Lords Sitting of 8 March 1939

Preamble
The House met at a quarter before four of the clock, The LORD CHANCELLOR on the Woolsack.
CANCER BILL.
Brought from the Commons; read 1a; and to be printed.
MINISTRY OF HEALTH PROVI- SIONAL ORDER (SOUTH STAF- FORDSHIRE JOINT HOSPITAL DISTRICT) BILL.
Read 2a (according to Order), and committed.

THE FILM INDUSTRY.
VISCOUNT BRIDGEMAN VISCOUNT BRIDGEMAN rose to call attention to the decrease in production of cinematograph films in Great Britain and the consequent increase in unemployment in the film industry; and to move for Papers. The noble Viscount said: My Lords, it is very nearly a year ago that the Cinematograph Films Act was passed, and it seemed to me that after a year's working the time might have come to take stock of its provisions, bearing in mind that at the time when the Bill was being debated in this House it was the concern of a number of members of this House to improve the condition of the film industry. There were then two problems to be faced—unemployment in the film industry and the bad quality of the British films which were being produced. As to quality, the year's record appears to be a reasonably good one, and the "quickie" as made in England has, I think, disappeared. Many of your Lordships will be aware that the New York Film Critics' Society voted the film called "The Citadel" as the best film of the year 1938—a British film. And I think it is generally admitted that during 1938 there have been a number of outstandingly good films produced in this country going by the name of British, although some of those films were begun before the passing of the Cinematograph Films Act. However, it would be a mistake to suppose that the "quickie" has already gone,

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for although it is not produced in this country there has been a smaller production of British second feature pictures and a corresponding increase in the importation of foreign second feature pictures, which are often of worse quality, and of course these foreign second features are exempt from the cost test. So the position is that we still have the low quality pictures. We can say, however, that they may be horrible and they may be worse than anything we make ourselves, but thank Heaven they are no longer British.
As to quantity, think your Lordships will agree that the position is not nearly so good. I do not want to trouble you with many figures, but I have the following figures which I believe to be entirely reliable. In the year ending March 31, 1937, there were registered 225 British films; in the year ending March 31, 1938, there were registered 228; and in the year ending March 31, 1939, it is anticipated that, instead of 228 as in the previous year, only 90 will have been registered. Of those 90 I am given to understand that all but 10 are simply films made in this country to American order or with American money, and only the remaining 10 are genuinely British, made to British order, with British money.
Now looking at the debates at the time of the passing of the Act last year I notice that the noble Earl who leads the House, speaking for the Government, said:
"I suggest we had better go slow in the test year."
I hope that His Majesty's Government are satisfied that we have gone slow enough. Bear in mind that the studio capacity in this country is something in the order of 500 films a year. At the present time one big studio has recently been sold, one was constructed and ha; never been opened, another has just been closed, and altogether there are eight studios which have been without a single picture for twelve months. Unemployment was bad enough last year, but according to the figures, which again I believe are thoroughly reliable, the average film technician has worked 8½ weeks out of a possible 39 in the current year up to the time when the count was taken.
This unemployment affects not merely the film actors, many of whom have high salaries at one moment and can afford to be unemployed for large parts of the
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year; it affects all the crowd workers, all the screen writers, and the technicians on whom the stability of the industry depends, and who will certainly leave the industry rather than face another year of the same measure of unemployment. I see in his place opposite the noble Lord, Lord Strabolgi. I think I can safely leave it to him to plead the cause of the workers in the film industry, and therefore I shall say no more on that subject. It is only fair to say that one thing has happened during the last year which I think nobody foresaw at the time of the debates a year ago, and that is that there has been considerably less production of films in the United States, and therefore the gross total is smaller, and the quota, which is a percentage of the gross total, is correspondingly smaller. But that all goes to aggravate this unemployment, and I think there is no sign at the moment of the position in America improving. So you can say that at the present moment genuinely British films are hardly being produced at all and, as far as I can see, there is no reason why such films should be produced in the future unless the conditions are altered in some way or other.
It is necessary to differentiate between the American film produced in this country and the genuinely British film. Both kinds admittedly give work to the workers in the film industry—the technicians and the actors—but only the genuinely British films will give employment to the screen writers, and only the genuinely British films will convey British ideas and the British way of life and mode of thought, which, I think your Lordships will agree, we wish to be seen at any rate from time to time on the screen. It would be very easy, therefore, to come here this afternoon and plead for the quota to be raised; and if it were only a question of increasing employment at the present time that would be the right course. But I am quite certain that the raising of the quota would be no permanent solution. It would simply mean that the American producers would be obliged to produce more films over here. They would do it against their will, and there would be no corresponding increase in the genuinely British films. Moreover, the employment so created would last exactly as long as the duration of the Act of Parliament, and not a day longer.
Again, I do not believe that any permanent solution can be found if we try to support genuinely British films of the expensive type—the £100,000 type, the first features; because I do not believe that any film of that sort can be a profitable undertaking unless it is an international film, or unless it is produced and shown entirely in the United States of America. On the other hand, so I believe, it is possible to make and show good British second feature films costing between £15,000 and £45,000 at a profit. And those films can be profitably made even if not a single copy is shown outside Great Britain. However, as I said, there were only last year some To films of this kind produced out of a total of go British films, and I am beginning to wonder whether that decline from the previous year is progressive and whether, if nothing is done, we shall have any genuinely British films at all next year.
As your Lordships probably know very well, there has been what is sometimes called a "shake-out" in the film industry during the past year. A number of those elements which did not raise the repute of the film industry—and this matter was discussed in the House last year—have been removed. Money is no longer forthcoming for producers who are not suitable people to handle that money, but, on the other hand, no money is forthcoming at all now from British sources. When I say "no money," I should perhaps say hardly any money at all. In the debates last year I notice that the noble Viscount, Lord Swinton, said this:
"We shall only get them"—
that is British films—
"better by encouraging people to put their money into financing films and having the best people to make them and act in them."
It looks, so far, as if nothing has been done. I am not complaining that it should not have been done last year, because I feel that last year was a transition period for the film industry. That period had to be got over before it was wise or right to begin any constructive work on the finances of British films. The house, in other words, had to be swept and garnished.
It seems to me that that process is now over. The time has come when that should be recognised by those responsible—the Government and the Films Council
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—and when some constructive steps, both as regards finance and as regards arrangements to ensure that good British films can get into the proper renting circuits, should be taken, unless we want to see the disappearance of the genuine British film altogether. I am not suggesting that British films require a subsidy. Films can be made at a profit and should be made at a profit, and I do not believe there are any solid grounds for proposing a subsidy; but there are strong grounds which justify the Government and the Films Council taking a more constructive attitude than they have taken so far in recommending the organisation of finance for British films in such a way that the reputable producer and the reputable producing company can be certain of getting the finances they require for a film which is worth producing, and I believe that the result of that financing would be not only successful British films, but money in the pockets of the genuine British industry.
I should hesitate to go into details, and I do not believe that this is the place or the time to do so, because there is not only the Board of Trade but also the Films Council set up for that purpose. I have put this Motion on the Paper because this is the time of the year when, under Section 15 of the present Act, the Board of Trade, after consulting with the Films Council, can lay before Parliament before the end of June, 1939, a Draft Order increasing the exhibitors' quota up to the end of 1939 to a maximum of 30 per cent. Therefore I imagine that round about this time some decision will be taken in responsible quarters, and it seems to me a pity that no expression of opinion should be heard in your Lordships' House on that matter. Merely for the sake of employment I should like to see the quota raised, because I believe the actual state of employment is dangerously low, but I should not like to see the quota raised unless the raising of the quota were accompanied by some measures for financing British films and arrangements for introducing them into the renters' circuits such as I have outlined. That is my case and my reason for putting this Motion down this afternoon. I trust that there may be during the next year some indication of a more constructive policy on the part of the Government towards a genuine British film industry. I beg to move for Papers.
LORD STRABOLGI: My Lords, I am sorry to impose myself on your Lordships again after the considerable time I occupied of your Lordships' working hours yesterday, but this is a matter in which I have always taken a great interest, and my noble friend (Lord Snell) has asked me to say a few words in support of the Motion. I am very happy to be able to support the Motion and to agree with most of what the noble Viscount has had to say. It gives me all the greater pleasure to say that as one who, for many years, sat at the feet of his distinguished father and learned from him a great deal of Parliamentary strategy, tactics, and guile. The situation has been very fully explained by the noble Viscount. He would agree, and I suppose the Government will say, that it is early yet to judge the effects of the Act which we passed a short time ago. I am inclined to agree with that also, and if I were in the place of the noble Lord, Lord Templemore, I should say much the same.
It is, of course, early to judge, but at the same time we do see a very extraordinary state of affairs. As the noble Viscount has said, we have had the pleasing fact that recently a number of exceptionally fine British films have been produced—all British films—which have been great successes and, most remarkable of all, have been played with very great success in the North American Continent and in our own Dominions. That is, as I say, a very pleasing and most encouraging feature of the situation. At the same time my figures do not entirely square with those of the noble Viscount. It is true that whereas in the last full year under the old dispensation—the Bill which Lord Swinton introduced when he was in another place—British production was represented by the figure 225, now British production, as far as one can see, by the end of this year will be about 80. The noble Viscount said 90; there is not much in it, but that is my information. It is a remarkable thing that whereas by the end of March, 1937, the last full year, the figure was 225 British films registered, 100 of these were quota films and most of them were "quickies." There were 100 "quickies" and 125 independent films produced by independent producers, whereas now, out of the 80, my information is that about 60 are quota films. Of course the quota films are better quality now. Under the Act we have
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abolished the "quota quickie," which is a good result. Sixty are therefore quota films of better quality, but only 20 or thereabouts are independently produced films. It is that which is so very alarming in the situation. The noble Viscount was good enough to say that I could be trusted to speak for the interests of those employed in the industry.
VISCOUNT SWINTON: Would the noble Lord elaborate a little what he means by independently produced films?
LORD STRABOLGI: I mean films produced as an independent venture and not particularly for the purpose of filling the quota. In other words, films which rank, it is true, as quota films but are produced for the general market and not by renters to fulfil their obligations under the Act. I hope I have made that quite clear. Now to resume, I do not claim to speak specially for those employed in the industry. I imagine all of your Lordships would wish to see employment for British technicians in this industry, and although we on this side of the House do attempt to put the views of the great trade unions on industrial matters, I do not on this particular occasion make any special claim to represent the views of the workers. This is not a Party question. I do not think Party policy enters into it. We can on this occasion show a real united front—I am sure to the great pleasure of the noble Earl the First Lord of the Admiralty.
The trade union leaders concerned are naturally very much exercised and I sympathise with the hard lot of their members who ask for an increase of the quota. The Government may decide to make that increase—I do not know—but I think it is right to point out that there is danger in increasing the quota too rapidly. The reason for that is that there is not exactly a slump—recession is the word I think—in the American film producing industry at the present time. The American producers have been losing markets for reasons which we know in Europe. They have been driven from the totalitarian markets, and the language difficulty has had a cumulative effect on the film industry since the introduction of the talking film. Consequently there is a tendency in the United States, I understand, for producers to draw in their horns, so to speak, and to concentrate on the more expensive and elaborate pictures. They

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can carry that process further and if we increase the quota too rapidly we may succeed in reducing imports of foreign films, with the result that renters of those foreign films would not have to produce so many quota pictures. Whereas we might gain in one direction, those employed in the film industry might lose in another by having fewer films to make. I am sure that will be present to the minds of the Government.
Now I wonder if I might be allowed to support what the noble Viscount has said on the question of finance. The sources from which finance for British films was drawn some three or four years ago have dried up. I ventured to remind your Lordships when we debated the main Bill that financiers in the City of London always act like a flock of sheep. They go either in one direction at full speed or in the other direction at full speed. At one time they were all rushing in to get rich quickly in films. A lot of them suffered accordingly. Now they have buttoned-up their pockets completely and there is no money, or very little money, forthcoming from the ordinary financial sources. The noble Viscount has drawn attention to that in his speech. I cannot refrain from returning again to the proposals of the Moyne Committee with regard to finance. Your Lordships will remember that in Recommendations 29 to 32 the Moyne Committee recommended some form of financial co-operation which would not only make finance available at reasonable rates of interest but would do something to ensure that finance only went to reputable producers, to men of proved ability who were prudent in their expenditure of money. For many reasons this proposal of the Moyne Committee deserves very careful examination once more.
This matter of the production of British films is, of course, tremendously important. All your Lordships, I am sure, will agree to that. We have to consider the cultural aspects of the question, the effects of British films of the right quality in our overseas possessions and in foreign countries, and also the question of employing the technicians and the multitude of tradesmen who normally would seek and find employment in a great industry. It is, therefore, of very great importance, and I do not think you can treat the film industry like any ordinary commercial activity. It stands really in a class
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by itself, and I think for that reason the Government ought to reconsider whether they should not themselves take some hand in the question of providing finance.
I do not mean that they should give a subsidy, but I think a word from the Treasury in the right quarters in the City of London and in banking circles would be a great encouragement to the formation of a finance corporation, properly advised by the most skilled assessors available, who would pick out the men who had proved themselves worthy of support as British film producers and directors, and would encourage suitable younger men coming along who at present have hardly a chance of showing what they are capable of in this great and important field of culture and art. I do not think a great deal of money is required. The sort of credits I have in mind would be revolving credits. We have seen something of the sort in one or two Continental countries, where the idea was very successful. It operated in Germany very well until the stupid totalitarian culture came along and killed it, and I think something of the sort is needed here. I would ask the Government to investigate this side of the problem.
Finally, I would suggest to the noble Lord who will reply for the Government that if the present Act is proved to be unsuccessful the Government should not hesitate about bringing in an amending Bill. I hope they will not be put off by any question of Parliamentary time or by the ordinary excuses for dilatoriness but will be prepared to amend the present Act if it is shown to be unsuccessful. This matter is so important, and has so many aspects, of which I am sure the Government are aware, that I believe Parliament, if properly approached, would facilitate an amending Bill which would be to the advantage of a very great industry and of importance to industry generally.
LORD TEMPLEMORE: My Lords, my noble friend, as he always does, introduced this subject in a speech of great clearness and moderation and one full of information. I am quite sure that, as he has said, this Motion is not intended to be at all hostile, but that he really put it down in order to obtain some information from His Majesty's Government as to how the Act is operating. I am sure it is a most suitable occasion on which to put it down, because, if I remember

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aright, it is almost exactly a year ago to-day that my noble friend Viscount Swinton was standing at this Box introducing the measure, and, if your Lordships remember, we had a series of very interesting debates, culminating in what was very nearly a fight between the two Houses on March 30, and the Bill became law just within, I think, one hour of the time that it had to.
I should like to give your Lordships a short description of exactly how the Act has worked. The Government have nothing to hide. There are certain bad features in the situation and certain features that are not so bad. First of all, I should like to take the part of the noble Lord's Motion in which he asked me how the Act has worked. I am afraid it is undoubtedly a fact, as the noble Lord said, that British film production has fallen substantially in the past twelve months and that there is, unfortunately, a considerable amount of unemployment in the industry. In the twelve months up to the end of March, 1938—I think the noble Viscount quoted these figures, but I am going to repeat them; I do not think they are quite the same—some 220 long films were made in this country. In the current renters' quota year the number so far registered is 84, and by the end of this month it will probably have reached somewhere between 90 and 100. I think the number will probably be 95 or 96.
This is undoubtedly a very serious drop, but I think it would be wrong for your Lordships to assume that that is due to the new legislation. As everyone knows, that legislation, as did the Act of my noble friend, the Act of 1927, imposes an obligation on renters of imported films to acquire a proportion of British films. In the last year of the old Act the obligation on the renter was that at least 20 per cent. of all the long films which he acquired must be British films. In other words, this constituted a minimum quota of 25 per cent. on imported films. The number of foreign long films imported in that year was 614, which required something like 150 British films to offset them. The remainder of the British films consisted of films made independently of the quota for which it was hoped to find a market not only in this country but also abroad. Moreover, out of that 220 odd British films the Cinematograph Exhibitors' Associa-
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tion took the view that only up to 120 were reasonable booking propositions, the remainder being the ill-famed "quota quickies" of which we heard such a lot in our debates last year.
As already stated, it appears that the number of long films registered this year will be between 90 and 100, and it is worth while examining the causes of this decline. In the first place, the renters' quota in the first year of the new Act is 15 per cent., as against 20 per cent. in the last year of the old Act. It will be remembered that, with the introduction of the minimum cost test for quota films and of other novel features in the new legislation, it was felt that renters and producers should be given time to adjust themselves to the new conditions. This has in itself caused some decline in the number of films made, and the number has been further reduced by the operation of the double and treble quota provisions in the Act, which provide extra credit for films of which the labour costs have reached more than certain minima. A further very important factor is the decline in the importation of foreign long films. In the current renters' quota year the number had only reached 422 to the end of February, and the numbers for the whole of the year may not be much above 450. From this must be deducted over 30 films of the specialised Continental type, which, by an arrangement in the new legislation with which everyone agreed, are exempt from the normal quota requirements under Section 4 of the Act of last year. The decline in the number of long films imported is partly due to a certain amount of forestalling in the last month of the old Act, and to the recession in America, which has led to some decrease in production in that country.
Now apart from the films which are required to be produced statutorily, there has undoubtedly been a severe setback in independent British film production, which is largely due to the difficulty of finding the necessary finance. The noble Viscount who introduced the Motion, and the noble Lord opposite, both said a certain amount about finance, and I will return to that point later. It is hardly necessary to recall the events in the last two years of the old Act, when the City lent large sums of money for film production and something like a boom occurred. No one can deny that there ensued a

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period of considerable extravagance and inflated salaries, when too little of the money which was obtained for film production actually got on to the screen. In the event the City, in many cases, lost considerable sums of money, and in view of their bitter experiences they have shown little signs of any willingness to provide further finance. I know the noble Lord opposite suggested that the City were like a flock of sheep, but I think the City are like everybody else when they have lost money in a certain venture: it is very difficult, for some little time at any rate, to persuade them to go back into that venture again. The Government cannot influence the number of films which are imported from abroad, nor are they able to dictate to the City how and to whom they should consider lending money. The only way in which the Act has affected production is by the small reduction in the renters' quota. This reduction has been fully justified, as will be seen if we now turn to what I may call the brighter side of the picture.
It must be realised that the underlying object of the new legislation was entirely different from that of the old. The old Act aimed at the production of a certain number of films in this country. The experience gained of its working showed that large numbers of the films thus produced were harmful to British production and that no enduring British industry could be built up which depended solely on the United Kingdom market. The new Act, that of 1938, attempted to find markets for British films abroad, particularly in the United States. The harmful "quota quickie" was abolished by means of the minimum cost test provisions, and encouragement was given to the production of higher-quality films by the provisions already referred to, under which, where the labour costs amount to more than certain minima, they are allowed extra credit for quota purposes. Provision was further made that a renter could acquire certain quota credits for British films not otherwise required for quota purposes in this country, if he were prepared to pay certain minima sums for the right to show the film in a foreign country. It is no good disguising the fact that progress on these lines must be slow and can only be achieved by co-operation with the American industry. We have no means of forcing our pictures into the
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American market, and, even if we had, it is doubtful whether any real lasting benefit could be obtained.
We ask ourselves what has been the result of this new policy introduced by the Act of last year. The "quota quickie" has disappeared, but this is the least important of the results. The important factor to be noted is that in the last twelve months there has been a steady advance in the average quality of British films. That was also referred to by the noble Lords who have spoken, but I repeat it because I think it is a very important feature. A considerable number of films have been produced which can hold their own with films produced anywhere in the world. I should like to mention "The Citadel," "Pygmalion," "Sixty Glorious Years," "The Mikado," and "The Drum." I think the first of those was started by an American organisation; the last four represent the work of independent British production companies, although most of them have been distributed by American renters. Special significance lies in the fact that distribution has taken place not only in this country but also in the United States, and that these films, and others which could be mentioned, have done extremely well in that country, many of them far better than their makers had dared to hope. As has already been said, this process must be slow, but everything points to the fact that the underlying policy of the 1938 Act is the right one.
LORD STRABOLGI: May I interrupt the noble Lord? I did not mention the names of any films purposely; but is he aware that he has left out the most successful of the British films, from the point of view of the American market?
LORD TEMPLEMORE: I beg the noble Lord's pardon; I thought my noble friend behind me mentioned it.
LORD STRABOLGI: He mentioned it, but if you mention the others you ought to mention the most important.
NOBLE LORDS: Which is that?
LORD STRABOLGI: "Pygmalion."
LORD TEMPLEMORE: I did mention it.
LORD STRABOLGI: I am very sorry; I thought you said "The Citadel."
LORD TEMPLEMORE: I mentioned "The Citadel"; I mentioned them all.
LORD STRABOLGI: I am very sorry; that is quite right.
LORD TEMPLEMORE: At the beginning of April next, the long film quota in this country rises from 15 to 20 per cent. There is reason to believe that American production is on the up-grade, and the increased quota combined with increased imports should in itself give a much needed fillip to British production. Moreover, there are definite indications that the co-operation between British and American interests will show a further advance in the coming year, and in particular that more use will be made of the reciprocity provisions. What is particularly needed is some additional fillip for independent British production. We have in this country some of the best studios in the world, the best of talent, both among our technicians and our artists, and a wealth of material from which to draw for our stories and settings. It is to be hoped that financial interests will have observed the fine results obtained with the films made in the last twelve months and will be willing to venture their support for well conceived schemes of production. Quite apart from anything else, the international tension in the last year must have acted as a brake on finance, but the situation has now, of course, considerably eased, and we hope will slowly but surely improve.
With the present unemployment in the industry and the comparative shortage of work in the studios, certain interests, particularly those representative of employers and employees on Cle producing side of the industry, have turned to what may at first sight appear to be a partial solution of their difficulties—namely, an increase in the quotas. I was interested to hear that that course was not defended either by the noble Viscount who introduced the Motion or by the noble Lord who followed him.
VISCOUNT BRIDGEMAN: What I said actually was that I did not advocate an increase in quota by itself, unaccompanied by other measures.
LORD TEMPLEMORE: Exactly. I do not think I misrepresented the noble Lord. They have proposed that the exhibitors' quota for the year beginning October 1,
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1939, and the two succeeding years, and the renters' quota for the year beginning April 1, 1940, and the new succeeding year, should be increased. Under the Act, the Board of Trade have power under Clause 15, after consulting the Cinematograph Films Council, to lay an Order before Parliament increasing the long quotas for those years within the limits of 15 and 30 per cent. in the case of the exhibitors and 20 and 30 per cent. in the case of the renters. His Majesty's Government are naturally anxious that the position should be carefully considered and, for this reason, they have referred the question of these quotas to the Cinematograph Films Council for advice.
Here, in passing, I should like to say that the President of the Board of Trade wishes to take this opportunity of paying a tribute to the assistance which he has received from the Council in administering the Act during the past twelve months. That body, as your Lordships know, consists of representatives of all sections of the trade, including the employees, and of a certain number of independents. They have this question of the quotas before them, and are no doubt receiving evidence on the subject from all sections of the trade. I think I am right in saying that no report has so far reached the President of the Board of Trade, and possibly the Council may feel that at this stage they cannot reach any conclusions, at all events on the quotas to apply so far ahead as 1940, as under the Act the necessary Order can be laid any time before the end of December of this year. If they should eventually recommend, and the Board of Trade should agree with their recommendation, that the quotas should not be raised, it does not necessarily follow that this would prevent anything in the nature of an increase when the quotas came up again for consideration in 1941. The decision can, of course, only be taken in the light of the circumstances at the time.
I think I may say it is the opinion of my right honourable friend and His Majesty's Government that the effect of the Act has been to cause a general improvement in the quality of British films. In spite of this the amount of film production going on in this country is not so great as the Government would wish to see, but in their view this is due to underlying conditions in this and the American

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industry which are not affected by legislation. They consider from the working of the first year of the Act that the policy of co-operation between the United Kingdom and American industries is the correct one, and that with the increase in the quota which takes effect next month, and the plans which have been or are being made for extending this co-operation, we should see a definite improvement in the position. I hope I have said enough to show my noble friend and the House, that His Majesty's Government are fully alive to the difficult position of the film industry, but they are full of hope that this will improve if, as we all trust, world conditions improve. The noble Lord opposite talked about the Government not being slow to bring forward an amending Bill if this Act should prove to fail. I cannot speak as to that, but I really think it is early days yet to talk about a possible amending Bill. I am sure that would not be lost sight of by my right honourable friend and His Majesty's Government if things got as bad as that. I am sure that I and the Government are deeply grateful to the noble Viscount for bringing forward this Motion in the way he has, and to him and to the noble Lord opposite for the suggestions which they have made. I can only say at this juncture that this debate will be brought to the notice of my right honourable friend and his advisers at the Board of Trade and will be, I am sure, most helpful to them in the negotiations which they will hive now and in future with the Films Council and in any future action which they may take in order to put life into this most important industry.
VISCOUNT BRIDGEMAN: My Lords, I should like, if I may, very briefly to thank the noble Lord who has replied for His Majesty's Government for the very full way in which he has given to your Lordships' House the information available on the state of the films industry. I was a little surprised, if I may say so, that he said the drop in British film production was not due to the new legislation, if I understood him aright. Then he went on to say that the drop was due to the abolition of the "quickies" which had been brought about by the new legislation. I think there can be no real doubt that although the
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problem of the actual number of films produced was swollen by the "quickies" quite outside the scope of the Act, it has in part been caused by the abolition of the "quickies" and, accompanying that, a failure to replace them by genuine British films of high quality.
I would only say one other thing, and that is on the financial aspect. I hope I did not convey the impression that I thought the Board of Trade could dictate to the City. My intention was to suggest that if it were accepted that the bad financial conditions prevailing last year were very largely things of the past, the time would then come for the Board of Trade and the Films Council to suggest to the City that finance could now be made available to film producers in a way which would have been unsafe in previous years. If the Board of Trade are persuaded that that state of affairs has arrived, then I hope they will take the step of making some sort of suggestion. Finally, I was very glad to notice that the noble Lord made the distinction between the genuinely British and the British film produced to American order, because until that distinction is realised there will never be any hope of doing more than arranging for a certain number of films to be produced to American order in this country. I beg leave to withdraw my Motion.
Motion for Papers, by leave, withdrawn.

BACON INDUSTRY (AMENDMENT) BILL.
Order of the Day for the Second Reading read.
THE PARLIAMENTARY SECRETARY OF THE MINISTRY OF AGRICULTURE AND FISHERIES (THE EARL OF FEVERSHAM): My Lords, the purpose of this Bill is to make certain amendments in the Bacon Industry Act, 1938. These amendments have been found to be necessary since the passing of that Act last July. Your Lordships will know that the Bacon Industry Act established a bacon price insurance scheme for the bacon industry. This price insurance scheme was designed to protect pig producers against fluctuations in the price of feeding stuffs, and to protect bacon curers against fluctuations in the price of bacon, for a limited period of three

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years. Pig producers receive fixed prices from curers during the three years to which the Act relates, and if the price of a certain ration of feeding stuffs rises above a stated level, pig producers receive an additional sum, which is provided, in effect, by the Exchequer. If the price falls below that stated level the Exchequer receives, in effect, a payment from pig producers. On the other hand, bacon curers are reimbursed by the Exchequer if bacon prices fall below a standard fixed in the Act, and when prices rise above that standard they make a similar payment to the Exchequer.
Of course the operating margin of the curers is derived not only from the sale of bacon but also from the sale or manufacture of those parts of the pig called the offals, which are not turned into bacon. The most important product manufactured from the offals is lard. At the time when the principal Act was framed it was felt that there was no need to make any provision for lard in the insurance scheme, because it was anticipated that lard prices would maintain the stability which they had shown for a considerable period before the Act carne into operation. This, however, has not proved to be the case. The price of lard dropped steadily throughout the year 1938, and within that year there was a total drop of 20 per cent. compared with 1937. This drop was accounted for in part by a marked increase in imports from the United States, which appear to have had a dominant effect on the market for lard in this country. Over and above this consideration the position of the curers is made worse by the removal of the duty (10 per cent. ad valorem) under the Anglo-American Trade Agreement, and having regard to the increasing production of pigs in the United States of America it is expected that lard prices will remain weak for some time to come. The Government, therefore, decided that in order to round off and complete the insurance scheme of the principal Act there should be some means of compensating curers for falls in prices of lard, and the main purpose of the Bill now before the House is to remedy this deficiency.
The Bill gives effect to this decision by fixing basic lard prices in the same way as basic bacon prices were fixed in the principal Act. For the first year the basis has been taken as 65s. per cwt., as indicating the average level of lard prices
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which prevailed when the main structure of the price insurance plan was settled. It has been estimated that a rise or fall of 1s. per cwt. in the price of lard causes on the average a rise or fall of 1d. per cwt. of bacon in the curer's returns. It is therefore proposed that when the price of lard falls below the basic price by 1s. the standard bacon price shall rise by 1d.; that is to say, the level at which the curer ceases to receive money from the Exchequer and begins to pay into it is raised by 1d. Similarly, when the lard price rises by 1s. above the standard level, 1d. is subtracted from the standard bacon price. That is obviously and must necessarily be a rather technical and complicated matter of figures, but I must state the matter for your information if I am to explain the provisions of the Bill at all.
In the Bacon Industry Act, as your Lordships will be aware, the principle of "tapering" is applied to pig prices and also to the standard bacon prices in the interests of greater efficiency and greater economy, the effect being that these standard prices are lowered in the second and third years in which the principal Act operates. The same principle is now applied in the amending Bill to basic lard prices, which would be reduced to 63s. per cwt. in the second year and 59s. in the third. The alterations I have described are dealt with in subsections (2) and (5) of Clause 1 of the Bill. The remaining amendments effected by the Bill are of a somewhat technical nature, and I do not propose to detain the House by explaining them in detail, unless your Lordships desire me to do so. Subsection (3) of Clause 1 deals with the arrangements for weighing bacon for the purpose of calculating the amounts due to and from the Exchequer, and subsection (4) re-defines the ascertained bacon price, so as to remove certain difficulties that have arisen under the definition contained in the principal Act. Clause 2 effects an alteration in Section 19 of the Act relating to the curing of imported pigs and carcases.
Clause 3, subsection (2), of the Bill makes the provisions of the Bill retrospective, as it is felt that the price insurance on lard should come into effect on the date on which the curers become liable to pay the standard pig prices. Therefore the complete scheme will take effect from the commencement of the contract system, which started on 1st December last. It will be seen that there has

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been no departure in this Bill from the intentions of the principal Act, and I trust that, with the explanation that I have given to the House, your Lordships will be prepared to give the Bill a Second Reading. I beg to move.
Moved, That the Bill be now read 2a.—(The Earl of Feversham.)
THE EARL OF CRAWFORD: My Lords, I will engage to say not one in a million people who produce bacon or consume bacon will have the remotest idea of what this Bill means. It is one of the most complicated bits of draft-men's prose I have ever seen. But there is one group of words in it which I think authorises me to make a remark or two about my practical experience of matters. It refers to "specified premises and specified pigs"—Clause page 2, lines 14 and 15. For a good many years I have produced pigs and have done so in a manner which is, I understand, eminently satisfactory to the gentleman who buys the pigs from me. In the ordinary way of business my pigs are sent to him on a particular specified day in the week to his specified premises, and my specified article exactly suits his requirements. It is just as long as he likes, just as tail as he likes, just as broad as he wishes, and its interior is precisely suited to his requirements. His credit is good, and his cheques are received by me on the appointed day.
Well, it is a matter of twenty or twenty-five miles to his specified premises, but a few weeks ago I was instructed to send my pigs to Yorkshire, 220 miles away. It takes fifteen hours for them to get there. My factor has made the best arrangements he could that my pigs shall be cosy on the journey, and I am bound to say that I am paid as steadily and as regularly as I used to be paid before. But it seems to me rather a slow and painful and, for the pig, fatiguing process. I hope it may effect in due time, as my noble friend on the Front Bench said, a contribution to improved efficiency and greater economy; but meanwhile it seems to me a very cumbersome and roundabout method of doing business.
THE EARL OF FEVERSHAM: My Lords, I cannot but concur in the opening remark of the noble Earl when he said that this measure was one of the most complicated that it has ever been
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his experience to come across in your Lordships' House. The noble Earl has had infinitely greater experience of Bills submitted to this House during the course of this century than I have had, but I cannot believe that there have been more than a round dozen Bills submitted of a more technical character than this. It has taken me a considerable time to begin to master the intentions of the clauses. But my noble friend has, in raising a point arising out of the Bill, been generous to me, inasmuch as he has not referred to a small or detailed or technical point, but to the point of the allocation of pigs under the revised contract system which has called forth a lot of criticism during the last six months. Perhaps therefore your Lordships will allow me for a few moments to refer to certain aspects of that system. There is at present much misinformed opinion as to the intention of the Bacon Development Board and the Pigs Marketing Scheme because we have arrived at the position where, in the noble Earl's experience, pigs from the Midlands have been sent to Yorkshire, and in my personal experience a certain number of pigs have gone from Yorkshire, where there are within a radius of fifteen miles of me two factories, down to Birmingham.
I should point out that the first contract period under the new Act runs from December, 1938, to November of the present year, and producers have offered under that first contract about 1,500,000 pigs. Although the number of pigs offered is less than in previous years, this number in the circumstances must be considered satisfactory in view of the reduced supply of pigs. Rather more than three-quarters of the total were offered on what are called "nominated curer" offers. That means that most pig producers have been inclined to do as the noble Earl has done in the past, send their pigs to the nearest factory, of which they have some knowledge and in which they have some interest. The "open offers" and the "group offers" together have accounted for just over one-fifth of the total. As an indication of the extent to which contracts are being fulfilled, I think it worth while to mention that the total number of pigs offered on long contracts for December was 115,000, and during December 104,000 pigs were delivered and accepted against

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these contracts, which on past experience is quite a good ratio of deliveries to the number contracted for.
This is the point: the old system of contracting under which producers could contract with any curer they chose resulted in a very uneven distribution of contracts among the factories. Some curers were well supplied; many did not have enough pigs to give them an economic through-put; a few even were unable to secure a sufficient number of contracts to carry on their business with success. Curers who were short of supplies had to buy pigs on the open market and eventually open market prices rose above the contract prices to the detriment of contracting producers. The result was that the intentions of the Bacon Marketing Schemes completely failed, and we had a collapse in organised marketing which destroyed that confidence and success which had been given to such an extent in the initial stages to those schemes that within a comparatively short time the pig population of this country increased 98 per cent. Owing to the breakdown due to the causes that I have enumerated, the pig population has fallen in the last eighteen months to such a pitch that there are not sufficient pigs for all the curers, whether supplied in the open market or under contract.
Therefore, under the proposals of the Bacon Industry Act one of the most important features was a rationalisation scheme to be prepared in the course of three years among the curers themselves. Under the new legislation, which was brought into operation last July, it was necessary to protect the new contract system against the dangers of uncontrolled open market buying. Both sides of the industry agreed that there should be some fair apportionment of pigs among the factories, and this was a new principle for the industry. Those who were responsible for carrying it out were obviously breaking new ground and they had to remove or overcome the natural misconceptions and prejudices that existed. The main source of complaint about allocations has been the transfer of pigs to factories other than those which the pig producers have nominated on their contract forms. The reason, it is contended, is that several factories were offered pigs well above their proper shares and it was therefore inevitable that these extra pigs should be diverted
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to other curers who were short of their allocations. Further, owing to the reduced supply of pigs, as I said, it was inevitable that most curers would have to work with fewer pigs than formerly, and consequently their shares of the contract supply have been much smaller than were expected. In spite of the widespread criticism of the allocation proposals, only one pig out of every six for a nominated contract was transferred away from the nominated curer. These figures go to prove that the evil to which the noble Earl has referred is not quite so widespread as may be commonly imagined.
Just one further word on the important question Lord Crawford raised in respect of transport. Many complaints have been made that there has been unnecessary and costly transport, but I should like to emphasize the fact that there is no evidence at the present time that transport costs this year will show an increase over those of previous years. The Bacon Marketing Board have been given certain powers to regulate the transport of pigs by or on behalf of the curers, and these powers are being used so as to secure all possible economies in the transport of pigs. In conclusion I would like to express to the noble Earl this view, that the organisations concerned cannot necessarily be content with the experience of the allocation of pigs among curers that has occurred during the last few months, but it must be borne in mind that there is to all intents and purposes a revolution being effected in the processes for the marketing of pigs and of the manufactured product, bacon. A committee recently appointed by the Pigs Board has submitted a full report to the Bacon Development Board upon the present defects of the allocation system, and it is anticipated that the Development Board in the next contract period will do all that lies within their power to remove the ills to which my noble friend has this afternoon referred.
THE EARL OF CRAWFORD: By leave of the House, may I thank the noble Earl for his very interesting explanation and add that my pigs have expressed no prejudice on the subject at all?
On Question, Bill read 2a, and committed to a Committee of the Whole House.

GOVERNMENT OF INDIA (PROVIN- CIAL LEGISLATIVE ASSEMBLIES) (AMENDMENT) ORDER, 1939.
THE SECRETARY OF STATE FOR INDIA (THE MARQUESS OF ZETLAND): My Lords, I beg to move the Motion that stands in my name.
Moved, That the Draft Order, as presented to Parliament and reported from the India and Burma Orders Committee on the 23rd of February last, be approved.—(The Marquess of Zetland.)
On Question, Motion agreed to.

GOVERNMENT OF BURMA (INDIA- BURMA FINANCIAL SETTLE- MENT) ORDER, 1939.
THE MARQUESS OF ZETLAND: My Lords, I beg to move the Motion on the Paper.
Moved, That the Draft Order, as presented to Parliament and reported from the India and Burma Orders Committee on the 23rd of February last, be approved.—(The Marquess of Zetland.)
On Question, Motion agreed to.

GOVERNMENT OF BURMA (SHAN STATES FEDERAL FUND) ORDER, 1939.
THE MARQUESS OF ZETLAND: My Lords, I beg to move that this Draft Order be approved.
Moved, That the Draft Order, as presented to Parliament and reported from the India and Burma Orders Committee
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on the 23rd of February last, be approved.—(The Marquess of Zetland.)
On Question, Motion agreed to.

BUSINESS OF THE HOUSE.
THE FIRST LORD OF THE ADMIRALTY (EARL STANHOPE): My Lords, it may be for the convenience of your Lordships if I refer very briefly to the course of business which is proposed for next week. On Tuesday, we propose to take the Second Reading of the Cancer Bill, which was read a first time to-day. As your Lordships know, on Wednesday there is a Motion by the noble and gallant Viscount, Lord Trenchard, on Defence matters, followed next day, Thursday, by the Second Reading of the Defence Loans Bill. I suggest, therefore, it might be for the convenience of the House if those who wish to speak on Defence matters spoke on the Motion by Lord Trenchard and those who wish to speak on the financial side of Defence confined themselves to Thursday's debate. Wednesday would therefore be for Defence matters, and Thursday for the financial side of Defence, thereby arranging that we do not get the debate spreading over a very wide area on each day, which perhaps would be less satisfactory to all of us. Of course that will not prevent any of your Lordships speaking on Defence matters on Thursday. I only suggest, for the convenience of the House, that we should try to divide the debate in the way suggested.
House adjourned at a quarter past five o'clock.