HL Deb 03 March 1938 vol 107 cc987-1022

Order of the Day for the Second Reading read.

THE SECRETARY OF STATE FOR AIR (VISCOUNT SWINTON)

My Lords, I think it is my good fortune to move the Second Reading of a Bill which will be accepted in all quarters of the House, and for me it is rather like old times to be introducing a Films Bill. I had the privilege of piloting the original Bill through the House of Commons, and the duty also of writing nearly every word of that Bill myself. The British film industry, when the film industry was starting, held quite a proud place. It was a pioneer, and it held its own in the early days. It was only when the War came and more important matters engaged the country, and in the years after the War, that the British film industry dwindled away until, in the year before the old Act was introduced, I believe considerably less than 5 per cent. of the films shown on the screens of this country were of British origin.

I wonder if I might try to summarise the motives which moved me in 1926 to try to re-create, or help to re-create, that industry, because I think they were the same motives as those which move noble Lords in all quarters of this House to support the Bill to-day. It was not merely that the film industry was a great industry, that in America it was employing tens of thousands of people and making large sums of money, and, more important, that large sums of money were going out in wages, although that in itself was not unimportant. There was much more than that. This industry is of enormous indirect value to trade. I remember reading, shortly before I introduced or started work on the original Films Bill, a statement by the secretary of the Department of Commerce in America, who was very well able to judge, in which he said that the domination which the American industry had in the cinemas of the world was worth more to American foreign trade than the whole of the advertising which the American firms did put together. I was President of the Board of Trade, and it was my job to try to help British trade, and I thought that that was a very pregnant observation. But the reasons went much deeper than that. I do not think one can exaggerate the influence of films in spreading the atmosphere, the ideas, the characteristics of the country in which they are made, and just because that influence is subtle, is half-unconscious, so the less directly propagandist a film is the more effective is its influence in the countries through which it circulates. I felt, therefore, as I think we feel to-day, that this industry in the production of British films has very special national and Imperial importance.

I raised the question at the Imperial Conference in 1926 and I was encouraged at that Conference to go forward. It was a new field. I knew something about some industries, but frankly the film industry was entirely new ground. I felt that the best plan would be to try to get the film industry together—the three estates of the film realm, the producer who produces the film, the renter, who is the middleman so to speak, and the exhibitor who shows the films—to get them together and see whether they could agree upon a workable scheme. Their meetings were, if the most reverend Primate will forgive my saying so, a little reminiscent of some of the earlier Councils of the Church. There was great faith, there was, I think, perhaps a larger measure of good will than sometimes was shown in those assemblies, but there was a complete absence of any agreement. So I had to try my own hand and draft a Bill and ask the three branches of the industry to criticise it and try to make a practical scheme of it. That help was very readily given, as I know it has been given all through in the working of the Act and in the framing of this new Bill.

I would like, if I may, from that experience to pay a very real tribute to the exhibiting side of this industry. After all, it is obviously very much the interest of the producers to have a measure which helps them to produce; but showing films is the bread and butter of the exhibiting industry, and the facts that the exhibitors gave their very best endeavours to frame a practical measure for imposing a quota upon themselves, that they have with very few exceptions, and in spite at times of considerable difficulties, most thoroughly and honourably carried out their quota obligations, and that they are to-day supporting the extension of this measure, I think reflect a very large measure of credit on the exhibitors. Time and experience showed that there were defects and loopholes in the original Act but, by and large, that Act has succeeded. It re-created the British film industry. Throughout the years of its operation more British films were shown by British exhibitors, I think in every year, than the quota compelled them to show. And it enabled a very considerable extension of the showing of the British films in different parts of the Empire. To-day I believe Parliament is unanimous in its desire to continue the system which that Act brought into being, and to continue it very generally on the lines of the old Act. That Act was for a term of years—ten I think—which runs out at the end of this month, and therefore a new Bill became necessary if this scheme were not to die.

In preparing this new Bill the Board of Trade was very greatly helped by the work of my noble friend Lord Moyne and his Committee. The general structure of the old Act is reproduced in the new Bill. The system of quotas, on both the renter and the exhibitor, is continued. As in the old Act, the quotas start at a relatively modest level and rise progressively; and, as in the old Act, the renters' quota is always kept at a figure rather above that of the exhibitors'—a desirable provision, because that helps to ensure that there shall always be a sufficiency of British films available to the exhibitor to fill his quota. The definition of a British film remains very much the same as it was under the old Act. Your Lordships will see that that definition is given in Clause 25 of the Bill. There is, however, a new provision in a sense with regard to the definition of a British film as applied to the renters' quota, to which I ought to draw your Lordships' attention, because it is entirely new. That is in Clause 26.

In order that a film may count for the renters' quota, that film must have been made in this country. It will not count for renters' quota if it was made in another part of the Empire. That provision is absolutely necessary if the provisions to which I shall refer later for applying a cost test to British films is to be effective. If this provision were not made it would be perfectly possible for any foreign renter who wished to evade the provisions of this Bill to go and manufacture what is vulgarly known as a "quota quickie" at a very cheap rate in another country of the Empire, pass it through into this country, and thereby entirely evade the provisions of this Bill. Moreover, this really is no deprivation of any privilege which an Empire country could reasonably seek to enjoy, because any British film manufactured in another country of the Empire can count for exhibitors' quota. Therefore any Empire film which is worth showing can find its way freely into this country and can count as a full British film in the exhibitors' quota, if it is a good enough film for an exhibitor to wish to show. I therefore submit that that provision is fully justified.

In Clauses 17 and 18 are the provisions with regard to blind booking and block hooking, or advanced booking—the twin dragons which were so embarrassing to the exhibitors in the old days—under which on the chance of getting a good film in the lottery they were compelled to take quantities of films blind, that is, films they had never had the chance of seeing, and to book up their programme for months, and indeed for much more I believe than a year ahead. Those pratices were forbidden under the old Act. The prohibition, which is continued under the new Bill, is, I understand, most warmly welcomed by the exhibitors, and indeed insisted upon by them. Your Lordships will therefore see that the whole main structure of the new Bill is very much the same as the structure of the old Act.

There are, however, three main changes to which I ought to draw your Lordships' attention. The first is that a separate quota is imposed for long and short films; the second is that a special qualification is insisted upon for a long film; and the third is the creation of the Cinematograph Films Council. If your Lordships turn to the First Schedule of the Bill you will see that there are separate quotas for long films and for short films, and that in the case of renters the quota for long films starts at the higher figure, 15 per cent., and the quota for short films at in per cent., while in the case of exhibitors' quotas the percentages are 12½ and 7½ respectively. In each case the quotas rise by progressive stages until the long film quotas become 30 per cent. and 25 per cent., and the short film quotas 20 per cent. and 15 per cent. respectively. The father of the short film quota is my noble friend Lord Moyne. He gave in his Committee's Report very cogent reasons why a short film quota should be introduced, why the short film should be treated separately from the long film. Among the reasons which he advanced for special protection of short films were that these films afford a valuable training for both the higher and the general personnel in film production; that there is an opportunity for bringing in small capital for a film venture where the capital would be inadequate for a large film; that there is a possibility of experimenting with new ideas in film production; and last, but by no means least, that many of these short films, as your Lordships know from experience, have a special cultural value of their own out of all proportion to their cost. For these reasons, among others, it has been decided that there should be a separate quota for the short film.

The second big change is that a test is introduced for qualification for the long film. The old Act contained no test except length. It therefore afforded an opportunity—and we did not foresee this at the time—whereby anyone who wished to evade the spirit of the Act could make as cheaply as possible a film of the required length, and then come and get it registered for quota. In that way was born the "quota quickie," and the characteristic of the "quota quickie" was that it was cheap and nasty. That brought British films into disrepute. It did great harm because people saw these films deliberately produced as cheaply as possible and, I must frankly say, produced not only as cheaply as possible, but produced with a certain intention that they should not only be nasty and inferior but so appear, and so depreciate the genuine British film. That brought discredit on British films in general and, of course, occasioned great embarrassment to exhibitors, who either had to take films of this kind which had been registered or default upon their quota obligations. That was never the intention of the old Act. The object of that legislation, as of this, was to lead to the production of good British films, and if I am asked for a definition of what I mean by a good British film I would give the democratic definition that a good British film is a film which a sufficient number of British people will pay to go and see. I am bound to say I think well enough of British public opinion to believe that the British public will insist on reasonable standards of good taste as well ell as of competent acting and production.

Some test is necessary for the long film, and two possible alternatives have been suggested. The first is what I may call the quality test and the second is what I may call the means test, to use a well-known expression. A quality test sounds all right, but what is quality, and who is to be the judge? The ultimate test of quality in this matter is, will people go and see the film? To use the language of the trade, is it a reasonably good box-office proposition? But in any test which you are to apply you must have a very large measure of certainty. We shall not get films produced, we shall not get the necessary money put into the production of films, unless the men who produce them feel reasonably certain that once a large amount of money is put into the production of a film, and that film has come into being, it will automatically obtain its licence. We want to encourage finance to come into the production of British films. After all, this means test or cost test is a pretty good test. It does ensure that the producer and those who finance him are prepared to back their fancy to a very substantial amount, and, without doubt, this cost test will kill the "quota quickie."

In fixing the cost test, the Bill substantially follows the lines in cost considered by Lord Moyne. My noble friend considered a cost test of £2 per foot. It has been estimated that the labour costs in a film—that is, salaries, wages, and payments specifically attributable to labour and services in the making of a film, exclusive of copyright payments—amount approximately to half the total cost. We have, therefore, taken that figure, and it is laid down in Clause 26 of the Bill that the minimum cost to qualify for a long film shall be £1 per foot, with a minimum labour cost of £7,500. But care has been taken to ensure that a film shall not fail to get its certificate if it is a film of real merit, even if it has cost a great deal less than £7,500, and the Board of Trade is given power specially to licence films, cheaper films, of high quality on the advice of the Films Council.

There are two or three provisions with regard to the renters' quota which are new and to which I ought to draw attention. The first is that the renter, who hitherto has been able to satisfy his quota at any time during the year and has, I think, sometimes had a tendency to fill his quota rather late in the year, thereby not affording to exhibitors a full complement of films—the renter will have to fill his quota half-yearly. This and the fact that the renters' quota is higher than the exhibitors' and that the renters' year starts earlier than the exhibitors' year ought to go far to ensure that there will be a sufficiency of films, and more than a sufficiency of films, a choice of films, for the exhibitors. Then there are two special provisions with regard to the renters' quota which are designed to encourage high-class production and distribution abroad. The first is that if a film is more than treble the minimum value—that is to say, more than three times the £7,500 minimum labour cost, which is the test—that film may count twice for renters' quota. There is another rather more complicated provision in Clause 3 under which a renter—this would be a foreign renter or a renter largely operating abroad—may acquire for £20,000 the foreign distribution rights in one country of what I have called a treble value British film, and if he does so, he may count that foreign distribution right towards his quota, but he must not fill more than half his quota with such foreign distribution right films. I hope I have explained that rather complicated clause in as simple language as it lends itself to. I believe that that is a really valuable clause for encouraging foreign renters to acquire British films and to show them, and particularly to show them in the United States of America.

Finally, the Bill establishes a Cinematograph Films Council of twenty-one members, eleven of whom are to be independent of all film trade interests. That Council will take the place of the old Advisory Committee, and all important decisions taken by the Board of Trade in administering the Act must be taken after consultation with the Films Council. A Council in this form, with a predominating independent element, has the full support of all sections of the film industry. It will be consulted by the Board of Trade on all the periodical reviews of quota which are provided for in the Bill, and, in addition to the many specific duties which are laid down for it in the Bill, it will, if I may so put it, have the run of the whole field of film production and film activities, so that it can be in a position at any time to report to the Board of Trade on any matter of interest to the film world and to the public—after all, the film world is the public. It will, moreover, make an annual report to the Board of Trade and to Parliament. I believe that a Council of that kind will be of very real value. In addition to the provisions I have mentioned, there are a number of detailed amendments, to which I do not think I need refer, but most of which were recommended by Lord Moyne's Committee. I have no doubt that certain points will be raised on the Committee stage, and rightly raised, but, generally speaking, I believe that both the policy of the Bill and the practical application of that policy in the Bill will command general assent in this House, as they have in another place and as I believe they do in the country, because to-day it is universally realised in this country how far-reaching and how important is the influence which a sound film industry can exert. I beg to move.

Moved, That the Bill he now read 2a.—(Viscount Swinton.)

LORD STRABOLGI

My Lords, I think your Lordships will agree with me that the noble Viscount has occupied the minimum of time necessary to explain a very complicated and intricate measure, and he has given a very fair picture of the Bill now before your Lordships. I want to say at once that my friends in another place did not divide against the Third Reading of this Bill nor indeed against the Second Reading, and that, broadly speaking, we support it. Indeed I think it is a conscientious effort to meet the needs of a difficult and complicated industry, and we approach it in a non-Party spirit. I remember very well the noble Viscount, when he was President of the Board of Trade, piloting the original Bill of 1928 through the Commons. I also remember that that Bill was fought on Party lines, largely through the efforts of a noble Lord who has now left us, the late Viscount Snowden, who fought it on free trade lines, and of the late Mr. Ramsay MacDonald, who also fought it on free trade lines. That, of course, is still a line of opposition. You may say that no industry should be specially protected in any way. But I entirely agree, and the Party for which I speak agrees, that the special circumstances of this industry, and its importance for cultural and educational and even commercial reasons all over the world, make it absolutely necessary to maintain a flourishing British industry.

The Bill of 1928, as the noble Viscount has reminded your Lordships, was really his child. I suppose we can say that this Bill is his grandchild. It follows the framework of the 1928 Bill. May I say here that I am sorry indeed to hear of the ill-health of the present President of the Board of Trade, and I hope he will soon be better and that the value of his advice will be available on certain Amendments which will no doubt be moved. One of the difficulties, as the noble Viscount has said—and he would have found it just as difficult to-day as in 1928—has been to get agreement among the three main sections of the industry. The amazing thing is this. You can understand the distributors differing from the middlemen, the renters; and the renters disagreeing with the producers; but the curious thing is that within each of these separate sections there are conflicting interests. In the exhibiting side the large circuit owners take a different view from that of the small independent groups or single-theatre owners. The people who make these "quota quickies," and do it quite profitably apparently, have not the same viewpoint as people trying from the beginning to make worth-while prestige pictures. You have these cross currents within each section of the industry. Therefore it seems to me to be quite right that the Government should go above these conflicting interests and legislate for them.

I must make one comment on something that fell from the noble Viscount. He made a charge against the fabricators of "quota quickies" that I have never heard put quite so strongly before. If I understood him aright he said that they were deliberately made bad in order to discredit the British industry. I naturally pay great attention to such a statement from such a source, but that really is a charge of conspiracy and something should have been done about it long before. I have never heard the charge put quite so strongly and it rather surprised me. We have to deal with this industry in a drastic manner. I understand that the noble Lord, Lord Moyne, has a certain amount of agreement with me on that point. There may be other devices found for evading this present Bill. The noble Viscount said his advisers did not foresee the "quota quickie." We cannot foresee what means may be found of escaping from and evading the clauses of the Bill now before your Lordships, and for that reason I am going to plead for elasticity. You cannot legislate effectively for this extraordinary industry for ten years ahead. You must have elasticity, and there should be some body with sufficient power and right to take action to meet the changing situation.

In 1928, when the noble Viscount introduced his Bill as President of the Board of Trade, the whole industry was very different from what it is now. Within a couple of years of that Bill reaching the Statute Book there was a veritable revolution in the industry by the introduction of what are vulgarly called the "talkies." The introduction of sound on the screen was not foreseen. Yet it made an enormous difference to the whole technique of the industry. Another development that was not foreseen, and could not have been foreseen, was the growth of super cinemas, as they are called—those large, expensive, luxurious buildings which are now found in almost every town of any size. What are the revolutions ahead? I do not want to prophesy, but there is one great change which seems likely. I think there is a great future for the long feature spectacular cartoon film. I have not seen the latest cartoon film "Snow White," and I am only speaking from hearsay, but it seems to me that there will be something like a revolution if synthetic film stars are made by this wonderful art of the cartoon which Mr. Disney with his genius has produced. It may have a great future. Many films may be made in that way, and I believe they are very expensive and take a long time to make. That is one of the changes I can see coming.

The £15,000 film which is now to be the minimum, with £7,500 spent on labour, is only going to be a sort of "super-quickie." I have gone into this matter very carefully, even to the extent of seeing cost sheets, and I challenge contradiction when I say that you cannot make a film for £15,000 that will have any chance of finding its way abroad to our own Dominions, to leave the American market alone. You are going to get a sort of super "quickie" and that is all. As the Bill is drawn nearly all the British films are going to be of that kind. The next uncertainty I sec is a matter for which I do not expect the Government to take full responsibility, and that is the great uncertainty that there is going to be about finance. At present there is not sufficient finance available for the production of British films. The uncertainty as to how this Bill will finally emerge from the deliberations of Parliament is one of the causes of that. It has held up investment of money, because people did not know what was required in the industry, and that has held up production. In the boom period followed by the slump which happened in 1935–36 and the beginning of 1937 financial interests in the City of London got a very serious warning. They were perhaps parties to reckless finance, but they burned their fingers badly, and when once these gentry burn their fingers in a particular industry they leave that industry and go elsewhere. They go in for wireless or television or some other invention. This will make it a little difficult, I think, to get English finance once more into the industry.

It is a curious thing that a lot of English money has gone from the City of London in the last year into France to produce French films. I see in one of the trade papers, the Cinematograph Weekly, which I have usually found reliable, the statement that last year one million pounds of British money went to make films in France. It would not have gone unless the investment was profitable. French films to-day are very good. The good French film is very good indeed and therefore has deservedly attracted British capital. I am a little doubtful about English capital, even after the uncertainty of legislation has been removed, being again attracted into the British industry in sufficient quantity. That is why I regret that the recommendation of the Moyne Committee, that there should be a semi-official finance corporation, has not been pursued. I think it would be invaluable for the industry to have a semi-official body that could find finance for approved British productions. If the industry remains in the doldrums and does not revive, I hope that the Government will turn to that recommendation in the future. I do not expect it to be done by this Bill, but I hope that it will not be lost sight of in the future by the Government's advisers.

There is another point on which I feel disappointment—it is a matter which my friends in another place pressed very strongly—and that is that the recommendation of the Moyne Committee, that there should be a Films Commission composed of three or five full-time independent people, was not adopted, instead of setting up an unwieldly Council of twenty-one. I am very sorry about that and I will briefly give my reasons. There is, as I have said, need for elasticity. You cannot tell what is going to happen in this industry. I would have liked to see a small body of eminent people, with no pecuniary interest in the industry, paid adequately, and invested with the sort of powers suggested in the Report of Lord Moyne's Committee. At a later stage I am going to ask your Lordships to support that view. With the present body of twenty-one members—eleven independent, and ten from the trade, representing labour, exhibitors, renters, producers—you will have the same conflicts that have been described by the noble Viscount. The experts will disagree with each other, and the whole idea of a Council of twenty-one is in my opinion bad. It will be an unwieldy body which will not bring results. We think the Bill should be amended, and I think that is also the Government view, in order to provide minimum conditions regarding labour for films that are to qualify for quota. It was not in order in another place to move an Amendment, but in your Lordships' House that can be done and I hope we shall adopt an Amendment to put that matter right.

I just want to mention one other point where I do not see eye to eye with my honourable friends in another place, or some of them. I said this was a non-Party measure, and I have not had a chance of discussing this matter with my noble friend Lord Snell and my other noble friends in your Lordships' House. The Government introduced what is known as the triple credit proposal in the House of Commons, under which a film costing more than £60,000 in all should count as three for quota. Then, as a result of a storm by the exhibitors, of the pressure they brought to bear on Members of Parliament, and also of the arguments of Members of Parliament themselves, the Government withdrew it. They introduced it rather at the last moment, on the Report stage, and then they withdrew it again. I am not sure that when the whole matter is thoroughly examined and explained there is not a great deal to be said for that original proposal of the triple quota. I think that if you are going to get the great prestige pictures which we must have in this industry if we are to regain a place in the world's market, something of that sort is needed.

I do not want to take up your Lordships' time with arguments for it except to say this. I think that both the exhibitors who have taken alarm and the representatives of the labour in the industry are wrong. I think that they are needlessly alarmed. What counts, after all, in the exhibitors' quota is what is known as "playing time." It is not the number of films he shows but the amount of time he gives on the screen. Now these little "super-quickies," as I call them, for £15,000, these little second-feature pictures, will only be shown for three days or a week, but a successful British picture, a prestige picture that is popular, will run at a picture house for weeks at a time. Therefore this alarm about the shortage of pictures if a few great British pictures are made instead of a host of these little rubbishy films is, I think, unfounded. Then, with regard to labour, I have heard evidence from the leaders of labour in the industry, very able men. By labour, of course, I mean the scenario-writers, the actors, the directors, and the skilled technicians of all kinds. They have spoken almost as strongly as the noble Viscount against the "quota quickie." They say that the "quota quickie" is derogatory to British labour. I entirely agree with them. They said they wanted to see prestige pictures made by British labour in British studios which would be a credit to this country all over the world. I do not see how you can get these prestige pictures. I may be wrong, but I think it would have made it more certain that you got these prestige pictures on the Board of Trade proposal for what they call the triple credit.

As for employing less labour, I am not sure they are right there either. I have seen costing sheets by which the large picture, the large, expensive film, gives more employment than three or four of the smaller ones. It seems to me to stand to reason. Take the case of the American renter. He has to have so many quota pictures to fulfil his obligations. He can make three of these little pictures and spend £7,500 on each on labour, and then he has satisfied the law. Or he can make one picture to fulfil the same part of his quota, spending £30,000 on labour on a £60,000 picture. Three times £7,500 is £22,500, and that is less than £30,000. I cannot see the argument that there will be less labour employed on the big picture. Above all, I am hoping that the big pictures will reestablish the whole British film industry and, taking a broad view, will fill the empty studios and employ again the 8,000 or 9,000 men who are working short time or are unemployed in this industry. In their own interests that matter should be re-examined. As I say, I have not consulted my noble friends on this matter, but the whole subject needs thorough examination, and I should be glad if, when the noble Viscount replies—if he is in a position to do so; I do not press him if he is not yet—he would say whether, anything is proposed to be done along these lines. A hint was given in another place that your Lordships would be invited to consider some Amendment of that kind. It would be interesting to know if the noble Viscount is in a position to give any information.

I have one other suggestion to make, and that is entirely my own. I beg leave to throw it out for consideration at some future time. This is not the last word. I do not believe that this Bill, if it becomes an Act, will legislate for the industry for ten years. The whole industry is moving, changing and developing too rapidly. This is my own suggestion. If I were dealing with this matter I would go about it in a different way. I am taking account of the whole quota proposal. I would keep on the exhibitors' quota, but I would abolish the renters' quota and put something else in its place. The reason why I would abolish the renters' quota is that, as things are, with this tremendously powerful industry in the United States of America, if you put upon the American renters the obligation to produce so many British pictures, they will produce the pictures all right, they will produce the films in this country; but these will not really be British films; they will be British films made by Americans in England, which is not quite the same. I have nothing against the American film industry. I do not think they are villains, as the noble Viscount does. They are simply business men out to do the best business they can. First and last they are out for business, and without them we should not have the great exhibiting industry in this country. It is no use pretending otherwise. They have had certain advantages, and we cannot grumble if they have taken advantage of their.

But, after all, I want to see a British industry in this country. What I would do, instead of a renters' quota, is to enter into a kind of trade treaty with them. There is a certain provision for reciprocity, and I should like to congratulate the Government on that also. I think that is quite excellent. I think that might, again, be made a little more elastic. But instead of having a renters' quota, I would come to this arrangement with them. I would calculate what each of the great American companies—there are only seven or eight of them—or other great foreign companies make out of this country. That is easily done. Then I would fix a percentage as you fix your quota now and say that they have got to spend on British films, in the same way, that amount of money. You say the same thing in the Bill, but you do it by means of a quota film. I should say, "You can either make films in England, large or small, as you please; we will leave that to you; we presume you want to make films to sell; or you can spend that amount of money by renting, hiring, British films to show abroad. You can do which you please." That is reciprocity, of course, and I would wash out the renters' quota altogether. That is my own proposal. I should be very grateful if it could at some future time be considered—we know it cannot be done in this Bill—and I throw it out for examination. I hope this Bill will be successful as an Act. I hope it will have the desired effect, and if it does I shall be the very first to congratulate the President of the Board of Trade and the noble Viscount who moved the Second Reading.

THE LORD ARCHBISHOP OF CANTERBURY

My Lords, I hesitate very greatly to intervene in this debate, because I am wholly incompetent to deal with the highly technical provisions in a Bill dealing with one of the most complicated of industries. But, as we are all aware, and as my noble friend who introduced the Bill so clearly pointed out, we are dealing this evening with a matter which most profoundly affects the whole life of the community. I suppose it would be true to say that the cinema has as great as, and I would say a greater, influence even than the wireless and the Press. I wonder whether we who live in this generation realise the profound and far-reaching revolution which is taking place in the whole outlook of the minds of our people through these three agencies. Certainly, day by day and night by night, the films are for weal or woe moulding the habits, the outlook and the way of life of the community, of the old and, especially, of the young. Just for that reason my only object in rising is to express my disappointment that the whole of this elaborate legislation, dealing, as it proposes to do, with the whole industry, is based entirely upon the financial interests of the film industry.

I admit, of course, that its primary object has been the protection and encouragement of the production of British films, but even so I wish there had been more in this Bill to recognise that quality matters even more than quantity in the production of these films. The noble Viscount alluded to the effect upon this great matter of the Imperial Conference of 1926, and he will remember that the General Economics Sub-Committee appointed at the request of the Conference laid great importance upon what they described as not simply the volume of British films and Imperial films produced within the Empire, but on there being what they called a high entertainment value, and a sound educational value. It is not merely the financial volume of the trade that matters, but the intrinsic value of what it produces. Lord Moyne's Report certainly, and I think rightly, spoke of the exceedingly poor quality of many of the films that are made for renters, in order to enable them to fulfil their quota obligations, and the Committee therefore, for that and other reasons, insisted that there must not merely be a cost test but also a quality test, because, as they very forcibly pointed out, the mere cost is in no sense a sufficient and satisfactory test of value.

For that reason they recommended that there should be established some authority which could see that a quality test, as well as a cost test, was satisfied. It was not in the least proposed that there should be a moral or aesthetic censorship but that there should be a test by which we could be sure of a sound general minimum of good quality in the films, which could be tested by the films being viewed, directly or by deputy, by a Films Commission wholly independent of the trade. I am well aware that the Government have seen fit to reject both those proposals—both the proposal of a quality as well as a cost test, and also the proposal to appoint quite an independent Films Commission. I know that their reasons have been set forth by the noble Viscount, and are contained in the White Paper of the Government, but I am not satisfied that their objections are wholly sound, and I cannot but share the regret expressed by the noble Lord opposite that the Films Commision proposed by Lord Moyne's Committee, independent of the trade, permanent and expert in its character, has been set aside.

I certainly wish more attention had been paid in the Bill to the considerations of quality as well as of quantity. It is in that respect that while, naturally, I view the Bill with entire favour, I must record my disappointment. I can only hope that the new Cinematograph Films Council which is to be appointed, charged with the review of the progress of the film industry and the duty of reporting to the Board of Trade, will keep in mind not only the amount and cost of the films, but also their intrinsic value. Also, the matter is so vastly important, that I hope the powers of the Film Censor inadequate as they are, may be so strengthened, or his influence so increased, that this great industry affecting as it does the whole community may be influenced by considerations higher than the mere financial interest of the industry itself.

LORD MOYNE

My Lords, I need hardly say that I agree with the most reverend Primate that it is very unfortunate that no way has been found for judging films by quality rather than by cost. The subject was very carefully examined by the Departmental Committee, and they put forward a proposal which the Government have, no doubt for very strong reasons, not seen their way to adopt. I think, however, the most reverend Primate may to some extent console himself with this: that there is an appeal against purely cost qualification, and I am not sure that in practice the change over of emphasis from quality to cost is going to be quite so different from what we had in mind as might at first sight appear. After sitting through the hearings of that Departmental Committee, the strongest impression that they left on me was the very remarkable skill with which the original Act had been drafted. I think it showed most remarkable prevision on the part of the noble Viscount, who is now in a different office, that he was able so far to foretell the difficulties, and find a sound foundation for this system on entirely unknown and untried ground. I think this Bill, in the light of ten years' experience, will be able to achieve a great strengthening of the system, and that many malpractices and evasions will be effectively checked.

The system of control of the cinema industry by quota is one of extreme complication, and even after the evidence given before the Departmental Committee I would feel great difficulty in dogmatising as to the repercussions of the quotas between the various conflicting interests. The Board of Trade has been confronted with the necessity of balancing these conflicting interests, and it is very unfortunate, as Lord Strabolgi said, that they are not merely divided between distributors, renters and producers, but that each section has got very considerable cross-interests within its own group. Therefore I recognise that there are many ways in which we can look at this application of the quota scale, and I am going to make criticisms as to the standards in the Bill as it has reached us. The quota, of course, must be applied with a careful examination of the possibilities of the industry, and we are all familiar, from the information in the Press, with the extreme depression in which the producers now find themselves. All the same, the Bill reflects a gloomier view than that which was formed by the Departmental Committee.

The Committee proposed a temporary reduction of the exhibitors' quota, in view of the possibility of a shortage for a few months of British films, due to the suppression of the cheap film made for quota; but the Bill has gone even further and reduced the exhibitors' quota from 20 per cent. to 12 per cent. The Committee considered that the renters were fully able to remain at the present quota figure of 20 per cent., up to which they had been brought under the Act now expiring. But here, too, the Board of Trade propose a very large reduction of 5 per cent. We thought that any such pessimistic view was unjustified. Our great difficulty in this country with the film industry is the inferiority complex under which many people seem to suffer. Many quarters accept the domination of the foreign film as permanent and inescapable. I think one could see that by the remarkable commotion caused by a suggestion of the Departmental Committee, that, as an eventual goal, it would be reasonable if the British market were shared half and half between our home production and foreign competitors. And I can imagine no other industry, with every natural facility for home production, accepting with complacency a position of complete dependence on foreign importations. I do not agree that it is impossible to make good British films.

We know the advantage of the United States in their enormous market. That of course gives special facilities for the production of spectacular films. I heard on the wireless the other night some figures given by Mr. Rowson, who is a very eminent statistical expert and has studied this question, as to the way that British films are paid for. The average cost of admission in cinemas is 9¼d., and of that 9¼d. the first feature film gets a very small fraction over one penny. Therefore, say that a film costs only £30,000. Leaving profit altogether aside, about seven million people must pay one penny each before the cost has been covered. Well, the advantage of the United States, in view of that figure is, I think, easy to understand, because, with their vastly greater home market and their domination in our market as well, when they come to make super-films costing, not £30,000 but actually £300,000 and more, naturally it is much easier for them to find, not seven million people to pay a penny, but the seventy million pennies that would be required to cover the cost of production. While and so far as this taste for spectacular films is maintained, no doubt the United States will keep this advantage. The United States is the home of mass production, founded on mass consumption and mass taste, and we are all familiar with the methods of sensational publicity upon which this system depends.

I do not think we ought to accept this position. We should work to bring home the fact that the best British film in its own style is as good as any United States film, and that many of them are better than the common type of imported film which gives a false picture of life, perverted history, and garbled literature. It seems to be a matter of education of the public taste for films of a British flavour, and it is also for producers to learn to turn out films in accordance with the consumers' taste. Other home industries have been built up by protection, and this industry is unfortunately one to which it is particularly difficult to apply ordinary protective methods, because you cannot value a film at the time of importation, and it is only many months afterwards, when receipts have been worked out, that any fair idea of the profit on a film can be formed. I do not think you can better the very ingenious method of the double quota which has been vindicated by its success, which has worked up British film production in ten years from 5 per cent. to a quota of 20 per cent., and a performance, as judged by the exhibitors' returns, of 30 per cent. The stimulation of the industry has been such that it is now fully equipped to supply a much larger share of our own market, and its plant and resources have been multiplied tenfold in seven years.

We must not exaggerate the importance of the present slump. It is the inevitable result of the present uncertainty as to the new basis for British quota films. This uncertainty affects both foreign and British producers. Take a great combination like the First National and Warner Films. Their Teddington studios have been closed for, I believe, three or four months, during which time they would have produced three or four films at a fairly low cost. Some of these films would probably not have qualified under the new scale of costs, and until the Bill passes it is impossible for such producers to decide whether they are going on with a cheap film, costing £1 a foot, or a double-counting film costing £3 a foot. But the reason why we must not attach too much importance to the present slump and let it affect the quota scale against national interests is that the exhibitors' year ends in September. I am assured that there is no difficulty in maintaining the current quota from films already made, seeing the very big margin there has been in former years, and that there is still time to provide programmes for the beginning of the new quota year next October at a higher scale than that proposed in the Bill.

My first suggestion for strengthening the Bill is that Clause 16 ought to come out altogether. It is a clause to reduce the exhibitors' quota retrospectively below the level to which it has been brought under the expiring Act. It seems to be something very near a breach of faith to the renters that, when they have worked their quota to the full level of the Act, the obligation of the exhibitors to show films on that scale for the current year should be wiped out. An even greater weakness in the quota scales is, I think, with regard to the renters' quota. The noble Lord, Lord Strabolgi, would like to sweep the renters' quota away altogether. I think he was chiefly aiming at helping British films to get into the foreign markets. That is not the only object of the renters' quota. The renters' quota is to increase production and exhibition in our own markets; but I agree with his view that we should greatly benefit by more effective measures for reciprocity than those contained in Clause 3. I shall not develop that now—I shall do so if necessary during the Committee stage—but I am sorry to say there is very great difficulty in getting effective reciprocity owing to the impossibility of controlling the accuracy of figures in foreign countries. If it is not possible to be satisfied with statistical information from our Dominions, still less is it likely to be administratively possible to get a water-tight scheme of reciprocity on anything but a purchase of rights as opposed to the actual evidence of film-time achieved.

The renters' quota at first sight certainly seems less important than the exhibitors' quota, because it is only an obligation to offer films without, as in the case of the exhibitors' quota, any necessity to show that they have reached the screen. The Committee were convinced that this quota was at present indispensable; firstly, because exhibitors were very strong in their view that it would be unreasonable to leave them subject to an obligation to show British films unless adequate steps were taken to see that these films were made in the necessary numbers. Another reason for the renters' quota is that it is a way of financing British production which, though in theory it may be less desirable than independent financial support, cannot at present be spared. This renters' quota is admittedly a burden on the foreign producer, who generally has his own renting organisation, but I do not think it is an inequitable substitute for import duties which are perfectly fair in themselves but which have been rejected because of the practical difficulties they would cause. Mr. Rowson, whom I have already quoted once, has given figures, which are not contested, that every year there goes from this country to the United States £6,500,000 in payment for films. I do not know how much of that is profit, but certainly a very large figure, because they paid the cost of their films in their own market. Surely out of this very large sum it is not unreasonable that American producers, through their renters, should make a contribution to production here in England. It was for that reason that the Departmental Committee felt no sympathy with the plea of the renters that their quota should be reduced.

We ought to compare the treatment of these various interests in the Bill. The producer is not going to get anything, at any rate directly. The exhibitor, for the moment, will get a reduction of burden, though afterwards his quota will be put up. But when you come to the foreign renter—and renters are predominantly foreign—you find he is rewarded for his invention of the "quota quickie" by now having his obligation reduced to 5 per cent. below the figure which had been considered reasonable by the noble Viscount ten years ago when he never envisaged the "quota quickie." They are going to get this reward for having so long and so successfully evaded this obligation. There is another point, that owing to the method of counting some films twice over the whole basis of the quota is so altered that even the diminished obligation may become very largely inoperative, especially in the case of large combinations where, by means of the new reducing factor, they would be able to work partnerships which might let them out of any burden whatsoever. I do not say that has been achieved yet, but it does lend itself to manipulation in that way. I do not criticise this double quota on its merits. There is a great case for encouraging the production of high-class British films, even with foreign money. That, I think, will help us to compare more favourably with the extravagantly financed United States films; but the point is that this new factor is going to reduce the effective percentage figure of the renters' quota by an unknown amount, and if the President of the Board of Trade again introduces in this House a treble quota, for which there is much to be said, that reducing factor will be still less easy to determine.

I am quite aware that there is an unfortunate difference of interest between the independent British producers and those subsidised by the foreign renters' quota. The independent producers wish, by increasing the exhibitors' quota, to force up the demands for their own products. If investors were in a more favourable frame of mind that might be a safe course, but unfortunately the financial conditions are at present such that I do not think it would be wise for the industry to do with-out this foreign money. The Departmental Committee certainly agreed with the Government that the renters' quota must be maintained. I would therefore hope that the Government will still strengthen this renters' quota, and that it will he made effective at its present level. I would remind the noble Viscount in charge of the Bill that there are already two safety valves against an exceedingly high quota. Firstly, the renter can import rather fewer foreign films; and, secondly, the individual exhibitor can get dispensation from the Board of Trade under Clause 13 if, owing to forces out- side his control, he is unable to comply with that quota. If these safeguards are not enough, it would be quite practicable to take power under Clause 15 to give retrospective absolution, not merely to individuals as under Clause 13, but to exhibitors and renters as a class, from any quota requirements which the output of the industry had not made it possible to fulfil.

In spite of the rejection of a quality test, and the necessity which that would have caused for an independent body, I believe there still remains a strong case for having a Commission. There are many other functions besides a quality test in which the Commission could have done much to help this very badly organised and extravagantly run industry. If really effective stimulus to home production is to be achieved, the fixing of quota year by year under a more elastic system on the certified performance of British producers, as suggested by the noble Lord, Lord Strabolgi, and as also recommended by the Committee, would give an inducement and a quick reward for efficient development. In spite of sectional difficulties I believe the industry would have accepted it, but I suppose we have probably got to make the best of the Advisory Committee. I do not think that Council of twenty-one will do anything of value unless they are given the driving power of a full-time paid chairman and a full-time secretary. Rumours mentioned several names in connection with the Chairmanship, but it is quite evident that no part-time attention from an eminent person with his time more than filled by existing demands is going to be effective in supplying driving power in this very difficult administration.

Another amendment in the constitution which I would like to see is that the Board of Trade should be given wider discretion in appointing their representatives. The noble Viscount in charge of the Bill mentioned that no one with any financial interest in films should be eligible. I think that is going too far. I think that the Board of Trade ought to have full discretion to appoint anybody they choose in the public interest, and we can all think of people who are quite independent in their views about films but who may have had at some time a small financial interest in them. That in no way disqualifies them, in my opinion, from participating in a body of that kind where there are also trade interests. On the contrary, it probably makes them far more valuable members because of the experience which they would have had of this extremely difficult trade from a more detached position than that of the representatives of the trade bodies. I quite recognise that it is very difficult for the Board of Trade to hold a just balance between these various interests, but I feel that they have shown a little too much timidity in dealing with the foreign renter. I trust that even now they will consent to reenact at least that measure of effective protection which the industry was enjoying under the expiring Act, and thus increase the prospect of establishing a really strong British film industry.

THE LORD BISHOP OF WINCHESTER

My Lord, I rise for a few minutes only because I want to associate myself with those who are supporting this Bill as a Bill which will do something to strengthen and build up the cinema industry in this country. I want to see the cinema industry here present British pictures of British scenery, giving an accurate account of our history, showing something of the energy and enterprise of our people at the present time, and setting forth some of the ideals which have been characteristic of our nation. It is, I think, a most serious matter that at present 75 per cent. of the time in cinemas is occupied with foreign films. Now if 75 per cent. of the Press was owned by foreign companies we should undoubtedly feel considerable anxiety, and if in 75 per cent. of the schools of this country the text books were those which had been produced abroad and were taught by foreign teachers, we should feel that the position was quite intolerable; yet the cinema has a greater influence over many than the Press has, and over the young it has a greater influence than the schools.

It is not only that we suffer here through not having a strong British cinema industry, but we suffer abroad. The other day I was hearing from a man who had been travelling in South America how he was struck by the way in which certain foreign countries displayed their excellent films, but the only reference to England was as a rule of a contemptuous nature, showing our weakness compared to the alleged strength of some Continental nations. We are suffering also in our own Empire through the weakness of our films. I noticed in to-day's Times that in Australia the Commonwealth Film Censor's report for 1937 records a decline in the import of British films from 27 per cent., in 1934, to 20 per cent. last year, and then goes on to state: Film critics, commenting on the report, declare that the shrinkage in British films is attributable to a deterioration in standard, straining the loyalty of Australia. I hope that this Bill will do something to strengthen the industry at home, but I do very much regret two particulars in which it has departed from Lord Moyne's Report.

I refer, of course, first of all to the way in which the test of quality is to be by cost and not by direct viewing. The noble Lord who has just spoken has pointed out that that may not perhaps be quite as serious as it seems at first sight. Then I regret still more the fact that an Advisory Committee is to be called into existence instead of a small Commission. Advisory Councils are quite invaluable when they are not oppressed with certain conditions which are present in this case. An Advisory Council can get very valuable advice and reach useful decisions when they feel that the work which they have to deal with is limited, but here it is almost unlimited. They can get through a great deal of work when they are agreed on first principles, but in this case we are told that there is no agreement amongst those who are engaged in the trade, and if such a Council is to be successful there must be a very strong permanent staff able to carry on the work in the intervals and able to prepare the work for the meetings between which there will be considerable intervals. I believe it would have made enormous difference to the whole British industry if there had been created a strong Films Commission consisting of a few men whose main object would be to think out problems connected with the cinema business in England, and who would set themselves to encourage the business in every kind of way so that it might be of real value to the Empire, the nation and the general public as well as to themselves.

VISCOUNT BRIDGEMAN

My Lords, I hope I may be pardoned if I engage in this debate for a few minutes on the strength of a very slight and recent contact with these problems of the film industry. I hope that this Bill will become law as quickly as possible, if not entirely without amendment, because at the present time the cinema-producing industry is, so to speak, marking time, waiting to know how the Bill is going to turn out and what the quotas are going to be. It has always struck me that, compared with the treatment given to middlemen and distributors in other industries, the renter and the exhibitor in the film industry have got listened to a great deal more than, say, the home-grown beef trade. I have not noticed that auctioneers or butchers are consulted to the same extent as are the renters and exhibitors. As long as the cinema industry continues—and even football pools do not seem to interfere with it very much—so long will renters and exhibitors rent films and fill cinema houses. If they support regulations for quotas and such like it is surely from motives of patriotism rather than motives of business. Your Lordships will be aware that many of the big concerns in the cinema trade combine the functions of producers, exhibitors and renters, but that I think does not affect my present argument.

We should, when considering this Bill, study first and foremost the interests of the producer because it is the producer alone who has the power to transform a large number of spasmodic and casual workers in the industry into permanent employees. I saw it stated in the Press, I think on January 22, that out of 10,000 employees in the industry 8,000 were at the time on the "dole." I think every one will be agreed that if it had not been for the Act of 1928 the cinema industry would not be alive to-day, but it can hardly be claimed that the Act has increased quality to the same extent that it has increased quantity. Certainly I do not think anyone can claim that it has been completely successful in the establishment of a well-organised industry. Your Lordships may know that there is not a single University course in existence in this country which has a direct bearing on the cinema industry, and when one compares that state of affairs with the invaluable assistance which University courses give to most of the large industries in this country, that certainly seems a very strange thing. It makes one wonder whether some of the thousands of pounds used to finance companies which have since disappeared would not have been better used in endowing a University chair with the object of improving the standards of the cinema industry.

It was clear, I think, when the 1928 Act approached expiry how great the disorder was in the cinema industry, and how very wide the differences were between one section and another was shown by the correspondence in the daily Press. Until these matters are put right can we really hope for the conquest of foreign markets? We can certainly be sure that the new Bill, like the old Act, will achieve the output of films in requisite volume, whether they are quick or slow, but until this industry is in a better state of organisation than now I doubt whether any films, however much they are supported by quotas and the like, will ever make a successful invasion abroad. We shall still be faced with the question of how much money Hollywood is prepared to put down to comply with the letter of the law in this country. So it seems to me that the cinema industry should stand to gain a very great deal by the establishment of the Films Council, and I think that Council has the great advantage that it will afford a meeting ground for sections of opinion in each of the three estates of the cinema realm. There they will have an opportunity of discussing differences which would not be open in a smaller body, and perhaps would never occur if stricter control were exercised by a Government Department.

The new Bill provides a much more flexible amount of control than the old Act, and it will be within the power of the new Films Council to advise on the modifications which will certainly be required during the next ten years. I doubt, however, whether that Council will ever be really successful unless great care is given to the selection of the lay members as well as of the members representing the industry. May I venture to support the noble Lord, Lord Moyne, in his reference to the importance of choosing representatives of the financial interests on that Films Council? The film industry is suffering from a number of diseases, including financial diseases, and patients do not always succeed in curing their own diseases. The ailments of the film industry will, it seems to me, be cured much more quickly if among the lay members on the Films Council are included financiers, solicitors and accountants who are familiar with the special problems of the film industry, which, so we are given to understand, are very special ones indeed.

The noble Lord, Lord Strabolgi, made reference to the question of film finance. I do not wish to say more than a word or two on that subject, but I do think that it would be, to say the least of it, helpful if some indication were given of the attitude of the Government towards the recommendations of the Moyne Committee on the subject of film finance. It is no good pretending that there is not a great lack of confidence in the City and on the part of the investing public in regard to anything that has to do with films. Until confidence is awakened we shall have the situation where British films are financed entirely or very largely by foreign renters, not because they want to finance them but because they have to. Quotas may come and they may go, and they may be changed, but they are not likely to contribute any permanent benefit to the film industry unless a determined effort is made by the Films Council or others to produce cohesion and financial stability in that industry. I believe that the provisions in this Bill augur well for the establishment of that state of affairs in the next ten years.

LORD STONEHAVEN

My Lords, at this late hour I must apologise for detaining your Lordships even for a few minutes, but there is a point which has not yet been raised which I think is of sufficient importance to justify my dealing with it. It is the question of the change made by this Bill as regards the renters' quota. I want to speak particularly of the effect of the change on Australian films. Under the old Act Australian films have enjoyed exactly the same privilege, I understand, as films made in this country. For reasons which were explained by my noble friend, it has been found wise to alter the qualification which enables a film to be accepted as part of the British quota for the renters' quota, and under the new qualifications it is impossible for the Australian films to come in. My noble friend, in introducing the Second Reading, alluded to the tremendous and subtle force that the cinema has in spreading ideas about one country or another. It is precisely the desirability of making Australia better known to the world in large, and to us in this country among others, that seems to justify an attempt to retain, if it is possible, those advantages for the Australian cinema industry which I understand—I am not an expert in any sense—it enjoyed under the old Act.

Then there is another thing. The right reverend Prelate referred to the regrettable amount of films of foreign origin describing foreign life and foreign scenes that are shown here. If we want, as we do want, overseas films to be shown, surely it is very desirable that those films should depict scenes and events in our own Dominions rather than in foreign countries, and should act, as they would, as a connecting link and a strong uniting force between different parts of the Empire. And there is another point of a rather wider kind. The Australians are naturally, rightly and justifiably jealous of the part which they play in contributing towards helping the different parts of the Empire. There was a notable instance quite recently, to which too little attention has been paid, when Australia risked a very serious difference of opinion with Japan, one of her very best customers as a rule, in order to maintain in the Australian market a preference for British goods that acted prejudicially on. Japanese goods. That is only one example of many that might be given.

With regard to films alone, I understand Australia admits our films free, which is a very substantial advantage as compared with the American films, which have to pay eightpence a foot, I am told. That amounts to something like £300 on a single film, and as it applies to something like a hundred films in the year, it appears to be a substantial advantage. But the gesture is far more important than the amount of money involved. It seems a pity, if it can be done, that we should not reciprocate that in regard to Australian films coming under our own quota. I believe very few films are affected. The Australians import something like 500 British films a year, I am told, and not more than five or six Australian films come over here. Manifestly, if you want to encourage a film industry in Australia, no industry can be built up on a market of six and a half million people. There must be a larger audience, and that audience can only be provided by us and other parts of the Empire. Those are only a few of the arguments which I beg to submit to my noble friend. Undeniably this is a question which will need to be treated, if it is treated at all, on the Committee stage, and I hope your Lordships will deem the points which I have raised of sufficient importance to justify my intervening in the debate at this late hour.

VISCOUNT SWINTON

My Lords, certainly the Government can have no complaint of the general reception of this Bill, because every speaker has joined in expressing the hope that it will find its way to the Statute Book as soon as possible. Nor, indeed, has there really been any criticism of the broad structure of the Bill. The criticism has all gone to matters of detail, though, of course, some of them are important matters. Therefore I must make a rather disjunctive reply, which shall not be long, but I must in fairness deal with the various points which were raised. Let me take first of all the suggestion made by my noble friend Lord Stonehaven, who spoke last. He was obviously speaking under a misconception of the true situation. He said it would be wrong not to give Australian films a fair measure of reciprocity. If there were any question of refusing to Australian films a fair measure of reciprocity, I should be the first to agree with him. But let me assure him that, so far from there being any lack of reciprocity, I am pretty sure that I am correct when I say that Australian films receive a more generous treatment in this country than films from this country receive in Australia.

In certain of the States—if I am wrong I will take occasion to correct what I say—instead of exhibitors being able to take in British films perfectly free and count them for exhibitors' quota, as they do here, I rather think there has to be a proportionate holding of Australian films. Be that as it may, there is no question that we do treat them at least as well. But observe. My noble friend said it would be a pity if these Australian films were prevented from coming here. Indeed I would agree with that; but what is the situation? Under the provisions in this Bill not only are they perfectly free to come here, but if an Australian film comes here an exhibitor in this country is perfectly free to count that film in his exhibitors' quota. Therefore there is every encouragement for the Australian film to come here. The only thing that is now prohibited under this Bill is that a renter in this country—not an exhibitor at all, but a renter—shall not count for renters' quota a film which has been largely manufactured outside this country. As I pointed out in my opening speech, if that provision were not in the Bill then all that would happen would be that the foreign firm wishing to manufacture a "quota quickie" would be able to go and manufacture it in Australia, Canada or anywhere else he liked.

LORD STRABOLGI

In India, particularly.

VISCOUNT SWINTON

India, or anywhere; he could manufacture it anywhere in the British Empire and register himself as an Australian, Indian or Canadian company, make "quota quickies" by the mile, at a penny a mile, or whatever would be an appropriate rate, and import them into this country, and the whole of our provisions for the cost test would at once go by the board. I am sure that my noble friend would be the last to wish to suggest that, particularly when the Australian position is fully and fairly safeguarded.

Lord Strabolgi said that £15,000 was a bad figure because you would only get a poor film for that amount of money. I am not at all sure that that is true. I do not pretend to be an expert on film finance; all I can say is that it was the figure which the producers themselves suggested to the Board of Trade, and I presume they know something about their own business. But let me observe two things first of all, on the noble Lord's statement that you cannot get a good film for anything like that. It has been found necessary to put into the Bill a provision that a film of good quality may be allowed to count for quota when it has been looked at by this Council, although it has cost less than that. That provision has not come out of the blue as a sort of figment of the imagination. It is found necessary because there have in the past been films which have cost a good deal less than £15,000, but which have been very good films and very good moneymakers as well. Therefore I do not think it is reasonable to say that you are not going to get any decent films for £15,000. Let me observe that £15,000 is not a dead level figure. It is not the maximum figure; on the contrary, it is the minimum. What we are saying is not that you shall not spend more than £15,000 on a film, but that unless you spend at least £15,000 you shall not count your film for quota.

LORD STRABOLGI

May I put this right? The noble Viscount misunderstood me. I did not say that you cannot make very palatable or beautiful films for much less than £15,000, but that you cannot make spectacular films for that money.

VISCOUNT SWINTON

I quite agree. Nobody ever said you could, but in order to get more expensive films there is the provision that if you get the triple value film then it may count twice for quota. I think we should he unwise to raise a figure which the producers themselves think to be a good figure.

Then the noble Lord suggested that the Government might be ready to accept a fair wages clause. At present, the exhibitors have a wages agreement of their own with their employees, and such a clause as he suggested would not affect them, but it would affect the producers, and if an appropriate clause, which I understand has been drafted, were put down, the Government would be glad to accept it. The noble Lord also said that we ought to have an independent Films Council, because the industry was always in disagreement. It is quite true that the industry itself is in disagreement. Indeed there are very few things it is able to agree upon, but the one thing that it did agree upon was that none of them wanted a completely independent Films Council. Therefore I do not think that by trying to create such a council we should be adding to the measure of agreement in the industry.

I might take the whole question of the Films Council. I generally find myself in agreement with my noble friend Lord Moyne, but, frankly, about this I find it extraordinarily difficult to follow his reasoning. You cannot make people efficient by lecturing them. I am all for having the independent people in. I think this industry—as is indeed the case with most industries—has a good deal to learn. We all of us have, and we are all the better for associating with people wiser than ourselves, and getting a second and impartial opinion. But the wisest man outside—even my noble friend on his Committee, and he did some extraordinarily good work—did not know all about the industry before he started, and I am not sure that my noble friend did so even when his Committe came to an end. I would have thought that as the object of this Council is to make the industry more efficient, outsiders—provided you get the right kind of outsider, like my noble friend, and not people who talk a great deal about films, from a high moral point of view, but who seldom go to see a film and certainly have no money invested in the industry—in their association with this Council will be very valuable, and I cannot help thinking they will be more valuable if they are associated on the Council with members of the industry itself. Otherwise you might have an atmosphere created in which it is thought: "Here are people who are telling the industry what is good for it." If, however, you have ideas put forward by independent people, and difficulties explained by members of the industry, I think you will get much better results than otherwise would be the case.

I also see the importance of having a good Chairman. There is no provision in the Bill for payment, but I have enquired and I am informed that the President of the Board of Trade, in another place, did suggest that payment of the Chairman might be considered, if it was an important matter. I am not sure what the rules of order would permit. I do not know how wide is the Financial Resolution, if there be one, which covers this Bill, or whether, if as I suppose the expenses of the Bill are paid by fees taken from the industry, this might not be a financial matter in the strict sense of the word. Provided, however, that it were in order for this question to be raised here—and indeed it would be in order, although it might be taken exception to in another place—perhaps my noble friend, if he thinks it well to raise the matter, will raise it on the Committee stage.

I also see the point that you might have somebody who would be a very good man for the post but who might be considered disqualified by reason of his having some shares in a film company. It is worth considering, perhaps, whether instead of saying—I have no authority from the Department to say this, but I say it from my own experience in connection with other Bills—that none of the independent members must have any sort or kind of interest in the industry, you should say that anybody must disclose any interest he may have to the President. I know it has taken that form in a Bill before, because it was not wished to disqualify a man from being appointed—a first-rate man for the job—merely because he held, perhaps as a trustee, shares in a railway, and a very strict clause might be held to disqualify him. With regard to the triple quota provision it was fully discussed in another place, and if after consideration the President of the Board of Trade feels it is a matter which ought to be considered further, then it would be appropriate for the Government to put down an Amendment on which the question could be raised.

To come to the last point, the point raised by the most reverend Primate and the right reverend Prelate, the quality test, the most reverend Primate expressed his sorrow, that there was not a quality test in the Bill. He said, quite frankly, that in saying that he did not mean a moral censorship, but a good film. We all want a good film, and I do not think any of us dissent from the test which I ventured to put in opening, that a good film is a film good enough for a large number of people to want to go and see it. It is, incidentally, rather a mistake to suppose that the majority of British films, apart from "quota quickies," are bad films. I do not think they are. The trade itself has a system by which after trade shows the films get regularly marked. They go up from seven to nine and a quarter, I think, and the ascending figure shows what the film is supposed to be worth from a box office point of view; and I think that, though there were not a great many of them, the marking by the trade itself of the British films did not compare unfavourably with the marking of foreign films.

But we want to get these films better, and how are we going to get them better? We shall only get them better by encouraging people to put their money into financing films, and having the best people to make them and act in them, so as to get the best films produced. With great respect, I am perfectly certain that that will not be done by having a quality test imposed by some outside body. For it means that the man who is going to make a film, and has to collect, it may be, £50,000 for the making of it, will not know until the film is made whether it is going to be allowed to count for quota or not. I am sorry the most reverend Primate is not in his place, because I should have liked to have asked him this, as an acid test of the system he advocates. Supposing I were the arbiter of whether the film was of high quality, and he were the producer of the film, would he put £50,000 of the Ecclesiastical Commissioners' money into the making of a film, when he had not the faintest notion whether it was going to pass the test of me as a sort of arbiter elegantiarum? I am perfectly certain he would not produce a penny of the Ecclesiastical Commissioners' money in those circumstances, and he would be quite right.

If that is so, surely the answer is that you cannot have this kind of arbitrary test ex post facto. You must have the test of encouraging people to put the money into the business, and where the treasure is there will the heart be also. If they put a great deal of money into it they will put a great deal of energy into it, and they will do their best to make it a success. Quite frankly, I believe that the system in the Bill is the only one which will work in practice, and for these reasons I venture to commend it to the House.

On Question, Bill read 2a, and committed to a Committee of the Whole House.

House adjourned at twenty-five minutes past seven o'clock.