HC Deb 05 November 1959 vol 612 cc1213-71

Order for Second Reading read.

3.49 p.m.

The President of the Board of Trade (Mr. Reginald Maudling)

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

This is a modest but important Measure to continue and improve the protection given to the British film industry. I hope and believe that it will not prove to be controversial in principle. There are, of course, a number of very important points that will have to be examined in detail during the Committee stage in Standing Committee, but I hope that the whole House will consider that the main outlines of the Bill are on the right lines.

The need for the Bill is as follows. The present authority for the quota expires in September, 1960, and to give the proper notice to the trade we ought to have this Bill renewing the authority for the quota six months ahead of that date; that is, by April next year.

When the last Bill was passed, in 1957, the Government undertook to consider the many criticisms which were made at that time of the actual working out of the quota system. In the intervening two years we have been studying this problem with the advice and assistance of both the industry and the Cinematograph Films Council. I cannot say that that advice was invariably unanimous, but there was a consensus of opinion upon which these proposals have been based.

In particular, I am happy to say that, so far as I know, all the relevant parts of the Bill which concern the Films Council are in accordance with the recommendations of the Council. As this is the first time I have addressed the House on the subject of this industry, I pay a special tribute to the Cinematograph Films Council, whose advice is so invaluable to the Government in these matters and whose concern for the affairs of the industry, for a number of years now, has been remarkable.

Initially, perhaps I should say a few words about the need for a quota to protect the British industry. It has always seemed to me that the film industry suffers from competition of a particularly vigorous kind for the simple reason that the same film can be sold many times over. If a foreigner sells a motor car in this country, he cannot sell the same motor car in Australia as well, but he can and does sell the same film many times over. Clearly, that makes the competition and the relatively reduced amount of profit which it is worth taking in any market far more formidable than is the normal experience in the range of manufactured goods, for example. It is clear that this industry faces very severe competition.

It is also peculiar in that a tariff is not workable, because a tariff has to be imposed on the estimated value of an article as it comes into the country, and the value of a film resides not in the celluloid itself, but in the box-office takings, which cannot be determined at the time of entry into the country. Therefore, it has always been recognised that some form of a quota is the right way to protect the indigenous film industry. Indeed, that was enshrined in the G.A.T.T. in 1948, when special provision was made for the exhibitor's quota as the only means of protecting any indigenous film industry by quota.

I know that there is a good deal of interest in the question of the renter's quota. I understand that in 1948 the Films Council recommended the abolition of the renter's quota and remains of that opinion today. As people who have studied this industry know very well, the difficulty was that the system of the renter's quota brought about the abuse known as "quota quickies", and other things of that kind.

While it might be easier to deal with that problem now than it was under the original renter's quota system, the important point is that since 1948, under the G.A.T.T. to which this country is committed, it is not possible to use a renter's quota. We cannot reintroduce the renter's quota, because we are bound by international agreement not to do so. One can take encouragement from the fact that experience has not shown that the abolition of the renter's quota has reduced the degree of practical and effective protection available to British film production.

The film and the cinema industries have been going through extremely difficult times. Attendances have fallen from the very high figure of 1,635 million in 1946 to 755 million in 1958—and I gather that the tendency is still downwards. Within that very much declining total of exhibition and admission, British films have been holding their own surprisingly well. The number of British feature films produced has remained encouragingly steady, and it is a fact that, between 1950 and 1958, while the gross rentals of foreign films fell by 25 per cent., the gross rentals of British made films increased by 25 per cent. That is a very encouraging picture. At the same time, the industry has made great efforts to expand its export sales, and I understand that it is now earning foreign currencies and sterling from the sterling area at a rate of about £5 million per annum.

Considerable assistance has been given to the industry in recent years. There has been the work of the National Film Finance Corporation, which has been working very hard in often very difficult circumstances to bring support and assistance to the industry. There is the levy, which was introduced as a statutory feature in the last Measure. I can tell the House that the provisional figures for the last year, the second year of operation of the levy, which ended on 17th October, show a total of £3,850,000, which is £180,000 up on the year before.

Finally, as we all know, the Entertainments Duty was reduced. The future of the tax is unlikely to be an appropriate subject for debate this afternoon, but the fact is that last year, while gross takings were down £9.5 million, the reduction in Entertainments Duty was £12.2 million, thereby more than counterbalancing the falling off in the actual revenues of the cinemas.

Mr. Douglas Jay (Battersea, North)

Does the right hon. Gentleman recall that his predecessor told us in advance what was to be done with that tax in the next Budget? Will he do the same?

Mr. Maudling

I recall that the party opposite made a lot of fuss about it, but I do not think that it would be appropriate to make any predictions this afternoon.

Probably one of the best pieces of evidence for the effect of the quota is shown in the figures for the quota year to the end of September, 1958—the latest figures available—when British first features held 35.4 per cent. of screen time compared with a quota which, allowing for special exceptions, would have been about 25.9 per cent., so that the showing accorded to British first feature films—and this remains roughly the same at present—is a good deal in excess of the minimum determined by the quota.

On the other hand, that is not a reason for abolishing the quota. Without a quota, that sort of satisfactory performance could not possibly be maintained. If there were no quota to protect British film production, one would expect to find a far more vigorous assault on our market by foreign film producing interests. We conclude that the quota has done its job and is doing its job and we ask the House, in Clause 1, to continue it until the end of 1967.

For the rest of my remarks I want to keep to the main provisions of the Bill and briefly to explain their purpose.

Mr. John Diamond (Gloucester)

Will the right hon. Gentleman say why it should be 1967 and not nineteen-sixty something else?

Mr. Maudling

I think that it has been the practice to go in ten-year periods. We originally suggested a ten-year period in 1957, although that was not acceptable at the time. We are now taking ten years from the 1957 Bill.

Mrs. Eirene White (Flint, East)

The 1957 Bill had nothing to do with quotas, but was concerned with the Film Finance Agency. I suppose that what was in the mind of the Board of Trade then—and the right hon. Gentleman will know that better than I—was to keep this in line with the Film Finance Agency period of ten years rather than the quota, which normally would take one to 1968.

Mr. Maudling

As so often in these matters, the hon. Lady is right. If the party opposite wishes to change the date, the matter can be discussed in Committee.

Clause 2 brings news-reels into the scope of the quota and also into a share in the levy, a share which will have to be settled by regulations under the existing Act. We feel that this is necessary because news-reel producers have been suffering increasingly severe competition. In fact, some of them have been driven out of business. We feel that in the national interest, both at home and abroad, the production of British news-reels should be maintained. We therefore feel that it is right for the news-reels to have both quota protection and a share in the levy.

Clause 2 makes the necessary provision for that and also includes detailed conditions which must be fulfilled before news-reels can claim British treatment. It also provides for the special registration of news-reels after a first appearance rather than before. This is necessary because of their technical nature. I hope that it will be agreed that it is right that news-reels should now be accorded this treatment.

Clause 3 deals with the development of new techniques such as recording films on magnetic tape or wire rather than on the conventional celluloid.

Clause 4 is designed to deal with what is the growing practice of giving films, particularly non-standard films, very long runs. It enables exhibitors who indulge in this practice to fulfil their quota obligations over two years instead of one but there is provision here for consultation with the Cinematograph Films Council, which is a necessary safeguard.

Clause 5 deals with the question of exemption or partial relief from the full quota obligations. The House is aware that there are many technical breaches of the quota regulations which, on investigation, are found to be really excusable. Our objective is to concentrate our efforts on the relatively minor number of defaults which are culpable and should be treated as such. We are abolishing the need for the exhibitor himself to make application for special treatment, and giving more discretion to the Cinematograph Films Council. In this way the provision for enforcing the quota will, in practice, be made more effective and, here again, I believe this is in accordance with the views of the Films Council.

Clause 6 deals with the important matter of British content. I am sure that everyone recognises that we must not be too parochial about this. The film, being such an international medium of expression, and artists, producers, and directors being able to move from country to country, advances in international participation in films should not be destroyed by a too parochial nationalistic outlook. On the other hand, we have legislation designed to protect the interests of those engaged in the production of British films. It is important that this legislation should be properly observed.

The purpose of Clause 6 is to widen the definition of "cost" and, equally important to deal with what is said to be a way of getting round the British content condition. In theory, people are paid very small or nominal sums by the producers of the film but, at the same time, they receive large sums from somewhere else, thereby distorting the proper calculation of the true British content of the film. The powers given to the Board of Trade under this Clause will enable us to deal with any abuse.

Clause 7 deals with a strange anomaly. Sound recording that has not up to now been covered by quota legislation. It will now be brought in under Clause 7.

Clause 8 deals with producers and directors. I suppose that they are of fundamental importance to the character of a film. The Clause provides that if a film is to qualify as British everyone engaged as a producer or director, except one, must be a British subject, or a citizen of the Republic of Ireland, or resident in the Commonwealth. It means that there can be only one director or producer from outside those named territories. Again, this is one way of ensuring that the intention of Parliament in the matter of British content is properly observed in practice.

Clause 9 is to deal with a complaint made to us that films made in the United Kingdom by a subsidiary of a foreign company are often shown abroad as having been produced by that foreign company, and without proper attribution to the subsidiary company that made the film in this country. This is a protection for the British film industry in its world wide trade and we hope that it will be effective.

Clause 10 is particularly interesting. It deals with the question of co-production. We have in mind co-operation with some of the European film makers. No country in Europe can provide a market on its own adequate enough to sustain more than a very small number of highly successful productions. There has been a growing practice in Europe for producers in two countries to collaborate on a film which is then shown in either country and given national treatment in both countries.

Mr. Diamond

A common market?

Mr. Maudling

This tendency will go on developing and should be encouraged from the point of view of this country. It is difficult to prophesy how this will work, but the principle is that our producers should be enabled to collaborate with producers in other countries on a proper basis laid down beforehand.

The joint product should be treated here and in the country concerned as having national status and receiving national treatment. In all these matters we should aim at a reasonable degree of reciprocity with the countries concerned, but provision is made that this should in practice be carried out by Orders in Council.

Clause 11 is a small point dealing with what I am told are called "scrap book" films and to avoid confusion that is liable to arise in connection with them.

Clause 12 is designed to give the producer of a film a little more freedom to exploit his products to the maximum by enabling him to alter the title and even the length of his film. Clause 13 ensures that in using that freedom nevertheless the title must be properly registered and there should be no using of the greater freedom to get round the provision of the quota.

Clauses 14 and 15 hang together. Clause 15 makes provision for an increase in the registration fees. We do not intend to make such an increase at the moment, but we are taking this power because costs of administration tend to rise and we must continue to remember that the fees to be paid should cover those costs. At the same time, if fees go up it seems reasonable to provide, as we do in Clause 14, for quarterly licences for those exhibitors who have a seasonal trade only and may be affected by the increase unless they have the new provision.

Clause 16 deals with new technical developments. Films made by new methods and on new materials cannot be judged in comparison with conventional films by the physical length of the piece of material. For the physical length of the material we are to substitute the actual playing time. This is clear common sense and the only way in which we can deal with these new developments.

The provisions in Clauses 17 and 18 are minor ones which no doubt we can examine in detail if hon. Members wish to do so.

Those, briefly, are the general purposes of the Bill. As I said at the beginning, it is a modest Measure but an important one, and I am happy to think that it has been based on so much wise and experienced advice both from the industry and from the Cinematograph Films Council. I hope, therefore, that the House will give the Bill a Second Reading this afternoon.

4.8 p.m.

Mrs. Eirene White (Flint, East)

As the President of the Board of Trade said, this is a relatively minor, but important, Bill for the industry concerned. We are very glad that in his new office as President of the Board of Trade the right hon. Gentleman has chosen this Bill for his debut at the Dispatch Box.

The Bill is what we in the House of Commons would normally call a Committee stage Bill, rather than a Second Reading Bill, in the sense that there are a great many detailed points to which we shall have to give considerable attention during the Committee stage. If the Parliamentary Secretary, who, I think, will be with us more than the President of the Board of Trade, hopes that he will get away to his lunch early on any of those days, may I disabuse him of that hope from the outset.

There are a number of detailed matters which, although they have been the subject of lengthy consultations between officials of the Board of Trade and the interests concerned, do not necessarily satisfy everyone. As Her Majesty's Opposition it is our duty to see that where there are any substantial differences of opinion on any of these points they are fully aired and debated. We shall do this in a completely co-operative spirit, because the political aspects of the industry do not enter into the Bill to a great extent.

While I am speaking of the nature of the Bill as a whole, I want to make one small plea, namely, that the Board of Trade will consider either publishing a consolidation Bill, or doing what was done in the 1948 Act, which was to print, as a Schedule, the amended 1938 Act. We now have the 1938 Act, the 1948 Act, the 1957 Act, and this 1959 Bill. This is legislation by reference, and it is our duty to see that we give the public documents which can be easily used. I do not think that in its present state the Bill is such a document, and as we are all in rather a reformist mood in this new Parliament we might well consider whether we could present the public, at the end of our discussions, with something which it can more easily handle and refer to.

The main object of the Bill is to deal with quota. The quota provisions were not included in the 1957 Act, for reasons which the right hon. Gentleman has touched upon. To many of us it has seemed unfortunate—although we fully appreciate that it is due to an accident of film history, back in the 'twenties—that for quota purposes this country says, "You must play a minimum of British films," instead of saying, "You may not play more than a certain number of foreign films." We would have hoped to be able to supply our cinema screens with a sufficient number of British films to enable us to put the terms of the quota that way round.

However, we have not been able to do so in the past, and I suppose that even now, with the quite encouraging background which the right hon. Gentleman gave us, when we have reached the stage of being able to supply about 35 per cent. of British films to our cinemas, we must accept the verdict of the facts and continue upon the basis of legislating for a minimum number of British films rather than putting the emphasis on the foreign product. It is regrettable, but there it is. We must accept the fact that this Bill, as did previous ones, proceeds on that basis.

As the right hon. Gentleman said, there has been a good deal of concern in certain sections of the industry—more particularly among the trade unions—that the Bill deals only with the exhibitors' quota and not the renters' quota. There is still a feeling among those working in the industry that we would be able to improve upon the figure of 35 per cent. in respect of the British product if, somehow or other, we found a way of getting round G.A.T.T. and restoring the renters' quota. I am sure that the President of the Board of Trade is ingenious enough to find a way of getting round the terms of G.A.T.T. if he genuinely wants to.

Mr. Jay

A dangerous thought.

Mrs. White

As my right hon. Friend says, it is a dangerous thought. We should not wish him to exercise that ingenuity unless we thought there was a convincing case for it.

My view is that we should not be doing a service to the British film production industry by restoring the renters' quota, although I recognise that there are arguments in its favour. I believe that there are other more positive ways of helping British film production, although it would not be in order for me to go into them now. For instance, there is the policy of the National Film Finance Corporation, in respect of which we are not in entire agreement with the view of the Government. But I do not think that we would achieve the best results in quality as well as quantity if we restored the renters' quota.

In those circumstances I feel that it would be difficult to urge the right hon. Gentleman to find some way of thwarting G.A.T.T. However, there is strong feeling about the matter in certain quarters, and it may be that some of my hon. Friends will wish to pursue this matter further in Committee. I therefore give notice of that fact.

The positive provisions of the Bill fall into three or four main compartments. Naturally, after the passage of time one would expect that in our legislation we would have had to take notice of new developments in the technique of the cinema industry, and that we would have made some provision for bringing in the various new methods of producing and projecting films. That matter is, quite rightly and properly, dealt with in the Bill, including the alteration from the old familiar provisions for so many thousand feet to so many minutes' playing time. That is a sensible alteration.

It rather surprises me, however, that the Bill seems to have paid very little attention to the fact that during the passage of years since 1938 the value of money has changed. Although it is true that the Board of Trade makes arrangements to increase its fees—it has not overlooked that—in other respects it seems to have forgotten the changing value of money. For example, in the Second Schedule labour costs are left almost exactly where they were in 1938. In 1938, the criterion of 10s. a foot was laid down. It is now £50 per minute of playing time. If we take 90 feet as equalling one minute of playing time we see that it would amount to £45 at 1938 values, and the increase has been only to £50. The right hon. Gentleman is telling us that the change in the value of money between 1938 and 1959 can be correctly stated upon the basis of £45 then equalling £50 now. I cannot believe that his economics are as weak as that.

I do not want to labour this point, because I know that labour costs are not of first importance in considering the quota. However, they have a certain significance in preserving the general standard of films, including short films, and it is completely unrealistic to increase the financial provisions only to the extent of £5 in regard to labour costs. This point should be looked at again, although, as I have said, labour costs are of relatively minor significance, because almost every film which qualifies for quota bears well above the minimum labour costs.

We shall probably find ourselves in complete agreement on some of the other important provisions of the Bill, except, perhaps, on points of detail. We all recognise that in the present state of the film industry the exhibition side has been in very great difficulty in recent years. Attendances have been falling, and cinemas have been closing. It is only proper to temper the wind to the exhibitors. It is right that there should be some relaxation of the conditions whereby they can obtain remission of their duties under quota. Such a provision is well justified in the light of present conditions in the industry.

In principle, at least, though perhaps not in every detail, we would support the proposals made in the Clauses dealing with the exhibitors. One provision which will be particularly useful to the very small exhibitor is the raising of the exemption limit from £100 to £125 in respect of takings. That will let out the very small man. Further, it is now to be calculated as net, after deduction not only of tax but also of the levy. That further increases the value of the provision.

Although we welcome that on behalf of the exhibitor, however, we must remember that by exempting a larger number of exhibitors from quota obligations we are possibly depriving a certain number of cinema patrons of the chance of seeing British films. I refer to those living in small market towns where, in future, one might have an undiluted diet of Westerns and horror films from the United States. That is not desirable in itself, but we can appreciate the difficulty of the small exhibitor, and we should not cavil at the extra relief granted to him and the slight easing of the procedure, which has sometimes been a burden upon him. On that aspect, I think that we can find ourselves reasonably in accord.

Now we come to one of the main proposals in the Bill, which is to include newsreels. This is not quite as simple as the President of the Board of Trade tried to make out. After all, it raises some questions of principle which I think the House should consider very carefully. The real argument put forward by the newsreel companies is that they cannot carry on commercially without the help of and participation in the levy, and the whole object of bringing them into the quota has nothing to do with the quota, but is to make them eligible for the levy. They cannot carry on without the help of the levy, because the demands for their products in this country have very rapidly and substantially declined.

The reason is not hard to seek. We now have an admirable news service on television, and the ordinary patron of the cinema is quite likely to have seen a better-produced, better-edited and more up-to-date version of the day's news on his television set than he will find at his local cinema. Therefore, the demand for newsreels in this country has fallen very sharply. In fact, a large number of cinemas—one of the major circuits and one of the middle-sized ones, Granada—I think I am right in saying, no longer take newsreels at all, while others are perhaps a little lukewarm in their desires.

The real argument for this new provision has nothing to do with the cinemas in this country. The only substantial argument is about who is to pay for showing British newsreels in countries overseas. There one comes up against this problem. If we make newsreels eligible for the levy in this country, we are taking away money from the producers of feature films or other short films to give it to the newsreels.

We shall be depleting the levy fund; either that or we are going to ask for more levy, which would be a burden which I am sure the exhibitors would not wish to carry. Therefore, we are asking, in effect, that the producers of British feature films and other short films should subsidise the newsreels so that newsreels should be shown as projections of the British way of life, or whatever we call it, in countries overseas.

There are other sources from which film material can be obtained for showing overseas. There is the Central Office of Information, which produces some of its own, and there is another non-profit making company with which the Rank Organisation and Canadian and Australian interests are concerned, which also produces material, primarily for television, but which can also be used for cinema showing in overseas countries.

We are told that the ordinary commercial buyers of films for showing at commercial cinemas in about 125 counties altogether overseas would not be likely to get what they want from the products of the C.O.I. and the other bodies, that they must have the ordinary cinema newsreel, and that they will not take anything else. If we wish to show the British way of life, we must, somehow or other, keep the newsreel companies alive in this country so that the newsreels shall be shown. This is a matter of national public relations, but we are not going to do this as a national effort—as part of the job of the right hon. Gentleman the Chancellor of the Duchy of Lancaster—but are to ask the British film producers to do the job for us.

We ought seriously to consider whether that is the right way of doing it, and whether it is the proper thing in principle. I should feel much happier about doing it this way if I thought that the newsreels sent overseas were adequate representations of the British way of life, but when one thinks of the contents of an ordinary newsreel seen in a cinema one can hardly be satisfied.

I have no objection to a very large proportion of newsreels which are devoted to the rather duller aspects of the Royal Family, but when one thinks of almost any newsreel, one sees a formal occasion in which a member of the Royal Family is taking part. One sees a sporting event of some kind, and one has no objection to that, because it is a matter of general, if not universal, interest. Then we see somebody launching a battleship, or one of our Ministers opening an exhibition. One hardly ever sees anything that would be considered what we might call a "people-to-people" item in these newsreels.

In other words, they are highly conventional, and to many of us seem to be a very inadequate representation of the British people or the British way of life. I must, therefore, warn the Minister that this Clause is not likely to be accepted unquestioned. There are matters of principle behind it which we ought very fully to consider before we decide whether to accept it or not.

I come now to what I would say is the major provision in this Bill, which is the extension of the quota privileges to films made under what are usually called co-production arrangements. This might be of very considerable importance to British film production. I am sure that with his great interest in the European Free Trade Area and the Seven the President of the Board of Trade himself will be very fully aware of the possible value of such arrangements. There is no doubt that in the European Free Trade Area, the countries concerned have already established a considerable degree of co-operation in film production. In France, Italy and Germany particularly, there have been for some years co-production arrangements whereby a French film made with Italian co-operation counts as French in France and as Italian in Italy, and by so doing they get across all the difficulties of the quota arrangements in one country and the most fantastic double fees in another, and it is, therefore, possible for films to be exhibited in both countries.

It would be generally welcomed by our forward-looking producers in this country that we should have these arrangements. It is quite right to do what is suggested in the Bill, and not to have what one might call an open licence for this but negotiate these agreements very carefully between Great Britain and each of the other countries concerned. We want to see that our own interests are fully protected in these matters, both at the star and director level and at the ordinary worker's level, and see that we get a proper quid pro quo on the exhibition side as well.

For some years in this country, we have had a species of co-production arrangement with the American interests. We have had a considerable degree of American finance and personnel, though, unfortunately, partly owing to the structure of the American industry, we have not had anything like reciprocity on the exhibition side for films made by Anglo-American interests. This extension of co-production to other countries is to be welcomed. We should have a cross-fertilisation of talent, which is always a good thing, particularly with the very live industry which there is in certain countries, notably at the moment in France, and this is a proper step which should do nothing but good.

If we are to have these films brought in line with our quota, and eligible for quota, I think that it would be very helpful if the Government spokesman would make clear that they have to be taken into account when drawing the level of the quota. If these films come about in any number, and, therefore, increase the total number of films available for exhibition in this country, naturally one would expect to see a higher quota level in order to include them; just as, if newsreels are to be brought in for quota purposes, the quota should be increased to take that into account. We should have some assurance that this will be looked at by the Board of Trade when the time comes.

Another thing that I wish to mention in this connection is that nowhere in the Bill do we take any account of the fact that television has arrived. If these co-production films are to be brought in for quota purposes, are we to do anything to make sure that they are primarily cinematograph films in the sense that we normally use that word in our legislation? As the Minister will no doubt know, in this country the exhibiting interests have taken their own steps—under what is called "Fido"—to protect themselves against the encroachments of television.

But these films will be exhibited not only in this country but abroad, and I think we ought at least to consider whether we are to extend the protection of quota to films which may be used for television rather than for cinematograph purposes. We should be quite sure that we know what we are doing. One does not wish to be unduly restrictive, but I think that a fair point when we realise the very great competition which the cinema has to face from television. In general, we welcome this and think it a healthy expansion of British film production which will give great opportunities to the lively, up-and-coming film producers. But we think it must be looked at rather carefully to make sure that we shall give a fair deal to our people.

There are not many other points in the Bill which we need discuss at this stage although, once again, I should like to sound a warning note about Clause 7. which is concerned with the studio. I might make the general point that when we were first contemplating this legislation we thought there might be very much more controversy than perhaps there may be now over the question of defining what is a British film. That caused many headaches in the legal department at the Board of Trade and elsewhere. Now that the Bill is before us there is very little concerning the definition of what is or is not a British film, but on the point of what is or is not a British studio we may run into a little difficulty.

At present, and under the Clause as it now stands, a British studio can be anywhere in Her Majesty's Dominions. It has been put to us that we should narrow this definition to that of a studio in the United Kingdom. That is something which will have to be thought about rather carefully. The reason is, partly, that unless we can keep our cinema studios in the United Kingdom fully occupied we may find that they are devoted to other purposes, and that may have a detrimental effect on British film production. This may appear rather a narrow point but I think that it must be looked at carefully at a later stage.

There is also some feeling about the Republic: of Ireland, not so much I think about the nationality of any person concerned, because we are accustomed to having Irish, Scots and—like myself—Welsh coming to England.

Sir Leslie Plummer (Deptford)

They are very welcome.

Mr. John Rankin (Glasgow, Govan)

And the English coming to Scotland.

Mrs. White

It is a matter of the use of studios in Ireland and the suggestion that they, too, may perhaps be counted as being within the definition of British. I mention these points in passing to give a preliminary warning to the Parliamentary Secretary that there are quite a number of things in this perhaps rather simple looking Bill which will have to be considered at a later stage.

The Bill deals primarily with technicalities and does not attempt to deal with the more fundamental problems of the industry. I have mentioned that we on this side of the House have always regretted what we thought the rather narrow outlook of the Government in some directions, particularly concerning the National Film Finance Corporation. Proposals have been put forward in certain sections of the exhibiting industry in recent months—as I think that every Parliamentary candidate in the recent General Election will know—for some scheme of rationalisation on the exhibiting side of the industry. The exhibitors have seen what the Government were prepared to do for cotton, which is in a declining state, and they ask, "Why cannot you do the same for us?"

Had there been a Labour Government in office some years ago we should have taken a much greater initiative in this matter. About three years ago when Mr. John Davis, of the Rank Organisation, made proposals which, admittedly, were not taken up at the time by the rest of the industry, I think that a rather more forward-looking Government could have done something about these things. However, that was not done and one cannot perhaps expect this Government, with their philosophy, to enter that field now. But I think that a great deal more could have been done to help the exhibiting side of the industry to help itself.

We can hardly allow the Bill to pass without a reference—though I know that any more than a reference would be out of order—to the continuation of the Entertainments Duty. No matter what we may do by way of legislation to improve the administration of the quota, and so on, our labours will surely be in vain if the industry is not enabled to prosper in general. I am quite certain that those of us who have been concerned about the industry for many years cannot be happy with a state of affairs in which cinema attendances are still, unfortunately, declining. The latest figures give a 20 per cent. decrease in the last two quarters, but, nevertheless, the industry—it is the only entertainment industry of which this is expected—has to carry this still quite crushing burden of duty.

Although I am well aware that one cannot deploy all the arguments for the complete abolition of the tax on this occasion, one would be failing in one's duty if one allowed the Bill to pass without pointing out that no matter what good things there may be in it—there are some good things in it—they are likely to be of no use unless at an early date the Chancellor removes this burden upon the industry.

4.39 p.m.

Mr. Geoffrey Hirst (Shipley)

On one or two previous occasions I have had the pleasure, as I have today, of following the hon. Lady the Member for Flint, East (Mrs. White) in debates of this character. I am always very pleased to do so, because the hon. Lady addresses herself to these matters with substantial impartiality. In fact, normally she is almost wholly impartial, but this afternoon there was one minor "dig" about the Entertainments Duty which we do not mind very much because we realise that the last time a Labour Government were in power they increased the duty. They may have an opportunity in a few year's time to deal with the remainder of the duty which is still being charged—but we must not pursue that subject now.

My right hon. Friend the President of the Board of Trade drew attention—the other matter has some bearing on this, though not as much as some would have —to the level of film attendances. It is sad that they have fallen very substantially. Perhaps, at this particular time, the very fine summer has added statistically to the picture. I thought it very right of him, also, if I may say, to draw attention to the remarkable part which the British film industry has indicated it can play in diminishing this difficulty by producing a large proportion of really first-class films, very much better films than ever before. This must have played a part in the very commendable export results.

Not many years ago we were congratulating the film industry on bringing exports up to £2 million, and the fact that the figure has, in spite of all the difficulties which attend these matters, including the importance of having a large and firm home base, been able to reach a figure in the neighbourhood of £5 million shows that the industry has substantially rationalised itself and has played a very fine part in helping tur export trade. As we all know, films have a very high conversion value, and they are a very important type of export.

As my right hon. Friend said, the importance of the quota is paramount. Although the exhibitors have played their part, I believe that it acts as a kind of carrot or incentive to maintain as high a level of exhibition for British films as possible.

The hon. Lady the Member for Flint, East said several things with which I agreed. I particularly liked her suggestion that it would be rather good at some time to have a consolidation Measure. I am one of those who, at heart, really hate legislation. I wish that we could have a nice long legislative holiday so that we could consolidate a great deal of the law which now stands on the Statute Book. This is a very nice consolidation Measure. It should be easy to work, and it should have considerable value.

I am not sure that I quite agree with the hon. Lady on the subject of news-reels. I feel that any industry must play its part in the firm home base argument to which I referred. We cannot expect someone else, the poor old taxpayer—generally, in this House, called the Government—to foot the bills which arise from the export of the British way of life, and so forth. The industry must play its part, also. If we are to have the benefit of the British way of life, as it is mirrored by newsreels, disseminated widely, then, quite frankly, the opportunity for increasing or, rather, maintaining as much of the home base as possible as a cost-covering factor must be taken. This consideration, surely, must be behind my right hon. Friend's suggestion in the Bill to include news-reels for quota, and therefore, of course, for them to have the advantage of production funds.

I regard the Bill as an excellent one. In any case, we had to have one, whether excellent or not. That, of course, is a rather better reason for legislation than some which I have come across. I applaud the new departure of giving quota to news films as such.

Clause 12, I think, will require some discussion. I do not think that my right hon. Friend referred to it; if he did, I missed his comments. Clause 12 provides for amendment of the register. In my view, it will be necessary to safeguard our procedure against the same film being used twice for quota purposes under a different title. I have been informed that there is a slight danger of that, and I think that we should, in Committee, although the matter has not been mentioned so far from the Dispatch Box on either side of the House, consider it as one of the minor points needing our attention.

I approve of the tidying-up operation, if I may so call it, which provides that the quota year shall become the calendar year. That is the sort of tidying-up operation I should like to see carried out in respect of certain other things. I wish that our financial year could be treated in the same way, so that hon. Members would not have to take their holidays at the most crowded and most expensive time in August.

My right hon. Friend referred to Clause 5, which deals with exemption or partial exemption. I feel that these provisions are rather more realistic than those we have had hitherto, especially in what they may do to help a little the smaller cinemas, or those of medium size, namely, cinemas showing films for periods shorter than one week. This is a much-needed reform.

I am interested in Clause 6, which deals with labour costs, and I suppose, also, that at some point this Clause was designed to be an honest effort to clarify a little the matter of British content. If we are really honest, we must realise that so-called British content for quota purposes has been much fiddled in years gone by. It is an extremely difficult mischief to catch, in certain ways. To some extent, perhaps, home circumstances which required certain funds to remain in this country for sterling purposes have encouraged this running away from normal virtue.

Clause 9, to which my right hon. Friend did refer, requires the credits of the films to mention the name and address of the producer. I am at one with the British Film Producers' Association in its representation which, I suppose, has reached the Board of Trade, that the words, "This is a British film", or words to that effect, would be much better. There seems to be an unfortunate tendency sometimes not to use those words. Even British European Airways ran away from the term.

I do not suppose that any such intention was in the mind of the Board of Trade in this particular matter, but I feel that it would be very much better to show words such as I suggest instead of the name of some company which may not always be known or which, sometimes, quite frankly, although the name of a so-called British company, has a content which very few people would recognise as such. If the intention is to make the matter perfectly clear, that a film is a British film, then for heaven's sake let us be proud of it and say so. With those few words I welcome the Bill.

4.47 p.m.

Mr. John Diamond (Gloucester)

There was a previous occasion when I attempted to indicate what seemed to me to be the obvious and logical connecting links between the levy and Entertainments Duty in order to demonstrate that we were fiddling with the problem until we had firmly removed for all time the Entertainments Duty. The occupant of the Chair at that time, Mr. Deputy-Speaker, was not impressed by my logic. He drew me to order, suggesting that the matter could not be other than referred to. I wish merely to make it clear that the fact that I do not now refer to it should not be taken as indicating approval of that appalling, shocking, malicious selective tax. I come, therefore, immediately to the Bill.

As the President of the Board of Trade rightly said, the cinema industry, particularly the exhibition side, suffers from very great competition. If I may say so, it suffers, perhaps, more competition than is evident on these benches today. I must, however, add that I ought to take this opportunity to thank all the many hon. Members who, out of their sense of self-sacrifice and their desire to assist, offered to come to my aid this morning when I had the grave responsibility of taking round this building thirty-nine of the most beautiful women in the world. One is always impressed by the camaraderie and helpfulness which comes from both sides of the Chamber at all events on occasions of that kind.

The competition in the cinema industry is very great, and I give this Bill a very substantial welcome for its main provisions—Clause 10 and the Clause which deals with newsreels.

Clause 10 can be referred to very shortly. It is a great pleasure to note that the President of the Board of Trade, in his new position, has been able to remove the barriers to the international art of the film maker much more effectively than he has, in his other capacity, when he has been at, so it seemed to us, horrible sixes and sevens with his problems. We give the greatest possible welcome to Clause 10.

As to newsreels, at the risk of detaining the House for an unnecessary additional ten seconds, I might perhaps be allowed to say that, although I had at one time a considerable interest in this industry inasmuch as I was managing director of a company which exhibited newsreels and ran news theatres, I have had no such interest since I have been back in this House. That does not prevent one from having a slight knowledge of the problem and I know that the House is always willing to listen to those who speak with some experience.

I hope that the Government will be quite firm in assisting the exhibition side of newsreels, wherever there are arguments which might impinge one way or the other. It is perfectly true that the newsreel ceased to be a commercial proposition when television came in. It is an extremely expensive article to produce for the exhibitor because, as hon. Members know, he has to take many copies immediately and each exhibitor, instead of showing, as normally, a subsidiary copy, shows an expensively produced copy at the same time as all the other exhibitors. This adds enormously to the expense and in relation to the amount of running time is prohibitively expensive unless people are most anxious to see the news.

It is proper for me to say, with the authority of one who was interested in running news theatres, that if people were not interested to come to a news theatre to see the news they would a fortiori not be interested in going anywhere else to see the news. People ceased to be interested in going to news theatres to see the news, because news means simply what it says. People want to know about it on the day. If it takes three days or in some cases six days or even longer to present the news, it is less valuable to people than their seeing it at the time on television or later in the television news, the same day. Therefore, the news-reel ceased to serve its purpose and practically became extinct.

I understand that there are only two producers of newsreels at the moment. One, I am told on considerable authority, would have ceased to produce newsreels had it not been for the Government's undertaking to introduce this Bill. I do not know whether that is so and whether the Government will confirm that, but I am told this on the authority of a director of the company concerned and, therefore, I accept it. It makes quite obviously commercial sense.

There is, therefore, every possible justification for introducing this Measure to help the newsreels, otherwise we run into the danger of having no newsreels at all. The most fundamental thing about newsreels has not been mentioned so far. It would be a dreadful position if we had only one newspaper telling us everything that the editor of that newspaper thought fit to tell us, and we should be put in a frightful position if we had only one newsreel showing us its version of the news.

Quite apart from the enormous advantage of showing the British way of life overseas—which is an argument for the C.O.I. claim in face of the other producers losing part of their levy—there is an enormous argument for trying to keep in existence two competitive newsreels so that the public who come to see the news will have the opportunity to see two aspects of the truth. A lot of labour goes into the production of a newsreel and, for all these reasons, I support the Government in bringing in provisions which will help the exhibitors of newsreels.

I hope that it is right to assume that the newsreel will be multiplied by two-and-a-half in order to count for levy purposes as other "shorts" do. I think that is provided for somewhere in the Bill, and I have no doubt that the Parliamentary Secretary, when he replies, will be able to say that a newsreel will count as a short counts—two-and-a-half times its normal length for the purposes of levy.

Apart from that, there is not much that I need say about the newsreels. I share the view of my hon. Friend the Member for Flint, East (Mrs. White) that it is to some extent proper that this should be a burden on the Exchequer rather than a burden on other producers, but there is no evidence of the Treasury being willing to bear that burden, and until that happens one must welcome the chance which the trade has and the exhibitors have of being assisted in these very difficult circumstances.

I am encouraged by a Bill which refers to newsreels to talk for a moment about the possibility of taking a newsreel of the proceedings in this House. I do not know whether the Parliamentary Secretary thinks that his responsible and onerous duties and his high standing in the Ministerial ranks justifies him in committing the Government today by a statement as to whether newsreels of what goes on in this Chamber and elsewhere in the House will be permitted.

I do not know whether his position will enable him to say, as I hope that he will say, that he is wholly against newsreels, inasmuch as he is wholly against the televising of what goes on in this Chamber. It would be quite wrong for a newsreel to be taken exclusively of what goes on in the Chamber judging by the few hon. Members there are in this House at the present time. There are four or five benches occupied by most distinguished hon. Members and the rest are blank. The reason is that hon. Members on both sides of the House have onerous work to do which they cannot do in the Chamber. They have a great variety of duties. It would give an utterly misleading impression of what goes on in the House if a newsreel or indeed television were to be allowed of merely what goes on in the Chamber.

You will see immediately, Mr. Deputy-Speaker, that these two proposals have such great lack of merit that they ought rot to be introduced. I hope that I have not offended in any sense in letting the Minister know my views, because television is directly connected with newsreels which we are discussing today.

I say to the Government that we are most anxious that this Bill should be brought into effect. We welcome the Clauses dealing with newsreels and those dealing with the Common Market.

I am most anxious that, where there is any doubt as between the competing interests of the trade, for the time being, at all events, the exhibitors should have the benefit of the doubt, particularly as we have not heard today that the Government are repenting for their sins and intend to abolish the Entertainments Duty.

4.58 p.m.

Mr. Ray Mawby (Totnes)

I agree wholeheartedly with what the hon. Member for Gloucester (Mr. Diamond) said about newsreels. We must aim at ensuring that there is a selection of stories told, not just one story. That is one of the main reasons why we on this side of the House decided that there should be a second television channel, with results which are obvious. That brings me to Clause 11, which deals with old films. I hope that we can say to the television authorities that old films should form only a very small part of the programme. If I said any more on that, I should be out of order on the Bill.

Mr. Rankin

On a point of order. In case that statement tends to limit the debate, may I ask whether it is not clear that we have a wide scope in dealing with the Bill?

Mr. Deputy-Speaker (Sir Gordon Tonche)

Nothing has been said so far which is out of order. Perhaps we had better wait and see how we get on.

Mr. Mawby

I am trying to ensure that I remain in order. I was talking rather in parenthesis when I spoke about the large number of old films which seem to appear quite regularly on the two television channels. I will leave it there.

We congratulate the film producers of this country on the way in which they assist our export earnings not only because of the money which the producers receive for films exhibited throughout the world but also because of the prestige which this country and its industries enjoy as a result of the British way of life being shown in all parts of the world. This is not confined to the feature films. We have had and continue to have some first-class feature films which attract vast attendances throughout the world, but, in addition, when British-produced newsreels show to the rest of the world the British way of life, it gives a chance for the world to see what makes people in Britain tick.

However much the Central Office of Information, the British Council and similar fine organisations can do, it is always useful to have additional organisations which tell this story throughout the world. Any assistance which can be given to our film-producing industry is extremely important. One of the sorry things which one has to record is that a quota system is necessary. It is not very pleasant to have to say it, but an X certificate on a film seems to be an added inducement to people to go to see it, whatever the quality, the nature or the craftsmanship of the film.

We should record that British producers do not seem to have jumped on the bandwagon of those who seek to produce films which will gain an X certificate and as a consequence will presumably earn a good deal of revenue. British producers can be congratulated, in the main, on producing films of a high standard which are not trying to pander to some of the feelings which apparently many members of the British public have in saying that because a film has been given an X certificate—in the same way as if a book has been banned—they ought to leave no stone unturned in their endeavours to see it. Perhaps because of those traits, it is necessary that we should continue a quota to make certain that exhibitors play their part in providing a basic market for British producers, just as so many other British producers rely upon a basic home market to ensure that they can provide the best possible material to send to other parts of the world.

The question of the Entertainments Duty is outside the Bill, but I believe that the last step taken by the Chancellor of the Exchequer has given great assistance to the smaller cinema, in the smaller town, which is more of a social institution than perhaps the larger cinema, which probably is not so much a social requirement in a very large town. There has been an injection of new life-blood into many of our smaller cinemas, particularly in rural areas such as in my constituency. I hope that it will not be too long before the Chancellor makes another effort and removes the Entertainments Duty from this industry as early as possible.

One point which must be remembered, and which many people seem to disregard, is that the Entertainments Duty is levied on the patron and not on the owner of the cinema. This has a bearing on the view taken by many people that if the tax is removed it should immediately benefit the cinema proprietor rather than reduce the price of admission for the patron. We should always have that point in mind.

Mr. Diamond

If the hon. Member will permit me to interrupt him very briefly, although he and I are both out of order, he is utterly wrong about this.

Mr. Mawby

The hon. Member is far better versed in the trade than I am, but I have always imagined that the tax was levied upon the patron in accordance with the price of the seat which he occupied.

Mr. Deputy-Speaker

I hope that the hon. Member will not pursue that point.

Mr. Mawby

I am sorry, Mr. Deputy-Speaker. I said at the beginning that I would tread gingerly in order not to be out of order. This shows the great danger which faces an hon. Member when he is drawn into these arguments.

The hon. Lady the Member for Flint, East (Mrs. White) was concerned—I do not think very greatly—about the small cinema in the small market town, which, under the Bill, would have the opportunity to show American western films and the lowest possible type of foreign films. That is true, but my experience of the small cinemas is that they try to obtain a type of film which will satisfy the people who attend. I do not think that this will mean that all the small cinemas which are outside the restrictions will decide not to show at least a certain number of British films.

That is all I can say about the Bill, except to follow one point made by the hon. Lady about the number of times there is a reference in the Clauses by which citizens of the Republic of Eire are treated in exactly the same way as citizens of this country. In particular, I should like to know why it is that in each Clause where it deals with a British subject the Bill adds or citizen of the Republic of Ireland". I well remember in the debate yesterday that there was a reference to action by the Republic of Ireland which was completely against the interest of all the citizens of the United Kingdom. I should like to know why we should always include a citizen of the Republic of Ireland together with a British subject

5.9 p.m.

Sir Leslie Plummer (Deptford)

The hon. Member for Totnes (Mr. Mawby) will not be surprised when I say that I do not quite share the enthusiasm which he expressed for the quality of British pictures. I think that the British film industry produces as many "stinkers" in proportion to the number of films it produces as the Americans do. While there have been some exceptionally good films produced in this country, I do not think that the industry is entitled to dine out on its few successes and claim that it is beyond criticism. A very great deal of criticism can be levelled against it. The hon. Member is wrong in saying that British film producers are not producing quite unpleasant pictures. There are some horror films coming out of Wardour Street and British studios which I would have preferred were made in Hollywood or in some other country. They are no credit to the British film industry.

The hon. Member for Totnes will not think it odd that I should be at odds with him. What is infinitely more important is that I am at odds with my hon. Friend the Member for Gloucester (Mr. Diamond), because I have the greatest respect for my hon. Friend's energy, industry and application. It hurts me very much indeed to have to say that I totally disagree with him on the question of newsreels. I do not believe that newsreels represent the British way of life.

When I think of a newsreel, what comes into my mind is a flash of a race meeting, then a dog doing tricks with a trumpet, then someone presenting some colours to some regiment, and then a battle of flowers in Miami, and that is about all. As for representing the British way of life, it does not compare with the newsreels produced by the B.B.C. or I.T.N. I cannot imagine why anyone should think that this conglomeration of stale, flaccid nonsense, which is what the newsreels have been producing in the last few years, is something which we want to perpetuate and send abroad as a representation of the eager and vital interests of the British way of life.

Newsreels were in great difficulty even before commercial television came along. They were dull, late and dreary. They were no longer commercial propositions. The final knock-out blow was delivered to them by the Government when they introduced commercial television and so brought into existence I.T.N. The Government are rather like a. man who lends a club to someone else to go to beat up a third person and then goes round to the third person's family making a levy to pay the man's hospital bills. The Government are responsible for the parlous position in which the newsreel companies find themselves.

The President of the Board of Trade in introducing the Bill this afternoon made some play of the fact that the newsreels were suffering from competition. We know that the competition is that of television. I wish that the right hon. Gentleman had shown the same sympathy for some of the periodicals, like Picture Post and Illustrated, which suffered from the competition of television and went out of existence. They represented the British way of life infinitely more clearly and carefully than do the newsreels. At that time the Government had no concern for those victims of commercial television.

Let us consider what will happen if the Bill goes through in its present form and Clause 2 stands and newsreels are brought in for the purpose of quota and levy. The two newsreels now being produced in this country are Pathé, which is produced by the Associated British Picture Corporation, and Fox Movietone News, which is not a very distinguished or widely circulated newsreel. Pathé newsreels to a very large extent go into the cinemas of the Associated British Picture Corporation; they are made primarily for that Corporation. Therefore, Associated British Picture Corporation as a newsreel producer acts as producer, wholesaler and retailer; that is to say, it produces newsreels, it wholesales them to people outside its own circuit and it retails them within its own circuit. But Associated British Picture Corporation also has a controlling interest in a television programme company and, by virtue of its interest in that programme company, it has an interest in I.T.N., which is a competitor of the newsreels.

The general film industry is to have part of the levy taken away from it to give to a newsreel which is being produced by a television programme owning-company which is in competition with the news-reels. That is ridiculous. It is not as though it is necessary because Associated British Picture Corporation is a poor struggling company. On its £4 million worth of ordinary capital it paid an interim dividend for the year 1958–59 of 20 per cent. It is a vast company, making vast profits. There is absolutely no necessity for the Government now to be tender in their attitude to that company and say to it, "So that you may run this newsreel, which you run for your own profit, we will now allow you to make some money out of the general film industry, which is being materially hurt by your own actions through your own television company".

If there is a case for the newsreel as we know it today, there is a case for giving a quota and a levy to all the documentary films produced. The newsreel, as it is being produced today, is very largely a documentary and becomes less and less a real newsreel. If the President of the Board of Trade is correct in saying that it is necessary for us to have newsreels to represent the British way of life abroad, what is the matter with taking the newsreels from I.T.N.? What is the matter with taking "Tonight", which is a magnificent daily programme of contemporary comment on what is going on, produced by the B.B.C? "Tonight" is an outstanding form of the modern newsreel as compared with the old-fashioned one. I should have thought that the I.T.N. newsreels, the B.B.C. news programmes and "Tonight" would find a ready response abroad and would indeed be of very considerable interest to those members of Her Majesty's Forces who are stationed abroad and want to know what is going on in this country.

Furthermore, if it is necessary to have a newsreel for the purpose of showing the British way of life, I should have thought that it would be just as well if the Government revived the old Crown Film Unit, which did so much in the way of producing films for this country. It was a great credit to the country and truly and properly represented it.

As my hon. Friend the Member for Flint, East (Mrs. White) said, Clause 2 will go through a good deal of scrutiny in Committee. I am opposed to it for some of the reasons which I have just advanced. It is wrong that we should be levying the whole industry in the interests of practically one producing company, namely, Associated British Picture Corporation, which has sufficient resources financially and sufficient resources in its outlets in the great chain of cinemas which it owns to take good care of itself. It should not, therefore, be benefited in the way suggested in Clause 2.

5.18 p.m.

Colonel Sir Leonard Ropner (Barkston Ash)

I am sorry that the hon. Member for Deptford (Sir L. Plummer) began by making disparaging remarks about British films. If he thinks that it is so easy to make a film which will be good box office, why does he not go and make one himself? It is a very profitable occupation if it is a really good film.

Sir L. Plummer

Because I have not the money, the talent, the experience, nor the wish to make a film, no more than I want to go into the shipbuilding industry tomorrow, and build a ship. I would not know how to do it, nor how to run it. "Each man to his last" is a good motto to remember.

Sir L. Ropner

I accept everything which the hon. Member has just said; in admitting his ignorance of the difficulties, I suggest to him that he should be rather more careful in his criticism of those firms which, whenever they start producing a film, think and certainly hope that it will be good box office. But it just does not happen that way. The hon. Member may be interested to learn, in view of what he has said, that in a very recent popularity poll seven out of the best ten films shown in this country over the period of a year were British films. That is a fairly creditable performance on the part of those responsible for the production of films in this country.

I must acknowledge a personal interest in the film industry. I should also like to preface my remarks by apologising to the hon. Lady the Member for Flint, East (Mrs. White), whose speech I was sorry to miss. I had an important meeting upstairs. I am quite sure that the hon. Lady dealt with the industry very fairly—she always does—and with great knowledge. I am truly sorry that I missed her remarks.

The point of view of the film industry is that this Bill is non-controversial and welcome. I am glad that in framing it, my right hon. Friend the President of the Board of Trade has incorporated a number of suggestions which were submitted to him by trade organisations such as the Cinematograph Exhibitors' Association and the British Film Producers' Association. The Bill not only extends the film quota legislation until 1967, but it takes into account certain changed circumstances which have arisen since 1948.

I am, however, bound to add that the provisions of the Bill may become purely academic unless something more can be done for the film industry. Only a moment ago, I spoke about changed circumstances. For the industry as a whole, the change which has brought about really savage difficulties has been the calamitous fall in box office receipts. My right hon. Friend the President of the Board of Trade gave two sets of figures. I always hesitate to give figures in debates, but I should like to amplify what my right hon. Friend said by means of a few additional figures.

In 1946, the number of seats sold was 1,600 million. In 1956, it had already dropped to 1,100 million; in 1957, to 915 million, and in 1958, to 754 million. Already in 1959, the number of tickets sold has fallen by 74 million in the first six months of the year. The industry is bound to conclude that attendances throughout the present year will not be much in excess of 600 million. A fall of from 1,600 million to 600 million causes extreme difficulties to all sections of the film industry.

During the whole period for which I have given figures, the film industry has been paying considerable sums in Entertainments Duty. The incidence of that duty has been reduced and there was a substantial concession this year, but the benefit of that concession has already been lost by the fall in admissions.

I want to make a suggestion which, I hope, will keep my last few remarks on the Bill in order. Perhaps, even at this late stage, the President of the Board of Trade, in consultation with the Chancellor of the Exchequer, might add a single Clause to the Bill to abolish the Entertainments Duty. If my right hon. Friend feels that that is outside the provisions of the Bill, I hope that at least we may get an assurance today that in next year's Budget the Entertainments Duty will be abolished.

5.24 p.m.

Mr. John Rankin (Glasgow, Govan)

I agree thoroughly with what the hon. and gallant Member for Barkston Ash (Sir L. Ropner) has just said about the abolition of cinema tax. Whatever might happen after that would largely cease to be our business; we would have thrown the industry back on its own resources. That is one of the steps that should be taken, and taken immediately.

Mr. Deputy-Speaker

We cannot pursue that any further on this Bill tonight.

Mr. Rankin

I assure you, Mr. Deputy-Speaker, that I did not intend to pursue it. I was merely tempted, as hon. Members have been tempted before, to follow the remarks which have come from the Government side.

Mr. Deputy-Speaker

I take it that the hon. Member was making only a passing reference.

Mr. Rankin

My reference, Mr. Deputy-Speaker, has now passed. While my reference has passed, I trust that it is still in order to say that my hope remains.

In the first day of the debate on the Gracious Speech, on Tuesday of last week, I deplored the fact that there was no reference whatever in the Speech to the need for quota legislation. I do not know whether the Government noticed that omission, but 48 hours afterwards the Cinematograph Films Bill appeared at the Vote Office. I will not be so bold as to relate those two happenings, but I hope that what I said on that occasion not only merited, but received, attention from the Government. It is an indication that the interest in this great industry is a continuing one in this Parliament.

In the last Parliament, we debated the industry on many occasions. I think that it will be agreed that on both sides, those who participated and those who listened were equally interested. It may have been that on occasion the support from Members on the Government side was somewhat muted. Nevertheless, being generous, we are willing to believe that they realised with us that the film industry required help from Parliament. I have already indicated the one great source from which that help may come.

When I got a copy of the Bill at the Vote Office, and looked through it, one point that struck me forcibly was the repeated references to the Acts of 1938 and 1948, with one little reference to the Act of 1957. On almost every page of the Bill, starting at the Title, we are taken back to 1938 and 1948, and this continues right to the end. All that is necessary, but it involves enormous labour for the Member who seeks to study the Bill.

I turned to a volume containing the 1938 Act, to keep in touch with what had been done by those who have preceded me in this House, and I came across this astonishing statement in that Act, dated 30th March, 1938: Subject to the provisions of section 5 of the Cinematograph Films Act, 1948 In the Act of 1938 we are referred to the Act of 1948. I have heard, of course, of legislation by reference, but, so far, I have never heard of legislation by prevision. I do not know whether that is a usual feature of Acts of Parliament. Then, when I look at the bottom of the page I find that the Clause is excluded altogether and I am referred to 11 and 12 Geo. VI, Chapter 23, Section 5.

That kind of thing goes on in this sort of Bill. I do not mean that there are other references to Measures which have not yet reached the Statute Book, but there are all these changes, some of which are written in handwriting which—and I am not in any way criticising the person who wrote them in—is rather difficult to follow.

I have also studied Clause 25 of the Bill, which contains some sort of reference to the Act of 1957. But as far as I can remember, and I took a fairly active part in the passing of that Bill, I do not recollect anything that modified Clause 25 which deals with a point that has already been raised by one or two hon. Members on both sides of the House, namely, the definition of what is a British film.

On page 649 the Act starts to define a British film—what we mean by a British film is set out in the middle of the page—and the definition finishes completely on page 651. Therefore, if we are to define what was meant by a British film we have to read one page, another half page and another bit of a succeeding page. When we come to the 1948 Act we find that, instead of the Schedules being there for our ready and immediate information, we are referred to other Acts and that the Schedules appear in two small paragraphs.

I suggest to the Government—and I hope that they will take note of it—that the time is now ripe, if not over-ripe, for a consolidation Measure so that all these Sections, all the Schedules and all the modifications will be contained within one Act in order that hon. Members may be saved the great amount of labour involved in trying to follow the innumerable references made in the Bill to previous Acts.

I am sure that the Parliamentary Secretary will appreciate that the ordinary Member has not a Government Department behind him. He has not an organisation which he can consult. He has to do the job for himself, and it is not in any way an easy job to tackle along with the innumerable duties that fall to him as a Member of Parliament.

Coming to the Bill itself, I am in a little difficulty, because much of what I intended to say has already been said, and probably much better than I shall say it. Nevertheless, I remember a story which was told to me by a former Member of the House. He was a very strong supporter of the Government, but, despite this disqualification, I paid attention to what he said. He is now a Member of another place.

When I first same to the House and listened to hon. Members saying all the things that I had carefully prepared, I was terrified to get up and say the same things. I was speaking to this former Member one day and he said to me, "Do not bother about that. The business of this House is for the maximum number of people to get up and say the same things to the Government, because it is only when the Government see that there is a great pressure coming from several quarters to get them to do one or two things that the Government begin to respond."

It was for that reason that some of us today mentioned the abolition of the cinema tax which, of course, we can only mention in passing. Nevertheless, the more people who say that, the greater, perhaps, will be the chance of our getting the reward of our endeavours.

I want now to examine the point, which, of course, has attracted so much attention, of bringing newsreels within the scope of quota legislation. I welcome that, but, again, I think it is typical of the Government that they should be doing something which may be worth while but are doing it, as usual, too late. That is because, as has been said, there are now only two newsreels being shown, British Movietone and Pathé.

The fact remains that the newsreels are being killed by television. If one has sat comfortably in one's own home on a Thursday night, and seen all the news offered by television, then, obviously, one will not go to the cinema on the following Monday to see again what was seen on the previous Thursday.

One of the great circuits has decided to substitute for the newsreel a programme called "Looking at Life". During the ten minutes or so that this programme lasts they can show a film of immediate interest and importance, dealing, perhaps, roughly and quickly with the laying down of a great liner, its launching and the sort of work that goes into its building. That is something which I think is really worth seeing.

The other point that strikes me is that the President of the Board of Trade is making rather a strange demonstration today. He is showing a great interest in saving what, in fact, are the remnants of one small part of the exhibitors' world whereas hitherto he has shown very little interest in that world itself. If the right hon. Gentleman recognises the need to help the remnants of the newsreels, why not abolish the tax which is all too quickly helping to destroy the industry itself? The right hon. Gentleman may say, of course, that that is not his immediate duty. That is probably true, but he is still concerned with it. It is his business to take to the Chancellor a message which comes not from just this side of the House, but from both sides.

It looks almost as if today we are solemnly laying down the percentage of films that must be shown in United Kingdom cinemas, when every day more and more cinemas are being closed, so that there is less chance of the quota being shown. The Government appear to be doing two things which are diametrically opposed. While there is the Marxian synthesis which derives from the conflict of opposites, one cannot see any synthesis emerging from a policy that imposes a quota to encourage more films to be shown and retains a tax which helps to show fewer films. In continuing that quota system and at the same time continuing the tax, the Government are failing to produce the harmony that we all want to see not only in the industry but in this House.

My hon. Friend the Member for Flint, East (Mrs. White) said that if the news-reels were being brought within the ambit of the levy and of the quota, that meant that another consumer was being introduced into the production pool. If there is a greater demand on that pool it seems to me that we shall handicap the production of the first feature film which I regard as one of the essentials in British film production. It may be that the President of the Board of Trade has a concise answer to that point, but I fail to see how, if he is introducing another consumer, he can avoid limiting the amount of money which goes to the producers of first feature films.

I should like to ask a question at this stage. If the levy and the quota are to apply to newsreels, will producers be required to show their films at trade shows? That is a recognised policy. I understand that they are not to be required to do so, but that they will get the benefit without the requirement.

I come to Clause 8, which, I think, has not been mentioned in this debate so far. This Clause provides that for a film to qualify as British, every person engaged in its making as a producer or director, except one, must be a British subject or a citizen of the Republic of Ireland, or ordinarily resident in the Commonwealth or the Republic of Ireland. One hon. Member opposite seemed to have some objection to that, but, of course, the citizens of the Irish Republic have dual citizenship and therefore enjoy the benefits of this Clause.

Suppose, however, that the executive producer and the executive director were the same person—which can happen. Would he come under the exception, as the one person who would be exempted from the provisions of this Clause? Would he be the excepted person? If so, it could be that the producer and the director would be a person who did not hold British citizenship at all.

May I say a word about Clause 9, which deals with the nomenclatures of the makers of British films? The Clause is rather long-winded. Why should a British film be obliged to state the place where it was made and the name of the person who made it, which may not convey a great deal to an audience? Why should it not say, wherever it is shown, "This is a British film"? What is the objection to that?

I think that I have said all that is necessary at the moment. [Interruption.] There are mutterings on the benches opposite below the Gangway. I do not know what they are, but if they are pertinent and helpful in any way it would be much better if they were delivered in a tone that was audible to me at least. In view of the fact that they merely confine themselves to mutterings, perhaps I may terminate my speech by saying that since the exhibiting and production sides of the industry welcome the Bill, with certain criticisms, I, like others here who are interested in the health of this great industry, but not financially interested in any way, offer a welcome to it, also.

5.48 p.m.

Mr. A. E. Cooper (Ilford, South)

I suppose that during the last Parliament—and it looks almost as if it will apply to this Parliament also—there has probably been no industry which has had so much Parliamentary time devoted to it as the film industry. There is probably no other industry which makes such a small contribution to our national economy as does the film industry.

I find myself at variance with the speeches of my hon. Friend the Member for Totnes (Mr. Mawby) and my hon. and gallant Friend the Member for Barkston Ash (Sir L. Ropner), and very much in support of the speech of the hon. Member for Deptford (Sir L. Plummer). This Bill, according to the Explanatory Memorandum, has as one of its main purposes to amend the film quota legislation (… to show a certain proportion of British films) and to extend it until the end of 1967. It is unfortunate that at this time we still have legislation which provides that the cinemas of this country must show a certain proportion of films produced in this country. We must be quite clear on what, in fact, we are doing. By this Bill we are carrying on the tradition that a quantity of films must be shown, but not a quality of films. The fact that we have insisted over the years on this quota system and have at the same time produced films of such a low standard is one of the prime reasons why the British film industry is in such a bad state today.

Mr. Stephen Swingler (Newcastle-under-Lyme)

This is really a very important point. Is the hon. Member saying that the British film industry produces a higher proportion of trash than does Hollywood?

Mr. Cooper

At this stage of the argument I am not dealing with Hollywood at all. This Bill relates to the British film industry.

Mr. Swingler


Mr. Cooper

May I continue? Perhaps I shall be able to deal with the point made by the hon. Member as I go along.

It has been a cardinal point in the argument put forward by the British film industry for a long time that the tax position has been one of the factors which has caused the closing of small cinemas up and down the country. I, for one, do not believe that there is any substance whatever in that argument.

Take my own constituency. For some months past cinemas in Ilford have been exhibiting to very small audiences indeed, but a week or two ago there was a re-showing of the film "Genevieve": the cinema was packed at every performance and many people were turned away. That is simply a confirmation of a very old business saying, "Rolls Royce will never go bankrupt". In other words, if one produces a quality article people will buy it. The people in this country today, by virtue of an increasing and rising standard of living, have motor cars but they did not have cars before the war. They have television sets and a number of other ways in which they can spend their money. They are selective in the way they spend money on entertainment. If the British film industry persists in producing unmitigated "tripe" the cinema-goer will no longer be a cinema-goer, but will seek other ways and means of spending his money.

We really must face the fact that the cinema industry in this country has for years lavished money on films of poor quality, and has paid starlets and stars salaries far in excess of their ability to achieve, with the result that we have a lack of quality in films, and people, quite understandably, will not go to see them.

Mr. John Hall (Wycombe)

I have been slightly agreeing with my hon. Friend, especially on matters on Which he is an acknowledged expert, but is he really telling the House that the percentage of first-class films produced by British studios is less than that of those produced by American studios? I, for one, do not believe that.

Mr. Cooper

I am not saying anything of the sort. I again say to my hon. Friend, and other hon. Friends, that I am simply discussing the British film industry. If he wants to know my views on the American film industry, they are even more caustic than they are on our own industry, but that is no justification for us to go on, year after year, pandering to the British film industry which, quite frankly, is not doing a good job. Let us face it. An American film has been thrown on to an unsuspecting public in the present week. It was referred to in the Sunday Express in, I thought, quite proper language, as "a stinking awful film". Apparently more money has been spent on that film than on any other in history, but, simply because Hollywood and American producers do a thoroughly bad job, that is no reason why we in this country should go on doing a bad job also.

Mr. John Hall

Would my hon. Friend also agree that this "stinking awful film" will probably get a better showing throughout the cinemas of this country than would a good British film?

Mr. Cooper

I could not agree more with my hon. Friend. The reason is that it has the one element which will always attract people in this country—sex. The low-cut neckline will always attract the film-goer in this country. For that reason such films will pack the cinemas, but that does not get away from the fact that it is a thoroughly bad film. What I am trying to get over, perhaps with great difficulty, is that whenever in this country the Boulting Brothers produce a film, that film sells and packs the cinemas all over the country, tax or no tax.

All I am saying to the House and to the film industry of this country is simply that we should say, "Yes, we will give you this extra support for which you are now asking in view of the difficult situation in which you are faced, but it is high time that you as an industry set about producing a high quality product. If you will produce a high quality product, then the highly selective public of this country will buy that product, but so long as you go on producing rubbish as you have over the years"—

Mr. Hirst

It is not true.

Mr. Cooper

—"you can only look forward to an industry which will end in bankruptcy."

5.58 p.m.

Mr. Stephen Swingler (Newcastle-under-Lyme)

I wish that the hon. Member for Ilford, South (Mr. Cooper) was right in anything he said, but the fact is that he is quite wrong. Apparently, he does not even know why the quota system was introduced. He argues about a film dealing with the quota as if it could have no regard to Hollywood at all.

To take one point that the hon. Member mentioned, he said that admissions to cinemas had fallen off because of the declining quality of British films. I could produce plenty of evidence that during the last couple of years, when there has been this very striking drop in cinema admissions, there has been a very substantial and significant improvement in the quality of British films and a substantial number of good quality British films. We know that the drop in cinema attendances has had to do with another factor, the wide spread of television. That has nothing to do with the quota, but it is an important factor.

Why was the quota system introduced? If I remember rightly, it was introduced as a result of a resolution passed at an Imperial Conference. The reason for the resolution was that if the quota had not been introduced in Britain thirty years ago there would have been a complete Americanisation of the British cinema. That would have been inevitable, because Hollywood was first in the field and American cinema capitalism had a head start. It had the advantage of a vast domestic market. Having the advantage of sharing a language—as they say —to some extent any way, with the United Kingdom, it could make a profit on American film production in the United States market and afford to sell at a loss in the British market. That has been going on ever since. That is the reason for a quota system. It was quite impossible to have a British film industry and cinema trade which could ever compete on equal terms with that of the United States. That has been the position for thirty years and is still so today.

We have to recognise that, however greatly the quality of British films may improve, they will still always be at a great economic disadvantage compared with films produced in the United States, because our producers cannot so easily break into the vast United States market and collect the enormous profits which can be made in that market while using other markets overseas as a mere excrescence in the promotion of their business.

For that reason, therefore, I welcome the Bill, although very moderately, and support the continuance of the quota system for the simple reason that I do not see any alternative. I also welcome the fact that the Government think that there are more important considerations than merely commercial ones in relation to the cinema trade and the film industry. The significant part of the Bill is the recognition of the fact that, in relation to the production of cinematograph films and the continuance of the cinema, there are national and social considerations in some cases more important than commercial ones. As I have said, if the cinema trade were run purely according to the unrestricted laws of supply and demand and profit motive the film industry would collapse and we should have a complete Americanisation of the cinema trade.

The Bill is a recognition of the fact that the State should interfere so that there shall be a British film industry and that a certain quota of British films shall be shown even though it means that some exhibitors will have to pay a bit more for the films that they are under the law compelled to exhibit.

Mr. Cooper

I must make it clear that all that I am saying is that the provision of a quota does not mean that the filmgoer must go to see certain films if the quality is bad.

Mr. Swingler

That has always been the case. We cannot pass legislation to govern the number of admissions to the cinemas. We can only ensure that a modest proportion of what those who wish to go to the cinema see is the result of British talent and production, so that purely commercial considerations shall not exclude British film productions entirely from British cinemas, which, without the quota system, those in a position to get films on the cheap might well do. We can neither determine the quality of the films produced nor whether customers will go to see them. That is a matter of judgment for those within the film producing industry and those responsible for exhibition.

We should not be proud that after thirty years of the film quota system only—and I emphasise the word "only"—35 per cent. of the films shown in British cinemas are British. One of the things which this proves is that a quota system as such is just not enough. It is a very blunt instrument unless, at the same time, there is a dynamic policy for expanding the production of films and for tapping the talent which exists in the country for the artistic and technical creation of films. Thirty-five per cent. is still a very meagre proportion. The fact that we are still dependent to the extent of 65 per cent. on foreign films, after all the legislation to which reference has been made this evening, is a rather poor result.

As I say, I think that the quota system, although still inevitable because we have not discovered an alternative, is a very blunt instrument, but there are two things that I want to say about it, as it reappears with some amendment in the Bill. I do not want to go into a lot of detail with which we shall trouble the Parliamentary Secretary at some length in Committee, but there are two things that I want to say about the characteristic of the quota system. If we are to have the quota system, I want it to be, first, 100 per cent. British, and, secondly, 100 per cent. workable and effective.

There is no case for it otherwise. It would be better not to have one at all. If we are to have a quota system, especially in a diminishing market caused by people being attracted away from the cinema to other forms of entertainment, let it be a quota for genuinely British productions. As the President of the Board of Trade admits, we are still leaving 65 per cent. of the market to foreigners.

I welcome the stiffening-up in the Bill of the definitions of a British film. That is a good thing, but there are one or two other things which need to be attended to. One of the problems is that the definition of the word "British" covers the Commonwealth, and I think that it is a good thing under the British film quota system to encourage the exhibition in Britain of films produced within the Commonwealth. However, it is only fair that if this is done, which, after all, is something for the encouragement of the Australian or Indian film producer as well as the British, we should make our best endeavours to arrive at reciprocal arrangements about the exhibition of films in the Commonwealth. If there is to be an advantage given, as there is an advantage given under the British quota system, to promote the production of films in the Commonwealth, we should try to promote reciprocal arrangement for the encouragement of the exhibition of British Commonwealth pictures in the whole of the Commonwealth area.

In the same way, I accept that co-production is a good thing from the point of view of the flourishing of the film industry in the world in general, and from the point of view of pooling talent technically and artistically we should encourage it. I welcome very much the arrangements made by producers on Anglo-French and Anglo-Italian productions. This is an excellent thing. It is good that the Bill makes a move towards providing for that within the quota system, but again I think that it should be on a strictly reciprocal basis. If we promote a production which is half Italian in the British market, similar endeavours should be made by the Italians to promote films which are half British in their market.

I said that I should like a quota system which is 100 per cent. British with the qualifications that I have mentioned. The second thing that I want is a quota system which is effective. When one looks back over the history of the film quota system as it has been in operation over the last thirty years, particularly over the last ten, we must admit that it has not been really effective and workable in very many ways. For instance, how many people have been prosecuted for default under the quota system? The number is negligible compared with the number of people who have not fulfilled their quota obligations. Of the cinemas in this country which, year after year, have never shown a British picture, only about 10 per cent. of them have been prosecuted. This is because the Board of Trade know that if they take defaulters to the courts—and the Board has had its fingers burned a few times in this matter—there is always the get-out, "It was not commercially practicable this year to show 25 or 30 per cent. British films." There are even some cinemas in Leicester Square which do not show their quota of British films.

We should have had two or three levels of quota, not one. The thing that makes the system so blunt and ineffective is having one quota to apply to the circuits and to the back-street cinema, which, of course, is crazy. We cannot expect back-street cinemas, competing to get films with the circuits, to show their quota of British films. What happens is that they get exemptions. If they cannot do it, they default; and if that happens they are not prosecuted, because they can plead that it is not commercially practicable.

We should examine that side of the business very carefully. The quota system has been maintaining the level of British film production, and that is good. Certainly, over the years, it has kept up a certain level of exhibition of British films in British cinemas. That has been a good thing, too. But the President of the Board of Trade could not really say that it has been an effectively enforceable system—because of all the modifications that have had to be made. We ought to see whether we cannot devise a more practicable system.

One of the things that we should examine while discussing the Bill is the representation of film producers on the Cinematograph Films Council. I have spoken of quota defaults. It is one of the responsibilities of the Council to advise the Minister on those, and to advise him on the quota level, and so on. I have never been satisfied about producer representation on the Council. I do not, of course, make any reflection on any of the very distinguished persons—including some distinguished Members of this House—who have served on it, but the producer representation has not been strong enough because many of those on the Council as alleged producer representatives have had much more powerful and attractive exhibition interests. We should ensure that those who are supposed to be representative of production really do have the interests of film producers deeply at heart. I hope that we may strengthen that representation.

The circumstances mentioned by some of my hon. Friends have been created in very small part by the tax, but in very great part by the competition of television. Incidentally, there is no British quota in regard to television. That is one of its great deficiencies, and we should do something about it. With a diminishing cinema market, it is quite clear that unless, combined with the quota system, there is a positive Government policy to expand British film production, it can all mean very little.

Unless really positive aid and stimulus is given by the Board of Trade to enable independent producers and others to raise the quality and increase the variety of the films produced, there is resistance from the exhibitors to fulfil the quota, and the result of the quota is then to "freeze" the level of British films being shown in the cinema. Therefore, unless public enterprise is shown by the Government positively to encourage British film production, the quota will remain a very blunt instrument.

6.14 p.m.

The Parliamentary Secretary to the Board of Trade (Mr. John Rodgers)

I am sure that everyone in the House will agree that we have had an interesting and a most useful debate on what my right hon. Friend described as a modest but important Bill. The debate has allowed us to review the general health of the British film industry, and it is against the background of the state of the industry's progress that we should judge this modest Measure.

The purpose of the Bill is simply to extend and improve the quota arrange- ments, but I am quite sure that, as the hon. Lady the Member for Flint, East (Mrs. White) warned me, we shall have a very much more active time in Committee than, perhaps, we have had this afternoon, and that there will probably be many more points of difference between us there than have been obvious during our present discussion.

The debate has shown the concern of both sides of the House for our film industry. It is an industry which the more one studies it the more one recognises that it presents unusual and very specialised problems not common to many industries. Nevertheless, as my right hon. Friend pointed out, it is surprising and curious that the halving of cinema attendances since the war has produced no corresponding diminution in production. That is an extraordinary thing. There can be few other British industries that, with their domestic market halved, would find themselves in such a position.

At the Board of Trade, we do not know—and I am sure that hon. Members on either side would not like to foretell—what the industry's future holds. It may well be that rather fewer films will be made, but more complicated and expensive ones, to be shown for longer periods. Up to now, however, it is true to say that British film production has kept up remarkably well.

As my right hon. Friend said, it is gratifying that British films should have acquired a bigger share of a declining market—it was over 35 per cent. up to 30th September, 1958, the last quota year for which details are available—and that they have made notable headway in overseas markets, too; particularly in the European markets. There are a lot of Jeremiahs, some in this House, who have forecast a cessation of British film production, and have spoken of the inadequacies of Government action to assist production. To date, I think that these Jeremiahs have, on the whole, been confounded.

In my view—although I realise that I can be challenged on this—Government help to the film production industry has been fully adequate. Of course, we could have done more for producers. Of course, we could have risked more public money. But we believe that we have provided just enough support to give producers the courage to fight for their markets. This they have done most successfully and, frankly, I would congratulate them on their success to date—

Mr. Jay

While the hon. Gentleman is on that aspect, perhaps he would also pay tribute to the National Film Finance Corporation for the part that it has played.

Mr. Rodgers

I had intended to refer to the Corporation a little later. I thought that the hon. Lady the Member for Flint, East, hinted that there were difficulties in the way in which the National Film Finance Corporation was now operated; that it was, perhaps, becoming a little too tough in its lending policy as a result of the duty imposed on it in the 1957 Act to pay its way.

Frankly, I am quite unrepentant. I am glad the Corporation is paying special attention to the need to spend the taxpayers' money wisely and prudently. It is important that every reasonable care should be taken of public money, particularly in such a speculative industry as the film industry. The impression is sometimes given that the Corporation has reduced the scope of its activities, but this is really not the case.

The loans approved by the Corporation in the two years since the 1957 Act was passed have been at a rate higher than that in any other previous year, with the exception of the year in which very large sums were lent to the old British Lion Film Corporation—sums, it will be recalled, that were lost when the company was re-formed in January, 1955. The loans made by the National Film Finance Corporation in the first seven months of this year, for example, are at an average about that in each of the last nine years.

While on the subject of the Corporation, I am glad to inform the House that there has been an encouraging response in some quarters to the Corporation's call to the industry to get costs down by reducing the very high cash salaries that it was the custom to pay to some individuals, and giving them, instead, a share of the profits.

I should like now to turn for a moment to the exhibition side of the industry. The attention of the House has been drawn by speeches from both sides to the unfortunate situation in which a number of cinemas find themselves. This point was particularly underlined by my hon. and gallant Friend the Member for Barkston Ash (Sir L. Ropner). The fact remains, however, that the fall in attendances is not a matter for which this or any other Government can take responsibility. Basically, it is the result of the change in public taste for the cinema.

I do not, in saying that, seek for one moment to minimise the severity of the blow to some exhibitors. However, the Government, while not being able to stem the decline in attendance, have nevertheless paid very special attention to the needs of the smaller exhibitors, both in the method chosen for reducing the Entertainments Duty this year, and in the present Bill by relieving the cinemas from quota obligations whose average takings are less than £125 per week.

Practically 80 per cent. to 90 per cent. of the speeches today referred to the Entertainments Duty. I am sure that hon. Members will not expect me to guess at or in any way anticipate my right hon. Friend's Budget.

Mr. Jay

But when the previous President of the Board of Trade did that, does not the hon. Gentleman remember that the present Prime Minister said that he was quite right? Why cannot the hon. Gentleman follow that example?

Mr. Rodgers

I also remember, as the Prime Minister pointed out, that the Opposition created a good deal of fuss about this alleged leakage of a Budget secret. I have no intention of following that precedent today. I am quite certain that the Chancellor will observe what has been said in this debate. What effect it will have on his decisions I should not like to say at all.

About 900 cinemas are expected to gain exemption by the alterations in this Bill. Special attention is paid to these cinemas in collection of the levy. I hope that the hon. Lady is wrong in thinking that this will necessarily lead to smaller cinemas having a spate of horror films, Westerns and American films in general. One must, I think, keep the importance of these small cinemas to the trade as a whole in perspective. Some producers might well feel alarmed that so many as 900 cinemas were to be relieved of quota obligations, but the fact is, as I think the hon. Lady knows, that if these cinemas stopped showing British films altogether the loss to British producers would be less than 2 per cent. of their total earnings.

Despite closures of cinemas and the continuing fall in attendance the main groups of cinemas which provide the bulk of producers with revenue have not done so badly, as a result of the reduction in Entertainments Duty. I will quote the figures. Although gross takings of cinemas in 1958 were £95 million less than in the preceding year the amount of Entertainments Duty paid was £12.2 million less. After allowing for an increase in the rate of levy that left net takings £1.9 million higher than in 1957.

Clearly, the fact that about 900 cinemas can be relieved from quota obligation is really a tribute to the strength of British films. A few years ago these cinemas might well have complained at being forced to take British films. Today, their main complaint is not at being forced to take British films, but that they cannot get enough of them. This does not in any sense mean that we can do without the quota, although I realise that this is not a point which will commend itself to my hon. Friend the Member for Ilford, South (Mr. Cooper), who seemed alone in querying the necessity for the continuation of the film quota.

We must not lose sight of the fact that cinemas still depend on American films for the majority of their programmes, and I think that the hon. Member for Newcastle-under-Lyme (Mr. Swingler) was quite right in saying that we depend at the moment on the quota for the fact is that about twice as many American films are shown in the cinemas than British films. This quota legislation does afford protection against high pressure salesmanship in various ways such as the prohibition of blind and advance bookings under the 1938 Act. Furthermore, the very existence of the quota does ensure that all but the most hopeless failures will get some showing in the United Kingdom, and this provides that additional confidence without which it would be difficult for some film producers to raise the necessary finance. This aspect has not been touched on in the debate, but it is one of the most important reasons for continuation of the film quota.

I think that it is true to say that hon. Members on both sides of the House will agree with me that there is no real support for the abolition of the quota. As I say, I except my hon. Friend the Member for Ilford, South, but, apart from him, everybody does agree that we need continuation of the present legislation. On the whole, the Bill has been welcomed, and it has been thought that it is an improvement on existing arrangements with regard to the quota.

Not unnaturally, the Clauses which have attracted most attention in the speeches of hon. Members are those relating to the innovation of quota protection for newsreels and the provision enabling co-produced films to be made with foreign producers. There is no doubt about it, as the hon. Lady said, that the demand for newsreels has been very much affected by the coming of television, and it is a fact that three news-reel companies have closed in the last year or two and that there are now only two companies left, as the hon. Member for Glasgow, Govan (Mr. Rankin) mentioned.

I hope that the film producers will be magnanimous enough and sufficiently statesmanlike not to oppose the drain which they think this will make on the levy fund. All that the Bill proposes is to give the same right to newsreels as is given to other films. Why should we discriminate against them because some members of the public prefer TV? The producers are not subsidising news-reels. They are merely giving the news-reels the same advantages which have hitherto been granted to feature films. Therefore, I think that we really are adjusting the balance rather than robbing feature film producers.

Sir L. Plummer

But surely the whole purpose of the Bill is to give protection to the needy, that is to say, give protection to the feature film producer who, in this market as it is constructed, needs help. As I tried to show in my speech, one of the major producers of newsreels in this country does not need protection of this kind—not financial assistance, at any rate.

Mr. Rodgers

I do not want to be drawn into a debate on which section of the film industry needs aid more than others, but it is a fact that the so-called drain which would be the result of the inclusion of newsreels into the quota arrangements is from £150,000 to £200,000 a year. One would hardly call this much a depletion, and it is less than the amount by which the levy rose last year, so that I think that if we take all the factors into account the hon. Lady's argument that film producers are likely to lose a great deal by the inclusion of newsreels in the quota arrangements cannot be sustained.

Mrs. White

Will the newsreels qualify for two-and-a-half times the levy?

Mr. Rodgers

I was coming to that point, too, but I will answer it now. I was going to answer it later, in response to the hon. Member for Gloucester (Mr. Diamond). As the Bill is drawn it will give the newsreels the benefit of the two-and-a-half times multiplier.

It has already been pointed out that it would be a mistake to take more than necessary out of the levy fund since this would be at the expense of other film producers. Therefore, it may be wise to introduce a regulation under the 1957 Act reducing help to something less than that which would be given by application of the two-and-half multiplier. I hope that that satisfies the hon. Member for Gloucester and the hon. Lady.

I do think, too that we should not minimise the advantage this country gets in the way of prestige abroad from the presentation of newsreels by foreign exhibitors. The hon. Member for Deptford (Sir L. Plummer) asked: why did we not take I.T.A. and B.B.C. films? I think that they would be found much more difficult to sell. Another country would be much more reluctant, I think, to take that material than it would commercial films, because the former would be considered to be tainted much more by an official point of view than would ordinary commercial newsreels. This is only a point of view, but I advance it for the consideration of the hon. Member.

Sir L. Plummer

Surely it would not apply to I.T.A. films.

Mr. Rodgers

The hon. Gentleman did not confine his suggestion to the I.T.A. He mentioned the B.B.C. feature programmes, too.

Sir L. Plummer

But these news features do represent the British way of life. Surely no official stigma is to be attached to B.B.C. television newsreels.

Mr. Rodgers

I should not like to suggest that there was any official stigma attached to either, but there are difficulties and complications in the relations of the cinema film industry and the television industry not only in this country, but in countries abroad. It is, perhaps, more complicated than the hon. Member appreciated when he threw out the suggestion, although I entirely agree about the high qualify of programmes of newsreels produced on both channels of television.

Clause 10 will enable co-production films to be made and to qualify for British quota purposes. It is our intention in the Bill to do no more at this stage than to provide an enabling Clause. I am glad that the hon. Member for Gloucester welcomes this provision. The details of any international agreement made on this subject will have to be negotiated with very great care, but I think that hon. Members will agree that it would have been a great mistake to try to lay down in the Bill the detailed provisions necessary in relation to co-production films.

The sort of thing which the European agreements at present cover are the reciprocal benefits in the two countries which will be given to the co-produced films, the proportion of participation in the film by the various parties, including financial and labour participation; the use of studios, the way in which the films made under the agreements will be exploited in other countries, and so on. They usually provide also for some sort of joint commission to supervise the operation of the agreement.

I would point out that it is the industry itself which has asked for a provision of this sort, and any arrangement made pursuant to the Clause will have to be made after further discussion with the industry. It is obvious that the unions and the exhibitors as well as the producers and distributors will have strong points of view to be taken into acount on the type of agreement to be made. Personally, I welcome the fact that in the context of a Bill designed to continue to protect a home industry we can find a Clause so far removed from pure protectionism as this. Though there is no doubt that the Cinematograph Films Council will take into consideration the availability of co-production films when advising the Board of Trade, as it is their statutory duty so to do, on the size of the quota, I think that at this stage that is all I can say to the hon. Lady for Flint. East on the point she raised in the course of her remarks.

On the whole, I think that it does great credit to the film industry that it should have put forward this request which accords with a good spirit of competitiveness and export-mindedness. There is no doubt that British films have achieved an international reputation higher than ever before. I was slightly distressed by the remarks of one or two hon. Members about the quality of British films. Instead, I should like to pay my tribute to the perseverance which British film producers have shown in selling their products in the highly competitive markets of the world. The showing of British films in the recent British Film Week in Russia attracted tremendous attention, and Her Majesty's Government welcome the news, announced by the Rank Organisation yesterday, that it has done a deal with Russia for the showing there of four of their most successful feature films.

I shall not have time to comment on all the other points raised in the debate, but doubtless they will be all raised again in Committee. I think that my right hon. Friend adequately gave our views about the renters' quota and pointed out that it was impossible under the arrangement with G.A.T.T. to do anything about that. On labour costs, the hon. Lady the Member for Flint, East asked why the figure was 10s. a square foot.

Mrs. White

Not a square foot.

Mr. Rodgers

I cannot read my handwriting. It is 10s. a foot. She said that owing to the change in money values this should be raised to 15s. or £1, as recommended in certain quarters. There is an argument that can be advanced on that. Two points should be borne in mind. First, if we did that it would exclude many films that at present enjoy the quota, so I am informed, and it might lead to inflated costs of producing films which would not be to the economic advantage of the industry or of the patrons at cinemas. Therefore, I think that it is better to leave it at 10s.

The point about studios and the question of the inclusion of Commonwealth as well as United Kingdom studios is one which had better be left to the Committee stage. My hon. Friend the Member for Shipley (Mr. Hirst) raised an interesting point on Clause 12 and asked whether there was any danger of a change of title allowing films to qualify twice for the quota. I am glad to assure my hon. Friend that the Bill has been so drafted that there is no danger whatever of a film acquiring an extra period of quota life by being re-registered under a different title.

The hon. Member for Gloucester asked about the two-and-a-half multiplier. I have already dealt with that, and I think that I had better avoid altogether his invitation to me to comment on whether the proceedings of the House should be televised or be put on the newsreels. That is a subject perhaps for another debate, but certainly not one for me to comment on.

My hon. Friend the Member for Totnes (Mr. Mawby) asked why, throughout the Bill, we had the phrase which refers to the citizens of the Republic of Ireland. They are referred to merely to preserve the status quo. The Cinematograph Films Act, 1938, applied to the citizens of the Republic of Ireland as if they were British because that Act was passed before the Ireland Act, 1949. We are not giving extra privileges to the Irish or to the Republic of Ireland. We are merely preserving the status quo by their inclusion in the Bill.

Mr. Rankin

Oh, I see.

Mr. Rodgers

I do not quite understand the hon. Member's remarks.

Mr. Rankin

The hon. Gentleman will remember, or at least I hope that he remembers, that I raised on Clause 8 the question whether one person—

Mr. Rodgers

I am coming to the hon. Member.

Mr. Rankin

I am sorry.

Mr. Rodgers

I was proceeding in the order in which hon. Members spoke and in the order of the various points raised. I assure the hon. Member that I shall not overlook him. There is also another question which several hon. Members have raised which I shall leave to my closing remarks.

On the question relating to one producer or one director, which was the point that exercised the mind of the hon. Member for Govan, it would mean in that case that it could be a foreigner even though the two persons were "married" so to speak.

Mr. Rankin

This may be something we can talk about later. Could it not be met if the word "and" were substituted for "or"?

Mr. Rodgers

I do not pretend to be a great expert on film production. I do not know whether a film could be made without a producer or without a director, or whether it is necessary to have both, it seems to me that a great many people are involved in the production of films.

Frankly, I think that I have said enough about my hon. Friend the Member for Ilford, South. Therefore I come now to the hon. Member for Newcastle-under-Lyme. I am very glad indeed that he welcomes the Bill and the improved quota provisions. I have also great sympathy with his point of view that the quota should be, as he described it, 100 per cent. British and 100 per cent. workable and effective. That was our desire, and in the Bill we have tightened up the definition of "British" and the labour content and so on. I think that the hon. Member can take satisfaction out of that. We are also pursuing the reciprocal arrangements in the Commonwealth to which he referred. The question of two or three levels of quota is rather wide for today's discussion.

A number of other interesting points were raised which can more conveniently be examined during the Committee stage. Some are technical points arising from the group of changes by which the Bill proposes to take account of advanced techniques in the industry. Others relate to the general tidying up and improvements we have sought to make in the relief arrangements or the definition of a British film for quota purposes. On this latter points there has been some reference to the lack of British content of some British quota pictures, a point made by my hon. Friend the Member for Shipley. It is not easy to know where to draw the line which will enable the industry to obtain the benefit of foreign talent without leaving the situation so open that the talent can steal the picture. However, we have drawn the net tighter and we can leave to the Committee stage the explanation of how restrictive the new provisions are likely to prove.

Finally, in a matter of this kind compromise must inevitably be sought between the desire of the exhibitors to have as free a market as possible for the selection of their films and of the producers to protect their own interests. In the circumstances, there is a surprising amount of general agreement on what the Bill contains. This is due in no small measure to the painstaking work of the Cinematograph Films Council in which so many conflicting interests are at least partially reconciled. There is no person who has worked harder or to whom we are more indebted than the hon. Lady the Member for Flint, East, who has not only been a member of the Council, but has participated in the special committee set up to study the matter. The House is in her debt for her work, which is what has really led to this Bill.

There may be room for argument about whether additional amendments should be made to the existing legislation, or how precisely we should go about achieving certain goals we have in mind, but I think that there will not be much argument about the need to do most of the things we are setting out to do in the Bill.

Several hon. Members raised the point that the passage of this technical Bill will leave the film industry subject to three different Acts of Parliament. This is confusing and I am glad, therefore, to inform the House that we intend, shortly after the passage of the Bill, to introduce a consolidating Measure, which, I hope, will give pleasure to both sides of the House—[HON. MEMBERS: "Hear, hear."]—as apparently it does.

Both sides of the House regard this as a modest, useful and not very controversial Bill, and it is with this conviction that I commend it to the attention of the House.

Question put and agreed to.

Bill accordingly read a Second time.

Bill committed to a Standing Committee pursuant to Standing Order No. 38 (Committal of Bills).