly true to say that that organisation has done, and I am sure will in future do, a lot to promote the sales of British films overseas.

Nevertheless, the example I gave of the highly successful film taking £260,000 here, and only £7,000 overseas—a film which had international sales potential—still remains true. There is a real need, and I hope the President will look into this, to improve the facilities at the disposal of British Lion International Ltd. so that the independent producer in the country will feel that he has as good a revenue chance overseas with his film as has any film produced by the large corporations or in conjunction with the American producers.

That brings me to my final point, which is to reply to the hon. Member for Newcastle-under-Lyme (Mr. Swingler), who was trying to persuade the House that we ought to make such alterations in the definition of a British film as would exclude certain films from enjoying their present advantages of British title. I hope that my right hon. Friend will resist this very strongly, whether it comes from the hon. Gentleman, who is largely associated with A.C.T., or from the leaders of the industry on the production side, because I feel certain that what we have to do is to encourage as much foreign production of films here as we possibly can.

I should like to see this country a centre to which foreign directors and producers come to produce their films because here they feel that they have some advantage. If it means giving them quota advantage or levy advantage, it is well worth doing. Let us remember that the Americans have agreed to levy advantage on the films they show, which represent, roughly, 70 per cent. of the showing time in this country.

I hope that we shall not, as a result of these representations, have from the President a narrow, nationalist outlook. I am convinced that the future benefit of our industry lies in internationalising production here. Since the hon. Member for Newcastle-under-Lyme is present, and has so much to say for the A.C.T., I should like to suggest that it would be a very good thing if the A.C.T. were to make the production of British films in this country more attractive to foreigners. We had the very deplorable example a few weeks ago of a distinguished foreign producer leaving these shores and saying that never again would he produce in this country, not because he disapproved of the facilities here and of the higher technical assistance, but because he was very discouraged by the attitude of members of the A.C.T.

I hope that no one will underestimate the problems of the British industry. They remain very real, despite the assistance we are now giving. I am not as optimistic about the prospects of the industry as are some of my hon. Friends and hon. Gentlemen opposite. I feel that we have a particular problem here, and we are under the pressure of costs. It is now extraordinarily difficult to produce at the same price the sort of film that we produced a few years ago, and get away with it. We must have much more ingenuity and much more artistic application on the directing side than we have had in the past five or six years. We have a big battle ahead, and I hope that everybody who believes in the future of the industry will do all that he can to encourage it, and that the Bill will do something towards that end.

6.12 p.m.

Mr. H. Lever

In the "Christmas holiday" atmosphere which always marks the conclusion of the progress of Bills providing some support to the British film production industry, I hate to sound anything resembling a discordant note, but for some years the British film industry has been promised a comprehensive Government policy upon all its problems and the whole set-up of the producing and exhibiting side. Year after year it is promised, and year after year it fails to appear.

The President of the Board of Trade has produced this Bill, but it does not represent a comprehensive policy at all. It does three patchings, and attempts to deal with the three interim measures thought of from time to time to assist the film production industry, namely, the idea of the levy, the Film Finance Corporation, and the quota, all of which need review. The right hon. Gentleman brings them all together, and now he has a Bill which he pretends is a policy. It is a little difficult to make a Third Reading speech on this patchwork Bill, but I will do my best, without turning it into a Committee speech.

The first part of the Bill, which proposes to promote the interests of the film producing industry, provides for the levy. I have two observations to make about the statutory levy. If we are to have one, I cannot see why we need an Agency, a new, extra, Departmental agency of part-time accountants and the like, to operate it. We have admirable civil servants at the Board of Trade who are extremely well versed in these matters, and they could have implemented all that was required under the Bill.

The second matter about which I want to protest is this. No real thought has gone into the conception of this levy. All it amounts to is an effort to put off difficulties by doing something which pleases members of the industry. It does nothing substantial to improve the position of the British film producer. His difficulty is that, in the existing set-up of the industry in Britain, his economic strength is such that he is not able to secure for himself an adequate proportion of the total take on films. Until the Government do something to alter his bargaining strength in relation to the other people in the industry or do something to improve the general conditions of the industry, his position will not be improved. I will not make the point again in detail—I made it in Committee —but I will say that substantially what the film producer gets from the levy he will lose in bargaining when it comes to selling his produce, because his fundamental weakness as a bargainer remains, in spite of the Government's elaborate machinery for transferring money from one pocket to another.

The lamentable defence which has been put up by the Government for this half-thought-out, temporary, patching-up levy scheme is best revealed by the answers I have had in trying to elucidate why the Government think that the £3 million or so which is to be collected will be of help to the British film producer. I asked who it was the Government thought would be paying this levy, at whose cost the £3 million would be collected, and I was told in Committee, by the President of the Board of Trade, that the levy would really be at the expense of the American film producer.

The hon. Gentleman the Member for Cheadle (Mr. Shepherd) seems to think the same, because he imagines that we have this levy by permission of the American film producers. Again, in Committee, the Parliamentary Secretary thought that the levy was to be made at the expense of the exhibitor. Other hon. Members have at times suggested that it would come from the public. Today, the Minister has rather refined the simple economic theories he propounded in Committee because today, to be quite sure that he is not pinned down to any specific source for the fund, he says that it is really a fund which might have been shared out between the film producers, distributors and exhibitors but which, thanks to his kindly intervention, will be a prize packet, neatly packed up by the Agency, to the British film producer alone.

What has happened since the Committee stage to change the President of the Board of Trade's view about where the £3 million is coming from? In fact, of course, the Government's official view was foreshadowed by the President, in an unfortunate gaffe—of which, in fairness to him, I thought too much was made— when he revealed that the Chancellor was to make a concession to the exhibitors in Entertainments Duty. He showed quite clearly that the Government's view is that this levy is really being levied on the exhibitor, and that unless he gets a coresponding reduction in Entertainments Duty his position will be intolerable.

We really must have economic planning on a rather more intelligently argued basis than we have had it in this particular Measure. I may be wrong in saying that substantially all the money will merely be changing from one pocket to the other of the British film producer, without any real benefit; but if there is a case to the contrary it certainly has not been put by the Government.

I will now say a word about the Film Finance Corporation, because I have had occasion in the past severely to criticise that Corporation and the various ways in which it was using its money. Reluctant as I am, I am bound to give the President full support on the new Clauses governing the Film Finance Corporation. In my view, they represent an advance; they are a putting behind of what might be called the British Lion days, when millions of pounds were to be provided in the deliberate knowledge that they were not to be recovered. We have now a Film Finance Corporation which, whether one likes to call it a bank or not, will act the part of banker to the British film industry. It must remain solvent and try to pay its way. All this is very desirable in what is, in effect, a film bank or finance corporation, call it what one will.

I beg my hon. Friends not to confuse the functions of the Film Finance Corporation with the functions of the Arts Council or a similar body which might have been brought into being to support the film industry. This body exists to provide money to private profit seeking film producers to help them to produce British films. If they make a profit, all the better. If the bank gets back its money, it has it available to lend for more British films. That is highly desirable.

If any hon. Members desire that public money should be made available for cultural purposes in the film industry, nobody would be more happy to examine proposals to this end than I. But I should not call any organisation for this purpose a finance corporation; I should call it a Film Industry Artistic Promotion Company, or something like that, it being a body charged with that sort of task. The task of the Film Finance Corporation is to finance in a businesslike way business people in the film industry who are seeking to produce British films for profit. I see no occasion to make gifts to such people, directly or indirectly, by waiving interest or capital or by leaving out of account losses incurred in the past when it comes to future computations. I see no arguable ground for this Corporation giving financial presents of public money to profit-seeking enterprises in the British film industry.

Let me make it plain that I will readily vote proper sums, properly controlled, of public money for artistic and cultural and helpful purposes in the film industry and elsewhere, but this Corporation is not a body to execute such artistic purposes. It has a wholly different purpose. It is brought into being because we recognise that film production is not quite on a par with the production of tinplate or cheese. We cannot just weigh up the cost of producing a certain number of films in Britain and see whether it would pay us to impart films from America because we are dealing with something quite different from ordinary commodities like tinplate and cheese.

On the one hand, we have to bear in mind the need to preserve the British film industry and, on the other, I do not think that we should go to the extreme of forgetting that this is a profit-making industry and must be preserved on the basis of profit making, and that the Finance Corporation, if it is to survive and maintain its funds, has to be run in a businesslike way.

I welcome the Finance Corporation and the improvements made to its standing and style of business in the Bill and the recent appointment of its chairman who, I understand, is a great success and is likely to conserve and increase the funds and activities of the Corporation.

I cannot conclude without expressing a few words of great regret about Clause 12. I agree with the hon. Member for Cheadle that the threat of selling out the Finance Corporation is not a very real one. It does not represent a tempting target for anyone. But it is a matter surely of some concern to the House that that Clause was put in the Bill. Either the President has a nefarious scheme up his sleeve for use at some convenient time, or else he is using a Statutory Instrument as a kind of cheering implement for his disgruntled followers. He cannot have it both ways.

The hon. Member for Cheadle says, "Of course, this is a lot of eyewash; no one in the City would touch the Corporation with a barge pole", and he is probably right. If the President is guilty of putting in a Clause which he has not the least intention of implementing, I would strongly recommend the House to insist that Conservative Party propaganda should be issued through Conservative Central Office pamphlets rather than in Acts of Parliament.

Acts of Parliament are to give statutory effect to legislative intention and are not for the purpose of putting in some idle chatter to cheer up the flagging spirits of matronly members of local Conservative associations. But if it is not the idle chatter, which the hon. Member for Cheadle says it is, it represents some danger to us because it could be a reckless act which is contemplated by the President of the Board of Trade in the pursuit of doctrinnaire theories, and I must register a very strong protest.

The President assured the Committee that he would put in an Amendment which would ensure that this would be controlled by British persons. I then warned the Committee—I am not in the habit of inflicting what I have to say twice on the House, it is bad enough to have to listen once—but I cannot resist repeating to the House what I said in Committee: The President has said that he will produce an Amendment which will give some semblance of protection, but which even he will not honestly be able to say gives real protection against this mischief."— [OFFICIAL, REPORT, Standing Committee B, 21st March, 1957; c. 237.] That is precisely what has happened today. The President has come back with this supposed implementation of his undertaking which is, in a sense, an abuse of the House because it does not in the least protect anyone from anything and is a sort of device which ought not to be used by Ministers. They come before the Committee and put forward improper, badly drafted, ill-thought-out Clauses which are dangerous in themselves and push them through the Committee by stating what they will do when they come to the House and, when they come to the House, they produce a piece of window dressing which they have not the courage to get up and say deals effectively with the problem which it was supposed to deal with.

I am sorry that my speech has, of necessity, been discursive, but the Bill is discursive. While I welcome the improvement in the National Film Corporation, I regret very much the wasteful, ill-thought-out and inadequate arrangements for protecting and increasing British film production as devised in the quota system which is being continued by the Bill.

6.25 p.m.

Mr. Swingler

It is usual to make an uncritical speech on Third Reading, but the hon. Member for Cheadle (Mr. Shepherd) has challenged me on a number of points and I will briefly rely to them. I have no official connection with A.C.T. I have many friends who are connected with it, but I am not in any sense its spokesman and, although I agree with much of its policy, I have no responsibility for it. I agree, however, that much of its policy can be improved and I have sometimes directed my efforts towards that end.

Let us be clear about the quota system. I agree entirely with the hon. Member for Cheadle that we should welcome here all the foreign talent that we can get, because the film industry is an international affair and it benefits by internationalism. But that is not the purpose, obviously, of this legislation. For that purpose no legislation is required. The cream of that talent will come here, anyway. This legislation is intended to keep in existence the British film industry, to foster its talents and provide it with some financial resources.

In the measures we take in this Bill, we have to be discriminating. There would be no point in the Bill unless it was discriminatory. The question is: in what way are we to discriminate? Surely the benefits given here in the form of the levy and the quota should go to those, and only to those, who need them. What is the point of legislating to provide benefits for those whose competitive power is already great enough? We should welcome the fact that films are made here by foreign citizens prepared to come here and make films, and that foreign talent is included in those films.

Here, however, we are merely concerned with legislating to foster an industry whose competitive power is not great enough to maintain itself without such legislation and without these measures which we are taking. The kind of Amendments that my hon. Friends and I were suggesting were merely designed to close a number of loopholes or focus the benefits in the direction in which they are needed. That is not to discourage the making of films by others here or the inclusion of foreign talent.

I agree entirely with the hon. Member for Cheadle that we should abandon all these measures if completely reciprocal arrangements could be made. I would hope that in future developments of the film industry there might develop such international agreements whereby many of these measures could be abandoned. The hon. Member for Cheadle will be well aware that last year the Rank Organisation was advertising in the American Press because it could not get circuits for well-known, highly-entertaining British films. It felt, and declared in its advertisements, that its films were being discriminated against in the United States. If, however, all countries took the view of cultivating internationalism and of welcoming the products of other countries, a great deal of this legislation could be swept into limbo.

During the course of the discussions on the Bill I have made many criticisms. I believe that the Bill has been improved in the course of its stages, but it could be improved still more. I certainly hope that in relation to the quota system the President will take note again of the constructive points made and produce a very much improved system very soon in the future.

I feel that this is an appropriate time to praise some of the achievements. Whatever we may say in criticism of the kind of Measures intended here, and of which we have some considerable experience, let us at some point pay tribute to what has been done as a result of public enterprise of this kind. When I read the list of films in the Annual Reports of the National Film Finance Corporation, I am proud of the advance it has made. It is true that this is not entirely due to the Corporation itself, but also to the producers and others. Nevertheless, it is encouraging that so many entertaining and talented films have been produced.

Britain has made herself famous in the international film world by some of the documentary films which were produced during the war, into which a good deal of public enterprise was injected, by the creations of the Ealing Studios and by some of the more recent war films that have been produced. If, in some quarters of the industry and trade of this country, a little more credit and praise was given to the products of the film industry, we might do better abroad.

One of the difficulties in selling British films abroad is the fact that in this country there is still a tendency in some quarters to run down the British film industry. If more time was spent on showing what has been done—and done to a great extent with this kind of public support; because of the existence of the quota system, of the National Film Finance Corporation, of the voluntary levy—if tribute was paid to all sections of the trade for the voluntary levy and what has resulted from it, we could be proud that, in spite of difficulties such as the lack of competitive power, a comparatively flourishing British film industry has been attained.

I am not despondent about the future. When one considers the history of the industry over the last ten or fifteen years one sees the great potentialities for expansion in the future. I know that the hon. Member for Cheadle has criticised me before for suggesting that we could achieve a much greater expansion of film production, thereby allowing for a much bigger quota, and so on, but when one considers what has happened in the postwar period to film production, and what has resulted from the measures we have discussed in this House, I feel confident that a continuous expansion of film production could take place here which, as my hon. Friend the Member for Govan (Mr. Rankin) has said, would mean that more than half the pictures shown in our cinemas would be British. It is towards this end that I believe we should work, and that I hope we shall work.

There is only one serious blot in the Bill, but that is not too serious a threat. It is the threat to sell out the assets of what has been one of the best public supports. It is a sorry thing that it has been introduced into the Bill, but I welcome the statement of the Minister that it is not likely to be implemented in the near future. I should like to feel that in the very near future we will repeal that Clause and will ensure that what I call the film bank, the National Film Finance Corporation, as well as the other elements of the system, will continue and will be improved.

6.34 p.m.

Mr. Rankin

During the past weeks we have discussed the Agency, the levy, the National Film Finance Corporation and the quota, and I will not retread that ground. For the moment, we have said what we want to say and we have heard some things that we did not want to hear. However, it is never too late to mend, and I hope that even at the last minute the President of the Board of Trade will have another thought about the Corporation.

I was intrigued by one statement the Minister made when he was moving the Third Reading of the Bill. The right hon. Gentleman said that in applying the statutory levy he would follow the principle of the voluntary levy. It seems to me a difficult thing to do because, if the voluntary levy had any principle, it was that it was voluntary, and if the statutory levy has any principle it is that it has to be paid whether an individual wishes to contribute or not. If the right hon. Gentleman is going at the same time to ride two horses moving in different directions, he has greater agility than we have given him credit for having.

At this moment we should note what has been done for the industry through the voluntary levy. Since its introduction in 1950–51 the levy has contributed £14,790, 451. If we add what I think will be the accepted amount for the year 1956–1957, which I guess will come to somewhere about £2½ million, then the contribution which has been made to the industry through the levy will amount to £17,290,451.

I am sorry that during the proceedings on the Bill the Minister did not adopt the suggestion made by some of my hon. Friends that instead of having the levy on the industry he should meet the demand from the Entertainments Duty, which I know is to be reduced on Tuesday. We had that assurance earlier, and I am certain that it will not be departed from. As I say, I am sorry that the Minister did not take this opportunity of making the levy contribution from the amount collected by way of Entertainments Duty, because, say what one will, there is a little disharmony within the industry because of the incidence of the levy.

I support the Minister in what he said about overseas sales. At the present time, overseas sales of our films amount to £4 million, which is 28 per cent. of the total income we derive from British films. It contrasts badly with the American position, where 50 per cent. of its income comes from abroad, and all of it is profit. Therefore, as my hon. Friend the Member for Newcastle-under-Lyme (Mr. Swingler) and myself have suggested, it is not wrong and not nationalist to try to do our best to further the sales of British films abroad.

I think that the hon. Member for Cheadle (Mr. Shepherd) drove the argument a little too far, because it is a situation which neither he nor any of us here likes to accept, that in the cinema houses of Britain today the majority of the films shown express a way of life quite foreign to our own. The way to bring up young people is not for them to see in cinemas all over the country a way of justice being administered which depends on the weight of the fist or who is quickest on the draw. That is not our way and while Champion may be a wonder horse, the type of justice in which he is sometimes mixed up is not something to wonder at, but something to wonder about. The hon. Member for Cheadle will agree that it is not wrong of us to try to promote more widely throughout the world the exhibition of films which depict what we believe is a culture and way of life which is well worth showing.

I should like to make a suggestion to the Minister. We want to increase the production and exhibition of our films. One of the ways of doing so is by the revision of the Anglo-American Film Agreement. It would not be a bad principle to lay down that it is wrong of the Americans to extract for the showing of American films here more money than we extract from America for the showing of British films there. That is a basis of equity on the exhibition side which would help our production. I ask the President of the Board of Trade to help towards that end.

I know that not many minutes are left. There is much one could say, but I will reserve it for the next time when the Minister comes along with his amending legislation. In conclusion, I join in the general expression from both sides of the House that the Bill will be a real help to an industry which is of great importance to our country.

6.43 p.m.

Mrs. White

If I had not had a very trying session with my dentist a couple of hours before we began the debate, I should have spoken at slightly greater length on the conclusion of our deliberations. The President of the Board of Trade will have gathered that, in general terms, we welcome the Bill as being something which we hope will be of substantial benefit to the production of British films. Frankly, we are still not altogether happy about the right hon. Gentleman's attitude towards the National Film Finance Corporation. He has a different political philosophy from ours and, in our view, does not appreciate the idea behind the Corporation at its inception. I do not propose to go further into that. At this late stage we shall have to agree to differ.

There was one small point about the N.F.F.C. and the Bill upon which the President might have touched during the debate. That was the matter which he mentioned in another connection in the House, about what would happen to a producer who, because of the lateness of the enactment of the Bill, had to borrow money from the Corporation. In answer to a question, he gave an assurance that the producer would not be put to any expense, but the right hon. Gentleman might have explained to the House exactly what was intended by that and what arrangements have been made, because it was as a direct result of the lateness in the time-table that these difficulties arose. The House was owed a proper explanation about how the situation had been met and whether those concerned were completely satisfied with the treatment they received.

We are, of course, still discussing the Bill under the disadvantage of not knowing what is to be announced next week, because how the levy will work will depend very largely, on the decision of the Chancellor of the Exchequer. Although we have had the assurance of the President that something will be done, it is just possible that the film industry may receive something of a shock when it finds out that not as much will be done as it had hoped.

So we are to some extent working under difficulties, and we cannot really judge how successful Part I of the Bill will be until we know what the Chancellor will do next week. From all the signs, the pressure we have had from various sections of the industry in the last few months will be by no means relaxed if the Chancellor does not come up to expectations. We therefore have that proviso in our acceptance of the Bill as it stands.

For the rest, we have been more or less met on the matter of the quota legisla- tion. We got the best for which we could hope in the circumstances. We hope that the Bill will achieve what it is intended to achieve and will give a period of prosperity and stability to the British film production industry.

Mr. Jay

I wonder whether the President of the Board of Trade will answer the question about the interest liability which producers suffer from having to borrow in advance of the Bill being enacted. Do we understand that the Board of Trade is reimbursing them?

Mr. Erroll

It is intended that producers should not be out of pocket during this short period, but the precise details of the arrangements are still being worked out, and I could not say any more at the moment.

Mr. Jay

Can the Parliamentary Secretary say whether that means that there will be a liability on public funds, or will it come out of the Corporation's own funds?

Mr. Erroll

That is one of the matters which is being carefully examined at this very moment. The House will not expect me to reply at great length to the poitns raised on Third Reading, as we have had a very useful discussion. Naturally, we extend our sympathy to the hon. Lady the Member for Flint, East (Mrs. White) for her affliction and hope that she will soon be better. On this side of the House we appreciate the general welcome accorded to the Bill and likewise wish it a happy period during the next ten years.

Question put and agreed to.

Bill read the Third time and passed, with Amendments.

Mr. Speaker

The sitting is suspended until Seven o'clock.