BRITISH LION FILM COMPANY

HC Deb 04 February 1964 vol 688 cc1059-120

Motion made, and Question proposed, That this House do now adjourn.—[Mr. Redmayne.]

7.21 p.m.

Mrs. Eirene White (Flint, East)

If I may use the language of show business, tonight we are presenting another thrilling instalment in the sensational serial, "The Tale of British Lion". It has a star-studded cast. The public has had an ample selection of both heroes and villains, but this episode is directed by an entirely new director. I refer to the Secretary of State for Industry and Trade.

We now have a very different situation from that which existed on 20th December, when you, Mr. Speaker, kindly allowed us to have a short debate on the Christmas Adjournment, and when we had the Parliamentary Secretary at the Box and he, poor fellow, was entirely unable to tell the House what was to happen to British Lion. He could not give us any information. He was not able to give us any satisfaction as to terms or conditions. In fact, he seemed to know little about the Government's intentions. Therefore, my hon. Friends and I are of the opinion that it is only right that we should use this opportunity to ask for a very much clearer statement from Her Majesty's Government of what they propose to do.

Had things just been allowed to ride, and had there been no debate on 20th December, it appears to us that by now there would probably have been a completely tied-up package; the whole of the firm would have been sold, as far as we can tell, without any conditions being imposed, to the first person who came along—rather an "old pals" act—and we would have had no opportunity of finding out what was to be done.

We disagree with the Government on both the principle and on the way in which they have handled the matter, because even after 20th December we were able to read, in The Times of 3rd January, that the first bidder was Mr. Sydney Box. I want to make it clear that in anything I say I do not wish to be derogatory to Mr. Sydney Box—I am criticising Her Majesty's Government—but it seems odd that on 3rd January The Times was able to report that Mr. Box had received the detailed terms on which British Lion was to be sold, and also that he was able to say, in the Sunday Times, two days later: By normal City practice, the Finance Corporation cannot ethically go back on their offer to me. In spite of these statements, only last week I had a reply from the right hon. Gentleman to the effect that the legal advisers of the Board of Trade and the National Film Finance Corporation were engaged upon working out the terms which apparently had not seemed necessary to them before 3rd January.

It was since that date that the right hon. Gentleman himself came into the picture—if I might put it in that way—and took personal responsibility for seeing various people in the film industry, a large number of whom had made it clear that they were far from satisfied with what appeared to be about to happen to the affairs of this extremely interesting and, by this time, prosperous company.

I should say at the outset that a certain amount of personal mud-slinging has taken place. Although I am not holding any special brief for the directors of British Lion, I should like to remind hon. Members on both sides of the House who might have it in mind to say critical things about them that on 22nd January, 1959—just five years ago—the hon. Member for Sevenoaks (Mr. J. Rodgers), at that time a Minister in the Board of Trade, when referring to these very gentlemen, said: I personally should like to acknowledge a debt to these people who agreed to give up their previous interests and join British Lion at considerable risk to themselves and their own reputations."—[OFFICIAL REPORT. 22nd January, 1959; Vol. 598, c. 554.] I say that at the outset because much has been said in criticism of the way in which the contract has worked out.

Let there be no misunderstanding; when that contract was made the persons concerned, on both sides, were of the opinion that it was a very risky business. Therefore, we should be quite clear that the considerable success which has attended the efforts of British Lion Films Limited since that time is to be attributed to the work, enterprise, initiative, and considerable vitality of those directors. The fact that the relationship between them and the National Film Finance Corporation—both chairman and managing director—has not always been of the happiest or easiest does not detract from the real achievements of British Lion.

My hon. Friends and I object in the strongest possible terms to the declared intention of Her Majesty's Government to sell British Lion 100 per cent. to a private buyer. We are by no means the only ones who object to this. Large sections of those who have any knowledge of the film industry have objected. We have the Federation of British Film Makers—an organisation which represents the independent producers—the Cinematograph Exhibitors Association, which is far from being a Left-wing body, and we have the unions. Privately, we even have some leading directors of the circuits, who do not wish to go on record but who are emphatic in their private opinions that it would be a good thing if there were some continuing participation in British Lion. Lastly, although the right hon. Gentleman did not wait for it, we have the opinion of the Films Council, which is there to advise the right hon. Gentleman on these matters.

I am in a difficult position, because I am a member of that Council. Normally its decision are not published except in the form of an annual report. On the other hand, it would be unrealistic not to refer to the advice which by now, as everyone knows, has been tendered to the right hon. Gentleman. It was the opinion of the Council that some public participation would have been desirable.

Why is there this wide range of opinion in favour of some degree of public participation? It is because those of us who know anything about the industry do not believe that a purely privately-owned company can remain independent in the present monopolistic state of the industry. I know all the difficulties that the right hon. Gentleman can adduce but if he had been prepared to wait and to say, "For the time being we will continue some public stake in this," and had done something about the monopolistic state of the industry, it would have been another matter. But he is not yet in a position to do anything.

One has only to look at past history to realise that the chances of a completely privately-owned distribution firm remaining generally independent in the present state of the industry is very slim. Six years ago, there were seven independent distributors. Now there is only one, and that is British Lion. One has it on record that the present directors, after six years' successful experience, to quote from one of their documents, are convinced that the company's special rôle in the industry could not be maintained if the Board were responsible only to private investors. They are convinced from their experience that the kind of pressure which can be exercised directly or indirectly will make it virtually impossible for those who are concerned only with commercial considerations and not with considerations of the public interest to maintain their independence Why should they be concerned with the public interest if they are a 100 per cent. commercial firm? That would be asking a bit much. They put in private money and their responsibility in those circumstances is to their shareholders. In that case, there is no margin to allow for manoeuvre or for judgment of what would be in the public interest.

To us on this side it appears that, for what we consider to be doctrinaire reasons, the President of the Board of Trade is being quite unrealistic about the probability of genuine independence. The other day, in answering Questions in the House, the right hon. Gentleman made a point about my right hon. Friend the Leader of tae Opposition and suggested that when the National Film Finance Corporation was established, it was not the intention of the Labour Government that it should engage directly in matters of production or distribution. When, however, one looks at the speech of my right hon. Friend the Leader of the Opposition in July, 1948, it is clear from what he said that the two reasons for establishing Government finance in film making were, first, a balance of payments question, and secondly, that stability could be introduced into independent film production. My right hon. Friend went on to say that at later date it may be practicable for the Corporation to help in financing other experiments in methods of production and distribution."—[OFFICIAL REPORT, 22nd July, 1948; Vol. 454, c. 587.] It was clear that this was intended to be a flexible instrument which could be adapted to the changing needs of the cinema industry.

We all know very well that the situation in the industry has changed considerably since 1948. It is no fault necessarily of the monopoly interests concerned, but is an historical progression, that the pressures of monopoly in a relatively declining industry have intensified. We believe, therefore, that there is the strongest possible case for maintaining a public stake in the company.

The other reason which has been advanced, apart from the doctrinaire one, for selling outright has been that the National Film Finance Corporation is in need of money and that, therefore, it must realise its capital assets to obtain current finance. This, surely, is a most unstatesmanlike way of proceeding. If the Government were serious in their concern for the film industry, why, for instance, did the National Film Finance Corporation, as can be seen from its report, have to wait several months before it could get back the £591,000 paid over by British Lion last spring and which the Corporation did not get its hands upon until well into the summer? The worst possible time for the Corporation was when the President of the Board of Trade was Chief Whip in charge of Government business and owing to the mismanagement of their business in 1957, there was a period when the powers of the Corporation lapsed entirely because the Government had not caught up with the necessary legislation.

In paragraphs 27 to 29 of its last available report, the National Film Finance Corporation makes a strong case for an increase in the money available to it because of the changing conditions in the industry. I do not wish to go into that particularly, but I repeat that in our view, if the Government are serious about assisting British film production, to make the National Film Finance Corporation sell its capital assets is not the most statesmanlike way to go about things.

I have said enough to make plain our general attitude towards the sale and I should like, therefore, to come to the other main point concerning British Lion, on which, I hope, we will have enlightenment from the President of the Board of Trade: that is, the conditions and safeguards which he proposes to establish. Even on the Government policy of outright sale, we have had the assurances of the Minister that there will be certain conditions and safeguards. Mr. Terry, of the National Film Finance Corporation, said that they were to be published tomorrow, but I trust that the right hon. Gentleman will at least do us the courtesy of giving them to us tonight. I hope, therefore, that he will give a straight answer to some of the questions which I wish to put to him.

First, are all the conditions to be published and made public so that every bidder will know precisely what they are and there will be no question of slanting them as between one bidder and another? This is extremely important. Secondly, will the right hon. Gentleman assure us that another recommendation of the Cinematograph Films Council will be observed, namely, that it shall be a condition of sale that, whoever buys British Lion, should he at any time wish to dispose not only of his entire interest, but of any part in it, either in shares or in capital assets—in particular, Shepperton Studios—shall give the National Film Finance Corporation the first option of buying either the shares or the property? This does not necessarily mean that the Corporation would wish to exercise that option—it might say that it was not necessary—but it is important to have this pre-emption clause written into any contract of sale.

I have mentioned Shepperton Studios. We have been told at various times that their maintenance for film production would be a requirement, but as we have had so many obiter dicta from Mr. John Terry I prefer to have it from the Minister. We were told that Shepperton Studios would have to be maintained provided that they did not show a loss. It is easy to manufacture a loss—there is nothing simpler—or one might have a real loss. It might, nevertheless, be in the public interest that Shepperton Studios should be maintained as studios for film production—I am not saying that there should not also be television production, which there has been—that they should not be sold off, for example, to property developers and that this should be specifically included in any conditions of sale.

I wish to ask one or two questions about the criteria to be observed and not the legal formulæ. We have been told from time to time that whoever is to be regarded as the successful bidder must show the necessary financial strength. Obviously, he must be able to find the fixed purchase price; it is not an auction, but a valuation. Clearly, any suitable person must have the possibility of further resources, because it is no good merely buying the company; one must also be able to help to finance further production. Is anything specific being laid down as a condition for this, or is it simply a matter for subjective judgment—one trusts at least by the President of the Board of Trade, and not just by the National Film Finance Corporation?

Then we are told that those concerned must have "skill in management". No one could quarrel with that in general terms, but I am extremely anxious about a more particular aspect. "Skill in management" can mean more than one thing. It can mean skill in financial management, which is very proper and necessary, but it can also mean judgment of films and film production. This is where a great deal of the anxiety lies. It is extremely important if British Lion is to fulfil its proper function that it should not only have financial stability, which clearly is desirable, but that it shall be in the hands of people who will bring confidence to the live, vigorous British producers, people by whom they are prepared to be judged. If this fails and if it is handed over to someone for whose judgment they have very little respect, serious damage can be done. The Minister is looking worried, but he has got himself into this position.

The Secretary of State for Industry, Trade and Regional Development and President of the Board of Trade (Mr. Edward Heath)

indicated dissent.

Mrs. White

If the right hon. Gentleman is not worried he should be, because he has a difficult choice to make.

Another point which has been raised is the connection with existing circuits. I quite agree that "connection" is a difficult word. Obviously one has some concern if one merely books a film with a circuit. That is not what we mean. We are tremely anxious that there should be true independence of the existing circuits; in other words, that there should not be interlocking interests which would bring British Lion into the orbit of the existing circuits.

If that happened there would be no point in this whole operation. We are also concerned that British Lion should remain in British ownership. This is not that we are being jingoistic. There is, after all, considerable American finance now available for British film-making. There is no reason why that should be extended by selling British Lion to American interests. I hope very much that British Lion will remain British.

We also hope that before coming to any decision the Minister will obtain from anyone who is being seriously considered a complete declaration of his interests, not merely in film production or distribution, but also in television or theatrical agencies, because there are these interlocking interests in the world of entertainment. Those who know anything about it are most anxious that the monopoly over people as well as over money and cinemas should not be extended.

It is most important that before coming to a decision—I repeat that it is not an easy one—the Minister should take all these factors into consideration, because we believe them to be of the greatest importance for healthy British film production. I think it only right, without mentioning any names, because one does not want to be personal, to put on record the considerations which we know from our knowledge of the industry and people working in it are in the minds of producers, stars, actors, other distributors, and so on.

I want to say a word or two about the more general state of the industry. It is largely because there are anxieties about the position in the British filmmaking industry in general that we are particularly anxious about what is likely to happen to British Lion. I am not pretending for a moment that the right or wrong decision over it will make all the difference to the future of the British production industry, but it can make a great deal of difference. On the other hand, there are other even more important matters which need the attention of the right hon. Gentleman and on which we ought to be told tonight what his attitude is. As he knows, one of the most baffling problems in the film industry at the moment is the increasing booking power of the two circuits and the diminution of independent exhibition, and thereby the diminution of outlets for independent producers.

The proposal has been made, and was endorsed by the Cinematograph Films Council, that an attempt should be made to see whether some third booking force could be established in the film industry. Recently the right hon. Gentleman has said a great deal about monopoly, the desirability of competition, the wind of change and so on. Has he brought that about in the film industry? If he could solve that problem I should have a great deal of respect for him. He is here confronted with a very difficult monopoly situation. It seems that the Cinematograph Films Council has advised him that it believes something could be done, but, apart from making a few technical proposals, it has failed to make detailed recommendations about how this could be carried out. In effect, the Council has passed it over to the Board of Trade.

I should like to know whether the right hon. Gentleman is considering having a further inquiry into this matter. As a member of the sub-committee of the Films Council, I think we did a useful job in a relatively restricted sphere. I do not think we were capable of undertaking the sort of inquiry which would be necessary to take seriously the need for a third booking force in film exhibit- tion I do not think the Board of Trade is capable of that either.

Mr. John Davis suggested that we needed a Beeching for the film industry. We might have rather mixed feelings about that, but there is something to be said for having a quick, although detailed, inquiry by some person outside the industry, an examination by someone who certainly is competent and wants the industry to survive and to prosper, but who is not looking over his shoulder at his own interests or his master's interests in bingo, bowling or property deals. We want someone with the kind of mind which Lord Gardiner has, with an accountant on the financial side. Unless we can get that kind of evidence it will be very difficult to see how far this serious proposal will be practicable.

I hope that the right hon. Gentleman may take this point seriously because at the moment we have a great deal of complaint and allegations made by one side or the other, and they are difficult to prove one way or the other unless we have the evidence and access to figures. Real and hard evidence is needed in some of these situations. At present allegations are made by the independent producers that films are being held up. The circuits deny that, but in fact there have been one or two films which were held up and which are proving reasonably successful. The gravamen of the charge is not so much that they are held up but that other films—American-financed films for the most part—have been allowed preference and better booking potential although they are inferior films, not only aesthetically but financially.

This needs to be brought into the open and examined. When I say it should be brought into the open, I do not necessarily mean that it should be published abroad. We are told that of the 10 top-showing films in a recent period in the Rank system seven were British. Of the lowest earning, three were British and seven were American. That was the proportion in reverse. In A.B.C. the figures were similar. This adds validity to the suggestion that the two circuits are so closely allied with American interests that British film producers are not kept out, but are not given the kind of terms to which their quality entitles them.

Our case is straightforward. We believe that there should be public participation in British Lion. We wish to know what the safeguards are so that we can judge whether they are adequate or not. We think that if the Government are serious about British film production they should strengthen both the board and the finances of the National Films Finance Corporation. There is a very strong case for an independent inquiry to examine adequately the proposal for a third booking force. Meanwhile, we hope very much that, whatever decision the Minister comes to on the future ownership of British Lion, he will not shatter the confidence of the live, vigorous, creative young British film-makers by making a choice which would put them in thrall to mediocrity, to foreign finance or to interests whose real concern is not with film-making at all, but with other moneymaking ventures.

Unless we can feel satisfied on all these points, we shall feel obliged to divide the House at the end of this debate.

7.50 p.m.

The Secretary of State for Industry, Trade and Regional Development and President of the Board of Trade (Mr. Edward Heath)

The hon. Lady the Member for Flint, East (Mrs. White) has made it quite plain that she and her hon. Friends are entirely opposed to the Government selling British Lion.

The hon. Lady started by saying that had it not been for the adjournment debate just before Christmas this company would undoubtedly have been sold. All the arrangements would have been tied up, and it would have been sold without conditions and without anybody knowing anything about it. There is no justification whatever for that remark—absolutely none. Any arrangements for the sale of British Lion must have been given to the House and made public. It has always been the intention that the independence of British Lion should be maintained, although British Lion might be sold. I hope that I have made that absolutely plain.

The hon. Lady said that she objected to the sale of British Lion and accused those of us who are responsible for the National Film Finance Corporation of being doctrinaire. She gave absolutely no reasons why she objected to the sale of British Lion, with the exception of the question of the capability of independence, and with that I wish to deal in some detail. I hope that for her part she is not taking a doctrinaire view about this and saying that the Government must remain in British Lion even though there are ways of maintaining its independence. That is the crux of the argument on which we are engaged in this debate.

I should like to give some of the background to this matter because the hon. Lady has mentioned it. When it comes to the question whether the Government ought to remain in British Lion, in the way that she wishes, or whether it should be sold, one should ask oneself; what is the purpose of the Government being connected with the film industry at all? The purpose was very clearly set out in 1949 in the Cinematograph Film Production (Special Loans) Act, which set up the National Film Finance Corporation.

Its purpose was then set out quite clearly. It was to make loans for the financing of film production or distribution. That was the position which the present Leader of the Opposition defended in the House. I have looked up what he said at the time. I think that it bears repeating. He said: The scheme set out in the Bill starts from three points: First, we consider it essential that working capital must be found to enable the industry to carry out the production programme of which it is capable. Secondly, I think it is necessary to affirm that the industry's financing must be on an entirely self-liquidating basis. There must be no question of a subsidy for film production. Thirdly, that the special emergency arrangements proposed here should be temporary, and that in a resonable period when the industry has built itself up again and established confidence in itself it should be able to float itself free of the special arrangements and revert to more normal methods of financing."—[OFFICIAL REPORT, 2nd December, 1948; Vol. 458, c. 2186] That was the basis on which the Government provided money for the film industry. As the hon. Lady knows, there was never any intention that it should go into a company engaged in production and distribution. I will come later to the question whether the circumstances have so greatly changed that this is the only way of dealing with this new circumstance.

As I explained to the House on 16th January, the Government got into British Lion, as one might say, by accident. The reason is also well known, that having lent the present British Lion's predecessor about £3 million, which it had lost, they acquired the firm as the only way of saving anything from the wreck. The loan of £3 million had been authorised from 1948 to 1950 because at that time the cinema was the main entertainment of the public. Its screens were dominated by American films that involved a dollar trade which we could not at that time afford, so British film production had to be increased and the old British Lion, which was the main distributor for British films, had to be kept alive.

After the loss of the loan a Receiver and Manager was put into the old firm, which was then wound up, and the new company, with £569,000 new capital contributed by the National Film Finance Corporation, began its operation in 1955. Then the National Film Finance Corporation repeatedly said that it was its intention to return the company to private hands, as soon as it was prosperous enough to attract private investment. This was made clear in the annual reports for the years ended 31st March, 1957, 1958, 1959 and 1962.

Therefore, the position of the National Film Finance Corporation has been consistent. The Government have also made it clear that they endorsed this policy that when a suitable occasion arose it should be returned to private hands and should be able to attract private investment. There has never been any question, so far as I understand it, from either side of the House, of using Government money to subsidise the film industry.

The question is: is this the time at which British Lion should be returned wholly to private enterprise? The view of Her Majesty's Government is that the reversion of its ownership to the National Film Finance Corporation, which came about before Christmas because of the use of the options, provides a suitable opportunity for this to happen. The hon. Lady asked whether it would not be possible to hold on to this company until some action had been taken either on the Film Council's report or on the general question of monopolies, but I do not believe that what would be an interim arrangement—if that is what she really proposes—while action is begun about monopolies, would be a good thing for the company or for the health of the British film industry.

Therefore, the question that we have to examine is whether or not this is a suitable occasion for British Lion to be returned to private enterprise and to raise private capital, at the same time maintaining its independence. Our view is that it is.

The hon. Lady quite rightly, if I may say so, paid tribute to the five executive directors of the company, and I thoroughly endorse that. The story of their success has already been told, and I related it in the statement I made to the House in January. The company was in the doldrums at the end of 1957, when the five executive directors were appointed. There was a sale to them then of the £9,000 worth of deferred shares and, in 1961, the option arrangements were made so that they could carry on the management for the further period of three years.

It was these option arrangements that enabled them to realise in cash the results of their good management. I believe, also, that they have made certain sacrifices for the good of the company—in the means of production of their own films, in the fees they took, and in other ways—and they have reaped the rewards of their initiative and enterprise, their skill in management, and the sacrifices they were prepared to make.

I told the House that the five executive directors had, between them, realised the sum of £795,000. At the same time, I should like to emphasise the financial aspects of the arrangement for the Government. The Government have recovered their investment of some £590,000 which was put into the company; in other words that has gone back to the N.F.F.C. The Government will also realise the £795,000 on their own £9,000 of shares. We must, therefore, look fairly at the return to the N.F.F.C. and the Government, in addition to the return to the directors who have been working in the company for this period.

I was asked why the sale of British Lion should take place when the company is prosperous. It is true that, the announcement having been made—in accordance, again, with the former policy of the Leader of the Opposition—that it should be returned to private enterprise, attempts were made to sell the company between 1957 and 1959, when it was not prosperous, and, in fact, in one year when it was making a very heavy loss. It then attracted no worthwhile bids of any kind, and it was not possible to sell it. The fact is that now the company has been able to show that it is successful there are seven groups who are buyers in the market for that company. That endorses the view that, if the company is to be returned to private enterprise, this is a suitable occasion on which that should happen.

Let me turn to the general question, and the reasons for returning British Lion to private enterprise. The fact is that British film distribution is a highly individual and speculative business, and is bound to remain so. In our view, it is not one in which a Government should normally participate. The taxpayer is already financing, and will continue to finance, film production through the National Film Finance Corporation. That, I believe, is a justifiable procedure and one which we have carried on during the term of this Government. I do not believe that the industry can reasonably expect more public money by way of a permanent investment in British Lion, nor do I think it a suitable means of investing public money.

Secondly, as I have already explained, the ownership of British Lion is an accidental matter, and it has always been the intention that the company should return to private hands when possible.

But, thirdly, we believe that it is for the good of the industry that it should stand on its own feet. Great changes are taking place today. The full impact of television—possibly, of pay-television—on film making has yet to be felt. The making of films for cinemas will continue to enjoy very substantial support by means of the Eady levy, which increases British producers' commercial returns in the home market by about 60 per cent., by the screen quota, and by finance from the N.F.F.C. This is the contribution which the Government and the taxpayer make to the film industry.

I also believe that the ownership of British Lion, subject to conditions that I shall mention a little later, by enterprising private interests is the best equipment that it can have for facing these changes. It will also have the advantage that it will bring substantial new private funds into the industry. The hon. Lady and, I know, some of her hon. Friends, dismiss this rather lightly, but I believe that it is important that these resources should be brought from private sources into the film industry, and as the N.F.F.C. has its own source of finance, which the Government arrange, this, will enable, as the hon. Lady has suited, the N.F.F.C. to use for the industry's benefit such of the receipts from British Lion as may be necessary in the light of the discussions I shall be having with it.

Let me turn to the main argument produced by the hon. Lady—the independence of British Lion. She has said that the Government's stake should be retained in the company because only in this way can the company's continued independence be ensured. It is perfectly true, as the hon. Lady has said, that many of those who came to see me emphasised this point but, above all, they emphasised the fact that they wanted to see the continued independence of British Lion and that is the objective to ensure. In that case, we are both agreed about the desirability of maintaining the company's independence, but I believe that the independence of British Lion depends on the right selection from among those groups now seeking to buy it, and upon the conditions that we propose to stipulate for its purchaser.

Perhaps I may now say something about these points. The hon. Lady asked me a number of questions, and I think that she will find that they are covered by the points I shall put before the House. They are the points that the N.F.F.C. will be able to place before all bidders. There is absolutely no desire that any of this should be slanted in any way—if I may say so, it was rather an unhappy thought of the hon. Lady's that that should be the case with the National Film Finance Corporation—

Mrs. White

No. With great respect, what was happening with Mr. Sydney Box before Christmas? It was not thrown open then. Negotiations had been conducted with him to the point that he believed that the National Film Finance Corporation was ethically bound to continue them. If conditions could have arisen in which he believed that that was so, surely it was not open to all, and it had not been made at all clear that that was to be the position.

Mr. Heath

At that point, which was the time of the debate, Mr. Box was the only person who had approached the Corporation, as I announced in my statement in January.

Mrs. White

But the Corporation had entered into negotiations with him.

Mr. Heath

The Corporation had authority to enter into negotiations with him, but that did not exclude its entering into negotiations with others, and that has taken place. The facts speak for themselves.

Mr. Douglas Jay (Battersea, North)

Is the right hon. Gentleman aware that The Times announced that the sale to Mr. Box was an accomplished fact? Although The Times is not necessarily infallible, surely that announcement was enough to arouse considerable anxiety.

Mr. Heath

The right hon. Gentleman may prefer to believe what he sees in the Press, but that has never been an accomplished fact. No sale can take place without my authority, and there is no question of reports of that kind being accepted as the truth.

Let me now come to the points that will be put to those wishing to purchase the company—

Mr. Eric Lubbock (Orpington)

Is it not true that Mr. John Terry said, and was quoted by the Daily Telegraph as saying, that … unless and until these negotiations fail"— that is, the negotiations with Mr. Sydney Box's group: we are not offering the business elsewhere. We are not auctioning British Lion"?

Mr. Heath

I cannot answer for what Mr. Terry said, or for newspaper reports. I am answerable for the authority I give for the sale of this company, and that is what I am putting to the House.

Mrs. White

Can we get this quite clear? It is perfectly plain from what Mr. Terry is reported as having said that he was under the impression that he was enabled to negotiate, and there was no suggestion at that time that he had to find out from the Board of Trade what conditions were acceptable. At what point did the Board of Trade tell him that he had to go to the Department, that his conditions would be vetted, and that it would not all be tied up?

Mr. Heath

It has always been the case that any proposal for the sale of the company must come to me. There can never have been any question about that, and that was fully recognised by the Chairman and by the Secretary of the National Film Finance Corporation. They were absolutely clear about it, and there can be no question about that whatever.

I now wish to put before the House the points that are to be put to the groups that wish to purchase the company. It is intended that, probably by the device of holding a single special share in the company, the N.F.F.C. should retain certain rights. These rights will include the right to veto the company's voluntary liquidation, the right to veto the sale of its undertaking, the right to veto the repayment of any capital to shareholders and any disposal of its interest in Shepperton Studios Ltd., except in defined circumstances which would be in the judgment of the special shareholder.

It will also be ensured, probably by the same device, that a sum equivalent to any tax relief enjoyed by the company as a result of the use of the present accrued tax loss will revert to the National Film Finance Corporation. The Corporation will also have the right to nominate a director to the board so that the Corporation and the Government will be fully apprised at all times of the conduct of its affairs.

These provisions, which will be permanently effective, should ensure that no purchaser of British Lion shares can strip it of its assets or do anything but continue to operate it as a going concern. It will also mean that no cash made from an authorised sale of any assets can be removed from the business without the agreement of the N.F.F.C.

In addition, the purchasers will be required to give positive assurances to the National Film Finance Corporation that British Lion will continue to provide the facilities for independent producers which it now gives and continue to maintain an independent position.

Those are the conditions which have already been made known to the seven groups which had applied to buy British Lion by the closing date, 31st January.

The company is being offered at a price based on the independent valuation of 30th September. This is the price at which the N.F.F.C. bought out the half share of the executive directors. Therefore, there is no question of auctioning the company to the highest bidder. It means that the National Film Finance Corporation can, in referring a proposal to me, judge the other qualifications, some of which the hon. Lady mentioned, and, of course, it will be bound to take into account not only the financial strength of a group in purchasing the company, but also the resources which it will have for operating the company, according to the way it gives its undertaking.

The Corporation can also form a judgment on skill in management and film production. Also, it will be able to deal with the point the hon. Lady raised about there not being any connection with the existing circuits. I am quite certain that the Corporation has full information about those who are members of the groups and putting in applications for consideration as purchasers of the company.

I hope that that has answered the hon. Lady's questions. I have set out the situation and the means by which we wish to ensure the continued independence of British Lion.

Mr. George Wigg (Dudley)

Will the right hon. Gentleman tell the House when these conditions which he has just detailed were first made known to the seven entities?

Mr. Heath

I have just said that all these conditions have been made known. I canont give the exact date. If I am given the leave of the House to say a few words later, perhaps I can give the date on which they were informed.

The N.F.F.C. has informed me that all the prospective purchasers will, in the next few days, receive an accountant's certified analysis of British Lion's financial position and the necessary legal documents embodying the conditions and assurances. There will then be reasonable Lime to study these, but, of course, as I told the House in January, speed is important. We do not wish film production to be held up. We do not want the company's staff to be left in uncertainty, and we do not want the value of the company to be in any way jeopardised.

Mr. Wigg

If the right hon. Gentleman is not sure when the conditions were made known, and he is only now telling the House that the detailed figures will be available, how does he know that, if he had really set his mind to getting as many runners as he could and on circulating all the information, the seven would not have been seventy? Or is the true picture that he started with one and has been forced only by public opinion to get seven runners instead of just Mr. Box?

Mr. Heath

Not at all. This has been publicly known, and anybody who wished could apply to the National Film Finance Corporation. As I told the House, one had to have a date by which applications should be made; it was only reasonable to fix a date and, of course, other people have considered whether or not they should form or join a group Some, naturally, have withdrawn. There are at present seven groups, and they are being given this information.

Mr. Jay

If it has been Board of Trade policy all along to make this general offer, why did the Parliamentary Secretary say nothing about it to the House in the debate on 20th December?

Mr. Heath

It was quite apparent at the time of that Adjournment debate that it was not to deal with British Lion; it was an Adjournment debate on the general film situation, was it not?

Mrs. White

No. With respect, I let officials of the right hon. Gentleman's Department know on the Monday of that week—the debate was on the Friday—that I proposed specifically to raise the matter of British Lion.

Mr. Heath

The hon. Lady will recall that this was a very early moment after the arrangement regarding the options and the opportunity given to the five existing directors to consider whether they themselves wished to exercise their second option and buy back the company. One could not expect my hon. Friend the Parliamentary Secretary to go into all the details of this question at that time.

Mrs. White

But, with respect, the five directors, according to their contract, had six months to consider their second option. They did not have six months to consider it; they had a fortnight.

Mr. Heath

There was no question of six months—

Mrs. White

They never had it.

Mr. Heath

—as far as the option was concerned. As the hon. Lady knows, the chairman of the N.F.F.C. informed the chairman of the company on 27th November of his intention because he was already convinced, as I have said, that the directors did not wish to exercise their second option, so it was quite right that the N.F.F.C. should exercise its.

I have informed the House of the details of the arrangements which are to be put to the groups. The groups will receive the accountant's certified analysis of British Lion's financial position. I hope that this matter can then be dealt with speedily.

I have referred to the arrangements for dealing with the tax loss, which does not become the property of the group buying the company. In this connection, I wish to correct a slip which I made on 30th January when, in answer to a supplementary question from my hon. Friend the Member for Louth (Sir C. Osborne), I said that none of the loss had been applied before arriving at British Lion's profits in recent years. This was incorrect. What I was referring to was the proposal I have just mentioned relating to the tax loss for the future company.

The other argument used by the hon. Lady is that the Government's presence in British Lion is necessary to act as a brake on the two great circuits. This point has been made to me by many people, but I must confess that they have never been able to explain why an N.F.F.C. investment in British Lion has been effective in acting as a brake on the circuits. This is a point to which I have given great care and attention, and people have endeavoured to explain it. It may be that it is a psychological point. I do not know. However, it is a matter with which I now wish to deal.

The hon. Lady has referred to the report of the Cinematograph Films Council, and she has asked me for my comments on it. She will accept that the Council has been considering this matter since the summer of 1962. Only in the last few days has it come to its final conclusions on the report. So far, these have not been formally remitted to me; I have not received them from the chairman of the Council. Therefore, to ask me to give my comments on the sub-committee's report and on the recommendations is, to say the least, premature. This is not to say that I am not most anxious to deal with the matter as speedily as possible.

I have noted the suggestion of the hon. Lady that there ought now to be a further inquiry into some of the questions with which the Council has dealt. Naturally, I shall give them the fullest consideration. I cannot tonight commit the Government to doing so. What we shall do is to give the fullest consideration to the report and the Council's comments upon it in order to deal with the question of monopoly.

I understand that the Council has said that it would like more competition brought into the industry, and it wishes me to examine the feasibility of this. As I understand it, what the Council says falls far short of finding an abuse of monopoly. I think that this was really what the hon. Lady had in mind when she said that it was very difficult, on many occasions, to find the hard facts on which to form a judgment on some of the accusations which were made. Again, she is quite right. The problem is that we are dealing with this situation in what is still a steeply declining industry.

I shall give the House just two or three figures. During the last 10 years, including 1963, admissions to cinemas have fallen by about 70 per cent. The number of cinemas has fallen by 51 per cent., and the number owned by the two major circuits has fallen by 34 per cent.

The first assurance I can give is that we shall pay the greatest attention to the recommendations of the Cinematograph Films Council on the question of monopolistic practices. My second assurance is that if the Government's presence is important, the Government's presence will still remain through the National Film Finance Corporation. As I have said, they have a member on the board. They have rights which will be enshrined in the special share. They have a firm arrangement there. Also, the National Film Finance Corporation will continue to have a stake in a large proportion of British independent film production. That is what the Corporation is there for. It will retain that, and it is a very important stake indeed.

During the five years to March, 1963, the Corporation has been responsible for financial support to 57 first-feature films. During the same period British Lion directly invested money in 11 films. It is, therefore, clear that because of this stake at the production stage, the Corporation has the strongest incentive to resist any possible discrimination against independent production by the so-called duopoly … or monopoly, if hon. Members prefer so to describe it—because of its investment in independent film production anyhow and the scale on which it is doing it. Therefore, those who are anxious for psychological reasons, which I respect, or for reasons of artistic integrity, which, again, I respect, or whatever the reason, think that there should be this presence, will have it in the form of the National Film Finance Corporation.

I take this opportunity of thanking all of those who have given me the benefit of their advice in the last few weeks, covering almost the whole spectrum of the film industry. I found the discussions extraordinarily interesting and, indeed, fascinating. I appreciate the trouble they took to brief me on the intricacies of what I think even the hon. Lady the Member for Flint, East must agree is a highly complex industry. I hope that they will feel that in the arrangements which I have just set out for the sale of British Lion we have taken note of many of the suggestions which they put forward. I hope that they will agree that in this way, having reached a conclusion now, the company can best serve the British film industry by returning to private enterprise. I repeat that we have taken note of and embodied the suggestions they made.

The hon. Lady mentioned the advice that I received from the Cinematograph Films Council. I noted it. I read in the Press that it was by a narrow majority. Of course I pay attention to the advice. I am grateful to the Council for its thinking about this problem. It is seldom in the past that my predecessors have not felt themselves able to accept most of its advice, but in general it advises about matters which are internal matters for the film industry. On this occasion it has advised about a matter on which there are wide opinions and in which considerations of the taxpayers' interests are also involved.

I hope, therefore, that I have been able to explain to the House why we believe it is right that British Lion should be returned to private enterprise and why we believe that this is a suitable occasions for it to happen. I hope, also, that I have submitted to the House reasonable arrangements for ensuring the future independence of British Lion and arranging that it should continue to be of service to independent British film production, which is what we all want.

8.23 p.m.

Mr. Maurice Edelman (Coventry, North)

I cannot help feeling that no one on these benches and very few who work in the industry will be reassured by what the right hon. Gentleman has just said. He has belatedly produced a series of conditions for the sale of British Lion. He speaks now of "conditions". In the Adjournment debate his Parliamentary Secretary spoke of assurances, saying: The N.F.F C. has agreed with my right hon. Friend that it will be a condition of sale of British Lion that the purchaser will give firm assurances that the facilities which the company now makes available to independent producers will continue to be made available to them, and that the company will continue to be operated as a third force in the industry."…[OFFICIAL REPORT, 20th December, 1963; Vol. 686, c. 1692.] That last is now made a "condition," but I do not believe that such a condition, that British Lion in private hands shall secure the independence of independent film producers—even under the conditions which have operated in the past—is enforceable. Looking at the list of bidders for the company, and thinking of the company in private hands, and taking into account what has been said about the guarantee of a Government presence in the full sense, I cannot feel that those who will own British Lion in future can be trusted to operate the company under the same conditions as provided some security in the past.

Listening to the right hon. Gentleman, I was not surprised that his whole test of the value of the transaction was what its profitability was likely to be. It is extraordinary that in the whole of this discussion on the film industry the only test has been profitability, when what we are really concerned with is a great national asset, an ingredient of our national culture and something which concerns not only the livelihood of many thousands of people in the industry but also an important art form.

Mr. John Davis, of Ranks, has described what he considers to be the function of the cinema. He says that that function—I am summarising—is simply to provide entertainment. I can imagine that if that is the sole standard by which the value of the cinema is to be judged, it is not surprisng that the cinema as a whole has fallen into the hands of tycoons, accountants and unsmiling distributors who lunch daily at Les Ambassadeurs. That kind of person is not the person to be entrusted with the cinema as an art form.

For these reasons, I feel that we should examine the whole basis of this transaction, which has been carried out in an indecent haste, and seems to me to be a rare example of a shotgun marriage in which the bride rather than the bridegroom has been prodded to the altar. We have the example of British Lion, unwilling and reluctant, as expressed in the words of its statement. It is unwilling and reluctant first to be taken over and then to be sold in the form projected by the Minister. Now, after the extraordinary situation in which, first of all, it seemed as if the whole matter was cut and dried and the company was going to be handed over to Mr. Box, the Minister belatedly comes along with a set of conditions which I believe to be unrealisable and unenforceable; and now we have the spectacle of another six bidders suddenly appearing on the scene.

I am inclined to offer a few observations on some of the bidders, but I will refrain from doing so because I do not want to be prejudicial even in this situation. But I think it would be proper for me to quote what Mr. John Bloom is alleged to have said. When the terms of sale were announced, he is reported to have said that he could not resist the temptation. I can well believe that to be the case, because there is a great temptation in the sale of this company. I am absolutely convinced that the company has a large quantity of concealed assets. It is a company which has great resources. This is illustrated even by the price at which the directors were paid out.

It is a company which because it has, in a sense, a monopoly of independence is likely to have a very great future. If those who acquire the company are going to apply strictly material and commercial standards of profitability, which the Minister seems to admire so very much, I can see that in an affluent age and at a time when the cinema may once again be in a period of great expansion, this is a company which is certain to attract the attention of the take-over bidders, of the people who have become so expert at diagnosing the assets hidden within a firm and estimating its profitability, the people who are completely indifferent to the cultural values with which, among other matters, the cinema should be concerned.

No one has spoken in all these debates of what the cinema means to the nation as an art form. If one were to translate the concept of a cinema into terms of books, how improper it would seem if the only publishing house to remain independent were to be sold in such form and on such conditions that one could be absolutely certain that those who were going to exploit it would merely exploit it in the interests of profitability and if the test, in the words of Mr. John Davis, were merely going to be the entertainment value of books and they were completely indifferent to the artistic enterprise and cultural purpose of those concerned with books and the cinema as media for the arts.

Among those who are bidding for British Lion I see that leading one of the consortia is the name of a distinguished American producer. I certainly would not be in favour of nationalism in the arts, but I believe that it has been a basic concern of all those who have been interested in British films ever since 1926, when the Imperial Conference first stated that to produce a thriving British industry was a concern not only of Britain but of the Commonwealth as a whole. Ever since that date it has been recognised that it is desirable to have an indigenous British film industry and that it should be assisted and cultivated by some form of protection appropriate to the times.

Since we have had the Eady levy, we have had the incursion, welcome in many respects, of certain American film-makers in Britain. They have done extremely well and have provided employment, and for these reasons I welcome the part that they played. On the other hand, in the interest both of encouraging domestic talent and a domestic film industry, I think that it would be extremely undesirable if this third force, as it has been called, were to come under American domination, or any other domination from abroad, which would have the effect of limiting and restricting in any way the cultivation of native talent in Britain.

It may be said, to take a purely accountancy view, that if we have American interests in British films we shall attract American capital which will be ploughed back into British films and this will be all to the good of British employment. Heaven knows that at this time many of my friends in the film industry are deeply concerned precisely on this point.

The Minister talked about decline in the industry. I am concerned about increasing unemployment among filmmakers, not film producers as such. I am thinking of the cameramen, actors and actresses and all those who are directly concerned with the actualities of film production. There is a great decline in employment among them. We are concerned today, therefore, not only with the sale of a company but with an important economic element in the life of the country.

If there were an American interest it might be argued that this would provide employment. I would not be against that, if only on the condition that there was no alternative means by which employment could be stimulated from our own resources. The Minister said that the Government are not in the film industry and do not want to be in it and that for that reason they are concerned with selling British Lion, but I believe that the Government ought to be in the film industry.

Mr. Heath

With great respect, I defined the part which I thought the Government ought to take in the film industry and that was the part agreed by both sides of the House, as exemplified in the N.F.F.C., which makes loans for the production and distribution of films. That is different from being in the company which should do it.

Mr. Edelman

I said that. The right hon. Gentleman is understandably applying a purely financial test as the preposition in the film industry. I believe that we have to find something more than a purely financial test. I think that there must be something more than a purely financial participation. Just as we have areas of patronage which are highly desirable—the British Council, the Arts Council, and bodies of that kind—so I believe that in the film industry, which is concerned not simply with the medium of entertainment but the medium of culture, the Government should have a much more direct and active interest.

I would ask the right hon. Gentleman to revert to the statement of Mr. John Davis of what he considers to be the desiderata of film production, and he will see from that that he regards one of them as being culture in the widest sense. If British Lion is to be sold to a purely commercial interest whose standards will simply be the standards of profitability, then indeed I think that the British film industry's concern for the film as an art medium will certainly die. It may linger on; it may indeed form part even of an expanding medium of pure entertainment; but in terms of national culture, in terms of projecting a picture of the nation, I believe that the sale of British Lion to a purely commercial interest will do great damage.

Mr. Heath

Is the hon. Member suggesting that British Lion is being devoted purely to the purposes of the film as an art medium? I gave the figures and demonstrated very clearly indeed that its performance had been one of profitability in which it had been eminently successful.

Mr. Edelman

I am not suggesting for a moment that there is anything inconsistent in a film company of any kind being concerned with its medium as an art medium and being concerned with its products as a medium of profitability. I do not think that there is any inevitable inconsistency between the two. There need not be. What I am arguing, and perfectly clearly, is that a company which is primarily, indeed exclusively, concerned with its commercial interest is a company which is exclusively concerned with profitability and cannot be a company which is prepared to tolerate experiment, prepared to tolerate the enterprising young producer who wants to try to produce a new kind of film.

I do not believe that is so, and even if it were argued that in the past the operations of British Lion have been so restricted as not to have produced work of that kind—which I do not suggest for one moment, but if it were—I still say that looking at the future of the film industry from the accountancy figures which seem so to preoccupy the mind of the right hon. Gentleman, looking towards any possibility of an expanding film industry in which there will be room and opportunity for the young men and women in the film industry to exercise their talents, to experiment, do the sort of work which is certainly not being done in the industry today and which I say the right hon. Gentleman should consider it his duty to encourage—

Mr. Heath

If the hon. Member keeps on regarding me as dealing with this only on an accountancy basis perhaps he will recollect that British Lion in three years dealt with 11 films and the N.F.F.C. 57 films. I said the N.F.F.C. did it in five years. It was three. Those 11 films of British Lion for the most part were very successful, and it is the N.F.F.C. which has been financing films of the kind which the hon. Gentleman wants to be encouraged which has been making losses.

Mr. Edelman

I gladly accept what the right hon. Gentleman says, but I do not believe for one moment that it influences my argument, because my argument rests on a twofold basis. I am saying that finance is necessary to encourage the experimental kind of work I have been talking about, but in addition, I believe that direct participation of the Government inside British Lion to ensure that distribution and the showing of the films do take place is of equal importance and of equal validity.

What is the use of encouraging production of a film with the present monopolistic situation in which there are difficulties and delays in showing films? I asked the right hon. Gentleman a question about this on an earlier occasion and his reply was inevitably vague. As everyone knows, the truth is that Rank and A.B.C. are primarily—perhaps I am using a mild word—concerned as a vertical monopoly in looking after their own films and their own interests. Rank and A.B.C. give the best showing times for their films. They give preferential treatment to their films. Although they are theoretically forbidden—this is why some of the conditions enunciated by the right hon. Gentlmeman are unenforceable—to pencil in dates for future showings on their circuits, there is no doubt that they do so and deny the opportunity of showings to independent producers who are outside the so-called duopoly. If that is the established technique of Rank's, if these pencillings-in are the basis of some of its contractual relations in the exercise of its monopoly, we have to be very careful in scrutinising those to whom British Lion will be sold.

Mr. W. R. Rees-Davies (Isle of Thanet)

That argument cannot be right; surely it is a non sequitur. The whole trouble today is that the present set-up cannot get the showings it wants. How on earth will it assist the problem one way or the other whether the company is sold off to private enterprise or not? Surely, the only way to assist is to sell it to private enterprise and hope that the Government, who would be wholly independent and strengthened by the powers over monopolies that my right hon. Friend the Secretary of State for Industry and Trade will bring in later this year, will have the power to enable the duopoly to give some of the support to the then created independent company. If the hon. Member would apply his mind to this point, we might do something for the future of the industry and not the past.

Mr. Edelman

The hon. Member is in error. My argument was not a non sequitur. Its whole basis was that if there is a strong Government element in British Lion, Rank and A.B.C., although they have the habit of pencilling these things in, will be much more cautious and wary about doing it because of the presence of the Government interest in British Lion. It is precisely the absence of the Government element which is likely to encourage them.

The action which the right hon. Gentleman has taken has been done hugger-mugger in a rather hole-in-the corner manner. It has been rushed through with indecent haste. Only belatedly have the conditions suddenly been produced. The whole enterprise is something of which to disapprove, not only because of its content, but because of its form.

Because of the talent which lies in the young producers, directors, actors and technicians, our film industry potentially has a great future, but the men who are concerned with the financial manipulations and combinations of the industry are throttling it. They are men who are indifferent to whether the industry as such handles cinemas, bingo halls or bowling alleys. They are concerned merely with the test of profitability, but profitability directed not to the film as a medium, not to the constructive energies of those engaged in the industry, but simply to the interests of those who have a financial stake in their company. I believe that they are men of restricted taste, guided by material values, afraid to experiment and indifferent to artistic enterprise. They are men with a limited sense of public responsibility whose test and standard is profitability.

For these reasons, it is absolutely vital for the future of the British industry that the Government presence in a concern like British Lion, so far from being diminished and weakened as the right hon. Member has done, should be strengthened and reinforced.

8.45 p.m.

Mr. Geoffrey Johnson Smith (Holborn and St. Pancras, South)

I wish to be as brief as possible. I cannot agree with a large part of what the hon. Member for Coventry, North (Mr. Edelman) said. I could have understood his strictures if my right hon. Friend the Secretary of State for Industry and Trade had said tonight, "I intend to deliver British Lion to an unscrupulous group of private buccaneers who will produce a few films for the benefit of the duopoly which would be designed purely for profit without any regard for merit". It does not necessarily follow that a film made for profit lacks merit, but, accepting the hon Member's assumption that it does, that is the inevitable result. Hon. Members on this side would happily have gene into the Lobby with the hon. Member if my right hon. Friend had said that; but he has not said that.

The National Film Finance Corporation will remain in existence and will continue to do a very worth-while job. British Lion, restored to private hands, will have a Government watchdog on it. Let us suppose that he is a sneak, someone who will see that if British Lion gets a lousy, raw deal from A.B.C. or Rank, or both together, will come tripping back to my right hon. Friend's office and tell him. Where is the sanction? If Rank or A.B.C. want to prevent independent producers from showing their films, there is no deliberate sanction which we can impose.

However, I should have thought that, knowing that there was the Government watchdog on the British Lion private enterprise company, Rank and A.B.C., if they thought of getting up to some nasty tricks, would think again, particularly as they know that my right hon. Friend is a monopoly hunter. He is the Minister who will produce the blueprint, of a package deal, to streamline the Monopolies Commission and the Restrictive Practices Court. I should have thought that it would be very shortsighted of Rank and A.B.C. to behave improperly with British Lion, restored to private enterprise hands. They cannot be that stupid. If they are, my right hon. Friend could introduce legislation which would administer a thick stick very firmly on their financial behinds.

I am delighted with what my right hon. Friend said tonight. I came in a very suspicious frame of mind. That is perhaps a rather harsh thing to say, because I have a lot of respect for the integrity, intelligence and ability of my right hon. Friend to dissect even the most complicated problems, as he has shown in his handling of the Common Market negotiations. I should have thought that the film industry would hold no terrors for him. However, I say that coming, as I do, from the comparatively calm and peaceful pastures of television.

I was struck by some of the arguments which the hon. Member for Coventry, North put forward. We hear the most monstrous allegations made about the way that A.B.C. and Rank can carve up the exhibition side of the film industry; that they make it difficult for independent film producers; that there is a series of interlocking agreements with American interests; and that if Rank turns down one film A.B.C. will turn it down, too. These allegations are serious. We know that between them Rank and A.B.C. control 41 per cent. of the cinemas in this country, and they are key cinemas.

We know that the United States, where a similar situation prevailed, set about trust-busting the film empires—those vertical organisations to which the hon. Member for Coventry, North referred—and that those involved in showing a film had to sever their links with the production-distribution side of the industry.

Many of us on this side of the House feel very perturbed about the situation in this country. We will be here after the General Election to hold my right hon. Friend to it when it comes to legislation on monopolies because we feel that here at least, from what we have heard and the allegations made, is a prima fade case for a very swift inspection of some of these dubious practices in the hope that we can get some real competition.

We would like rather stronger assurances from my right hon. Friend that he will investigate this matter speedily. But that is not the end of it. Many of us want to know who is to take over. Obviously, it cannot now be the person who makes the highest bid. My right hon. Friend has made it clear that this will not be an auction. The criteria for the decision will, therefore, be very complicated. If it is not to be an auction, in what way will the National Film Finance Corporation make up its mind as to who is to have British Lion?

This makes me at least think that a further question must be asked: who is to decide who is to take over? My right hon. Friend says that the Corporation will make a recommendation. I do not want to lay about me too widely, but I think that I can stand here without fear of contradiction when I say that there does not seem to be any independent film producer who has any confidence in the ability of the Corporation to make a very sensible choice in this matter. The independent producers do not think very much of those who run the Corporation. I will not go into personalities, but I am sure that other hon. Members will support me on that.

Perhaps one might argue that, thank goodness, the final decision will rest on the broad and capable back of my right hon. Friend, but when one recalls that the recommendation he will receive will come from the National Film Finance Corporation I wish that it had earned greater respect in the film industry, particularly among independent producers. I hope that the job of making a recommendation can be taken out of the Corporation's hands. Maybe that is impracticable, but I hope that at least the warning I have uttered, and which will be repeated by other hon. Members, will alert my right hon. Friend so that on this occasion he will be unusually perceptive.

Who is to take over? We are concerned because of the most complicated interlocking arrangements. Among the names that have been suggested there are people who are hooked up with special television interests, others who are associated with American companies, a nd so forth. It is because we know how complicated this is that we feel that it will take a body which commands the support of the independent producers to enable many of us to accept that a sensible recommendation has been made, based on merits and proper examination.

Finally, I return to my starting point. Many of us on this side of the House and, as I judge from the silence, many hon. Members opposite were delighted to hear the various conditions which a potential buyer of British Lion will have to accept if he wishes to be given the franchise. They seem to me to be excellent conditions.

I am convinced that we shall not get to the root of the problem until we bring a breath of fresh competition into the actual circuit arrangements so that films produced under these auspices get as fair a showing as I think they ought to get. Until that is done, many films of quality will not get the sort of showing at, to use a television term, peak viewing time, to which they are undoubtedly entitled.

Because of this curious sort of smell about the film industry, many people with real talent are discouraged from entering it. There are many people in the television industry today who have left the film industry because, as the years went by, they found that it was an industry which did not put a premium on integrity. They found that the interlocking financial interests created an atmosphere which was detrimental to real talent.

I hope that before my right hon. Friend finally decides who is to own British Lion he will examine with unusual care the recommendations made to him by the N.F.F.C. If he does not agree to the suggestion that the Council should not be the arbiters my right hon. Friend should show commendable zeal in ensuring that there is a swift examination of the monopolistic practices which many people allege exist in this industry.

8.57 p.m.

Mr. Harold Lever (Manchester, Cheatham)

The Minister has told the House that there is no question of subsidy in this industry, and of course if that kind of pretence, or that measure of sincerity, were to be applied to the whole of his speech, it would be a cause for alarm. Everybody knows that since the declaration of no subsidy the industry has been continuously subsidised, and that is the purpose of the N.F.F.C. The Council has been lending public money not under commercial considerations, but without any desire to make a profit, and without even managing to safeguard its capital, still less produce an income from it.

The Council has undoubtedly acted to provide some form of subsidy for the British film industry. I deplore it as a permanent state of affairs. I think that the remedy is for the film industry not to be pauperised in this way, but that conditions should be created by the Government which make possible an industry which can be viable without this specific subsidy. It may be that when my right hon. Friend the Leader of the Opposition brought it in as an emergency measure in these terms he stated specifically that it was not intended to produce a permanent subsidy of the industry but to buy time to give the Government the opportunity of creating better conditions for film production in this industry. Time was bought, but no use was made of it, and now the Minister has the courage to tell the House that nobody is subsidising the film industry. It will be interesting to see how long the position of non-subsidy is maintained, and how long it is before the Government come back for more money.

As regards British Lion, the Minister has told us that it was never contemplated that there could be a sale without the sale coming to him for approval, but the heart of the matter is at what point does the deal come to him for approval? Is it to come to him for approval alter Mr. Terry has committed the N.F.F.C. and is bound in honour and decency to go on with the deal, or is he to come to him for approval while he is still a free agent, neither morally nor legally committed to any particular personal group?

What is widely supposed is that the N.F.F.C. is already morally committed to Mr. Box and we are going to see something in the nature of a charade to satisfy many hon. Members who have taken a sincere interest in the matter—not exclusively Members from this side of the House, but many from the benches opposite. I hope that the Minister will pledge his honour that there no such commitment is in the mind of the Government or of the National Film Finance Corporation. This is not an eccentric supposition on my part. As has been pointed out by the hon. Member for Orpington (Mr. Lubbock), this declaration of the position was given publicly by Mr. Terry, of the N.F.F.C. Therefore, it must be repudiated in express terms, and terms of utter sincerity.

I shall not go into the question raised by the hon. Member for Coventry, North (Mr. Edelman) about artistic merits. We are not talking about the minority cultural aspects of films. This company is concerned with mass audiences, which necessarily and inevitably, in all countries, are mainly concerned with entertainment. The minority artistic film about which my hon. Friend is talking is irrelevant to the issue that we are discussing tonight, although I share many of the views that he has expressed.

He may take consolation in the fact that nearly all the films of great artistic merit have been made by hard-faced gentlemen of a philistine character, and various individuals who very often managed to employ members of the Communist Party and nuclear disarmers to propagate extraordinary and interesting opinions among a wide sector of the public. It is not necessarily a good formula for artistic success to take a philistine and put him in charge of one's operations, but so far all the great classics of the screen have been made precisely under such auspices. My hon. Friend need not mutter in despair on the question of who will own British Lion in the immediate future.

I do not wish to comment upon individuals, but I wish that the Boulting Brothers had not missed the unique opportunity that was afforded to them when making "I'm all right, Jack"—when they caricatured so effectively and amusingly the trade union side—of incorporating in their script the happenings in the life of British Lion itself, in order to give an air of verisimilitude to the "boss" side of the picture, which I thought was the weak side of it.

Mrs. White

They have a wonderful opportunity to make a film about the Board of Trade, which would make "Carlton Browne of the F.O" pale into insignificance.

Mr. Lever

I agree, but what everyone now wants to see is public property not being handled in the manner that private property necessarily would be. It is a delicate question, because if we say that we shall not sell property that belongs to the Government to the highest bidder it means that we are giving something away at less than its market value to a private group. It is a very delicate question.

Mr. Lubbock

The President of the Board of Trade has said that there would not be an auction, and that the price would be the same whoever bought it.

Mr. Lever

Having established the principle of not trying to secure the maximum price, it then behoves the right hon. Gentleman to see that the public gets much better value. We would prefer that British Lion remained wholly owned by the Government. We cannot really expect a Conservative Government wholeheartedly to adopt all our principles, so I act on the assumption that the Government will sell. But we expect that if they do they will be at great pains to ensure that they bring into being—if necessary by negotiation—a group of people which represents all that is most constructive in British film production, so that British Lion Films Limited will continue to be an organisation which will support, guide, finance and distribute films, possibly mainly of an entertainment character and possibly mainly with a view to their being financially viable, but still continuing to be an essential and independent force in British film production, of great value to all those who are honestly and creatively concerned with making films in this country.

It would be a disaster if the Minister were to fall short in any way of this requirement, and I hope that we shall have an explicit and sincere assurance that there will be no rigged deal and no foregone conclusion, but that the matter is still open for genuine free negotiation.

9.5 p.m.

Captain L. P. S. Orr (Down, South)

I entirely agree with what has been said by the hon. Member for Manchester, Cheetham (Mr. H. Lever) and I will return to it in a moment.

The great concern of many people about the sale of British Lion is whether we are enacting a charade, whether the Government are morally bound to someone or not. I think that this state of uncertainty has resulted from the extraordinary way in which the National Film Finance Corporation has handled the whole affair. I am sorry for my right hon. Friend having been landed with this problem in the form in which he found it.

The background of this—I do not wish to labour all the points which have been made—is, of course, the question of monopoly, which is taken for granted by hon. Members. My right hon. Friend said that the question was not one of whether a monopoly exists, but whether an abuse of monopoly exists. The opinion is widely held among independent producers that there are abuses of a monopoly, and I should have thought that the hon. Lady the Member for Flint, East (Mrs. White), with her experience on the Cinematograph Films Council, would know enough to be able to say that an abuse does exist.

I should have thought it a sufficient abuse of monopoly power that there should be restrictive agreements between the two combines, so that, in effect, the future showing of any British film is decided by two men. If that is not abuse of a monopoly, I do not know what is.

The reason we are so concerned about the future of British Lion is, as the hon. Lady pointed out, that British Lion was the last independent distributor left. British Lion was unique in that it was the only one able to break the restrictive agreement between the two combines. It was the only producer able to do any bargaining between the two. Our fear has been that if the Government money is withdrawn from British Lion without there being proper safeguards, British Lion, while it might nominally retain its independence, would certainly not retain its robust, aggressive nature and its determination to compete, and force the two combines to compete, even to a limited extent, with each other. This is the rôle which we think that British Lion ought to play in the industry. If it abandoned that rôle it would ultimately tend to drift into the aura of one or other of the two circuits. This is the basis of the whole of our concern.

I am one who thought that the Government should retain some holding in British Lion. In my opinion, it would be wrong to sell the entire company to anyone outside. The right sort of situation—I still think that probably it would have been a better solution than that of my right hon. Friend—would have been to retain, say, a 50 per cent. holding in the company and to have offered the rest back to the present five directors, on the general understanding that they would bring in with them other independent producers; that they would broaden their board and make themselves more representative of the independent British producers. I should have thought that the better solution.

None the less, I think that my right hon. Friend has made a genuine and ingenious attempt to retain some control over the future of British Lion. I think that what he has done is on the whole good. I gave some thought to how a single director appointed by the Government to N.F.F.C. could have any possible power and I must say I did not think of this one. I think it is ingenious. I only hope that it will work.

Whether or not one can put in more veto power than is already there I should like to examine, but it still seems possible even now, in spite of the powers given to this single director, that British Lion, if the wrong choice is made in ownership, might lose its robust, independent quality and tend to get into the aura of one or other of the combines. I hope that when the director is appointed he will be someone in whom the independent producers have confidence. He should not be simply someone appointed by the present management of the N.F.F.C. in whom, as my right hon. Friend rightly pointed out, it is very difficult to find any independent producer who has any confidence at all.

I should like to underline what my right hon. Friend said about the N.F.F.C., because it is extremely important. He has to rely upon the present management of the Corporation for his advice. Perhaps a few quotations from the chairman and managing director of the Corporation without any comment from me will simply illustrate why the independent producers do not have any confidence in the present Corporation. For example, on 20th December Mr. John Terry is reported in the Daily Cinema as stating that the five directors are no longer shareholders although they will still manage the company. On 23rd December, in the Daily Cinema, Mr. Terry is quoted as saying that the N.F.F.C. owns and controls British Lion, but that in future it might release it into private hands if suitable purchasers could be found.

That is for the future. At present, there is no intention to make any changes. Perhaps Mr. Terry was misquoted by the newspaper. If so, I beg his pardon, but I have taken care to check the reference. Mr. Terry said: We have not asked for resignations. In The Times of 31st December Mr Terry was quoted as saying: Negotiations with Mr. Box are well advanced. It is very difficult to reconcile what Mr. Terry said then with what my right hon. Friend said this afternoon. If I am asked to choose between one and the other, I prefer my right hon. Friend every time, but that surely underlines why it is difficult to have confidence in Mr. Terry.

On 31st December the chairman said that Ministerial approval for the sale had been given some time ago. It was not clear whether he meant the sale to Mr. Sydney Box, the opening of negotiations with him or of the company being sold. We come to Sir Nutcombe Hume. On 1st January, he said: We feel that of any available purchasers Mr. Box is probably one of the best. It is very difficult to ask my right hon. Friend to comment on that, but can he imagine that Mr. John Terry is able to make an unbiased judgment in giving him advice after that has been said? I shall not quote from The Times about strong indications that the sale of British Lion to Mr. Sydney Box was an accomplished fact, but perhaps I may give one more illustration to show why it is difficult to have confidence in the present N.F.S.C.

On 2nd January, Sir Nutcombe Hume stated that a few weeks ago he had not even heard of Mr. Box and there was no reason in the world why he or anyone else should be favoured. Yet, as hon. Members who follow the affairs of the film industry know, the minutes of evidence taken before the Public Accounts Committee on 20th May, 1958, show that Sir Nutcombe Hume mentioned Mr. Sydney Box by name. He was asked a question about the people who purchased this company and whether they were making a success of it. He replied: "That is Sydney Box." As far back as 1958 is a considerably longer time than "a few weeks ago".

I have countless quotations which could be produced to show the extraordinary state of muddle and equivocation which has been produced on the part of the N.F.F.C. and which illustrate why everyone in the industry whom I can find has lost confidence in the present management. Consequently, I say to my right hon. Friend that the important thing in this matter is that he should make up his own mind at an early stage. Having laid down his criteria—and I have no quarrel with the criteria—I think that the principal criterion is that those who are chosen to be the new owners of British Lion should command the respect and confidence of the independent British producers. That overrides all else.

The Federation of British Film Makers has put its views to my right hon. Friend, and has given him certain criteria by which he could judge whether or not persons had that confidence. The conditions have only been published today, and all I would ask of my right hon. Friend is that there should be sufficient time to allow applicants to get their forces together. It would be derisory, for example, to seek to come to a decision in a fortnight. Mr. Sidney Box may have known a great deal in advance of others—we do not know—but others have since come into the field. We have the conditions of sale only today and, if we are to be fair to everyone, rather more than a fortnight is needed. I think that a month would be fair.

That having been done, I would ask my right hon. Friend to avoid being put in the position of having, as it were, to rubber stamp a recommendation given to him. The decision should be matte genuinely by himself. He should not get into a position when the deed would be practically tied up, the N.F.F.C. morally bound to someone, and my right hon. Friend then having to turn it down.

The future of the industry is very greatly bound up with this particular independent distributor. It is the last one left and, if it goes, or loses its quality and its present determination and competitive spirit, it will be a bad day for the industry, and the industry would rue it in the long run.

9.20 p.m.

Mr. Eric Lubbock (Orpington)

I agree with the final statement of the hon. and gallant Member for Down, South (Captain Orr) and with his wish to preserve the robust independence of British Lion. That has been the one concern of this House all along, and it has cut right across the discussion of the doctrinaire reasons for the Government's wish to dispose of their holding in British Lion and the wish of those on this side that they should retain it. At one time, it seemed that the independence would not be preserved, but the conditions given by the right hon. Gentleman the Secretary of State for Industry and Trade this evening have been welcomed on all sides as a step towards safeguarding the independence of British Lion. We should all like some little time to examine those conditions in detail before commenting on them.

I welcome the appointment of a director to the board of British Lion. It is very important that we should know who he is likely to be, because the appointment will not be made by the President of the Board of Trade but by the board of the National Film Finance Corporation and the nominee on the board of British Lion might well be Mr. John Terry, of whom we have heard so much this evening.

The special share that the N.F.F.C. will hold will give the Corporation the right to veto certain decisions of the board of British Lion and will meet certain eventualities that might arise, but will these rights be written into the articles of British Lion? If the N.F.F.C. holds only this one share, what is to stop the board of British Lion later altering its articles so as to remove these safeguards? We should be grateful for an answer to these points.

Without going back to the first reel, so to speak, I want to set right one or two matters of the history of the affair which I do not think have been properly explored. In his statement on 16th January, the right hon. Gentleman said that Mr. Box's first approach to the N.F.F.C. was on 20th September, 1963, and it was not until 29th November that Mr. Kingsley, the managing director of British Lion, was told that after the first option had been exercised by the N.F.F.C. it was the intention to sell off British Lion to a suitable purchaser, subject to the right hon. Gentleman's agreement.

The British Lion directors did not believe that the right hon. Gentleman would consent to this sale, in spite of the officially announced Government policy to that effect. They had two very good reasons for not believing it, which were explained by the Boultings in an article which they wrote in the Spectator on 10th January. First of all, the right hon. Gentleman's predecessor, the present Chancellor of the Exchequer, had vetoed a similar attempt in, I think, late 1960. Secondly, the company was now earning very substantial profits, and was paying dividends on the 50 per cent. of the equity owned by the Corporation.

The discussion of the option arrangements is a rather important point. In his staemen[...] on 16th January, the right hon. Gentleman said that the Corporation had informed him that it was … left in no doubt … that Mr. Kingsley and his colleagues would neither exercise their second option to buy the Company nor continue the option arrangements on the same basis for a further period".—[OFFICIAL REPORT, 16th January, 1964; Vol. 687, c. 424.] All the time in their minds was the original option arrangement, no doubt, but this was never adhered to because, as the right hon. Gentleman well knows, the two weeks which they were finally offered was not the period provided for in the agreement. So what the right hon. Gentleman said was not strictly true, because the situation in which the Government having become the 100 per cent. holder of the equity, would decide to sell it off to some private interests was never put to Mr. Kingsley and his colleagues till late in November.

They were very surprised to learn on 13th December that the Government had given permission for the sale of British Lion and that they were offered an option then to buy it themselves within two weeks. It could not possibly have been intended that this offer should be taken seriously at all.

I remind the House that all these negotiations had been taking place behind closed doors, in spite of what is now generally recognised to have been their crucial importance for the whole British film industry. This is the way—one must say it—the party opposite likes to do things. It is the same with the nuclear power industry or the recent upheavals in B.O.A.C. Everything must be done behind closed doors, the idea being to tell the public and the House as little as one can possibly get away with, even though substantial sums of Government money are involved.

Fortunately, in this case, the directors of British Lion refused to be good boys and keep quiet. They insisted that a statement be issued, and this statement happened to come the day before the Adjournment debate initiated by the hon. Lady the Member for Flint, East (Mrs. White) just before Christmas. I can confirm what the hon. Lady said. If it had not been for that debate and the statement the directors insisted on being issued the previous evening, we should never have known anything about all this. By now, British Lion would have been safely in the hands of Mr. Sydney Box and his anonymous syndicate, who, in their turn, would have been busily engaged in drafting agreements with Rank and A.B.C. in order to remove all competition from the British film industry.

Mr. Heath

indicated dissent.

Mr. Lubbock

The right hon. Gentleman shakes his head. Has he read what was said in the Observer of 5th January: Box's plan is to approach the moguls of the Rank and A.B.C. circuits with script, stars and budget all tied up, seeking a tentative date for showing". The next bit is in quotation marks, coming from Mr. Box himself: 'If I have ten films a year, I should like to give five to one and five to the other' What kind of competition is that?

Of course, no one would have known anything about these negotiations. No one would have been able to demand the assurances which were given by the Parliamentary Secretary in the debate on 20th December, repeated in the hon. Gentleman's statement on 16th January, and now expanded this evening.

There is no doubt whatever in my mind that this whole deal would have been pushed through during the Christmas Recess and we should have been presented with a fait accompli on our return. The right hon. Gentleman may smile at that, but Mr. Box himself gave the game away when he told the Daily Herald on 3rd January: My accountants have been viewing the books since Tuesday, and if everything is O.K. by Monday, I will put the money down". He thought that the whole thing would go through and that Parliament had nothing more to say. So did Mr. Terry, according to the quotation which I have already read to the House— The situation at present is that we have made an offer to Mr. Sydney Box's group and, unless and until these negotiations fail, we are not offering the business elsewhere. Mr. Terry and Mr. Box were at one in thinking that the whole thing was a fait accompli.

It is quite shocking that an attempt should have been made to push through this deal behind our backs, in a matter of such grave public importance. It was also bad business. This must have become obvious by now. There was only one contender in the field at one time. The right hon. Gentleman said that it appeared that there was only one satisfactory bidder, whereas now there are no less than seven. According to the right hon. Gentleman in his statement on 16th January, the Government claim that they attach the greatest weight to the ability of the purchasing group to provide the necessary financial strength and skill in management and to maintain its independence".—[OFFICIAL REPORT, 16th January, 1964; Vol. 687, c. 418.] If nobody had been told of the Government's intention to dispose of their 100 per cent. holding in British Lion, after acquiring the 50 per cent. holding of the directors, how could there have been any competition in the bidding and how could these factors which the right hon. Gentleman mentioned have been brought into the matter at all?

It has been said that Mr. Box came forward and offered to negotiate as early as September and that none of the other seven groups did so, although they would have been free to make an offer similar to that of Mr. Box to negotiate with the National Film Finance Corporation. That ignores the fact that if anybody had got as far as reading the option agreement he would certainly have been led to think that the Government would take only 100 per cent. control as a matter of deliberate policy to extend their holding permanently. That certainly was the impression given to the five directors when the agreement was signed. That was why the Government wanted the first option clause to be included in the contract.

If the Government had not decided to exercise their first option, there would have been a period of six months within which the directors could have tried to raise the finance for them, in turn, to buy out the Government's 50 per cent. holding. The other six contenders certainly would not have approached the Corporation in September, because they would have imagined that there would be at least another nine months before the situation came to a head. It is probable that the initiative did not come from Mr. Box in September and that this is the explanation why there was only one contender.

It is natural to suppose that someone who was privy to the intentions of the National Film Finance Corporation put Mr. Box up to making his approach over a lunch-table some time in September. If that is true, it is no wonder that Mr. Box appeared to be the only suitable purchaser until a public announcement was made, when the number rapidly rose to eight, since when it has fallen back to seven. This proves that it' the Government had been determined to bear these factors in mind in returning British Lion to private ownership, the right course would have been for them to make a public announcement to that effect, listing the qualifications which an applicant would be expected to have, which the right hon. Gentleman mentioned on 16th January, and then inviting bidders to come forward.

As long as there is this monopolistic structure in the industry, it would be a good thing for the Government to maintain a large holding in British Lion. It was a pity that the promised legislation to deal with a monopoly in the film industry did not come before the proposed sale. I am glad to have at least the partial consolation of knowing the important powers which are to be attached to the one share which the right hon. Gentleman mentioned. We know, however, that for doctrinaire reasons it has been decided to pull out. Our task is at least to try to safeguard the future independence of British Lion. The viability and independence of the company depends ultimately upon its falling into the right hands.

I wish for two minutes to consider the contenders. First, there is the Box group, none of the members of which have been announced, apart from Lord Willis, who must be something of an embarrassment to the Opposition. [HON. MEMBERS: "Why?"] No sooner had he been translated from Dock Green to the House of Lords than he bit the hand that put the coronet on his head. The coyness of Mr. Box in revealing the other members of his group results from the fact that he has no associates other than his own family, and all his family are under contract to one or other of the big combines. It would, therefore, be embarrassing for him to have to reveal this.

If one considered Mr. Box by himself, one would not feel at all happy about entrusting British Lion's future to him. He was at one time in charge of Rank film production for four years and at the end of it the studios were closed, hundreds of people were thrown out of work and a good deal of money was lost. Therefore, in considering the financial strength and the technical expertise which these groups bring to bear, I hope that the right hon. Gentleman will take that point into account. Then there is the John Woolf-Sam Spiegel-Leslie Grade group. Sam Spiegel is a substantial shareholder in Columbia Pictures, an American company with an exclusive trading agreement with the Rank Organisation.

Leslie Grade and his brother operated Elstree Film Distributors which has an exclusive agreement with the A.B.C. circuit. It does not appear, therefore, that this group would remain generally independent of the Rank-A.B.C. axis any more than the Box group would do. Finally, there is the Michael Balcon group. It must be generally agreed that this is the most talented. It includes John Osborne and Tony Richardson who made films like Tom Jones and "Saturday Night and Sunday Morning" and it includes people who can be trusted to keep to the spirit as well as the letter of any undertakings they give.

If the Government have absolutely made up their mind that their holding in British Lion should be sold, it should be to these people rather than to Sydney Box and Sam Spiegel. I have dealt only with the serious contenders. I do not think that the other four could be considered as such. Whatever the decision may be, this crisis is only an episode in the long and sorry history of the Government's refusal to deal with this problem of monopoly in the film indstry. We can account for this tenderness towards the Rank-A.B.C. octopus only by reminding ourselves that the Tory Party is the party of big business and it does not really believe in the competition to which sometimes it pays lip-service.

Mr. Wilfred Proudfoot (Cleveland)

Surely the hon. Member heard the speech of my right hon. Friend. This is an exact reversal of what he said.

Mr. Lubbock

Not at all. The right hon. Gentleman did not demonstrate in his speech that the one share which the Government will hold in British Lion will ensure future competition within the industry. It is true that we have been promised legislation later this year. It has not yet appeared and it should have preceded any decision to dispose of the Government's shareholding indirectly in British Lion through the N.F.F.C.

The decline in cinema audiences continues in Britain because here the fate of a film is settled not by the public but by a few bookers of the two circuits who sit in private viewing theatres before the film reaches the public. It is common knowledge that the film "Tom Jones," which has been an outstanding success at the box office, was turned down by the bookers when first shown to them. Apparently the same applies to "Dr. Strangelove" which last week had outstandingly enthusiastic reviews. Not only is the method of selecting the films to be shown unlikely to pick on those which will have the greatest appeal to the public, but the rigidity of the booking system is well calculated to drive audiences away from the cinemas. Nothing that we have heard tonight will do anything to cope with this situation. Unless the Government act quickly to break up the Rank and A.B.C. empires there is a great danger that the film industry in this country will expire.

9.38 p.m.

Dame Patricia Hornsby-Smith (Chislehurst)

In the few minutes left before the Government reply, I should like to say that many of my hon. Friends take an entirely different view about my right hon. Friend's plans and determination to sell the Government interest in British Lion. We support what he has set out to do. We welcome his assurance that it is the intention to keep it British-controlled and also to keep it independent.

It is not perhaps without significance that during the whole of the debate, until we heard the speech of the hon. Member for Orpington (Mr. Lubbock), only one name of an individual director of the various groups has been put forward. I had no views on this matter until I came here tonight, but I noticed throughout the debate that among those who do not want to see the holding sold, or are determined to give it to those self-confessed reluctant buyers the Boultings, there has obviously been a persistent policy of denigration of Mr. Sydney Box in nine out of ten speeches.

I am not associated with any of these organisations in any shape or form, but so far as I can see, and from reading the newspapers, it seems to me that here is a gentleman who had the initiative, knowing it was the Government's intention to sell, to put in an offer, and to go to the N.F.F.C. and say he would negotiate. The hon. Gentleman the Member for Orpington, my colleague—I had better say, my political neighbour, rather than my colleague—complained bitterly that the terms offered and the negotiations were not immediately made public. Well, did anyone ever go out to buy a business and tell all his business competitors what the offer was?

Sir Cyril Osborne (Louth)

That is how the Liberals work.

Mr. Lubbock

rose—

Dame Patricia Hornsby-Smith

With great respect, I cannot give way.

Mr. Lubbock

rose—

Mr. Speaker

Order.

Dame Patricia Hornsby-Smith

The hon. Member had a fair innings and beat me into the debate, and I promised to sit down soon, because there are two speakers to wind up the debate.

If the hon. Member had studied some of the publications as well as I have he would have known that, quite apart from Mr. Box and apart from Lord Willis, there is Lord Archibald, with a long and distinguished career in the film industry, on the proposed board. Then there is the son of a very old, one-time friend of mine, whose early career was in the film industry, the late Colonel Bromhead; his son, Michael Bromhead, is also one of the directors. They are all people with long and distinguished careers in the film industry.

We have heard so much denigration centred so specifically upon one person tonight. Although I did not intend to mention anyone, I think it only fair that someone ought to get up and say that Mr. Sydney Box has had a long and distinguished career in the film industry and great experience of it.

It is now up to my right hon. Friend, who has shown his mind quite plainly from the undertaking he has given tonight. There were times when speakers opposite seemed to me not to have listened to any of the statements my right hon. Friend has made on this matter, but my right hon. Friend has shown that he is determined to keep this organisation independent.

My hon. and gallant Friend the Member for Down, South (Captain Orr) said something about these tame people on the various boards. One can mention people of the Wolfson type and of the Spiegel type and of the John Bloom type. One can call these gentlemen many things, but no one could call them tame.

What is important, I am sure, to all of us in this House is what my right hon. Friend has said about the intentions. I only got four of them down, because of the speed at which he spoke, but he said that there should be no voluntary liquidation, no sale of the controlling holding without the Government being able to prevent its going to a monopoly; and while I am not going into the details as accurately as he did, he also outlined that there would be an assurance—and I think that this is tremendously important—that there would be no sale of the area or the space at Shepperton. I think that this is extremely important to the industry and something which will be welcomed by people who hold particularly strong ideas about this, because they are extremely concerned that those employed in the industry and using the studios should be encouraged to the greatest possible extent.

I do not believe that any of the groups has any lack of money, and so I think that this boils down to the question: who is capable of doing the job? This is an experienced team of directors, and they are all experienced in films, and they are prepared to guarantee independence, and they will give a stronger and even more powerful future to British Lion.

9.45 p.m.

Mr. Douglas Jay (Battersea, North)

The Secretary of State is rather difficult to understand these days. When it comes to the retail trade he is a convert to the most ruthless competition, without restraint and regardless of consequences. But when we come to the film industry, where we are really faced with a near monopoly, he is extremely timid, and tiptoes cautiously this way and that under pressure from public opinion.

The right hon. Gentleman, thanks to the vigilance of the House, and to my hon. Friend the Member for Flint, East (Mrs. White) in particular, has certainly moved a good distance since 20th December. We are now to have a special single shareholding, a Government director and a number of assurances. I can only tell the right hon. Gentleman that if he expects us to believe that that was the Government's policy on 20th December, his Parliamentary Secretary was grossly misleading the House that day.

I even asked the Parliamentary Secretary straight that day whether he would give an assurance that these shares would not be sold to Rank or A.B.C., but he refused to give even that assurance. Therefore, I do not believe that he was misleading us. I believe that the Secretary of State has very extensively altered his policy.

We are now to have, if I understand the right hon. Gentleman aright, a special single share, owned by the N.F.F.C., retained in British Lion, and I also understand from him that there will be a condition attached to that by which—I am not sure whether I am right, and this is important—neither the shares nor the assets of the company, in effect, can be sold by the new owners without the consent of not just the N.F.F.C., I hope, but of the Board of Trade. Can the right hon. Gentleman confirm that that is true?

There is to be one Government director. We should also like to know for certain—we have not yet had it made clear—that the director will be selected and approved not just by the N.F.F.C., but by the right hon. Gentleman and the Board of Trade as well. That would take us some way.

I must say that if the right hon. Gentleman admits, in effect, the case for some Government control and in the last resort a veto on future sales and activities of the company and, therefore, the need for an independent force in the industry, why does he refuse to go the whole way and retain the present Government ownership of the shares? After all, it is the universal view—not just of us here, but of almost every school of thought in the industry—that as a pure matter of fact it is likely to be easier for British Lion to stand up as an independent third force, or whatever it is called, in the industry separate from the two circuits, both for production and distribution, if there is substantial public ownership in it.

That is not our view; it is a question of fact. That view is held not merely by the unions, but by a whole number of associations in the industry. Indeed, if one puts it as a point of fact even to the leaders of the two circuits themselves they admit that they would be less likely, if they had any inclination, to bully or try to cabin and confine British Lion if the Government stood behind it.

If that is the case, if that is the opinion in the industry as a matter of fact, and the right hon. Gentleman is contesting that, he is putting his own opinion—his familiarity with the industry so far is fairly slight—against all those interested in the industry. But if that opinion is right and if the right hon. Gentleman really has the objective of maintaining British Lion as an independent force, what are his reasons for wanting to sell the other shares at all? I do not believe that he has made out any case on this point, except the original doctrinaire intention of the Government to get rid of public ownership of the shares regardless of the effects and consequences.

I think that, having come this way and admitted the substance of the argument, the right hon. Gentleman might have had the courage this time to put his doctrinaire ideas beside him and accept what is obviously the best solution. Unless he is prepared to do that, we still cannot accept the remedy which he is putting before the House tonight.

9.50 p.m.

Mr. Heath

In this last remark the right hon. Member for Battersea, North (Mr. Jay) has indicated quite clearly that he is actuated by doctrinaire considerations. He is not prepared to consider the proposals which I have put before the House on their merits, but is merely wiping them aside and dividing the House on the continued public ownership of the British Lion Company. That is the sole issue on which he is dividing the House, and not on the part which the Government play in helping the film industry.

The right hon. Member said that if we are to have this measure of control, if one likes to use that word, why should we not keep the whole of British Lion in public hands and publicly financed? The answer is: because we believe, as I have said, that, in this developing situation in which there are still very considerable opportunities for a company of this kind and for the film industry, it is right that private enterprise and initiative should be used within the context of the firm being retained as a third force in the British film industry and to support British independent production and distribution. We therefore have the framework in which it can operate and we would leave the rest of the intiative and enterprise of the group which will secure the company as a result of the proposals which I have outlined. That is a very strong and firm reason why this arrangement should be made and one which we have put before the House tonight.

I have been asked a number of questions which which I should like to deal, but, first. I wish to deal with the point of the right hon. Member for Battersea, North that this is a sudden conversion. My hon. Friend the Parliamentary Secretary said in the Adjournment debate on 20th December that the purchaser would give an assurance about the facilities which the company now makes available, and so on, and that this was at that time a condition of sale. What I have outlined today are the specific arrangements for that condition of sale. That is what has been worked out in the past weeks since my hon. Friend spoke in the Adjournment debate. He made it clear at the beginning that this was a condition of sale and that British Lion should remain a third force in the interests of the independent producers.

Therefore, this miasma of suspicion and innuendo which has been created by the hon. Member for Orpington (Mr. Lubbock) in his speech about the way in which this matter has been handled is untrue, and demonstrably untrue from what my hon. Friend said during the Adjournment debate. He does not help his friends in the film industry or the film industry itself by making speeches of that kind.

The hon. Member for Manchester, Cheetham (Mr. H. Lever) asked me to say quite clearly that there was no commitment to any would-be purchaser of British Lion. I can say that categorically to the House. For my part, there is no commitment on behalf of the Government and I understand that there is no commitment on behalf of the N.F.F.C. This can be illustrated by the fact that Mr. Box has not yet made any formal offer to the N.F.F.C. for the British Lion Company. I therefore hope that the hon. Member will accept that there is no commitment to any particular group concerning this sale.

Mr. Rees-Davies

Will my right hon. Friend or the N.F.F.C. be the decisive factor? Secondly, what are the criteria of choice which will be uppermost as the matters of principle affecting his judgment?

Mr. Heath

I think that I described that specifically and clearly in my opening speech. However, the Corporation must judge on the character of the group in carrying out the policy for which it will give an assurance and also on the financial resources of the group not only for the purchase but for the operation of the company in accordance with the assurance which it has given. Those seem to me to be very clear criteria by which the judgment must be made about which would best operate the company in the way that we want it to be operated.

The hon. Member for Coventry, North (Mr. Edelman) said that he was quite convinced that there were concealed assets. What happened was that there was an independent valuation by an accountant of the greatest integrity which was accepted by the N.F.F.C. and by the five directors of British Lion, and on that decision rested the valuation of their own holding in the company. I do not see how one can do better than to have an independent valuation of all the resource; which is accepted by both the N.F.F.C. for its holding and by the five directors for their holding. So I hope that the hon. Gentleman will not pursue this matter further in suggesting that there are some hidden assets which either the Corporation, or the five directors or the Government are trying to write off.

The hon. Member for Orpington asked about special shares and how they could be maintained. The special shares will be a whole issue of a class of shares and therefore unable to be withdrawn without the owners' consent. That position will be safeguarded in the articles from the point of view of the future of British Lion.

A number of questions concerned the monopoly situation in the industry. I give an assurance that we will come to the speediest consideration of the report of the Films Council when it is received. But, of course, we must have an opportunity to examine it carefully and consider the points made by the hon. Lady the Member for Flint, East (Mrs. White) and other hon. Members.

It is perfectly true that many of these problems, if they can be substantiated, arise from the fact of the two great operators in the industry and not from the question of the ownership of British Lion. The problems are there whether British Lion is partly or wholly owned by the Government or entirely owned by private enterprise. What is at issue is the question of whether, when it is owned by private enterprise, it can remain an independent force. That is what we have been discussing tonight and we have given an assurance that it will remain an independent force.

Mr. Jay

Is it clear that these shares will not be disposed of without the permission of the Board of Trade?

Mr. Heath

I gave a specific assurance that there will be a right of veto on the disposal of the undertaking, and this, of course, will be in the hands of the directors of the Corporation. Ob-

the Corporation reports to the Board of Trade. The right hon. Gentleman knows that arrangement.

The question of artistic merit of British films was raised. Of course I have been fully concerned about the artistic achievements of the industry. Many of those who came to see me discussed this in detail together with methods of maintaining the integrity of the industry. I believe that it is of vital importance.

Most hon. Members who know me also know that I have certain specific interests in the arts, music and painting. I have personally great concern and consideration for the artistic aspect of British films and for those who work in the industry. That is why we are so anxious that they should be helped through the Corporation and the maintenance of British Lion as an independent force. I believe that what we propose is the best way of helping them and I hope that the House will accept that we are acting in the best interests of the industry as a whole.

Question put, That this House do now adjourn:—

The House divided: Ayes 241, Noes 301.

Division No. 19.]	AYES	[9.58 p.m.
Abse, Leo	Castle, Mrs. Barbara	Foot, Dingle (Ipswich)
Ainsley, William	Chapman, Donald	Forman, J. C.
Albu, Austen	Cliffe, Michael	Fraser, Thomas (Hamilton)
Allaun, Frank (Salford, E.)	Collick, Percy	Galpern, Sir Myer
Allen, Scholefield (Crewe)	Corbet, Mrs. Freda	George, Lady Megan Lloyd (Crmrthn)
Awbery, Stan (Bristol, Central)	Craddock, George (Bradford, S.)	Ginsburg, David
Bacon, Miss Alice	Cronin, John	Gourlay, Harry
Baird, John	Crosland, Anthony	Greenwood, Anthony
Barnett, Guy	Crossman, R. H. S.	Grey, Charles
Baxter, William (Stirlingshire, W.)	Dalyell, Tam	Griffiths, David (Rother Valley)
Beaney, Alan	Darling, George	Griffiths, Rt. Hon. James (Llanelly)
Bellenger, Rt. Hon. F. J.	Davies, G. Elfed (Rhondda, E.)	Griffiths, W. (Exchange)
Bence, Cyril	Davies Harold (Leek)	Grimond, Rt. Hon. J.
Benn, Anthony Wedgwood	Davies, Ifor (Gower)	Gunter, Ray
Bennett, J. (Glasgow, Bridgeton)	Davies, S. O. (Merthyr)	Hale, Leslie (Oldham, W.)
Benson, Sir George	Deer, George	Hamilton, William (West Fife)
Blackburn, F.	Delargy, Hugh	Hannan, William
Blyton, William	Diamond, John	Harper, Joseph
Boardman, H.	Dodds, Norman	Hart, Mrs. Judith
Bottomley, Rt. Hon. A. G.	Doig, Peter	Hayman, F. H.
Bowden, Rt. Hn. H. W. (Leics, S. W.)	Driberg, Tom	Healey, Denis
Bowen, Roderic (Cardigan)	Duffy, A. E. P. (Colne Valley)	Henderson, Rt. Hn. Arthur (Rwly Regis)
Boyden, James	Ede, Rt. Hon. C.	Herbison, Miss Margaret
Braddock, Mrs. E. M.	Edelman, Maurice	Hill, J. (Midlothian)
Bradley, Tom	Edwards, Rt. Hon. Ness (Caerphilly)	Hilton, A. V.
Bray, Dr. Jeremy	Edwards, Robert (Bilston)	Holman, Percy
Broughton, Dr. A. D. D.	Edwards, Walter (Stepney)	Houghton, Douglas
Brown, Rt. Hon. George (Belper)	Evans, Albert	Howell, Denis (Small Heath)
Brown, Thomas (Ince)	Fernyhough, E.	Howie, W. (Luton)
Butler, Herbert (Hackney, C.)	Finch, Harold	Hoy, James H.
Butler, Mrs. Joyce (Wood Green)	Fitch, Alan	Hughes, Cledwyn (Anglesey)
Callaghan, James	Fletcher, Eric	Hughes, Emrys (S. Ayrshire)
Carmichael, Neil	Foley, Maurice	Hughes, Hector (Aberdeen, N.)
Hunter, A. E.	Mitchison, G. R.	Slater, Mrs. Harriet (Stoke, N.)
Hynd, H. (Accrington)	Monslow, Walter	Slater, Joseph (Sedgefield)
Hynd, John (Attercliffe)	Moody, A. S.	Small, William
Irvine, A. J. (Edge Hill)	Morris, Charles (Openshaw)	Smith, Ellis (Stoke, S.)
Irving Sydney (Dartford)	Morris, John	Snow, Julian
Janner, Sir Barnett	Moyle, Arthur	Scrensen, R. W.
Jay, Rt. Hon. Douglas	Neal, Harold	Soskice, Rt. Hon. Sir Frank
Jeger, George	Noel-Baker, Francis (Swindon)	Spriggs, Leslie
Jenkins, Roy (Stechford)	Noel-Baker, Rt. Hn. Philip (Derby, S.)	Steele, Thomas
Johnson, Carol (Lawisham, S.)	Oliver, G. H.	Stewart, Michael (Fulham)
Jones, Rt. Hn. A. Creech (Wakefield)	O'Malley, B. K.	Stonehouse, John
Jones, Dan (Burnley)	Gram, A. E.	Stones, William
Jones, Elwyn (West Ham, S.)	Oswald, Thomas	Strauss, Rt. Hn. G. R. (Vauxhall)
Jones, J. Idwal (Wrexham)	Owen, Will	Stross, Dr. Barnett (Stoke-on-Trent, C.)
Jones, T. W. (Merioneth)	Padley, W. E.	Swain, Thomas
Kelley, Richard	Paget, R. T.	Swingler, Stephen
Kenyon, Clifford	Pannell, Charles (Leeds, W.)	Symonds, J. B.
King, Dr. Horace	Pargiter, G. A.	Taverne, D.
Lawson, George	Parker, John	Taylor, Bernard (Mansfield)
Ledger, Ron	Parkin, B. T.	Thomas, George (Cardiff, W.)
Lee, Frederick (Newton)	Pavitt, Laurence	Thompson, Dr. Alan (Dunfermline)
Lee, Miss Jennie (Cannock)	Pearson, Arthur (Pontypridd)	Thomson, G. M. (Dundee, E.)
Lever, Harold (Cheetham)	Peart, Frederick	Thornton, Ernest
Lewis, Arthur (West Ham, N.)	Pentland, Norman	Thorpe, Jeremy
Lipton, Marcus	Popplewell, Ernest	Tomney, Frank
Loughlin, Charles	Prentice, R. E.	Wade, Donald
Lubbock, Eric	Price, J. T. (Westhoughton)	Wainwright, Edwin
Mabon, Dr. J. Dickson	Probert, Arthur	Warbey, William
McBride, N.	Proctor, W. T.	Weitzman, David
MacColl, James	Pursey, Cmdr. Harry	Wells, William (Walsall, N.)
MacDermot, Niall	Randall, Harry	White, Mrs. Eirene
McInnes, James	Rankin, John	Whitlock, William
McKay, John (Wallsend)	Redhead, E. C.	Wigg, George
Mackie, John (Enfield, East)	Ress, Merlyn (Leeds, S.)	Wilkins, W. A.
McLeavy, Frank	Reid, William	Willey, Frederick
MacMillan, Malcolm (Western Isles)	Reynolds, G. W.	Williams, D. J. (Neath)
MacPherson, Malcolm (Stirling)	Rhodes, H.	Williams, W. T. (Warrington)
Mahon, Simon	Roberts, Albert (Normanton)	Williams, E. G. (Edinburgh, E.)
Mallalieu, E. L. (Brigg)	Roberts, Goronwy (Caernarvon)	Winterbottom, R. E.
Mallalieu, J. P. W. (Huddersfield, E.)	Robertson, John (Paisley)	Woodburn, Rt. Hon. A.
Manuel, Archie	Robinson, Kenneth (St. Pancras, N.)	Woof, Robert
Mapp, Charles	Rodgers, W. T. (Stockton)	Wyatt, Woodrow
Marsh, Richard	Rodgers, G. H. R. (Kensington, N.)	Yates, Victor (Ladywood)
Mason, Roy	Ross, William	Zilliacus, K.
Mayhew, Christopher	Royle, Charles (Salford, West)
Mellish, R. J.	Shinwell, Rt. Hon. E.	TELLERS FOR THE AYES:
Mendelson, J. J.	Silkin, John	Mr. Charles A. Howell and
Millan, Bruce	Silverman, Julius (Aston)	Mr. McCann.
Milne, Edward	Skeffington, Arthur
NOES
Agnew, Sir Peter	Brewis, John	Cunningham, Sir Knox
Allan, Robert (Paddington, S.)	Bromley-Davenport, Lt., Col-Sir Walter	Curran, Charles
Allason, James	Brooke, Rt. Hon. Henry	Currie, G. B. H.
Amery, Rt. Hon. Julian	Brown, Alan (Tottenham)	Dalkeith, Earl of
Anderson, D. C.	Browne, Percy (Torrington)	Dance, James
Arbuthnot, John	Bryan, Paul	d'Avigdor-Goldsmid, Sir Henry
Ashton, Sir Hubert	Buck, Antony	Deedes, Rt. Hon. W. F.
Atkins, Humphrey	Bullard, Denys	Digby, Simon Wingfield
Awdry, Daniel (Chippenham)	Bullus, Wing Commander Eric	Donaldson, Cmdr. C. E. M.
Balniel, Lord	Burden, F. A.	Doughty, Charles
Barlow, Sir John	Butcher, Sir Herbert	Douglas-Home, Rt. Hon. Sir Alec
Barter, John	Campbell, Gordon (Moray & Nairn)	Drayson, G. B.
Batsford, Brian	Carr, Rt. Hon. Robert (Milcham)	du Cann, Edward
Beamish, Col. Sir Tufton	Cary, Sir Robert	Duncan, Sir James
Bell, Ronald	Channon, H. P. G.	Duthie, Sir William (Banff)
Bennett, F. M. (Torquay)	Clark, Henry (Antrim, N.)	Eden, Sir John
Bennett, Dr. Reginald (Gos & Fhm)	Clark, William (Nottingham, S.)	Elliot, Capt. Walter (Carshalton)
Berkeley, Humphry	Cleaver, Leonard	Elliot, R. W. (Newc'tle-upon-Tyne, N.)
Bevins, Rt. Hon. Reginald	Cole, Norman	Emery, Peter
Bidgood, John C.	Cooke, Robert	Emmet, Hon. Mrs. Evelyn
Biffen, John	Cooper, A. E.	Errington, Sir Eric
Biggs-Davison, John	Cooper-Key, Sir Neill	Erroll, Rt. Hon. F. J.
Bingham, R. M.	Cordeaux, Lt.-Col. J. K.	Farey-Jones, F. W.
Birch, Rt. Hon. Nigel	Cordle, John	Farr, John
Bishop, F. P.	Corfield, F. V.	Fell, Anthony
Black, Sir Cyril	Costain, A. P.	Fisher, Nigel
Bossom, Hon. Clive	Coulson, Michael	Fletcher-Cooke, Charles
Bourne-Arton, A.	Courtney, Cdr. Anthony	Foster, Sir John
Box, Donald	Craddeck, Sir Beresford (Spelthorne)	Fraser, Rt. Hn. Hugh (Stafford & Stone)
Boyd-Carpenter, Rt. Hon. John	Crawley, A'dan	Fraser, Ian (Plymouth, Sutton)
Braine, Bernard	Critchley, Julian	Freeth, Denzil

Galbraith, Hon. T. G. D.	Lilley, F. J. P.	Roberts, Sir Peter (Heeley)
Gammans, Lady	Lindsay, Sir Martin	Robinson, Rt., Hn. Sir R. (B'pool, S.)
Gardner, Edward	Linstead, Sir Hugh	Rodgers, John (Sevenoaks)
Gibson-Watt, David	Litchfield, Capt. John	Roots, William
Gilmour, Ian (Norfolk, Central)	Lloyd, Rt. Hn. Geoffrey (Sut'nC'dfield)	Royle, Anthony (Richmond, Survey)
Gilmour, Sir John (East Fife)	Lloyd, Rt. Hn. Selwyn (Wirral)	Scott-Hopkins, James
Glyn, Dr. Alan (Clapham)	Longbottom, Charles	Sharples, Richard
Glyn, Sir Richard (Dorset, N.)	Loveys, Walter H.	Shaw, M.
Goodhart, Philip	Lucas-Sir Jocelyn	Shepherd, William
Goodhew, Victor	Lucas-Tooth, Sir Hugh	Skeet, T. H. H.
Gough, Frederick	McAdden, Sir Stephen	Smith, Dudley (Br'ntf'd & Chiswick)
Gower, Raymond	McLaren, Martin	Soames, Rt. Hon. Christopher
Grant-Ferris, R.	McLaughlin, Mrs. Patricia	Speir, Rupert
Green, Alan	Maclay, Rt. Hon. John	Stainton, Keith
Gresham Cooke, R.	Maclean, Sir Fitzroy (Bute & N. Ayrs)	Stanley, Hon. Richard
Gurden, Harold	McLean, Neil (Inverness)	Stevens, Geoffrey
Hall, John (Wycombe)	McMaster, Stanley R.	Steward, Herold (Stockport, S.)
Hamilton, Michael (Wellingborough)	Maddan, Martin	Stodart, J. A.
Harris, Frederic (Croydon, N. W.)	Maginnis, John E.	Stoddart-Scott, Col. Sir Malcolm
Harris, Reader (Heston)	Maitland, Sir John	Storey, Sir Samuel
Harrison, Brian (Maldon)	Markham, Major Sir Frank	Studholme, Sir Henry
Harrison, Col. Sir Harwood (Eye)	Marples, Rt. Hon. Ernest	Summers, Sir Spencer
Harvey, Sir Arthur Vere (Macclesf'd)	Marshall, Sir Douglas	Talbot John E.
Harvey, John (Walthamstow, E.)	Marten, Neil	Tapsell, Peter
Harvie, Anderson, Miss	Mathew, Robert (Honiton)	Taylor, Edwind (Bolton, E.)
Hastings, Stephen	Matthews, Gorden (Meriden)	Taylor, Frank (M'ch'st'r, Moss Side)
Heald, Rt. Hon. Sir Lionel	Maude, Angus (Stratford-on-Avon)	Taylor, Sir William (Bradford, N.)
Heath, Rt. Hon. Edward	Mawby, Ray	Teeling, Sir William
Henderson, John (Cathcart)	Maxwell-Hyslop, R. J.	Temple, John M.
Hendry, Forbes	Mills, Stratton	Thomas, Sir Leslie (Canterbury)
Hicks Beach, Maj. W.	Miscampbell, Norman	Thomas, Peter (Conway)
Hiley, Joseph	Montgomery, Fergus	Thompson, Sir Kenneth (Walton)
Hill, Mrs. Eveline (Wythenshawe)	More, Jasper (Ludlow)	Thompson, Sir Richard (Croydon, S.)
Hill, J. E. B. (S. Norfolk)	Morgan, William	Thorneycroft, Rt. Hon. Peter
Hirst, Geoffrey	Mott-Radclyffe, Sir Charles	Thornton-Kemsley, Sir Colin
Hobson, Rt. Hon. Sir John	Neave, Airey	Tiley, Arthur (Bradford, W.)
Hocking, Philip N.	Nicholls, Sir Harmar	Tilney, John (Wavertree)
Hogg, Rt-Hon. Quintin	Nugent, Rt. Hon. Sir Richard	Touche, Rt. Hon. Sir Gordon
Holland, Philip	Oakshott, Sir Hendrie	Turner, Colin
Hollingworth, John	Orr, Capt. L. P. S.	Turton, Rt. Hon. R. H.
Hope, Rt. Hon. Lord John	Orr-Ewing, Sir Ian (Hendon, North)	Tweedsmuir, Lady
Hopkins, Alan	Osbern, John (Hallam)	Van Straubenzee, W. R.
Hornby, R. P.	Osborne, Sir Cyril (Louth)	Vane, W. M. F.
Hornsby-Smith, Rt. Hon. Dame P.	Page, Graham (Crosby)	Vaughan-Morgan, Rt. Hon. Sir John
Howard, Hon. G. R. (St. Ives)	Page, John (Harrow, West)	Vickers, Miss Joan
Howard, John (Southampton, Test)	Pannell, Norman (Kirkdale)	Vosper, Rt. Hon. Dennis
Hughes Hallett, Vice-Admiral John	Partridge E.	Wader, David
Hughes-Young, Michael	Pearson, Frank (Clitheroe)	Walker, Peter
Hurd, Sir Anthony	Peel, John	Walker-Smith, Rt. Hon. Sir Derek
Iremonger, T. L.	Peytown, John	Wall, Patrick
Irvine, Bryant Godman (Rye)	Pickthorn, Sir Kenneth	Ward, Dame Irene
James, David	Pike, Miss Mervyn	Watkinson, Rt. Hon. Harold
Jennings, J. C.	Pitman, Sir James	Webster, David
Johnson, Dr. Donald (Cralisle)	Pitt, Dame Edith	Whitelaw, William
Johnson, Eric (Blackley)	Pounder, Rafton	Williams, Dudley (Exeter)
Johnson, Smith, Geoffrey	Powell, Rt. Hon. J. Enoch	Williams, Paul (Sunderland, S.)
Jones, Arthur (Northants, S.)	Price, David (Eastleigh)	Wills, Sir Gerald (Bridgwater)
Jones, Rt. Hon. Aubrey (Hall Green)	Prior, J. M. L.	Wilson, Geoffrey (Truro)
Joseph, Rt. Hon. Sir Keith	Prior-Palmer, Brig. Sir Otho	Wise, A. R.
Kerans, Cdr. J. S.	Proudfoot, Wilfred	Wolrige-Gorden, Patrick
Kerby, Capt. Henry	Pym, Francis	Word, Rt. Hon. Richard
Kerr, Sir Hamilton	Quennell, Miss J. M.	Woodhouse, C. M.
Kershaw, Anthony	Ramsden, Rt. Hon. James	Woodnutt, Mark
Kimball, Marcus	Rawlinson, Sir Peter	Woollam, John
Kitson, Timothy	Redmayne, Rt. Hon. Martin	Worsley, Marcus
Lagden, Godfrey	Rees, Hugh (Swansea, W.)	Yates, William (The Wrekin)
Lambtron, Viscount	Rees-Davies, W. R. (Isle of Thanet)
Langford-Holt, Sir John	Renton, Rt. Hon. David	TELLERS FOR THE NOES:
Leather, Sir Edwin	Ridley, Hon. Nicholas	Mr. Chichester-Clark and
Lewis, Kenneth (Rutland)	Ridsdale, Julian	Mr. MacArthur.