CINEMATOGRAPH FILMS (LEVY) (Hansard, 12 July 1962)

§ The Parliamentary Secretary to the Board of Trade (Mr. Niall Macpherson)
I beg to move,
That the Cinematograph Films (Distribution of Levy) (Amendment No. 2) Regulations, 1962, a draft of which was laid before this House on 26th June, be approved. The Cinematograph Films Act, 1957, provides that there should be a levy on cinema exhibitors and that the proceeds should be distributed to makers of British films by the British Film Fund Agency, which in turn was established under the Act. The makers of various classes of films get payments from the Fund in varying proportions to what they earn from their films. Under the present arrangements, first-feature films get a direct proportion of their normal earnings, while short films other than newsreels have their earnings multiplied by two and a half times before the same proportion is applied. At present, the proportion is about 44 per cent. of their earnings. Low-cost films, with which the Regulations deal—that is, long films the labour costs of which do not exceed £20,000—have their earnings multiplied by two up to the point where those earnings reach £15,000 or the film's labour costs, whichever is the lower.
1662 There is a shortage both of first-feature films and of second-feature or low-cost films. The industry considers that second-feature films not only help to attract audiences to the cinema if they are good, but also, in the process of their production, provide opportunities to train the younger generation of actors, directors and all the other skilled personnel who help to create films.
For these reasons, after consultation with the Cinematograph Films Council, we propose this change in the Regulations to encourage further the making of low-cost films by increasing the Fund's scale of payments on such films by onequarter—that is, by providing that their normal earnings shall be multiplied by two and a half times for the purpose of calculating their entitlement from the Fund instead of by two as hitherto. The existing upper limits of low-cost films will be retained.
The House will want to know where the initiative for making the change originated. It was the film producers themselves who proposed it—that is to say, the people to whom the proceeds of the Fund are paid, including the producers of first-feature films. It is the producers of first-feature films who are likely to receive less from the Fund to the extent that the producers of low-cost films will get more as a result of the Regulations. I should add that no increase is proposed in the amount of the levy raised from the exhibitors. The proposed arrangements will apply in the current year, which ends on 13th October, 1962.
I hope that with this brief explanation these Regulations will commend themselves to the House as they have, by and large, to the industry, including the Cinematograph Films Council.

§ Mr. Harold Lever (Manchester, Cheetham)
I make a very brief intervention, I hasten to reassure any hon. Member who has trepidations or a memory which goes back some years on this subject. I desire only to express my disappointment that by staying for the Motion on these interesting Regulations to be proposed I have not learned anything about the progress of the scheme for assisting British film production. No doubt after my hon. Friend the Member for Flint, East (Mrs. White) 1663 has spoken I shall be more enlightened, but it seemed to me that the gist of the precise speech from the Government Front Bench was simply that there is a scheme, which we all know is in force, which creates a pool of money for producers, and the beneficiaries have avoided a public squabble as to how the benefits should be distributed among them, and that this is a matter which the Minister thinks is cause for congratulation and reassurance, and we ought, therefore, to pass the Regulations.
I feel that we ought to know a little more from the Minister about how the scheme in general is progressing. It is all very well telling us that the money under the scheme will be divided somewhat differently—

§ Mr. Speaker
I interrupt the hon. Gentleman to point out to him that there would be difficulties about order in dealing with the general working of the levy on this issue.

§ Mr. Lever
I was not hoping, Mr. Speaker; that we should have a general dissertation on the effectiveness of the scheme, but I should have thought that it would not have been entirely out of order to say, relevantly to the question of how the fund should be distributed, that the fund as a whole is working well and this has encouraged the Minister to accept the recommendations of the industry and split the benefits in a slightly different way in the hope that they will produce an even greater fillip to the success which the Government have notoriously enjoyed in supporting the British film producing industry. If we are asked to reconsider the arrangements hitherto in force governing the distribution of the proportions of the total, may we not know how the previous disposition works? If it worked well, we might feel inclined to resist the benevolent despotism of the Minister and not be so ready to yield to the democratic processes of the film production industry which have arrived at a result which has found embodiment in the Regulations.
Therefore, without inviting the Minister to transgress any rule of order, I should have hoped that the House might have had a sentence—no more—to indicate that the Minister was satisfied or 1664 dissatisfied with the working of the scheme so far or with its success as a plan. I am particularly interested because when the scheme was introduced and subsequently I expressed some scepticism as to whether it would achieve the result intended. I have to decide whether I should vote in favour of a rearrangement of the existing scheme for distributing the money, and for this purpose I would hope that, subject to your guidance, Mr. Speaker, upon which we all rely, the Minister would vouchsafe a little information about his satisfaction or dissatisfaction with the experience the industry has had under the Government's policy to encourage British film production.

§ Mrs. Eirene White (Flint, East)
The Regulations are relatively short and, I think, relatively uncontroversial. There are some very much more controversial matters concerning the collection and distribution of the levy which may well come before the House before very long. For example, some persons are proposing that there should be a ceiling placed on the maximum amount paid in levy to the producer of any particular film. Others are pressing that there should be higher exemption limits for cinemas from which the levy is collected, and there are various other matters of considerable controversy within the industry which we may have to consider in the fairly near future.
These Regulations are very narrow, concerning, as the Parliamentary Secretary said, only one category of films—the low-cost films—and it has been agreed within the industry that this redistribution of income should take place. As a Socialist, I am all in favour of the redistribution of income, and if this is to produce better quality second feature films, we should all be happy. If, on the other hand, the quality of second-feature films remains as it has been in all too many films in the past, it would be a very disappointing result. Every one of us has had the experience of going to a cinema to see a feature film and of having to sit through a supporting programme which was far below the quality which we had every right to expect.
On the other hand, I would warmly support my hon. Friend the Member 1665 for Manchester, Cheetham (Mr. H. Lever) in suggesting that the Parliamentary Secretary should tell us more about the present state of the Cinematograph Films Fund. Although it is a redistribution, this is, nevertheless, the fund put up to improve second-feature films. If the first-feature producers, who, after all, are the more important, were to find that because of the Fund itself not being, in a healthy state, their returns were to diminish, that might be rather serious, and we might have to reconsider the priorities. It is only right that the Parliamentary Secretary should inform the House what is the present state of this Fund, which we are now dividing out.
At the beginning of the year, I think I am right in saying, there had been some drop in receipts. I think we should be told whether or not that position has improved, and what the estimate is of the amount of change in the Fund which will be received by the respective groups of producers. I think that, most certainly, we should be informed about that.
My hon. Friend asked whether, on the whole, the Minister is satisfied with the working of the Fund, and I think I am correct in saying that, on the average, the producers get about one-third of their total income by means of the levy, about one-third from receipts from the home market and a further one-third from receipts from overseas. It is, therefore, clear that the amount of the Fund is a matter of the greatest possible concern to the film producers, as they depend upon it, on the average, for about one-third of their income. Before we dispose of the Regulations, it is only right that the House should be told just what is the present state of the Fund and what its future prospects appear to be.

§ Mr. N. Macpherson
The hon. Member for Manchester, Cheetham (Mr. H. Lever) invited me to pronounce "a 1666 sentence, no more". I have already done that, but I think that the House would like a little more information than I have given so far.
I have been asked what is the amount that has been realised by the Fund in the last period. In the last period, to October, 1961, the gross yield of the levy was roughly £4 million. It is true that the total amount collected has been falling, as indeed cinema admissions have been falling over a period of years, but this £4 million was more than it was expected to be When the rate was fixed in July, 1960, when it was expected to yield £3.7 million. When it was originally fixed, it was fixed with the object of raising about £3¾million, so that it is not too bad, from the point of view of what was originally anticipated.
I do not know what further information the House would like to have about this, but hon. Member might be interested to know what were the shares of the Fund going to the various classes of films. In respect of the last levy year, which ended in October, 1961, the interim payments from the Fund to date, although some supplementary claims have still to be settled, have been £3.7 million, of which £2.8 million was for high-cost films, £460,000 for low-cost films, £320,000 for short films and £125,000 for newsreels.
The hon. Lady the Member for Flint, East (Mrs. White) asked whether the Regulations will tend to produce a better quality of second feature films. To the extent that it is likely to make them more profitable, it should do that, but no one can say that it will. Certainly, that is one of the intentions of the Regulations, and I hope that, with this brief explanation, the House will agree to them.