LORDS AMENDMENTS. (Hansard, 30 March 1938)

§ VISCOUNT SWINTON
My Lords, I beg to move that the House do not insist on the first Amendment, to strike out Clause 16 of the Bill. Your Lordships will remember that Clause 16 amends the Act of 1927, which the present Bill will supersede, by reducing the exhibitors' quota from 20 per cent. to 15 per cent. during its last year. We are dealing here with a situation which is largely accomplished. It is not as though we were able to discuss what should happen in some year which lies before us. We are, by the passage of time and the force of events, dealing with a situation which in fact is half over and which, as I shall show in a word or two, is really much more concluded even than that. The exhibitors' year under the Act of 1927 runs from October 1, 1937, to September 30, 1938. The Act provided that exhibitors should exhibit a minimum of 20 per cent. of British films during that period. Clause 16 proposes that the quota should be reduced to 15 per cent. The year having started on October I last, half of the exhibitors' quota year is already finished.
The position is even more difficult than that because, as your Lordships are aware, exhibitors do not buy films like fresh fish on the day before exhibition. They have to make arrangements a long way ahead, and I suppose it would be true to say that nearly every exhibitor in this country—there are between 4,000 and 5,000—has already booked films completely, or almost completely, for the rest of the current year. Therefore if we insisted on this Amendment we should upset the programmes which thousands of exhibitors are engaged upon. We should force them to acquire additional films over and above the necessary number to fill their programmes, or we should drive them into default. And the position is even more complicated and more difficult 493 than that, because an exhibitor who has contracted with a renter for films to be shown during the next six months would not discharge his contractual obligation to his renter merely by taking a film and paying a sum of money and then buying a British film to show in its place.
That would be a bad enough position for him, because he would have to pay for two films when he could only show one, but I understand that the system under which all the larger houses acquire their films is not by an outright purchase, paying so much down for the right to show a film. They buy it on a sort of principle of participation. The renter hires out to the exhibitor a film, but instead of receiving a flat-rate payment he receives a proportion of the net proceeds of all the showings of that film. He contracts with the exhibitor that the exhibitor shall show that film at so many performances on so many days. Your Lordships will therefore appreciate that if the exhibitor is told that he must not show a foreign film which he has acquired the right to show, but must show a. British film in its place, he not only has to spend extra money on the British film but he has a very difficult contractual relationship to adjust with his renter, which cannot simply be adjusted by paying over a lump sum of money. I may add that if he is forced to acquire extra British films we have no guarantee that the films would be satisfactory films. One of the great reasons for getting the Bill through is to kill the "quota-quickie"—the bad cheap film merely manufactured for quota purposes. I am told that there are plenty of these bad "quota-quickies" still knocking about and anybody would be glad to sell them who is in possession of this unpleasant stuff. If we forced the exhibitor to buy films and very likely forced him into the buying of bad films, that, I think your Lordships will agree, would make the position worse for British producers.
Is it reasonable to put this extra and unexpected burden upon the exhibitor? Of course, constitutionally Parliament can make any amendment in a Bill at any stage, but what we have to ask ourselves is whether it is reasonable to do so. In asking that question we should also put another question, and that is, whether the exhibitors themselves have acted reasonably. They have to hook forward and they must have certainty in 494 their business. They naturally booked forward on a reasonable expectation of what would happen. The Government, last summer—I think it was last July—published a White Paper in which they said they would propose this reduction. The Bill was introduced in another place and passed through all stages there with this Clause 16 still in, and while, of course, your Lordships were well within your rights in deleting it, exhibitors, who perhaps do not know so much about Parliamentary procedure as we know, might reasonably have expected that the Bill was likely to go through in the form in which it was introduced in another place, and have acted accordingly.
In all legislation it is important that the persons affected by that legislation should feel that it is reasonable, and it is equally important—perhaps even more important—that the carrying out of the law should be practicable. Here, I think, without a doubt, on the facts I have stated to your Lordships, the exhibitors and the subjects affected would feel that we were putting an unfair and unreasonable obligation upon them. Moreover, as I have shown, they could not in fact carry it out. They would find themselves between the alternatives of breach of contract and going into a technical default under the Act. The Act provides that the President of the Board of Trade shall have an exempting power where he is satisfied that a default is either involuntary or not unreasonable. What would happen if we insisted on deleting this clause? There would be a legal obligation upon these thousands of exhibitors to do something which they could not in fact do and which it would be unreasonable to expect them to do. They would be excused, and rightly excused, in their default by the President of the Board of Trade. I venture to suggest that you could not do anything worse or more calculated to bring the whole structure of the Act into contempt than to have this series of defaults which would have to be excused.
In addition to that, we all want to make this Bill a success. We want the producers and the exhibitors to have confidence in one another and to operate with good will. The old Act, so far as it succeeded, succeeded because of that good will. This Bill, when it becomes an Act, will depend very largely on that 495 good will. I venture to say that you could not give the Bill a worse start than to insist on this provision, which would be, I submit on the facts I have stated, unjust and which in fact could not be carried out. I hope your Lordships will agree not to insist on your Amendment.

§ LORD MOYNE
My Lords, I very much regret to see a Minister with the respectable and unspotted reputation of my noble friend engaged upon infanticide! He made sure that he would be able to strangle the last struggling breath which may remain in the Act of 1927 by arming himself with the very effective, but in this case quite unnecessary, weapon of a three-line Whip. I say it is unnecessary because I agree, in view of what we have been told by the exhibitors in their protest to the Board of Trade and also in the debate in another place, that the provision of the 1927 Act is practically dead in so far as it is completely disregarded; and the noble Lord has told us that it would be impossible for exhibitors to carry out the obligation which was there laid upon them. I think, however, that it is very important for the House to understand the distinction between this Amendment and those which we are going to consider in a few moments. This Amendment applies only to an existing obligation which was enacted more than ten years ago.
It was provided in 1927 that until October 1 next, exhibitors should show twenty feet of British film for every eighty feet of imported film. The operation of that enactment was destroyed by the White Paper issued last August, and exhibitors are all breaking the law in advance. They sent a letter to the Board of Trade in which they stated: Exhibitors, therefore, had every right to assume that Clause 16 would form part of the Bill, and have proceeded on that assumption. If these contracts have indeed been made on the assumption that they could ignore the existing law, the last thing that any of us wish to do is to put these people into the position of defaulters. I agree that it would be a bad send-off to the Bill, and unreasonable, to place the burden of hearing all these cases upon the new Films Advisory Committee.
496 I want, however, to make just three brief comments on the lesson which we should draw from the present position on Clause 16. First, the Board of Trade miscalculated the position. There was no need whatever to let the exhibitors off their statutory obligations. The films made in the last eleven months, I think it is, show enough for a 25 per cent. quota, not merely 20 per cent. My second comment is that this episode throws a very striking light upon the anxiety, about which we have heard so much in the Departmental Committee and elsewhere, of exhibitors to "buy British" whenever they possibly can. It surely is a vindication of the necessity for quotas, and proof of their powers. The exhibitors could quite well fulfil more than a 20 per cent. quota, and their alleged widespread failure to observe the law, whatever their justification, shows that we cannot afford to do without effective quotas.

§ VISCOUNT BERTIE OF THAME
My Lords, I think my noble friend below me has made out a tolerably reasonable case. This clause will only operate, in effect, for six months, but I was rather shocked at his reliance on the White Paper. As your Lordships know, no White Paper should ever be incapable of annulment by Parliament.

§ VISCOUNT SWINTON
I must correct my noble friend. I said that constitutionally, of course, Parliament had every right to do what it wished and was in no way bound by the White Paper. I was only drawing attention to whether or not the exhibitors, who are not, of course, Members of Parliament, had been reasonable in their action.

§ VISCOUNT BERTIE OF THAME
I only wanted to make the point quite clear.

LORD DARCY (DE KNAYTH)
My Lords, I think it is quite clear that certain wholly new factors have arisen since this matter was before your Lordships' House. I think my noble friend Lord Moyne is taking a reasonable and common-sense attitude towards the matter in not pursuing it further. I think we are all most anxious to take a reasonable and common-sense attitude, and we hope that it is an example which will not be overlooked by the Government themselves at a later stage.