CINEMATOGRAPH FILMS BILL. (Hansard, 14 March 1938)

HL Deb 14 March 1938 vol 108 cc52-102 52

§ Order of the Day for the House to be put into Committee read.

§ Moved, That the House do now resolve itself into Committee.—(Viscount Swinton.)

§ On Question, Motion agreed to.

§ House in Committee accordingly:

§ [The EARL OF ONSLOW in the Chair.]

§ Clause 1:

§ Determination of renters' quotas for period beginning 1st April, 1938, and ending 31st March 1948.

§ 1.—(1) Subject to the following provisions of this Part of this Act, where a renter has, in any renters' quota period, acquired for distribution in Great Britain films which are registered as foreign long films, or has, in any such period, so acquired films which are registered as foreign short films, then unless—

(a) in the first case, …
(b) in the second case, …

the renter shall be guilty of a quota offence, except in a case where either the Board of Trade certify, under the following provisions of this Part of this Act, that his failure to fulfil the relevant conditions imposed by this subsection was due to circumstances beyond his control, or the renter proves that fact to the satisfaction of the court.

§ (2) For the purpose of paragraph (a) of the preceding subsection, the length of a film shall be taken to be its registered length; but where a film registered as a renters' quota film is also registered as a British long film and also as doubled for the purpose of renters' quota on the ground of its cost, then, subject to the following provisions of this Part of this Act, the length of the film shall be taken for the purpose of that paragraph to be twice its registered length.

§ LORD STRABOLGI moved, at the end of subsection (1), to insert "or the Board of Trade has approved, on the advice of the Film Commission, of an order exempting the renter from quota obligations under this Act." The noble Lord said: The Amendment which I have the honour to move to Clause I should be read in connection with the proposed new clause on pages 5 and 6 of the Marshalled List of Amendments and particularly paragraph (g) near the top of page 6. Your Lordships will see that I propose, on page 2, line 31, after a paragraph which deals with the powers of the Board of Trade to make certain concessions to quota renters, to add the words "or the Board of Trade has approved, on the advice of the Film Commission, of an order exempting the renter from quota obligations under this Act." There is little meaning in the Amendment without the further Amendment which I propose after Clause 7. I there propose to insert in the Bill a scheme for a Films Commission. Part of its powers are indicated in subsection (4) (g). I do not mind if your Lordships do not accept my proposal for a Films Commission—the same powers could be conferred on the Board of Trade. Or, if your Lordships would prefer that the Films Council, referred to in Clause 40 of the Bill, should be given these powers, I do not mind at all, as long as I can get this principle into the Bill.

§ To explain what is in my mind I would draw attention to subsection (4) (g) of the proposed new clause, by which I would empower the Films Commission—or the Board of Trade, it does not really matter for the purposes of my argument— to negotiate with any individual renter or group of renters engaged in the distribution of foreign films with the object of drafting a contract for the renting or making of British films, for the approval of the Board of Trade, as provided in subsection (1) of Section one whereby the renter or renters may be exempted from quota obligations under this Act. The two clauses are knit together, and what I am asking the Government to assent to is the waiving altogether in certain circumstances from year to year of what is known as renters' quota. These circumstances are as follows: That a scheme shall have been agreed whereby these foreign renters, in return for the great privilege of using our market and 54 taking from it in a year between £6,000, 000 and £8,000,000—the second greatest market to them in the world—shall, as we say in Yorkshire, "pay their shot"; that they shall enter into an agreement either to make suitable British films, or to rent for exhibition abroad British films made by entirely British companies. In other words, we get away from all this compulsion of renters' quota and penalties, and we try to make a businesslike agreement with the people who, after all, are the leaders of the cinematograph industry. We in this country have a small promising cinematograph industry, which we are trying to stimulate and build up by this Bill, but it has to be protected; whereas across the Atlantic in particular is a great, powerful, extremely efficient cinematograph industry. If we can come to a suitable arrangement with these highly successful business men who control that American industry to use some of their profits out of the English market for helping our own industry, then I think that would be a very admirable thing.

§ Your Lordships will notice that this is only permissive. The Board of Trade have to approve, and nothing can be done without their sanction and consent. The two ways in which I suggest that the foreign renting interests might help our industry by agreement are either by making cinematograph films in this country with British labour, or by renting British films to show in their own markets. With regard to the making of films in this country, I would like to see them given a free hand to spend a certain substantial sum of money. Whether they make large pictures or small pictures does not so much matter, as long as there is an honest attempt to make suitable pictures of high quality and high entertainment value. Alternatively, or as part and parcel of the same plan, they could rent suitable British pictures, and really push them in their own markets, and show them in their own theatres, and thus carry British ideas and British art overseas. I believe that something of this kind might be of the greatest value to the cinematograph industry, and you would get away from the idea of penalties and of punishing the foreign film producers for making such attractive pictures for the British public—because that is what it 55 comes to. We have had to have quotas in the past. I think the present Minister for Air was perfectly right in introducing the quota system in the original Bill which we are now amending. But it is not an ideal system. It is rather clumsy and it has had bad effects in the past, as the noble Viscount has himself described to your Lordships; and if we can get right away from it, I think it would be very good for everyone concerned. The exhibitors' quota of course will remain. You have to reserve a certain portion of screen time for British cinematograph films of a suitable quality if you are to give the industry a chance at all. That is untouched. But I believe that this scheme of mine is really worthy of sympathetic attention.

§ With regard to the way in which I have attempted to draft this far-reaching proposal, I must confess that I did this myself alone a few days ago. I sat up with a wet towel round my head, and I thought the thing out very carefully. I read the old Act and the new Bill and the redrafted Bill, and the wording of the Amendments is mine. If it is not perfect I apologise. I am not a Parliamentary draftsman, but I drew on what experience I had. I think my words do convey the meaning I intended, but if the President of the Board of Trade or the noble Viscount would prefer other words I do not mind a bit, so long as they will carry out what I have in view. This is an attempt to give greater elasticity. It is an attempt to form an alliance with these great, powerful, wealthy interests abroad for the benefit of our own industry in this country. I tried to outline something of this kind during a debate we had in your Lordships' House last April, when I had the privilege of moving a Resolution on the film industry, which your Lordships were good enough to accept. On that occasion I outlined this idea of what I called a trade treaty, and I referred to the same matter on the Second Reading of this Bill. I have therefore had this idea for a very long time in my head, and I think there is something in it. Since I put this Amendment and its allied Amendment on the Order Paper I have had very favourable reactions indeed from prominent members of the British cinematograph industry. They say, "If only we could get something like this it would 56 be most helpful, but it may be too late and it is a pity this was not thought of before." But I have not had any criticism at all. I would particularly ask the noble Viscount not to turn the scheme down holus-bolus. My words may not be the best possible, but in this idea I really think there is the germ of something which may develop into a most helpful scheme for the British industry.

§ Amendment moved— Page 2, line 31, at end insert ("or the Board of Trade has approved, on the advice of the Film Commission, of an order exempting the renter from quota obligations under this Act").—(Lord Strabolgi).

§ THE SECRETARY OF STATE FOR AIR (VISCOUNT SWINTON)
I think the noble Lord, in the combination of his speech and the words he has put on the Paper, has made plain what it is he wishes to do. What he wishes to do is in fact to substitute an entirely different Bill for the Bill to which your Lordships gave a Second Reading the week before last. Indeed the noble Lord himself has said that. On the Second Reading he said he had this ingenious idea germinating in his brain, that he thought it was well worthy of consideration, but, he added, "we know it cannot be done in this Bill." I entirely agree with the noble Lord that it cannot be done in this Bill and, frankly, I was rather surprised that he put down an Amendment for that purpose. For observe what it is that the noble Lord is going to ask us to do. The structure of this Bill is a simple one. It is to impose a quota on the renters and a quota on the exhibitors. The renters' quota will always be rather higher than the exhibitors' quota, a very necessary precaution in order to ensure that the exhibitors will always have a sufficiency of films. There are some rather complicated but, I think, wise provisions which enable the renter to count a film of great value as worth more in quota value than a film of smaller value, and there are the provisions which I explained to the House on the Second Reading enabling the renter to acquire the foreign rights in expensive films and to count that as part of his quota obligations.
But observe what the noble Lord is proposing to do. One thing, after all, that has always been laid down with regard to every Act of Parliament is that if you put statutory provisions into a 57 Bill you must have certainty. Everybody must know what is the obligations put upon him, what are the rights and what are the duties of a Government Department. Consider what is proposed here. The Bill says, to start with, that every renter has got to satisfy his quota obligation by acquiring a proper and a rising proportion of British films. What the noble Lord proposes is that the Board of Trade, either at its own discretion or on the advice of the Films Committee or Films Council, shall be able to do a deal with a foreign renter to exempt him entirely from any obligation to fulfil his renters' quota by acquiring British films for this country, and to say, "If you make some arrangement by which you will show British films abroad, you shall be exempt altogether from your obligations under the quota." I am not going to argue whether that might or might not be a good thing to do, but I am quite certain that if you carried out that principle the whole of the exhibitors, whose good will is essential to the working of this Bill, would say at once and with one voice—and for once be unanimous—"We do not know where we are under a provision like this. We do not know whether there will be the British films to satisfy our quota, or where they are going to come from."
For these reasons I submit that, while nothing is in a sense out of order in a Bill drawn so widely as this one, it would be utterly without precedent—I would almost say entirely unconstitutional—to give the Board of Trade so wide a discretion as this, defined in no way at all, to put the exhibitors at the risk of not knowing whether there were going to be British films out of which they could fulfil their quota. If I may again quote what the noble Lord himself wisely said on the Second Reading, this may or may not be a good plan, but "it cannot be done in this Bill." Well, my Lords, it cannot.

LORD STRABOLGI
I believe that the noble Viscount began his brilliant career as a debater in the Oxford Union.

§ VISCOUNT SWINTON
I never spoke in the Union until I had left Oxford.

LORD STRABOLGI
I was never at Oxford myself, but I have also spoken in the Union. His speech was rather 58 reminiscent of some of the more brilliant orations I have heard there. I probably said on the Second Reading—I have not looked up my words—that it might be difficult, if not impossible, to put it in this Bill, but I have gone very carefully into the matter and, on looking into the Bill and at the noble Viscount's Amendment on the Paper, I believe it is possible. All I am suggesting is something permissive. The noble Viscount looks at this matter in a much more hostile spirit than I had anticipated, and I am very sorry indeed that it should be so. I was trying to do something constructive, to make the Bill more elastic. I was putting my trust in the efficiency of the Board of Trade. They are capable of knowing what is good for the industry.
What I had in mind is that to-day the only finance available for the industry comes from these same American renters, because they are making a great deal of money. The ordinary channels of finance for British production have dried up. It is no use blinking our eyes to the fact. The ordinary sources of finance have dried up, and the industry is looking for its main sources of finance to these very renters because they have the money. If something of this sort could be arranged, they perhaps could make arrangements with British finance. What is it that people in the City say with regard to British production? "If we were certain there was efficient machinery of production available we would again venture our money." If people who have been tremendously successful in producing films are prepared to put their talent into it, bring their people over here, I think British finance would again be available in conjunction with foreign finance. I am very sorry that the noble Viscount has not seen this. I am certain there is something in it. It would give the elasticity required, and I hope that between now and Report the noble Viscount and his advisers will see whether they cannot find some way of embodying in the Bill what I regard as a valuable I do not propose to press the Amendment now.

§ Amendment, by leave, withdrawn.

§ LORD TEMPLEMORE moved, in subsection (2), to leave out "paragraph (a) of." The noble Lord said: This is a 59 drafting Amendment, which is necessary to make it clear that both in a case of a long film and a short film the length of the film is to be taken, for renters' quota purposes, as its registered length. Subsection (2) defining the length of a film, refers, as drafted, only to paragraph (a) of subsection (1) which relates to long films. Paragraph (b) of the subsection, relating to short films, is not referred to in subsection (2). By removing the words it is now proposed to delete, the whole of subsection (1) is covered by the definition of length contained in subsection (2), as was intended in drafting the Bill.

§ Amendment moved— Page 2, line 32, leave out ("paragraph (a) of").—(Lord Templemore.)

§ On Question, Amendment agreed to.

§ LORD TEMPLEMORE moved, in subsection (2), after "doubled," to insert "or trebled." The noble Lord said: This Amendment and the Amendments on Clause 26 may be considered together because they link up. They are designed to give effect to a promise made in the Standing Committee of the House of Commons to consider giving higher value, for renters' quota purposes, to more expensive films than is done in the Bill as drafted. Thereby the Government hope that films of better quality will be provided. Clause 26 (6) of the Bill as drafted provides that where the total labour costs of a film amount to at least £22,500 and at least £3 a foot it shall count at double its registered length for the purpose of quota. The Amendments add to this principle by providing (within limits indicated later on) that a film with labour costs amounting to £37,500 and £5 a foot shall count at three times its length for the purposes of the renters' quota. An Amendment on much the same lines was moved at the Report stage in the House of Commons, but met with opposition on the ground that it might reduce the number of British films available and therefore make it difficult for exhibitors to meet their quota. It was accordingly withdrawn without prejudice to reconsideration of the matter by His Majesty's Government, and His Majesty's Government have now decided on its reintroduction.

§ These Amendments provide certain safeguards to meet this contingency. In 60 general it may be said that the object is to provide an incentive to those renters who are mainly interested in the distribution of foreign films to acquire as quota against those films British films of high labour cost. This, it is hoped, will assist in the production here of quality films acceptable to the public not only in this country but also abroad to a much greater degree than the less expensive type of film could hope to be. The general idea of the Amendments is supported by the producers in this country and in fact is in their interests. It is a constant complaint against British producers, particularly of the ordinary programme type of film, that they are undersold by the American renters who regard the British films of the ordinary programme type they are required to produce as something in the nature of a tax and have no special incentive to sell them at a profit. To the extent, therefore, that these new provisions induce the American renters to go in for high cost films—and many of them show signs of doing so—this alleged pressure on the small British producer of programme films will be relieved.

§ It has now been decided that the proposal to grant treble quota in respect of expensive films shall be pursued. The treble quota grant will however be given only in respect of films costing five times the minimum, instead of only four times as was the case when the previous Amendment was moved in another place. A limitation, moreover, is now placed on the degree to which the proposal may operate. This limitation is imposed in order to safeguard the position of exhibitors, who fear that by the operation of the treble quota the number of British films available would be reduced to a serious degree, even though the quality be higher of those films which are made. I might illustrate this proposal by taking the case of a renter who has to acquire 100,000 feet of British film in order to meet his quota obligations. Under the Bill at present in Clause 62 (6), it is possible for him under Clause 3 to acquire the foreign rights of British films with a minimum labour cost of £22,500 up to one-half of his quota obligations. These will be films which are surplus to renters' quota and will, of course, be available to exhibitors through other renters. He could, therefore, by adopting reciprocity, reduce his obligation to 50,000 feet. This obligation he could then meet by acquir- 61 ing double quota films of a minimum cost of at least £22,500, and the actual length of film which he can acquire is thus, in the limit, reduced to 25,000 feet, if he acquires all double quota films.

§ This position will not be disturbed under the Government Amendments dealing with treble quota. The renter will still be able to use the reciprocity clause and in this way reduce his national obligation from 100,000 feet to 50,000 feet. In meeting the remaining obligation of 50,000 feet he can use a combination of single, double or treble quota films in such a way that the actual length of celluloid which he acquires does not fall below 25,000 feet, the minimum which he must acquire under the Bill as it now is. The reduction of the renters' quota period from a year to six months will make it less easy for renters to take advantage of the treble quota concession. It has therefore been provided that whilst the quota must, on the basis of feet of British film to be acquired, be satisfied in each quota period, yet the obligation to provide 50 per cent. of the quota length of British film, by actual physical feet of film acquired may be met in each two renters' quota periods beginning on 1st April. By means of the alterations now made in the original proposal, treble quota will be given to films costing even more than was necessary before—five times the minimum instead of four times—and the total number of feet of films available to exhibitors cannot be less than it might have been under the existing provisions of the Bill. I am afraid I have addressed your Lordships at some length in describing this Amendment, which is rather a complicated one, but I hope I have made it clear to the House. I beg to move.

§ Amendment moved— Page 2, line 36, after ("doubled") insert ("or trebled").—(Lord Templemore.)

LORD DARCY (DE KNAYTH)
I should like to make clear the position that I and some of my noble friends adopt towards this Amendment. I understand that the desire of His Majesty's Government is to create an incentive for films that should be available to enter the American market. I think I shall not be regarded as being controversial it I state one thing which seems to be quite obvious, and that is that the American market for motion pictures, even to a greater extent than the market in our own 62 country, is in fact dominated by American capital, and unless one can get within the orbit of those great American combines it does not matter what value your pictures are, whether they be good, whether they be bad, or whether they be indifferent, they will not be exhibited in that market. Your Lordships may realise after all that where one owns a productive unit in America for the creation of these big pictures, one does not want to make a separate picture solely for the small market in this country; one wants both an Old World and a New World market for the one film; and the slogan "One film, two markets" is a thoroughly effective commercial one, wherever that productive unit is situated.
If one produces a film in this country one wants it to be able to have not only the restricted market of this country but also the other market as well. That is a commercial policy that has led to American capital producing in this country films in excess of the quota cost that is required for this triple quota. There is a film, for instance, now called A Yank at Oxford, which, as far as I can see from the circulars, is attracting an almost complete Cabinet meeting in Leicester Square shortly. I am credibly informed that the cost of that film was £105,000, far in excess of what is required by this quota. I have in my hands a list of twenty-two films produced in the last two years in Britain at that value or at somewhere about that value. They include such things as Rhodes of Africa, Sanders of the River, Catherine the Great, The Ghost goes West, and The Private Life of Henry VIII. I am told that not only are there those twenty-two films, but I am assured that there are a great many more. These are produced actually under the existing system, without any incentive of a triple quota to do it, but only under the commercial incentive of obtaining a double market. There is a further point, that if you encourage the production of these expensive films in this country by people who have not got access to the American market, it means that they are not going to make a success of them, for the simple reason that the restricted market available outside American control in this country is not going to pay for them, and you are encouraging bankruptcies in the industry.
In those circumstances I should like to ask His Majesty's Government in con- 63 nection with this Amendment four questions: Why is it necessary to give people privileges to do what they have already an overwhelming commercial incentive to do? Why is it necessary to give privileges to induce people to do what they are already doing without those privileges? Why is it necessary to give privileges to people who are already in such a privileged position that it is necessary to introduce this Bill in order to prevent the complete destruction of the British industry? And why, if you want more pictures produced, do you reduce the incentive to produce them by allowing one picture to count as three? I hope my noble friend will not think I am being captious, but what I do want to say definitely is this: We are anxious about this Amendment, but we think it can be made to work; at any rate we would like to hear what His Majesty's Government have to say about it. We think that it can be made to work by an alteration of the Schedules of this Bill. In those circumstances we propose to ask His Majesty's Government to restore the equilibrium of this Bill, which we think is being somewhat upset. When we come to the Schedules I hope it will not be said, if we do not divide on this Amendment at this stage, that we have conceded the principle and are not therefore to be allowed to raise the matter on Report stage.

§ LORD MOYNE
I feel it difficult to follow the very complicated calculations which the noble Lord gave us in explaining this Amendment. I do not know whether the limitation of 50 per cent. on the total percentage of footage is going to apply, or whether it is going to be brought down to an even lower figure, but undoubtedly it is an extremely complicated provision. I wish we could have a little more light as to how it is going to work. We were told at an earlier stage of the debates on this Bill that it is very important to keep an exact balance. The quota machinery can be driven to help the foreign producer or to help the home producer. We know that hitherto a very great difficulty in the British film industry has been that under the renters' quota, without any proper safeguard against inferior films, the renter is put against the competition of an uneconomic product which has been sold at a price below the cost of production. I agree with what 64 the noble Lord said that it is an advantage if we can induce a greater output of good quota films, knowing that if we do so they are less likely to be sold at an uneconomic price and to depress the market for good British independent films. I am very much afraid that unless we have some adjustment this particular provision is going to throw the whole organisation out of balance.
The President of the Board of Trade said in another place that it was absolutely essential that a balance should be kept in the matter of these quotas, and the noble Viscount the Air Minister told us on the first Amendment this afternoon that if you put statutory obligations into a Bill the one thing you want is certainty. I am afraid that this treble quota is going to introduce a strong element of uncertainty into programmes of the British producers. They will not know until the last moment what demand there will be for independent films. The exhibitors will not know what resources they can call on for fulfilling their quota, and I think it is going to be very unfortunate in its effect on the British producer unless the basic figure which is contained in the Schedules can be put up so as to ensure that the output brought about by the renters' quota is going at least to exceed the requirements of the exhibitors' quota. I do not know whether the noble Viscount can tell us at this stage what he proposes to do on the Schedules, but unless he can correct them and give some readjustment in view of his lowering of the output of the renter, I think we shall have to press very hard, even to the extent of a Division, for better treatment for the producer.

§ VISCOUNT SWINTON
I sympathise with my noble friend in the inevitable complexity of a clause of this kind. When you try to express in legal language the three times value of something which has to be considered in relation to something else I must admit the finite mind, or my finite mind, gets nearly as confused as it does with my noble friend's questions of privilege with which he bombarded me. But I shall try—I hope I shall do it accurately—to put this in somewhat simpler language. I think we all accepted the point which was dealt with on Second Reading, that it was a good thing that a renter should be able to satisfy part of his quota by films of much 65 higher value. In fact, speaking from memory, I think my noble friend Lord Moyne, in the Report of his Commission, actually recommended action along those lines. At any rate I think there was a very strong recommendation that in future legislation we should try to encourage the production of the more expensive film and make as sure as we could that we got away not only from the "quota quickie," which is a despicable animal we all wish to see the last of, but from the very low-priced film in cases where low price connotes a certain lack of efficiency as well as of charm. Therefore I think there was general agreement in the House with the proposal which is in the Bill, that where a film costs three times as much at least per foot to produce as the minimum cost, the renter should be able to count that for something more than the ordinary 7,500 £1 a foot minimum. Therefore there is already in the Bill a provision that where this treble value film is produced a renter may count that twice for a proportion of his quota.
Now I entirely agree with my noble friend that when you introduce a provision like that you do also want to make sure that you are going to have enough films for the exhibitors. I was insistent in my original Bill that you should always keep the renters' quota rather higher than the exhibitors', otherwise you might find that you were defeating your purpose, and that the renters' quota actually fell a little lower than the exhibitors'. But there is already in the Bill the provision that the renter must satisfy at least half his quota by normal lengths. My noble friend will remember that provision. If he will look at the words of the proviso on page 2 of the Marshalled List of Amendments, he will see the words "Provided that a renter," and if he looks on to the end of that paragraph he will see the words "for the purpose of that paragraph, to be the lengths of those films a proportion being less than one-half." That means that the provision is maintained intact to which I alluded on Second Reading, that where those extra value films are being dealt with by renters they must still fill at least half their quota with a normal length of film.
Therefore, if this Amendment is introduced which my noble friend Lord Templemore has moved, it will still be 66 subject to the proviso that the renter can only use his extra-value films for half of his quota. Once that basic proviso is understood, it seems to me on the whole to be good sense and good business to say that if a film is produced which costs not three times but five times the minimum value, that should be allowed to be counted by the renter in the other half of his quota for something more than what he can count at three times the minimum value. Your Lordships will see that what is proposed here is that, in order to enable a film of this kind to count for three times its value, it shall not be merely four times the value in cash cost, which was proposed in the House of Commons; it shall be not less than five times that cash cost.
That is, as far as I can appreciate it, a good provision. We all agree that we want to encourage the production of really high-class films. The high-class film inevitably costs, except in very exceptional circumstances, a great deal more money to produce than the ordinary film, and I think that in this way you are giving an incentive to people to produce these high-grade films which will be at least five times the minimum value. That does help to prevent that underselling about which my noble friend Lord Moyne spoke. I feel, therefore, that we are not really taking any risk that the exhibitors will not have enough films to fill their quota under this Amendment. There is still the provision that at least half the quota has to be filled by normal length. But we are—I will not say ensuring, but giving an incentive to, the production of the really high-class expensive film, whether it be by British capital or by foreign capital. For those reasons I think that this provision is sound.
My noble friend put very fairly to me, and I therefore submit it to the House strictly on its merits, the question: If the House agrees to this Amendment, are you going to press us to leave the Schedule of qualities as it is? He is entitled to a perfectly frank answer on that. I think that was involved in my other noble friend's question about privilege, if I followed him aright. I will be, as I always am, quite frank with the House. We do propose, if the House will agree with us, to stand upon the quality Schedules as they are in the Bill. My noble friend is quite entitled, 67 if this Amendment is accepted, to advance such arguments as may occur to him—and I have no doubt that they will be forcible—in respect of any Amendment of his to vary the Schedule. But, as at present advised, I have to resist an Amendment of that kind, and I will ask the Committee, on this explanation, which I hope has been reasonably clear, of a complicated matter, to accept this proposal on its merits.

§ LORD MOYNE
I should be grateful if the noble Viscount would just elucidate those figures a little more, because I am not sure whether we got them quite straight. They seemed to me not quite to fit in with the noble Viscount's very sound principle that the renters' quota should always be a bit higher than the exhibitors' quota. From what he has just told us, only half of the renters' obligation can be satisfied by the triple-counting films; the other half has to be full footage. Therefore, of his obligation there will be half full footage, and one-third of the remaining half will be at one-third I footage.

§ VISCOUNT SWINTON
Might be.

§ LORD MOYNE
And the remaining half will be at one-third footage. So you may get a reducing factor on the renters' quota of one-third. In that case the renters' quota, standing in the Bill, as it does, at 15 per cent., goes down to 10 per cent. and is therefore below the exhibitors' quota, which, ex hypothesi and upon the noble Viscount's admission, ought by any sound adjustment of quotas to stand lower than the renters' quota. I do not want to pursue this matter now, but if we let this proposal go by default I trust that the noble Viscount will go into it again and see whether he cannot do something to allay the very serious uneasiness of producers and of exhibitors that this treble quota is going to disturb the whole balance of the Bill and may be disastrous in its effect on British production.

LORD STRABOLGI
This is the most important of the Government's Amendments to the Bill. I therefore rise just to say one word about it, with your Lordships' permission. This is a modification of an Amendment which was moved 68 in another place by Mr. Wallace, the Parliamentary Secretary to the Board of Trade, in the absence of the President, who was unfortunately ill. That former Amendment, which was rather different from the one now before your Lordships, was withdrawn, partly because of a tremendous outcry from the independent exhibitors all over the country and partly because of an outcry by the labour unions in the industry. Now the Government have produced this Amendment, which does give a safeguard. As the noble Viscount has explained, half the provision of smaller films remains. Therefore half the quota will be filled with a number of films, the spate of little films, and only the other half can be satisfied by these super-films. Your Lordships will observe that under the Bill already, the so-called double-quota films can be made. This is therefore only an extension, but the same safeguard remains. I should therefore like to congratulate the Government. They have met the situation very fairly. That is borne out by the fact that the exhibitors, who are very well organised, have not attempted, as far as I know, to bring any pressure to bear on your Lordships. They have not made any protest to your Lordships, as far as I am aware, and I am sure that they would have done so. We are not quite so open to pressure from exhibitors, no doubt, as members of another place, but nevertheless I am sure they would have protested if they had not been satisfied—as, in fact, I understand they are.
With regard to the labour objections, I should like again, if I may, to point out that these large films, the triple-quota films, the big, expensive, spectacular films, taking a very much longer time to make, actually will give more employment to labour.

§ VISCOUNT SWINTON
Yes.

LORD STRABOLGI
I am bound to say that, because on this side of the House we do try, however inadequately, to look after the interests of organised labour, and not least of labour in the film industry. I am convinced, having studied this matter very carefully, that there will be more labour employed in making these large films. Taking the long view, I believe they will do something to raise again the prestige of the British industry, and therefore in the long run will do much 69 more to give employment by making the industry sounder and more flourishing. I therefore think we must support the Government on this occasion.

§ VISCOUNT BERTIE OF THAME
I am not quite sure that the noble Lord opposite is quite correct when he says that more labour will be employed. It seems to me that the stars may get much more pay, and no more labourers will be employed, and they will get the same as they get now.

LORD STRABOLGI
The answer to that question is very simple, if the noble Viscount will allow me to give it to him. It is that the labourer is employed for a much longer time. You can make these little short films in a couple of weeks, but these long films mean months of work. I have seen the actual costing sheets of really large films, big, expensive films, and what is spent on labour is much greater in these long, expensive films. Furthermore, although these long, expensive films only count three for quota, their actual cost is five times as much, so there is plenty of margin for stars.

§ LORD OLIVIER
If I may, as a mere amateur frequenter of the pictures without knowledge of the operation of studios, say a word with regard to what Viscount Bertie has said, my observation would lead me to suppose that the more stars you employed the more work they would give.

LORD DARCY (DE KNAYTH)
I think the noble Lord, Lord Strabolgi, is not quite right in saying that half of the films must be of the type that now count once for quota purposes. The words of the Amendment are: "the aggregate of the lengths which are to be taken, for the purpose of that paragraph, to be the lengths of those films a proportion being less than one-half." The effect of that would be—we will take 1,000 feet as a convenient length—that supposing the quota requirement was 4,000 feet of a particular exhibitor, that could be met without any one-time film. It could be met by two double-times or a three-time and a single time. I would like to say to Lord Strabolgi that I think his point about the extra cost of these films, and the extra labour employed, on the face of it is unanswerable, but in practice it does not work out. It does not work out because 70 it is worth while producing a film for two markets if you produce it at all, and these big, expensive films are being made. It is not going to increase the cost or the labour of these films, but fewer of these pictures will be made in this country, and therefore there will be less labour employed.

§ VISCOUNT SWINTON
I think my noble friend is rather proceeding on the assumption that the whole of the renters' quota is going to be satisfied with these very expensive films. I rather wish I could think so, because it would mean that the whole British industry was going to get on a basis where there was unlimited money, and that very big films would be produced. What will really happen will be that a certain number, probably a small proportion, will be these very costly films, and therefore counting treble for quota, but they will not make very much difference in the aggregate footage available for exhibitors. Therefore, in considering whether there are sufficient films for exhibitors, you do not want to think of one particular renter but of the total output of the whole of the British studios, the whole of which is available for exhibitors. I do not think that in the aggregate there would be the least risk of the total number of renters' films not being materially above the exhibitors' quotas. Always, in fact, the total number of films available has been very much in excess of the minimum requirements in the past. Moreover, the renter has to fill his quota half-yearly, so that is a further insurance to the exhibitors. I am assured that the operation of this provision will mathematically ensure that the same footage of films is available as was available under the Bill with the double value provision in. I am quite prepared between now and the Report stage to go into the interesting mathematical calculation a little more closely, and if necessary to make a statement on Report, but I think this can happen in a sense so rarely, and is so much in the interest of British production and of the exhibitors, who I understand are not opposed to this, that I hope the Committee will accept the Amendment.

§ On Question, Amendment agreed to.

§ VISCOUNT SWINTON
The next Amendment is consequential.

§ Amendment moved— Page 2, line 39, leave out ("that paragraph") and insert ("paragraph (a) of that subsection").—(Viscount Swinton).

§ On Question, Amendment agreed to.

§ VISCOUNT SWINTON
The next two Amendments are also consequential.

§ Amendments moved—

§ Page 2, line 39, after ("twice") insert ("or, as the case may be, three times").

§ Page 2, line 39, line 40, at end, insert— ("Provided that a renter shall be deemed not to have fulfilled the quota conditions imposed by paragraph (a) of the preceding subsection as respects the quota period beginning with the first day of April, nineteen hundred and thirty-eight, or either of the two renters' quota periods falling in the year beginning with the first day of April, nineteen hundred and thirty-nine, or in any subsequent year, if the aggregate of the registered lengths of the films acquired by him in that period or year, as the case may be, for distribution in Great Britain which are registered as British long films and also as renters' quota films bears to the aggregate of the lengths which are to be taken, for the purpose of that paragraph, to be the lengths of those films a proportion being less than one-half. (3) The Board of Trade, after consulting the Cinematograph Films Council and considering its advice in the matter, may, not later than the end of June in the year nineteen hundred and thirty-eight or any of the eight succeeding years, lay before Parliament the draft of an order directing— (a) that, in relation to the renters' quota period beginning with the first day of April then next following and in relation to any subsequent renters' quota period specified in the order, this section shall have effect as if for subsection (2) thereof there were substitution the following subsection: '(2) For the purpose of the preceding subsection, the length of a film shall be taken to be its registered length; but where a film registered as a renters' quota film is also registered as a British long film and also as doubled for the purpose of renters' quota on the ground of its cost, then, subject to the following provisions of this Part of this Act, the length of the film shall be taken, for the purpose of paragraph (a) of that subsection, to be twice its registered length"; (b) that, in relation to the year beginning with the said first day of April and in relation to any subsequent year specified in the order, the proviso to subsection (2) of this section—

(i) shall have effect as if in that proviso for the reference to one-half there were substituted a reference to such other proportion as may be specified in the order, or
(ii) shall have no effect;

and if, not later than the thirty-first day of July next following the date on which the draft of any such order is laid before it, each 72 House of Parliament resolves that the order be made, the Board shall forthwith make the order in terms of the draft. (4) The power conferred by the last preceding subsection to lay in draft before Parliament and to make an order shall be construed as including a power, exercisable in the like manner and subject to the like conditions, to lay in draft before Parliament and to make an order varying or revoking an order having effect by virtue of that subsection.")—(Viscount Swinton.)

§ On Question, Amendments agreed to.

§ Clause 1, as amended, agreed to.

§ Clause 2 agreed to.

§ Clause 3:

§ Special provisions with respect to British films rented in foreign countries.

§ 3.—(1) Where, by means of such evidence (including statutory declarations) as the Board of Trade may require, a renter carrying on business in Great Britain satisfies the Board with respect to any film registered under Part III of this Act as a British long film and also as a renters' quota film,—

(a) that the film has been made in Great Britain,
(b) that the total labour costs of the film amount to not less than twenty-two thousand five hundred pounds, and that the quotient derived from dividing the amount of the said total labour costs by the number of feet comprised in the length of the film is a sum of not less than three pounds, and
(c) that in any renters' quota period the said renter has, for a price of not less than twenty thousand pounds, acquired the film for distribution in a foreign country,

the Board may, if they think fit, give directions that the said renter may, for the purpose of fulfilling any relevant quota conditions, count the film as if, at the time when he acquired it for distribution in that foreign country, he had acquired it for distribution in Great Britain, but that the length of the film is to be taken, for the said purpose, to be its registered length; and if and so long as any directions given under this section in respect of a film have effect, no renter shall be entitled to count the film for the said purpose by reason of his having acquired it for distribution in Great Britain:

§ Provided that if the total length of the films which, by virtue of any directions under this section, a renter is to be deemed to have acquired in any renters' quota period for distribution in Great Britain exceeds half the total length of films registered as British long films which, apart from those directions, he must have acquired for distribution in Great Britain in order to fulfil the relevant quota conditions as respects that period, the first-mentioned total length shall he deemed to be reduced by the amount of the excess.

§ LORD TEMPLEMORE moved, in subsection (1), to leave out "a renters' quota film" and insert "doubled or 73 trebled for the purpose of renters' quota." The noble Viscount said: This series of Amendments to Clause 3 is the outcome of the desire expressed in the Standing Committee of the House of Commons for greater latitude in the provisions for reciprocity or sale of foreign rights. The clause as drafted specifies the total labour costs and the costs per foot which are the criteria for a film to be able to count for renters' quota through the sale of foreign rights. These are, that a film costing not less than £22,500 and £3 per foot in labour may count as equivalent to the acquisition of one renters' quota film on payment of £20,000 for the foreign rights. It is now proposed that whilst, where the film costs at least £37,500 and £5 per foot in respect of labour and/or a payment of £30,000 is made for foreign rights, this will be counted as equivalent to the acquisition of twice the length of the film. As the cost limits mentioned are the same as those for films which under other Amendments on the Order Paper carry respectively double and treble renters' quota through distribution in Great Britain, in accordance with the provisions of Clause 26 (5) as amended, it is simpler to refer in this part of the clause, to films which are available for the reciprocity provisions, as those which are doubled or trebled for the purpose of the renters' quota.

§ The Amendments include the deletion of condition (a) of subsection (1). Subsection (2) of Clause 26 now more closely defines the meaning of a film made in the United Kingdom. The remaining Amendments are purely drafting Amendments. It is hoped that this Amendment will help the production of quality films which will find a market both here and in America, and lead to American renters arranging with British producers to make such films.

§ Amendment moved— Page 4, line 22, leave out from the second ("as") to end of line 23, and insert ("doubled or trebled for the purpose of renters' quota).—(Lord Templemore.)

LORD DARCY (DE KNAYTH)
There is one thing I want to ask about this Amendment. In moving it my noble friend did not suggest that this introduced a five-fold quota. I do not suppose that it was intended to do so, but if you look at the Bill and construe it, as far as I can see it can be dissected as follows: 74 Where … a renter carrying on business in Great Britain satisfies the Board with respect to any film registered under Part III of this Act as a British long film and also as a renter's quota film … the Board may, if they think fit, give directions that the said renter may for the purpose of fulfilling any relevant quota conditions, count the film as if, at the time when he acquired it for distribution in that foreign country, he had acquired it for distribution in Great Britain' and any acquisition of the film by any other renter shall be disregarded. I have tried very hard to get a proper construction of this and I rather think that the word "relevant" must mean relevant to the said acquisition for distribution abroad. The effect of that is that the renter may acquire a film for distribution in this country and count it three times. Then another renter may acquire it for distribution abroad and count it as twice for this country. He himself can do it if he does it through the means of a subsidiary company, but I cannot help feeling that my noble friend does not intend that the Amendment should have this effect. I shall be thoroughly satisfied if he will consult his experts about it, and ensure that that does not take place.

§ LORD TEMPLEMORE
May I assure the noble Lord opposite (Lord Strabolgi) that every watch and care will be taken on this clause. And may I assure my noble friend Lord Darcy (de Knayth) that what he fears will come to pass is not intended by the Bill. But I will look into the matter.

§ On Question, Amendment agreed to.

§ LORD TEMPLEMORE
I beg to move the omission of paragraphs (a) and (b) in subsection (1).

§ Amendment moved— Page 4, line 24, leave out lines 24 to 31.—(Lord Templemore.)

§ On Question, Amendment agreed to.

§ LORD TEMPLEMORE
I beg to move.

§ Amendment moved—

§ Page 4, line 35, at end insert ("and (b) that the said renter has not acquired the film for distribution in Great Britain").—(Lord Templemore.)

§ On Question, Amendment agreed to.

§ LORD TEMPLEMORE
I beg to move.

§ Amendment moved—

§ Page 4, line 36, leave out from ("that") to end of line 4 on page 5, and insert ("in determining whether any relevant quota conditions have been fulfilled— 75

(i) the film shall (except for the purpose of the proviso to subsection (2) of Section one of this Act) be treated as if, at the time when the said renter acquired it for distribution in that foreign country, he had acquired it for distribution in Great Britain, and
(ii) any acquisition of the film by another renter for distribution in Great Britain (whether before or after the giving of the directions) shall be disregarded.

§ (2) Any directions given under this section by the Board of Trade shall—

(a) in a case where—
1. (i) the film to which the directions relate is registered as trebled for the purpose of renters' quota, and
2. (ii) the Board are satisfied that the price paid or payable by the renter in respect of his acquisition of the film for distribution in the foreign country is not less than thirty thousand pounds,
include a direction that the length of the film shall, for the purpose of determining whether any relevant quota conditions have been fulfilled by that renter in any renters' quota period, be taken to be twice its registered length, or
(b) in any other case, include a direction that the length of the film shall, for the said purpose, be taken to be its registered length.")—(Lord Templemore.)

§ On Question, Amendment agreed to.

§ LORD TEMPLEMORE
I beg to move.

§ Amendment moved— Page 5, line 7, after ("deemed") insert ("for any purpose").—(Lord Templemore.)

§ On Question, Amendment agreed to.

§ Clause 3, as amended, agreed to.

§ Clause 4:

§ Exemption in respect of films for which demand is limited.

§ 4.—(1) Upon application made, with respect to a film to which this Act applies, by a renter who has, in any renters' quota period, acquired that film for distribution in Great Britain, or who proposes to acquire it in any such period for distribution in Great Britain, the Board of Trade, if satisfied that the film is a long film and that it has not been exhibited to the public in Great Britain within the twelve months immediately preceding the date an which the application was made, may, if they think fit, direct that, subject to the fulfilment of the conditions set out in the following subsection, the said film shall, for the purpose of determining whether that renter has fulfilled any quota conditions, be disregarded.

§ (2) The conditions subject to which any directions given under this section in respect of a film shall have effect are that the film must not, in the year beginning with the date of the application upon which the directions are given, be delivered by any other renter to exhibitors in Great Britain for public exhibition therein; or be exhibited to the public at 76 more than twelve theatres in Great Britain or at more than six theatres in the administrative county of London, or be exhibited to the public at more than one theatre in Great Britain on the same day; and if the renter delivers the film, after the end of that year, to an exhibitor for exhibition to the public at a theatre in Great Britain, then for the purpose of determining whether any quota conditions have been fulfilled by him, the film shall be treated as if, at the time when he first so delivers it, he had acquired it for distribution in Great Britain.

§ LORD TEMPLEMORE moved, in subsection (1), to leave out "said film" and insert "fact that he has, before the end of the year beginning with the said date, acquired the film for distribution in Great Britain." The noble Lord said: This Amendment and the next are purely drafting. The clause is designed to meet the case of specialised long films, particularly of Continental origin, which have only a limited circulation here. Subsection (1) provides that a film covered by a Board of Trade direction shall, for the purpose of determining whether a renter has satisfied his quota conditions, be disregarded. The object of the Amendment ment is to make this position more clear.

§ Amendment moved— Page 5, line 33, leave out ("said film") and insert the said new words.—(Lord Templemore.)

§ On Question, Amendment agreed to.

§ LORD TEMPLEMORE moved, in subsection (2), after "shall" ["shall be treated"] to insert "(without prejudice to any previous effect of the directions)". The noble Lord said: This Amendment makes it quite clear that, although a renter who at the end of a year of exemption continues to rent the film shall for the future be regarded as subject to quota requirements in respect of the film, yet the necessity to provide quota in the future shall not prejudice the fact of the previous exemption from quota given by the directions issued by the Board of Trade.

§ Amendment moved— Page 6, line 6, after ("shall") insert the said new words.—(Lord Templemore.)

§ On Question, Amendment agreed to.

§ Clause 4, as amended, agreed to.

§ Clauses 5 to 7 agreed to.

§ LORD STRABOLGI moved, after Clause 7, to insert the following new clause:

§ Films Commission.

§ ".—(1) With a view to the better organisation and development of the film industry in the United Kingdom, there shall be constituted a Commission to be called the "Films Commission," hereinafter referred to as "the Commission."

§ (2) The Commission shall consist of a chairman and not less than two or more than four other members who shall be appointed by the Board of Trade. All the members shall be entirely independent of any professional or pecuniary interest in any branch of the cinematograph film industry and shall devote their whole time to their duties as such members.

§ (3) The functions of the Commission shall be—

(a) to carry into effect and administer the provisions of this Act subject to the overriding authority of the Board of Trade;
(b) to make representations to the Board of Trade and to draft regulations for submission to the Board of Trade in respect of all matters affecting the film industry.

§ (4) The powers of the Commission shall be—

(a) to make regulations for governing its own proceedings and for delegating so far as may be necessary its functions to certain of its individual members or to its officers;
(b) to prescribe such fees as are laid down in the Second Schedule to this Act;
(c) to hold such inquiries as it considers necessary or desirable, for the discharge of any of its functions;
(d) to recommend to the Minister the initiation of proceedings in respect of infringements of the provisions of this Act;
(e) to set up a viewing panel for the purposes of Section twenty-six of this Act and for examination of films in respect of all applications for registration for renters' quotas;
(f) to recommend to the Board of Trade such alterations or suspensions of quotas as are provided for under Section fifteen of this Act;
(g) to negotiate with any individual renter or group of renters engaged in the distribution of foreign films with the object of drafting a contract for the renting or making of British films, for the approval of the Board of Trade, as provided in subsection (t) of Section one whereby the renter or renters may be exempted from quota obligations under this Act;
(h) to consult whenever necessary with the advisory committee referred to in Section forty of this Act;
(i) to do all such matters and things as are necessary for the exercise of the functions of the committee.

§ (5) The period of office of members shall be three years subject to re-appointment.

§ (6) The Commission shall make to the Board of Trade, as soon as may be after the end of the year beginning at the commencement of this Act and each subsequent year, a report of the proceedings of the 78 Commission during the year, and a review of the progress of the cinematograph films industry in Great Britain, with particular reference to that branch of the said industry which is engaged in the making of films.

§ (7) The Board of Trade shall, upon receiving any draft regulations submitted under subsection (4) of this section, forthwith cause the same to be published in the Gazette and in such other manner best adapted to inform the persons affected, a notice of their intention to consider the making of the said regulations. The said notice shall contain—

(a) information of the place where the draft regulations may be inspected and copies thereof obtained;
(b) a statement that the Board are prepared to receive and consider any objection to the proposed regulations which may be made in writing within the period of one month from the publication of such notice.

§ (8) Within the period of two months from the publication of such notice the Board shall after consultation with the Commission consider any such objections so made and shall make such regulations as they may think proper. All regulations so made shall be laid before Parliament so soon as may be after they are made. If either House of Parliament within the next thirty days on which that House has sat after there is laid before it any regulation under this section resolves that the regulation be annulled the regulation shall thereupon cease to have effect, without prejudice, however, to anything previously done thereunder or to the making of a new regulation.

§ The noble Lord said: This Bill is legislating for the British film industry for the next ten years, and I and my noble friends, and my friends in another place, are very disturbed indeed about one part of it, and that is the Films Council mentioned in Clause 40. We support the view of the Moyne Committee that it would be better to have a Films Commission. We think, indeed, that this goes to the very heart of the Bill. The Amendment is in practically the same terms as an Amendment moved in another place by my friends there, with the exception of paragraph (g), which was put in by myself in an attempt to allow for a trade treaty, which the noble Viscount this afternoon declined to accept. So, if the rest of the Amendment were accepted, I would be quite prepared to accept the judgment of the House and cut out paragraph (g). What we have in mind is to have a small whole-time, absolutely independent Committee of men of high position and integrity, who would be adequately paid, and who would give their whole time to their tasks, and their tasks are outlined in my proposals. In 79 brief they would administer the Act, watch over the fortunes of the film industry, make reports, make suggestions for future improvements, always under the authority of the Board of Trade and of Parliament. I do not wish to take away any of the powers of Parliament or of the Government Department concerned.

§ Will your Lordships compare for a moment the British film industry with its great overbearing rival, the film industry of the United States, and see the vast difference between them? In the United States the industry is dominated by eight or nine very large companies who produce films. Some of these great companies, in addition, own great strings of picture houses, some do not, but they all own their own studios, lavishly equipped with the very latest machinery. They therefore start with a solid equity value in this property. They have also got their own renting organisations all over the world. You therefore have these eight or nine large corporations, very well knit together and very efficient and wealthy. They have an organisation in the United States called the Hays Organisation, which is voluntary, and which I understand looks after the censorship in the United States, but it also looks after the general interests of the industry and it imposes a kind of self-discipline on the industry. When the industry wants something from the Federal Government it is the Hays Organisation—Mr. Hays was a very distinguished Senator—which is received by the appropriate Department and puts the views of the industry.

§ Now what have you here? Compare that with the British industry. You have a number of companies which own cinema studios, which they let out to independent companies for the production of films. The ordinary producing companies have no capital in the form of goods; they have no equity. Some of them have a very small capital. They come into the studios, rent a studio for a certain time, gather together a personnel, and they may be successful or unsuccessful. They do not own theatres. The people who own the theatres in England, broadly speaking, own theatres and nothing else. You have, of course, the great circuits of theatres, and you have two large corporations almost on the American scale, who produce in their own studios, who have their 80 own renting organisation, and who have a string of theatres as well. Those are the only two on anything like the American scale of organisation. And then there are other producers going from studio to studio as they can get credits or find space, as the case may be, gathering together their stars and actors as they can. Then you have the independent renters, who are not very strong compared with the American renters, because they have not such a valuable product to offer.

§ I think the noble Lord, Lord Moyne, and the noble Viscount will agree with me that this smaller and almost infant industry in England is not at all organised as the Americans are. You have no body in this country that can speak for the industry as the Hays Organisation does in the United States. The noble Viscount knows quite well that when this Bill was being drafted, and it was desired to find out the view of the industry, it was most difficult to find out what they wanted. There are five or six conflicting bodies of opinion within the industry diametrically opposed to each other. The President of the Board of Trade in another place, and the noble Viscount here, have said how difficult it has been to get the views of the industry in this country. In this Amendment I and my honourable friends in another place are trying to set up this Commission as recommended in the Report of Lord Moyne's Committee—a small whole-time Commission which will look after the interests of the industry and watch over and study its needs all the time. I hoped that this Commission would have been the people to negotiate across the water with the Hays Organisation and see that British cinematograph films which were worthy had fair treatment in the great United States market and also that the United States industry would co-operate in this country in helping our industry. That is what I hoped, but in any case some such body as this is needed.

§ Let us see what the Government propose instead. In Clause 40 your Lordships will see they propose this body of twenty-one. I am very glad that some noble Lords on the other side have Amendments on the Paper to cut down this absurd number, this mass meeting, which is proposed. There is to be an independent Chairman. I am glad to see 81 that Lord Moyne is proposing a whole-time paid Chairman, and I hope the Government are going to accept that proposal. There is no whole-time paid secretary, but I hope the Government will accept Lord Moyne's Amendment. There are ten other independent members. We do not know who they are. They will come to these Council meetings as and when they like. They have to know nothing about the cinema industry. They cannot do so, because they have to be completely independent of the industry in a peculiar way. They cannot even be shareholders. They are, therefore, the ordinary men and women whom Governments appoint to Committees of this sort—all estimable people, but perfectly useless for the job.

§ Then we have got ten trade members. Two represent the producers of films, the makers of films. The producing industry in this country is divided into three main camps. First of all there are the people who own studios and let them out. Then there are the people who produce small films, cheap films, "quickies" and so on, to the order of the renters. There are independent producers, who are venturers, who make films, but they are usually small people who borrow to do so from season to season. Over against them you have a third group of very powerful corporations, to which I have already referred, corresponding to the American corporations. They have their own renting organisations, their own theatres, and their own studios. There are two such companies in this country. The interests of these producers are opposed to each other, but these three groups of producers will have two persons on this Council representing them.

§ Then you have got two people representing the renters. Again the renters are divided. There are the British renters, as they call themselves, who deal in and merchant British films, and there are the renters who deal in and merchant American films. Their interests are opposed, and must be opposed. The renters naturally are opposed in their business interests—they cannot help it—to the producers. They are the middlemen, like the middleman in agriculture, of whom I have heard your Lordships complain. They are also opposed to the exhibitors. Their object is to buy films as cheaply as possible from the producers and sell them as dearly as they can to the exhibitors. They provide two on this 82 body. Then there are no fewer than four representing exhibitors. They represent again two different interests, because the exhibitors are divided into the great circuits of, perhaps, one hundred theatres who look at the whole problem quite differently to the small man who owns one, two, or three theatres or manages one, two, or three theatres. You have the independent exhibitors—about 3,000 of them—and the exhibitors who are organised in rings and who represent the remaining 1,000 theatres. Then you have two people representing the persons employed. There are ten representing twenty different sections in this industry opposed to each other. They will be the people who will turn up, of course, at the meetings. Over against them will be the eleven with the eminent Chairman, not even paid. That is the body of twenty-one that is to look after and watch over the interests of a highly-complicated industry which is constantly developing and changing all the time.

§ That is the Government's proposal—a Council of twenty-one, the mass meeting. What is the Government's case? "Oh, the industry want this Council, and the industry does not want the Commission." I am not so sure. At the beginning, I understand, the producers were in favour of the Commission. I think Lord Moyne will bear me out. I am informed that the producers were in favour of the Commission, and they came into line with others as part of a general bargain to support the Council. I have it all here. Since the noble Viscount stood up at that box on the Second Reading, and informed your Lordships that the whole of the trade was against the Commission proposed by Lord Moyne's Committee, I have made some inquiries and I find they are not all opposed. Many important people in the industry are not opposed to the Commission at all. They tell me that it is possible for the noble Viscount to say these things in the House of Lords because all sorts of people pretend to be speaking for the film industry, and have the ear of the Government, but who in fact do not speak for the film industry but only for their own section of it. They honestly believe they are speaking for the film industry just as the Seven Tailors of Tooley Street believed they honestly represented the people of England. It is not entirely accurate for the noble Viscount—on the advice given to him—to say that 83 the whole of the film industry is united against this Commission.

§ These are the reasons why we think the Commission would be a great advantage over the proposed Films Council. If you like to keep the Council for advisory purposes and hear what they have to say—that is all that will happen in any case—if certain people who have seats on the Council are pleased, let them have their pleasure; but have your Commission and let it he a whole-time body, a small independent body of men of integrity and experience to watch over this industry, which all your Lordships agree is of great importance to the State and of great importance particularly to people of the rising generation. I beg to move.

§ Amendment moved— After Clause 7, insert the said new clause.—(Lord Strabolgi.)

§ VISCOUNT SWINTON
We really have listened to a most astounding speech from the noble Lord who is temporarily leading the Labour Party. What was the burden of his song? These people are small, they are not very rich, so they must not be allowed to come to the Board of Trade. It is only when you get a great plutocratic oligarchy such as you find in the film industry in the United States, able to brief a Senator—it is only a body like that which ought to be allowed to come and advise the Board of Trade and make representations. What a perfectly extraordinary point of view to have expressed from those Benches! With great respect, this matter does not turn on the size or the wealth of the people concerned. It turns on their interest in the business which is their livelihood. The noble Lord said that you have sections in the industry and he described a meeting in which no one member possibly would agree with another. It sounded to me extraordinarily like a meeting of the Labour Party. The noble Lord said that they find it very difficult to agree on a policy. Perhaps that also sometimes happens in other quarters. But quite honestly this is the only thing, it may be, on which they are agreed.
The noble Lord said that he had found some producer who at some stage was prepared to support an independent Commission. I say without any hesitation, on instructions on the information I have received, that after months of negotia- 84 tion the one thing on which the industry did present a really united front to the Board of Trade was a plea that they should not be run by a Commission on which they had no representation. As for the story that you cannot get an organisation that represents them, I do not believe it for a moment. I had a good deal to do with this industry when I was framing the first Bill, and I have seen something of it since. If I may take what is far the largest number of these people, the exhibitors, of whom there are something over 4,000 to-day, I never found the least difficulty in getting the views of the exhibitors through the Cinematograph Exhibitors Association. There are also the bodies which came along and represented the renters. But if there be a difference of opinion between one section of renters and another, that seems to me to be a very good reason for having perhaps two renters upon the Board instead of only one. You may get a genuine difference of opinion quite reasonably represented.
Broad and large, what is the proposal? It is that nobody with any interest in or any knowledge of this business shall he on the Council which is to advise the Board of Trade to make the reviews, to say whether the films are coming along satisfactorily or whether the quota ought to be put up or down. I do think that is a most astounding proposal to make. The Board of Trade is to be advised by people who are not only quite impartial but who, by the nature of the case, cannot have any knowledge of the difficulties and the problems of this industry. On the other hand, what the Government propose does seem to me to be a thoroughly practical proposal. It is that you should have a Council with the independent element upon it and also the three interests, producers, renters and exhibitors.
I do not want to say more on this because I dealt with it at considerable length in reply on the Second Reading. Rut I will give just two reasons why I think the Government proposals are absolutely sound. In the first place I think it would be quite unreasonable to have a Committee which, it is true, is not executive but which is to advise the Board of Trade on all the action which it is to take and which is not representative of the industry. I am quite sure that if you had such a body you would 85 find there was continual opposition from the industry to this Council, and that would lead to great friction in the working of the Act. You would also find, I am quite certain, that the independent members wanted the advice of the people in the industry, which they will get by sitting together, and if, as is indeed no doubt true, it is very desirable to get independent opinion and independent advice brought to bear upon the people in the industry, you will certainly better do that by having the independent element and the interested element sitting round the table together, facing the problems together and advising the Board of Trade, after such joint consultation, than you will by having an independent Commission merely set up to tell the industry how to do its job. I venture to think that in the Bill we have hit upon a really sound compromise in this matter. I am not ashamed of calling it a compromise, if compromise it be, in that the independent element and the interested element are there together. It seems to me, if I may say so, the only common-sense way of doing it. I hope your Lordships will reject the Amendment.

§ On Question, Amendment negatived.

§ Clauses 8 to 14 agreed to.

§ LORD MOYNE moved, after Clause 14, to insert the following new clause:

§ ".—(1) Subject to the following provisions of this section the Board of Trade, after consulting the Cinematograph Films Council and considering its advice in the matter may, not later than the end of June, nineteen hundred and thirty-nine, lay before Parliamet the draft of an Order reducing in relation to long films the proportion prescribed in Part II of the First Schedule to this Act for the year beginning with the first day of October, nineteen hundred and thirty-eight, and if before the end of July, nineteen hundred and thirty-nine, each House of Parliament has resolved that the Order be made, the Board of Trade shall forthwith make the Order in terms of the draft and the Order shall come into operation upon the making thereof.

§ (2) Subject to the provisions of the next following subsection the Board of Trade, after consulting the Cinematograph Films Council and considering its advice in the matter, may at any time during the year nineteen hundred and thirty-eight, lay before Parliament the draft of an Order reducing in relation to long films the proportion prescribed by Part I of the First Schedule to this Act for the year beginning with the first day of April, nineteen hundred and thirty-eight, and the next succeeding year, and if before the end of the calendar year in which the draft of such an Order is laid before Parliament each House 86 of Parliament has resolved that the Order be made, the Board shall forthwith make the Order in terms of the draft, and the Order shall come into operation upon the making thereof.

§ (3) This section shall not authorise the making of an Order—

(i) reducing the proportion prescribed by Part I of the First Schedule to this Act to a proportion being, in relation to long films, less than fifteen per cent., or
(ii) reducing the proportion prescribed by Part II of the said Schedule to a proportion being, in relation to long films, less than twelve-and-a-half per cent.

§ (4) As from the coming into operation of an Order under this section altering any of the proportions prescribed by the First Schedule of this Act, that Schedule shall have effect as if it prescribed, instead of that proportion, the proportion substituted therefor by the Order.

§ (5) In this section the expression 'calendar year' means year beginning with the first day of January."

§ The noble Lord said: The purpose of this new clause is to give a power to the new advisory body to recommend a reduction in the quota in the case of the first year. The reason that I have put this down is that I am going to move an Amendment when we come to the Schedule, to put the quotas up to the figures of 20 per cent. and 15 per cent., respectively, as recommended by the Departmental Committee. I think, on the analogy of what the Government have proposed for subsequent years, there ought to be a power of remission from the quota for the whole industry if the fears of the Government are fulfilled and any difficulty arises in the general maintenance of the quota figures. I do not think I need really elaborate the details of this clause. It follows the machinery proposed by the Government under Clause 15 and I hope that, with this safeguard against any hardship occurring under the quota, the Government may accede to my Amendment to put the quota up to what the Departmental Committee recommended and not to let the renters off the present level of quota, which they are quite able to maintain. I beg to move.

§ Amendment moved— After Clause 14, insert the said new clause.—(Lord Moyne.)

§ VISCOUNT SWINTON
It is a little difficult to discuss this clause without also discussing the Amendment which my noble friend wants to make to the Schedule, because I think probably if the 87 Committee were to agree with my noble friend that the quotas ought to be moved up, then I should probably agree with my noble friend that there ought to be an Amendment here to give the Board of Trade, on the advice of the Advisory Committee, the power to move them down again, which is really what the noble Lord's Amendment would do. Therefore I think, in replying, I am bound to deal with the proposal on its merits, including the Amendment to the Schedule, though I do not of course wish at all to prejudice what my noble friend wants to say when he comes to the Schedule. But I think that would be the position, that if my noble friend's Amendment were carried, probably, though I should ask the Committee not to accept this Amendment now, I might be put in the position of having to move an Amendment on the Report stage.

§ LORD MOYNE
Perhaps the noble Viscount would prefer me to postpone this until the Report stage; then we shall know how we stand about the Schedule. Perhaps I might reserve my right to move it on the Report stage. I am in your Lordships' hands.

§ VISCOUNT SWINTON
I am rather inclined to think that would be so. I want to be quite sure that I understand what the noble Lord's proposal is. What he really wants to do is to increase both the renters' and the exhibitors' quota during the first year, to put it up to what I may call the Moyne figure, which is where the Government put it in the second year; but then he realises that, if you do put the quota up like that, it might be difficult of fulfilment, and there ought to be power in the Board of Trade, on the advice of the Advisory Committee, to put it down. I shall argue, when it comes to discussing whether the quota ought to be put up, that that would be an unreasonable thing to do. The power which the Board of Trade take under the Bill, under which after the first year they can either raise or lower the renters' or exhibitors' quota with a tolerance between twenty and thirty per cent., is, I think, the most convenient way of doing it. Probably it would be wise to withdraw the Amendment at this stage, to take the substantive question whether quotas should stand as they are in the Bill or go out when we come to the Schedule, and 88 then, whatever decision is come to on that, we shall consider on the Report stage whether any further alteration is necessary. I think that would be better.

§ Amendment, by leave, withdrawn.

§ Clause 15:

§ Power of Board of Trade to alter quotas by order.

§ (3) This section shall not authorise the making of an order—

(i) altering any of the proportions prescribed by Part 1 of the First Schedule to this Act to a proportion being, in relation to long films, less than twenty per cent. or more than thirty per cent. or, in relation to short films, less than ten per cent. or more than twenty per cent., or
(ii) altering any of the proportions prescribed by Part 11 of the said Schedule to a proportion being, in relation to long films, less than fifteen per cent. or more than thirty per cent. or, in relation to short films, less than seven and a-half per cent. or more than twenty per cent.

§ VISCOUNT BRIDGEMAN moved, in subsection (3) (i), to leave out "twenty" and insert "fifteen" and to leave out "thirty" and insert "thirty-five." The noble Viscount said: This Amendment is distinct from the Amendment that follows, and it deals with the renters' quota as distinct from the exhibitors'. It is designed to make the provision more flexible in two directions according as to whether things go well or badly for the producers of British films. If all goes well it may easily be desirable to reduce the renters' quota, for this reason. It may be necessary to protect the producer of British films from a flood of films produced in order to satisfy quota, thereby causing price cutting, which would not be necessary and would not occur if the renters' quota were reduced. On the other hand, optimism might not be justified, and the opposite situation might arise. In other words, it might be necessary to stiffen the obstacle and to raise the renters' quota from thirty to thirty-five per cent. as has been suggested in the Amendment. In making this suggestion I would ask your Lordships to bear in mind that the Moyne Committee envisaged as high a proportion as fifty per cent., and there seems to be no reason why we should bind ourselves to the lower figure and why we should not give a further margin of five per cent. in addition to the thirty which is already provided for in the Bill.

§ Amendment moved— Page 16, line 43, leave out ("twenty") and insert ("fifteen") and leave out ("thirty") and insert ("thirty-five").—(Viscount Bridgeman.)

LORD DARCY (DE KNAYTH)
I should like to support my noble friend in this Amendment if only because of the extreme complication that this legislation has now assumed. We have got one Act, which has a large number of sections, some of them repealed and some unrepealed, running parallel to the sections of what will be the new Act, and altogether they are producing a position of confusion. I think it is quite clear that it is impossible to deal with a new situation under this Bill in the same way by piecemeal legislation. When a new Act is wanted it will require to be a completely new Act. In those circumstances, I feel that it is very desirable to make provision for a slightly increased flexibility here. The Bill itself provides for a certain amount of flexibility, but we do ask that a slightly greater amount should be given. The reduction might take place as low as fifteen. After all, it is quite easy to envisage circumstances where so many pictures are already being produced that the obligation of American renters to produce more pictures would only result in a fight for the restricted market that was left.
We are asking therefore that a little higher figure should be given and that it should be increased to thirty-five. Under the Bill I think the maximum is twenty-five, but under the clause there is a power to increase that to thirty. We are only asking for five per cent. more. This is entirely permissive. The Board of Trade can use it, but is not compelled to do so. Surely the noble Viscount thinks that the Board of Trade can be trusted to exercise their discretion in a reasonable manner. We are only asking my noble friend if he is prepared to trust his right honourable friend. Of course if le tells me it is impossible, I must accept his answer, but I would like to say that it is not a very big thing that we are asking. It is only asking him to place a five per cent. confidence in his colleague, and I do hope he will be able to go as far as that.

§ VISCOUNT BERTIE OF THAME
Speaking in the House of Commons on the 23rd February, the Parliamentary Secretary to the Board of Trade said that if circumstances ever arose which would 90 justify a renters' quota as high as forty-five per cent. that would necessitate new legislation, despite the fact that the Moyne Committee had mentioned a figure as high as fifty per cent. Why not forestall the possibility of future legislation?

§ VISCOUNT SWINTON
This is a very subtle appeal which has been made to me. The first part of the appeal I must resist without any hesitation. If I have understood the proposal aright it was a proposal to reduce the renters' quota quite irrespective of a reduction made in the exhibitors' quota. That is as I understand it. I think that would be wholly wrong. I was taken to task, I think by my noble friend Lord Darcy, because he was not sure whether my mathematics were right, and because I was said to be violating my own cardinal principle that the renters' quota must always be kept ahead of the exhibitors' in order to make sure the exhibitors would have enough films to show. I was a little anxious when so attacked, but I am going to stand absolutely firm now in saying that nothing would induce me to accept an Amendment which was going to leave the renter—it may be the foreign renter, too—with a lower obligation than that imposed upon the exhibitor. I think that would cut at the whole basic principle of the Bill. I am sure, on consideration, that my noble friend will not press that part of the Amendment.
My noble friend Viscount Bridgeman and he both made a pleasant appeal saying, would not I trust the Board of Trade with five per cent.? I would trust the Board of Trade with a great deal more than that. My trouble is that my right honourable friend does not want to be trusted in this matter, and, on consideration, it has been felt that to have this pretty wide margin, within which the Film Commission of the Board of Trade, moving like planets, may adjust these quotas to give this range of between twenty and thirty, is probably a wise discretion. It is not a very easy thing to argue, because I cannot say that there is anything in principle between thirty and thirty-five. My noble friend may say: "Well, you need not use the discretion, you may go up to thirty-five per cent. provided always that you keep the renters' quota above the exhibitors'." I do think that is really important. I do not say I attach great importance to 91 whether the discretion and measure of tolerance is put at thirty or thirty-five, but I should not like to concede that. I would ask the House to accept these tolerance margins, which have been very fully considered.
Let me point out this. It is irrelevant, when one comes to consider the figures that ought to be put into quotas, whether they are in the Schedule or in a discretionary power which is given. Your Lordships will remember that these are minimum requirements, something that every single exhibitor has to carry out. There are 4,000 exhibitors. Broad and large, they have played the game extraordinarily well under the ten years of what I may call my Act. It has not been at all easy for them. It has been much easier for exhibitors in some places to get the necessary films than in others. There is the whole question of circuits. Films are shown in the first-class circuit first of all, and it is difficult in the second-class circuit to get them for a long time. Good will is everything in this Bill, getting the good will of the exhibitors to show the right number of films. If there are good films offering, I have not the least doubt that they will show more than their minimum obligation. But you might put a great hardship upon them. You might have failures of the kind of which there have been a good many already: failures to comply with quota which on investigation the Board of Trade found were not in the least criminal and were not even negligent, but cases in which the exhibitors could not reasonably get hold of the films. You do not want to get a great many of these cases. It is much better to have a quota of twenty-five or thirty per cent., which every exhibitor in this country can fill, than to put the quota up to thirty-five and then find that there are 500 or 600 exhibitors who have to come to the Board of Trade and say, "I could not fill this." Therefore I would ask your Lordships to accept the figures, which have received great consideration, as they stand in the Bill. We all want to see the greatest possible number of films; we all believe in the need of good will in this matter; and on the whole I believe that we shall get better and probably more British films shown in the long run if we leave the margin of tolerance where it is.

§ On Question, Amendment negatived.

§ VISCOUNT BRIDGEMAN moved, in subsection (3) (ii), to leave out "less than fifteen per cent. or more than thirty per cent." and insert: In respect of the period set out in paragraph (a) of subsection (2) of this section less than seventeen and a half per cent. or more than twenty-five per cent.; In respect of the period set out in paragraph (b) of subsection (2) of this section less than twenty per cent. or more than thirty per cent.; In respect of the period set out in paragraph (c) of foregoing subsection (2) of this section less than twenty-five per cent. or more than flirty-five per cent.

§ The noble Viscount said: This Amendment is quite distinct from the last Amendment, and deals with exhibitors' quota. Under Clause 15 as at present drafted, it would be perfectly possible for the Board and for the Films Council to go on saying, each time these figures were due for review, that the quota should stay at fifteen per cent.—that is to say, the lowest figure in the Schedule Equally, unless I am very much mistaken, it would be possible for the Board and the Council, having raised the quota to a higher figure at one period of review, to reduce it again at the next. It seems to me perfectly clear as a matter of principle that an assurance should be given in the Schedule to the Bill that the intention is that the exhibitors' quota should rise progressively. It should not, whatever happens, go backward. But under the clause as now drafted it seems perfectly possible that the quota could stand still for the whole term of operation of the Act, or even that there might occur an Irishman's rise—in other words the quota, having gone up, then goes down. Elasticity is a virtue much to be desired in this Bill, seeing how little we know what the future may bring. But elasticity must be combined with a reasonable certainty for the producers and for those who find the money for the producers, not to speak of all those who work in the film industry, that the progress of British films—in other words, the rise of the quotas—if not fast is at least continuous. As the clause now stands, it looks to me as though there is no safeguard that that will happen.

§ With this uncertainty hanging over the whole film industry for the ten years, do you not think that far too much time is going to be taken up by the best brains of the industry in engaging in fights as 93 to whether the quota shall be or shall not be raised? Do you not think that we are liable to have what is certain to be called sooner or later the "quota front," that quota front being in Whitehall, and the industry distracted from its proper business, which is the production of British pictures? The figures which are down in the Amendment are not unreasonable figures. They correspond pretty closely with the figures already in the Schedule, and the top figure, thirty-five per cent.—as I ventured to say in discussing the last Amendment—is still fifteen per cent. below the highest point which the Moyne Committee envisaged the production of British films might reach, namely, fifty per cent. I hope that this matter may be favourably considered from the standpoint of giving the film industry some certain indication of what is going to happen in the next ten years. I beg to move.

§ Amendment moved— Page 17, line 5, leave out ("less than fifteen per cent. or more than thirty per cent.") and insert the said new words.—(Viscount Bridgeman.)

§ VISCOUNT SWINTON
My noble friend has moved this Amendment, as he puts it, in the hope of securing greater certainty. Quite frankly, however, I do not think it would do that. If he wants certainty—that is to say, that everybody, whether he be a producer, renter or exhibitor, shall know precisely where he stands—then the only thing to do is to put in our Schedule an absolutely flat quota provision which says it shall be so much in the first year, so much in the second year, and so much in the third year. That was exactly the provision under the old Act, and it was because experience under the old Act showed that it was desirable to have a discretionary power—subject always to Parliamentary sanction—either to increase the quota if the industry forged ahead or to lower it if the industry was not successful enough to carry out the measure of growth which had been anticipated, that this discretionary power was brought into being.
You therefore have to choose between the absolute statutory power which cannot be altered and the discretionary power. He himself agrees, by virtue of his own Amendment, that he accepts the desirability of the discretionary power, but he wants to limit the discretion of the 94 Board of Trade and the Council by saying that, as you go forward through progressive periods, you should be limited with one margin of tolerance, we will say, in the first three years; then you move up. You can only go, say, from eighteen to twenty or twenty-five in the first period, and then it must be from twenty to thirty in the next period. What would he do if, quite sincerely, it was found by common consent that the industry was not producing enough films during the second period to fulfil the minimum we have laid down? The only thing you could do would be for the Board of Trade to give wholesale exemptions to exhibitors from showing the requisite number of films. I think you will all agree that that is a very undesirable way of working the Act. We want the Act to be so constructed that everybody can conveniently and with good will carry out the obligations. For those reasons I think there ought to be that full discretion in the Films Council and the Board of Trade to move up or down in each period, within the general powers which are given. I submit that it is wiser not to limit the discretion of the Commission and the Board of Trade in the way the noble Viscount proposes.
There is one other point. The noble Lord expressed some anxiety that, although the Schedule of the Act lays down a steadily rising quota for both renter and exhibitor, the Films Commission might say: "Notwithstanding what is in the Schedule we propose to keep the quota at fifteen or twenty per cent. for the whole period of the Act." That would be entirely under Parliamentary control. The statutory quota is going to be the figures laid down year by year in the Schedule, which has got to be carried out by renter and exhibitor, year by year, unless Parliament itself, by Order, on the advice of the Commission, thinks fit to vary it. Parliament will have it under its own control, and the Commission can only advise the Board of Trade to vary it if it is satisfied that it is impracticable for the industry to carry out what Parliament has laid down.

§ VISCOUNT BRIDGEMAN
After what the noble Viscount has said I will not press my Amendment, but I hope we may take it that what he has said is a general indication of what the policy of the Government will be—namely, to keep 95 the quota proportion laid down in the Schedule gradually rising—and that that will be the way in which the Government and the Board of Trade will exercise the powers given in the Bill after it becomes law.

§ Amendment, by leave, withdrawn.

§ Clause 15 agreed to.

§ Clause 16:

§ Reduction of exhibitors' quotas for year ending 30th September, 1938.

§ 16. The First Schedule to the Act of 1927 shall have effect, and be deemed always to have had effect, as if the proportion prescribed by Part II of that Schedule as respects the year ending with the thirtieth day of September, nineteen hundred and thirty-eight, were fifteen per cent. and not twenty per cent.

§ LORD MOYNE moved to leave out Clause 16. The noble Lord said: This is a very curious clause, of a retrospective character. The renters' year ends on March 31, but the exhibitors' year only ends on September 30, so that under the existing Act the exhibitors have still another six months which is covered. When the noble Viscount introduced his Bill more than ten years ago he anticipated that it would be perfectly reasonable to work by a quota for both renter and exhibitor of twenty per cent. up to the end of the term covered. There has really been a very strong bear movement in the quota market, and for some reason, hitherto unexplained, the Government seem to have capitulated to those who are agitating to whittle away the protection and encouragement which it is the main object of this legislation to give to the producer. I think it is going to be deplorable if we put these quotas lower than we can maintain in the interest of the producer.

§ There is no evidence whatever on the figures that there is going to be any difficulty to the exhibitors to fulfil the quota which they expected to fulfil for the last six months of the expiring Act. The renters have fulfilled their twenty per cent., and the exhibitors' quota necessarily hinges to some extent on the renters' quota. There seems to be no case whatever why, having turned the tap on to a certain volume for the renter, you should suddenly restrict it when it comes to the exhibitor. There is no shortage of films. During the last eleven months the total of long films registered was 706. Of these 180 were British films, 96 so that the British output was 25 per cent. of the whole. That is well beyond the exhibitors' obligations. Besides that it must be remembered that the exhibitor has exactly the same margin of choice in the foreign films offered as he has in the British films—exactly the same ratio of choice—and clearly if we pass this clause to reduce the quota of the exhibitor for the last six months we shall prejudice the maintenance of a reasonable quota under the full operation of the Bill which we are now discussing, because if we are going to jump off from a lower level than the existing Act contemplated, obviously we cannot get up to as high a quota as we hoped to do. I trust the noble Viscount will therefore see his way to accept my Amendment, and show that he was not wrong in fixing the exhibitors' quota in the last six months at twenty per cent.

§ Amendment moved— Leave out Clause 16.—(Lord Moyne.)

§ LORD ASKWITH
I would like to support my noble friend Lord Moyne in his Amendment to omit this clause. It seems to me that it brings in an element of uncertainty, which the noble Viscount has expressly said (and I agree with him) it is one of the objects of the Bill to remove. To my mind the clause is uncertain, unfair and, what is more, unwise. It is uncertain in the sense that there has been created a vested interest, and that vested interest is suddenly interfered with by a clause put into this Bill. Therefore it creates a certain feeling of uneasiness, which is very undesirable. Then it must be very unfair, because the renters, having spent money and engaged operators and employees of various kinds and got their films ready, are suddenly told that the exhibitors' quota is not to be the same, but is to be cut down. They had been expecting that it would be twenty per cent. They have been expecting this protection under an Act of Parliament, and suddenly they are told they cannot have it. In my opinion and experience a retrospective action of this kind is most unwise. I have seen it in arbitrations of different kinds between labour and capital, and wherever it has occurred, wherever there has been a retrospective award, it has caused a lot of vexation, uneasiness and had feeling, which the little advantage that it may possibly give is not worth. It is not worth while having this clause in 97 the Bill. It is a most undesirable clause in every way, and I support its rejection.

§ VISCOUNT BERTIE OF THAME
Such respectable papers as The Times cry out against the quota being reduced. On February 24 The Times said: The need now is to restore the optimism inspired ten years age, by the prospect of a substantial sheltered market for British films. The City is not likely to think that market substantial if the exhibitors' quota is less than twenty per cent. The City is the place where the money comes from, and if the City is not satisfied with the quota the whole industry may be ruined. It seems to me, if I may say so without offence, that the proposal in this clause is sheer madness, without the redeeming feature of any method. It is playing into the hands of foreigners. The Financial Times on February 28 said this: The second point which the Lords should consider is the more technical one of the quota in the first year of the Act, Under the old Act the quota is twenty per cent., but in the twelve months starting 1st April, 1938, the renters' quota for long films is to be fifteen per cent., and the exhibitors' quota twelve and a half per cent. Mr. Stanley has stood firmly by these figures throughout the discussion of the Bill, but in the Report stage he indicated that they might be changed in the Upper House. It is to be hoped that they will be. Well I hope that that is a true prognostication of what is going to take place.
This morning in the Financial Times there were some very caustic and telling remarks. This is what the paper says: The question is whether the protection ensured so far by the 1927 Quota Act has been effective, and whether that envisaged by the present Bill is likely to be any more so. Under the 1927 Act, the quota rates for the year ending 31st March are twenty per cent. for renters and exhibitors alike. Under the proposed new Act the rates are fifteen per cent for renters and twelve and a half per cent. for exhibitors, and the latter will not rise to twenty per cent. again until 1942. For the immediate future, then, the field of protection has been noticeably reduced. … In fact, the main disadvantage of the quota in the past was that it was insufficiently protective of the British producer. The operation of twenty per cent. quota rates for exhibitors has been severely circumscribed in actual practice, first by the technical difficulties of film production, and, secondly, by the renters' overruling interest in Hollywood films. We do not want to be ruled by Hollywood, and therefore I support the Amendment.

§ VISCOUNT SWINTON
My noble friend (Lord Moyne) made an appeal to me, which I find it difficult to resist, that I should stand by my own Act, and say that the quota provisions I put into it ought to be fulfilled. The last thing in the world I want to do is to reduce a quota if it is not necessary to do so, but I must put to the Committee the very strong advice on this matter which I have from the Board of Trade, and that is that if we kept the quota at twenty per cent. for the exhibitors in the last part of the exhibitors' year, it would not be possible in their opinion for them to acquire up-to-date and suitable films sufficient to discharge their obligations, and that one of two things would happen. Either there would be a very large number of defaults, in respect of which the Board of Trade would either have to prosecute (and they, of course, would not prosecute if they thought the default was reasonable) or they would have to give a very large number of exemptions—a bad thing to do. The alternative to that would be that exhibitors would go out into the highways and collect the indifferent British films—"quota quickies" and the like—in order to discharge their legal obligation.
That would be bad for the exhibitors, because certainly it would make their houses unpopular; and, above all, it would be bad for British films because nothing has done so much harm to British films, or done so much to prejudice the success of the Act—it did succeed pretty well but the complete success of the Act was prejudiced—as the "quota quickie" and the bad film. We should do a terrible disservice to the British film industry at the outset of this new period, which we hope will be a period of advance, if we started with an obligation which compelled the exhibitors either to default or to show had British films. I naturally cannot profess to have firsthand knowledge of what will be the number of films forthcoming, but that is the responsibility of the Department which has been administering this Act for ten years, and I think that if they advise that the exhibitors would have a very genuine difficulty—in fact, they put it so high as to say impossibility—in getting suitable films to exhibit in their cinemas if this figure were maintained, then I feel bound to ask your Lordships to reduce my 99 twenty per cent. figure to the more modest fifteen per cent. in this clause.

§ Resolved in the negative, and Amendment agreed to accordingly.

§ Clauses 17 to 24 agreed to.

§ Clause 25 [Determination of films to be treated as British films for purposes of registration]:

§ LORD TEMPLEMORE
The Amendment to this clause is purely a drafting Amendment. The clause as it now stands requires that in the case of a British film the studio used in making the film "is" within His Majesty's Dominions. The Amendment would require that the studio used in making the film "was" within His Majesty's Dominions—that is, at the time of making the film, which, of course, was what was intended by the clause.

§ Amendment moved— Page 23, line 20, leave out ("is") and insert ("was").—(Lord Templemore.)

§ Clause 25, as amended, agreed to.

§ Clause 26:

§ Conditions governing registration of British films as quota films.

§ (2) A film registered under this Part of this Act as a 13ritish film shall not be registered as a renters' quota film unless—

§ (b) the studio, if any, used in making the film is within the United Kingdom, and

§ (6) Where, in the case of a film registered under this Part of this Act as a British long film and also as a renters' quota film,—

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§ On Question, Whether the clause proposed to be left out shall stand part of the Bill?

§ Their Lordships divided:—Contents, 15; Not-Contents, 27.

CONTENTS
Bath, M.	Vane, E. (M. Londonderry.)	Fermanagh, L. (E. Erne.)
		Gage, L. (V. Gage.) [Teller]
Bessborough, E.	Swinton, V.	Luke, L.
Fortescue, E.		Strathcona and Mount Royal, L.
Lucan, E. [Teller]	Clanwilliam, L. (E. Clanwilliam.)
Munster, E.		Templemore, L.
Stanhope, E.	Cottesloe, L.

NOT-CONTENTS
Aberdeen and Temair, M.	Addington, L.	Hindlip, L.
	Askwith, L.	Holden, L.
Onslow, E.	Balfour of Burleigh, L.	Moyne, L.
Poulett, E. [Teller.]	Cornwallis, L.	Rankeillour, L.
	Darcy (de Knayth), L. [Teller.]	Saltoun, L.
Bertie of Thame, V.		Snell, L.
Bridgeman, V.	Doverdale, L.	Strabolgi, L.
Chaplin, V.	Fairfax of Cameron, L.	Teynham, L.
Chelmsford, V.	Gorell, L.	Waleran, L.
Exmouth, V.	Harris, L.	Wolverton, L.

On Question, Amendment agreed to.

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(a) the total labour costs of the film amount to not less than twenty-two thousand five hundred pounds, and
(b) the quotient derived from dividing the amount of the said total labour costs by the number of feet comprised in the length of the film is a sum of not less than three pounds,

the film shall be registered as doubled for the purpose of renters' quota:

§ Provided that it shall be the duty of the Board of Trade to ensure that, if and so long as any directions of the Board under Part I of this Act by virtue of which the length of such a film as aforesaid is to be taken to be its registered length have effect, no statement that the film is doubled for the purpose of renters' quota appears in the register.

§ LORD TEMPLEMORE moved, in paragraph (b) of subsection (2), to leave out "is" and insert "(exclusive of any portion of the film which, by virtue of subsection (3) of the last preceding section, is to be treated as not forming part of the film) was." The noble Lord said: This is really a drafting Amendment.

§ Amendment moved— Page 25, line 40, leave out ("is") and insert the said new words.—(Lord Templemore.)

§ On Question, Amendment agreed to.

§ LORD TEMPLEMORE
The next Amendment is consequential.

§ Amendment moved— Page 27, line 21, after ("pounds") insert ("but to less than thirty-seven thousand five hundred pounds").—(Lord Templemore.)

§ On Question, Amendment agreed to.

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§ LORD TEMPLEMORE
The next Amendment is also consequential.

§ Amendment moved— Page 27, line 25, after ("pounds") insert ("but of less than five pounds").—(Lord Templemore.)

§ On Question, Amendment agreed to.

§ LORD TEMPLEMORE moved, in subsection (6), after "quota," immediately preceding the proviso, to insert: and where, in the case of a film registered as a British long film and also as a renters' quota film,—

(i) the total labour costs of the film amount to not less than thirty-seven thousand five hundred pounds, and
(ii) the quotient derived from dividing the amount of the said total labour costs by of feet comprised in the length of the film is a sum of not less than five pounds,

the film shall be registered as trebled for the purpose of renters' quota.

§ The noble Lord said: This is Amendment.

§ Amendment moved— Page 27, line 27, after ("quota") insert the said new words.—(Lord Templemore.)

§ On Question, Amendment agreed to.

§ LORD TEMPLEMORE moved to leave out the proviso in, subsection (6). The noble Lord said: This proviso required that, although in the case of an expensive film costing at least £22,500 for labour, the film could count double for renters' quota purposes, nevertheless if, in respect of that film the Board have given directions under Clause 3 enabling the foreign rights to be sold for renters' quota purposes, the register of films should not contain a statement that the film counts double for the purpose of renters' quota. This was required because the reciprocity conditions attaching to a £22,500 film give only single renters' quota. The new provision whereby a firm which costs at least £37,500 for renters' quota purposes and £5 per foot may count double for the purposes of the renters' quota under reciprocity conditions, and also treble for renters' quota under the ordinary conditions of distribution of the film in this country, would require a further complex alteration of this proviso. It is considered that, on the whole, it is unnecessary for the complicated proviso which would result to be in the Bill: the matter of marking the register to indicate that a film registered as double or trebled had later become subject to the reciprocity 102 provisions is one which could be dealt with administratively by the Board of Trade without special provision in the Bill. The proviso, being unnecessary, has accordingly been deleted.

§ Amendment moved— Page 27, line 28, leave out lines 28 to 34.—(Lord Templemore.)

§ On Question, Amendment agreed to.

§ Clause 26, as amended, agreed to.

§ Clauses 27 to 33 agreed to.

§ LORD STRABOLGI moved to insert after Clause 33: