HL Deb 19 February 1948 vol 153 cc1251-72

5.12 p.m.

Debate resumed.

THE EARL OF DROGHEDA

My Lords, it is traditional that the Chairman of Committees should speak in this House only if the subject matter of the debate is entirely non-Party and if he has, or at any rate is supposed to have, some special knowledge of the subject. I hope that your Lordships will think that this is one of those occasions. I am most grateful to the noble Lord the First Lord of the Admiralty for the kind words he used about the small amount of work I have been able to do on the Films Council. No one who has been a member of that Council could fail to learn something about this most fascinating and complex industry, but I am very conscious how superficial and incomplete is my knowledge of it. May I add that anything I have to say this afternoon is merely the expression of my own personal views; I make no claim to speak for the Films Council as a whole, or even for the non-trade members of it. As is only right, many schools of thought and different interests are represented on the Council, and few indeed are the subjects upon which the Council are unanimous. I think, however, that all my colleagues would wish to join me in expressing their appreciation of the efficiency and the helpfulness of all the members of the Films Section of the Board of Trade.

In a sense, the present Bill is quite overshadowed by two events of major importance to the industry. The first of these, of course, is the Customs Duty and the subsequent embargo on the shipment of films to this country from the United States which has created a situation of very great difficulty for many exhibitors. The second event is the announcement by the President of the Board of Trade of his intention to set up a Committee to inquire into the whole question of the distribution and exhibition of films, and also a Production Council, under his own chairmanship, to keep under review every aspect of production efficiency. The subject matters with which those two bodies will have to deal are of the utmost importance to the industry—they go to its very roots—and the outcome of their deliberations, when the international situation has permitted the Committee to be set up, will be watched with the deepest interest. In comparison with some which have come before your Lordships, this Bill is a very modest affair. All it does is to maintain in force for a further ten years the quota protection afforded by the previous Act, and to amend and modernize in some way the provisions of the 1938 Act. Nevertheless, the maintenance of the quota protection is by no means unimportant. It is quite unthinkable that we should risk losing the ground which has been gained with so much effort during these difficult years. I am sure that one day the British film industry will be so well established, and British films will be so much in demand, that they will need no artificial help; but until that day comes we must have the quota protection and I do not think that any one seriously contends that that is not the case. For my part, I am extremely glad that the Government did not fix any quota percentages in the Bill. I know that it is argued—and, indeed, I believe the noble Viscount, Lord Swinton, said to-day—that: it might not matter if the percentages were fixed too high and subsequently there turned out to be a shortage of British films, because that fact could always be taken into account in considering quota defaulters. That is perfectly true. But surely, on general principles, it cannot be right to create large numbers of offenders whose offences have to be overlooked because the law that they have broken cannot be carried into effect.

I have been for three years a member of the Defaults Committee of the Council, which considers these defaults in the first instance. Owing, no doubt, mainly to the war, and also to the rigidity of the 1938 Act, we have been faced year by year with something like 1,000 defaults. We have gone through them carefully, and we have been satisfied that the vast majority of cases have arisen simply because the exhibitors have not been able to procure sufficient British films. I submit that a total of something like 1,000 offenders, and perhaps ten prosecutions by the Board as a result of our saying that some of the cases are particularly bad, simply brings the law into disrepute. I do not think that it does any good to anyone, not even the independent producer, to assist whom is one of the main objects of the Bill.

If any of your Lordships who have not yet made a film were to wish to produce, not a very expensive film, but an important film—shall we say a film costing £200,000—and supposing again that it was not quite convenient for you to find most of that money, it would not be any help, I think, when you went to. look for finance, to say: "Oh, it is quite all right, the quota percentage is 35 per cent." I think that your bank would very likely reply: "That may be so, but what we want to know is that the film you are going to make will have a quota booking; until then there is nothing doing." I am quite certain that it is a fallacy to think that, by making high percentages, we can thereby stimulate production. What the producer must know is that his films are going to have a large showing. The quota percentages should, in my opinion, be substantial, but they should not be unrealistic. To fix the percentages too high is to inflict considerable hardship upon exhibitors, particularly the more conscientious exhibitors, and it does no good to anyone at all. I am sure that the quota percentages must be most carefully considered and related to British films that look likely to be coming forward in the next quota period; and that is one of the reasons why it is difficult to fix the period too far ahead. The Films Council, or whoever advises the Board of Trade, must be able to see what is in view before they can advise reasonably as to percentages.

May I turn for a moment to the position as regards Scotland? During the passage of the Bill through another place apprehensions were expressed lest the Scottish defaulters might be treated with undue harshness, because there was such a small number of Scottish representatives on the Council compared with the numbers of their English colleagues. I know the noble Earl, Lord Rosebery, made that point, but I do not think those fears have any foundation. The procedure of the Films Council in advising the Board of Trade, certainly during the past three years and I think since the establishment of the Council, has been as follows. The Films Council appoint a Committee consisting of eight members. Two Scottish representatives are members of the Committee—and I an assure your Lordships that they have in full measure the eloquence and the zeal for Scottish interests which we have come to associate with the representatives of Scotland in your Lordships' House.

On every Scottish default the Committee is guided by the advice given by the Scottish representatives, and I do not recall a single case—I am sure there is not one—in which their advice has not been accepted. Indeed, I may say that if for some reason or other neither of the Scottish representatives had been able to be present at a particular meeting, the whole consideration of the Scottish default would have been postponed until one or both had been able to be present. Then the Defaults Committee report to the Council; the Council consider these cases and give their advice to the Board of Trade, and if the Films Council have shown any disposition to be unduly severe on Scottish defaulters, again the two Scottish representatives are there to argue their case. But there has never been the slightest necessity for them to do so. Therefore I think that so far as Scottish defaulters are concerned, Scotland has not had at all a raw deal in the past, and I cannot imagine that in future the Films Council would treat the defaulters in any different way.

The Selection Committee, which is mentioned in Clause 5 (2), have so far not been overburdened with work, as not a single film has yet been submitted to them. I do not think that any of us really expected that any films would be submitted to them yet. The position now is that if a good British film is made it is absolutely certain of a circuit booking and a very wide showing in Great Britain. Indeed, I think there is far less chance of a good British film not being shown than there is of an indifferent British film having to be shown. I myself should be delighted if I could think that many films were likely to come before the Selection Committee, but I fear that for some time to come the Selection Committee will not be overburdened with work, because there are not and cannot be for some time enough British films coming forward. In this connexion, may I say how delighted I was to see that the President of the Board of Trade said in another place that films are to be recommended by the Committee eventually, when some come forward, as being suitable for exhibition by reason of their entertainment value? There is a vast potential field for educational films that has not yet been touched, but in general I feel sure that the man in the street, who is after all the customer upon whom the whole industry depends, looks for entertainment rather than instruction.

The British film industry has made great strides in the last few years, but this is certainly no time for complacency. Receipts are falling, expenses are mounting, and the immediate outlook is, to say the least of it, very obscure. Nevertheless, I think that the British film industry can view with pride what it has achieved and can look forward with hope and confidence to the future. It is most fortunate that the leaders of this industry, of whom Mr. Rank is such an outstanding figure, are men of such high ideals and tenacity of purpose in the midst of great difficulties. There is only one other point upon which I should like to touch, and that is the question of finance, with which the noble Viscount, Lord Swinton, dealt. I noticed that in the debate in another place a very interesting suggestion was put forward for the first time—I think it was by the honourable Member for West Nottingham—that films which might be difficult to finance should be subsidized out of the entertainments tax. I do not ask for an answer about that to-day, but I hope that it is one of the things that will be borne in mind by the Government as a very interesting possibility. I think this Bill is a good Bill, a necessary Bill, and I hope it will receive the favourable consideration of your Lordships' House.

5.28 p.m.

LORD STRABOLGI

My Lords, we hear too seldom the voice of the noble Earl who has just sat down, addressing your Lordships, so to speak, on his own ground. I am sure we have been most interested in the informative address to which we have listened. We have enjoyed the benefit of his experience; and he holds a unique position because of his special office. Before making a few remarks on this Bill—remarks which will be of the most friendly nature, let me reassure my noble friend the First Lord of the Admiralty—I think it right to say that for some years I have had an interest in the business, in an old but small firm producing British films. I am therefore trying to do my part to help the production of British films.

The Bill has been received, I gather, in all parts of your Lordships' House and by all Parties in another place with general satisfaction. According to the noble Earl who has just addressed us, that view is shared by those who have the interests of the great industry at heart and who work for it in the various branches of production, distribution and so on. It certainly has the support of the organized workers in the film industry, and perhaps I might be allowed to quote here the words of the General Secretary of the Association of Cine-Technicians, Mr. George Elvin. The noble Viscount, the First Lord of the Admiralty, and I have known Mr. Elvin for many years, and we know that he certainly speaks with authority from the point of view of the more highly-skilled workmen in the industry. This is the letter he personally wrote to me at my request: On the Bill generally, we think it excellent. Certainly the best of the three Quota Bills we have had. A lot, of course, depends on the results of the Committee of Inquiry which the President of the Board of Trade proposes to set up and the result of his promised discussions with the Chancellor of the Exchequer on the question of a Films Bank.'' That is a weighty opinion and, in my small way, I would like to endorse it. It is a good Bill and I should like to congratulate my noble friend on the clear and concise way in which he has explained it. Apart from the complaints made by the noble Earl opposite on behalf of Scotland, the only solid criticism which I have heard is in regard to the 10s. a foot minimum labour costs. My noble friend knows the arguments very well. I hope that in Committee, even now, that matter can be re-considered. I gather from all informed persons that the general view is that 10s. a foot labour costs is really too low—that with all economies and eiffciency a worth-while film cannot be made for that money. If you are to have that sort of cost test at all, make it really effective. I refer to Clause 3 (6).

I have given my noble friend notice of a certain matter which I intended to raise. This was not referred to by the noble Viscount who spoke from the Opposition Benches, or by the noble Earl, Lord Drogheda. I refer to the extraordinary situation in which we find ourselves to-day in respect of the boycott in Hollywood on films for this country. The Americans have taken this unfortunate decision, which was dealt with by my noble friend and also by the President of the Board of Trade in another place. One would suppose that that decision would have given a tremendous impetus and stimulus to the production of British films in British studios; and yet about one-third of the available studio space is lying idle. My noble friend said something about labour and materials. The position is that employees are being sacked right and left, and there is great unemployment amongst highly skilled technicians because of the idle studios.

Let me quote from an article by the Films Correspondent of the Daily Express which appeared on February 11, 1948. Mr. David Lewin is very well known—I am sure that the noble Earl, Lord Drogheda, knows him too. Mr. David Lewin knows what he is talking about, and he says: Seven of our smaller studios capable of making twenty films a year are closed. Denham and Pinewood, the largest studios, which can make between them six or seven films at a time, are only working on four. Three hundred to four hundred film technicians—30 per cent. of the total number on feature films—are out of work"— that is one-third of the total number of film technicians. That is an extraordinary state of affairs. I wrote to Mr. Elvin for confirmation of this. I wonder if your Lordships would permit me to read now what he says about it. Subsequent to the statement in the Daily Express which I have quoted, Mr. Elvin said: Herbert Wilcox's next film will not be made at Metro-Goldwyn Mayer's studio, but at Shepperton. Over 700 workers have a? a consequence been dismissed from M.G.M. studios, and when the present production finishes there is No 1ndication of any further films being made there. No films have been made by M.G.M. since the end of the war"— and this is one of the largest studios. The only films made there—four in all—have been made by independent companies who have hired their space. Of the other American-controlled studio space, the A.B.C. studios at Elstree (controlled by Warner Bros.) have not yet re-opened since the end of the war." Then he goes on to talk about structural alterations, but I will omit that part for the sake of brevity. He continues: Welwyn studios, controlled by the same company, have been intermittent in production. Warner Bros. own studio at Teddington is just making its first film since re-opening. Twentieth Century Fox, who own the studio at Wembley, have not yet re-started to make films in it. Their record is only one film made at Denham. M.G.M. studios are the second largest studio in the country, Denham alone being larger. So he goes on to give more details with which I will not trouble your Lordships. I shall be glad to send the detailed in- formation to my noble friend, but the net result is—and here I am quoting from this letter: … that the American owned or controlled space is about one-third of our existing studio space. None of this is fully occupied. Most of it is threatened with complete idleness resulting in a quarter of A.C.T.'s members"— that is the trade union of the skilled workers— engaged in feature production being to-day unemployed. He then goes on to speak of the remedy proposed by the union. The remedy proposed by the union is that if the Americans are not going to use space themselves then others should not be deprived of using it. It should be requisitioned by the State and made available to independent producers. This, of course, must tie up with our plea for a Films Bank, financing independent production. That is the writer's proposal which I do not necessarily endorse because I quite understand that there might be difficulties and complications. However, I put it forward as coming from the responsible officials concerned.

My noble friend and other noble Lords are well aware that the Americans, in order to meet the quota, have been making films in this country—which was one of the objects of the original legislation—and they have used their money for that purpose. It was a suitable arrangement until the "quota quickies" were invented. Then we had the 1938 Act, which has been referred to by my noble friend and its parent, the noble Viscount, Lord Swinton. That ended the "quota quickie" and we had real production with American finance. This is what the President of the Board of Trade said on the Second Reading of the Bill. It is reported in Column 224 of Hansard of January 21, 1948. The Motion Picture Association of the United States has given us an undertaking that, subject only to the qualification that no company will be pledged to make films here if and when it is not sending American films to the British market"— that, of course, is the loophole— the American companies who are its members will maintain film production in the United Kingdom at the rate contemplated by their original plans for production which were formulated early last year. This should result in a volume of production from this source at least as great as we could have expected from it if we had maintained the renters' quota. My right honourable friend, the President of the Board of Trade, was explaining the dropping of the renters' quota, and there is the explanation. Later on, Mr. Wilson said that … studio space is a very scarce asset, and we cannot afford not to see all of it used. Here we have one-third of this studio space unoccupied and unused, apparently in retaliation, as it seems to me, for the duty imposed on American films which has been referred to in this debate by my noble friend and by the noble Viscount, Lord Swinton. That is a very serious situation.

The cutting off of the supply of American films by reason of this boycott from Hollywood will cause a lot of inconvenience and disappointment to the British public, thousands and millions of whom look upon their weekly visit to the cinema as one of their great relaxations and pleasures, unless the loss can be made good by British films. There will be a considerable loss to the owners of theatres and there will be unemployment amongst the people they employ, all of which is very serious. If, in addition to that, we are not to have a real effort to fill the gap with British films—and, after all, the same ad valorem duty prevents other foreign films coming in, though the public for such films, non-English-speaking films, is not very great—then the situation will be more serious still. What is to be done about it? The lying idle for long or prolonged periods of these great studios cannot be tolerated. I think something will have to be done about that.

With regard to the question of finance, the noble Viscount, Lord Swinton, spoke about some new-fangled idea. I suppose he meant this proposed film bank, which was referred to in the Second Reading debate by the President of the Board of Trade; he then said that he has an open mind on the matter. That proposal has been debated and discussed and examined for twenty-five years, to my knowledge, and the need for some strong corporation to provide finance for the competent independent producer has been known for a long time. Lord Swinton made an interesting suggestion that the Government corporations, especially those for assisting industry, might be approached. I have never heard of their being approached. I only hope that he made that suggestion with some authority behind it. If they can, and if the so-called junior corporation can provide some of the finance for reputable producers, under some sort of safeguard, that might help; but there would still be this shortage of studio space and this artificial idleness created by the American controllers. Mr. Rank's organization has been referred to by the noble Earl, Lord Drogheda, and I agree entirely with what he said. I think Mr. Rank and his co-operator; have done a splendid service to the country and, incidentally, to the British film industry. Mr. Rank has brought business methods and also a great deal of money to the industry. He has produced some remarkably fine films which have helped our prestige abroad and helped the whole industry; but I presume that Mr. Rank's organization itself must be pretty fully stretched for finance, and I do not see how it can be expected to fill the whole of this gap.

The independent producers, also, apparently cannot obtain sufficient finance to make enough films and they are, above all, faced with these idle studios. I suggest to my noble friend that the Government will have to look at this matter very seriously indeed. A Committee of Inquiry into the whole industry has been proposed. I do not know when that is to be set up. These Committees of Inquiry cannot be hurried, and this is an extremely complicated industry. The Committee may take a long time to report, and there is sometimes quite a long time between the Report of a Committee and actual action by the Government. My noble friend Lord Lucas can tell us something about that. With great respect to my noble friend and his advisers, I suggest that we cannot afford to wait for this Committee of Inquiry before we deal with this very real emergency of artificial idleness in the studios of this country, artificial unemployment amongst the skilled technicians—the very heart of the industry, of course—and the lack of films to keep our studios supplied and the public entertained. Something must be done about it.

I want to say only one thing with reference to the dispute with the Hollywood industry. I regret it deeply, and I am sure that we all regret it. During the Second World War, and especially during the period before Pearl Harbour and American intervention, the leaders of the film industry in the United States were among our best friends; and the influence (which is not an inconsiderable influence) of the Hollywood industry was very much in favour of the Allied cause. That should not be forgotten. We are their second best market after their own great home market, and surely some compromise can be reached. I entirely agree with what was said in another place by my right honourable friend the President of the Board of Trade, by the First Lord to-day and, indeed, by Lord Swinton, that we cannot afford the amount of dollars which were going out. There; must therefore be a compromise which will save the dollars, perhaps by some reciprocal arrangement—as has already been suggested—whereby the undoubtedly good British films of to-day can be allowed to earn dollars as a quid pro quo to balance up. I hope that some sort of arrangement as that will be made. Both parties are losing at present, and it is both sad and disturbing to find our very good friends there with a grievance, perhaps because they do not really understand our need to save dollars. There is, nevertheless, an undoubted grievance which I hope will be resolved.

I do not want to detain the House longer in this matter. I have ventured particularly to bring forward this matter of the idle studio space, and of unemployment in the industry at the present time, because I do suggest that it is of considerable importance. I hope that earnest consideration will be given to this problem by the Board of Trade and by the Government, despite the many distractions and responsibilities and anxieties which they have in other directions. I very much welcome the Bill itself, and I again congratulate my noble friend on introducing it.

5.47 p.m.

LORD GRANTLEY

My Lords, I will venture to trespass for only a few moments upon your Lordships' patience. There are noble Lords in this House who know that for twenty years I have had close connexion with the film industry, especially with Mr. Rank's organization. I hope that your Lordships will not assume that that necessarily means a glamorous life; it does not; it means facts and figures. I would like; to comment particularly on two aspects of the speech of the noble Lord, Lord Strabolgi. In the first place, I think that we should look at this Bill from other aspects than the question of the complexities and problems raised by ad valorem duties. It is a Bill that is to last for ten years and is to protect (and solely to protect) the interests of British film makers in this country. Secondly, I would add that I think Lord Strabolgi has painted a rather blacker picture than should be painted in regard to the present closing of the studios. It is, of course, perhaps an indirect result of the ad valorem duty, but it cannot be cured with extreme speed. Motion pictures cannot suddenly be flung on to studio floors. A great deal of preparatory work has to be done in order to fill studios with pictures actually being shot.

We who are concerned with the making of motion pictures in this country consider this Bill a very good one. The 1927 Bill, of which my noble friend Lord Swinton rightly claims to have been the author, did a great deal for the film industry, even though it was heavily criticized from time to time. The excellent work done by the Chairman of the Committee appointed in 1938, the late Lord Moyne, led to an even better Bill in 1938. Notable in the improvements in the 1938 Act was the minimum labour cost clause, which entirely and effectively remedied the making of what used to be known as "quota quickies." The improvements—and they are notable improvements—in the present Bill, designed to meet present conditions and alterations and war effects, are the four categories of separate quota, by which provisions the theatres that are able more easily to get bookings of British films are allotted higher quotas than theatres in a more difficult position in that respect. It must result in giving more screen time to British pictures; and that, after all, is the final object of this Bill.

I would like, if I may, to make a brief comment with regard to the Films Council, the work of which has already been touched upon by the noble Earl, Lord Drogheda. I was a member of the Films Council during its early years, approximately from 1938 to 1941, and I gained valuable experience by reason of my connexion with it. Naturally, I learned something about the attendance of members at meetings of the Council. Conditions may have altered now, of course—I have not had an opportunity of asking my noble friend Lord Drogheda about that—but I would urge the President of the Board of Trade, when he comes to select the seven independent members of this Council which is to be formed, to bear this in mind. When the appointments were made under the 1938 Act, those appointed were men of immense position, prestige and reputation. That carries the obvious corollary that they were also tremendously busy men, and I am bound to say that the attendance of the independent members in the last years of the last decade was poor. I hope, therefore, that when he makes his selection the President of the Board of Trade will have special regard to the ability of those selected to attend with frequency at meetings of the Council.

LORD STRABOLGI

May I ask the noble Lord whether it would be possible to have deputies for these members; substitutes as well perhaps?

LORD GRANTLEY

I would hardly like to answer that myself. I feel that, while it may be a valuable suggestion, it is a matter for His Majesty's Government. I would like to add that, in my opinion, one of the reasons why this Bill is, as I believe, a splendid one, lies in the assiduity and the enthusiasm with which the President of the Board of Trade and his officials have consulted with all branches of the industry. They have, to my knowledge, been in continuous consultation with all branches of the industry for nearly a year. That consultation has gone a long way to the successful making of a Bill which I think should be welcomed by your Lordships. There are three or four matters—some of them have been touched upon by the noble Viscount, Lord Swinton—which your Lordships will no doubt wish to deal with during the Committee stage. For the present, as a practical film maker myself, I would like to pass on a message from my fellow film makers—namely, that we welcome this Bill.

5.53 p.m.

LORD HAWKE

My Lords, I intervene for a few moments only in order to express what experience has taught me to believe are likely to be the views of the British populations overseas with regard to this Bill. The noble Viscount, Lord Swinton, has said that the Americans attribute enormous power to their film industry as a means of advertising their goods. I am afraid that it is not only their goods but also the American way of life which is publicized by American films. Your Lordships may well think that, judging by what you have seen on the screen, the American way of life is not always good. Of course, what is shown in the films may possibly not be the American way of life. British films, however, rarely distort the British way of life, and those who have lived abroad, as I have done, have always, eagerly awaited the arrival of a new British film.

Another point I wish to make is this. I hope that the British film industry will never stoop to make films which pander to the tastes of the more illiterate coloured populations, or films which will depreciate in any way the "White" way of life, as has so often been done by Hollywood. I hope that this Bill will lead to a great increase in the number of good British films available for showing to audiences overseas, but I respectfully suggest that if British actors and actresses wish to be understood by foreigners, they must learn to speak more clearly, and particularly not to drop their voices on the last syllables of their words.

5.55 p.m.

LORD TEYNHAM

My Lords, we have had a very interesting debate this afternoon. I should like to add a few words of appreciation of the Bill as a whole and of the very clear way in which it has been presented by the noble Viscount, Lord Hall. Having said that, I should add that I think there are certain aspects of matters contained in the Bill which seem to me to require a little more elucidation and explanation. It was mentioned in another place that, in addition to the passing of this Bill a series of boards of inquiry are to be set up to examine sections of the film industry. I should like to ask, are these to be working parties, or boards of inquiry, or what? How are they to proceed, and what are their terms of reference? Surely these inquiries (I believe there are to be three) are interdependent. Why not have one inquiry? I hope that these inquiries will not mark the beginning of the appearance of the dead hand of nationalization in the film industry.

We have heard mentioned the possibility of State finance and State studios. There may he something to be said for State finance, but certainly not for State studios, for which the taxpayer would undoubtedly have to foot the bill—as he is beginning to now in the case of other nationalized industries. I can conceive a form of financial credit somewhat similar to the assistance given to farmers by the Agricultural Finance Corporation, which would assist independent producers who are outside the big combines and who may have difficulty in raising funds unless they have a guarantee of distribution by the large groups. But I am sure that it would be a great mistake to have the State actively engaged as a partner in the British film industry. I think that the noble Earl, Lord Drogheda, put forward an interesting suggestion, that a subsidy might be given out of entertainment tax. I hope that the noble Viscount, Lord Hall, will look into that point. In any case, there are finance corporations in existence, as was mentioned by the noble Viscount, Lord Swinton, which should be able to take care of the small producer, provided, of course, that he has something good to offer.

In some quarters there is a tendency to oppose and belittle the major organization in the film industry which has grown up in recent years. I was much interested to hear the noble Lord, Lord Strabolgi, put forward a good word for this organization. I feel that it has helped greatly to put our film industry on its feet in this country. And I am sure your Lordships will agree that it is absolutely necessary to have at least one organization which, in size and efficiency, can compete with the big concerns in Hollywood and thereby put the British film in the world's markets. In my view the country owes a great debt of gratitude to this major organization. The Bill which is before us to-day lays down a provision for special quota theatres, but relates this quota only to circuits of 200 cinemas and over. I would suggest that it is rather unfair that the small circuits, which are frequently very profitable and often have little or no competition, should be omitted from the provisions of the special quota. Surely it is only fair that they should pull their weight in the special quota scheme. I think this was mentioned by the noble Viscount, Lord Swinton.

As the Bill is drawn, I think it can be said that for the purposes of the quota cinemas in this country fall into four classes. In the first class there is the large category which under the Bill will have to show, in addition to a special quota, some six films selected by a Selection Committee to be appointed by the Board of Trade. Then there are the second class which are to be called special quota theatres and which will have to show a larger quota than that borne by the general class. The third, or general, class are to be theatres which can apply for a reduced quota if they can bring evidence to show that they have more powerful rivals in their locality and that they have difficulty in getting regular supplies of up-to-date British films. Finally, there are the fourth class, which are theatres free of all quota restrictions and which will qualify for exemption if they can show that they have competition from powerful rivals and their net takings are less than £100 per week.

I have taken the House rather carefully through these classes, because I think it is clear that the Bill provides machinery by which owners of theatres in the general class can drop into a lower quota class. It appears, however, that the Bill provides no means by which a cinema in the general class can be up-graded—that is the best way to put it—into the class of special quota theatres. The point was referred to by the noble Viscount, Lord Swinton. I think it should not be forgotten that there are many cinemas, perhaps owned by a man who owns not 200, but fifty or five or even one cinema only, which, because of their geographical position, have certain advantages and are quite able to comply with the special quota allotted to theatres in the second class. For example, there is the case of a theatre in a solus position—that is to say, a theatre which is the only one in the locality—which may be in a stronger position than a theatre which is one of a circuit of 200 and has two or three rivals in close proximity. In some towns one man or one company owns all the theatres and in this position of monopoly the theatres are well able to accept the special quota. There are something in the nature of 700 to 800 theatres in this position which could be promoted to the special quota theatre category.

It appears that no provision has been made in the Bill for a Sunday quota. I would suggest that there is no reason why the public should not have the opportunity of seeing the best British pictures on this day as well as any other. If this provision is not made, there is a danger that the tendency may arise for an exhibitor to show any bad or cheap film on that day. Again there is nothing in the Bill to prevent an exhibitor from showing his quota in the first half of the week and other films in the second half, which would have the effect of preventing British films from being shown in the best half of the week. I think it is true to say that box office takings in the second half of the week are usually 50 per cent. higher than in the first half of the week. I hope the noble Viscount will take note of that point. We all want to see more British films, more studios, and good working conditions, but what perhaps is more essential than anything else at the present time is a reduction in the costs of production. No doubt more care than hitherto could be taken by the producing organizations to cut down delays and speed up the efficient production time of a film. But I suggest that there are certain restrictive practices which have grown up on the set, due to trade union regulations which I feel could well be relaxed during these rather difficult times for the benefit of the industry as a whole.

I fully support His Majesty's Government in their efforts to reduce the dollar expenditure on films, and I hope the American film industry will realize that we mean business in this country, and that we intend to stand by the restrictions which have been imposed on American films until such time as our dollar position is on a more favourable basis. On the other hand, we shall welcome any arrangement that may be made whereby the dollar receipts from the showing of British films in America can be set against the showing of American films in this country. I think the Bill on the whole will be of great benefit to the film industry. The noble Lord, Lord Grantley, who knows a great deal about this industry, welcomed it cordially. I suggest that it should not be forgotten that the Bill is all in favour of the producer, who is not under any obligation to make films, whereas the exhibitors are controlled, and rightly so, by a quota system which the exhibitors accept in good heart as beneficial to the film in- dustry generally. The Bill is, of course, academic and meaningless until normal relations are again established with the American film industry, which I am sure all your Lordships hope will occur in a very short time.

6.7 p.m.

VISCOUNT HALL

My Lords, I am grateful to the noble Viscount, Lord Swinton, and to all noble Lords who have taken part in this debate for the kind way in which they have received this Bill. I fully expected the noble Viscount, Lord Swinton, to have some paternal feeling towards this measure. I well remember the introduction of the first Bill in 1927, just twenty-one years ago, and this Bill represents the mature legislation. It is a very much improved Bill and one which I think everyone will welcome. The first Act was a try-out in very difficult circumstances, but so good was that Act that it laid the foundation for the legislation which followed.

I can quite understand the noble Viscount, Lord Swinton, and other noble Lords who have taken part in this debate, intimating that there are certain points which they propose to raise on Committee stage. Indeed, I think most of the points which have been raised, with one or two exceptions, are points which we well might deal with at that stage of the Bill. The noble Viscount referred specially to the question of administration, which he hoped would be kept as small as possible. He can be assured that the Board of Trade are doing their utmost to keep down to a minimum the numbers employed in this department, and they fully appreciate how necessary it is to have the administration as small as possible. He also raised the question of the minimum period for the quota. Provision is made in the Bill for a minimum period of twelve months, with six months' notice to be given of any change that is likely to take place. I think that will meet any criticism which may be levelled against the continuance of the quota and of the giving of notice.

The noble Earl, Lord Rosebery, raised the question of the difficulties with which the Scottish people are faced because they have not a special Scottish Committee. I must say that I have a good deal of sympathy with him. I come, as he does, from a small country—but still an important country. I think he and I can almost join in a united front on this matter. The only thing I can say is that under this Bill, and in almost all other legislation which is being passed, Scotland comes out of it very much better than my little country of Wales. I am not complaining, but there it is. Much time was spent on this question in another place, and, as he said, a special subcommittee is being appointed to deal with one branch of the work provided for by the Bill, and two special representatives of Scotland are to sit on the Cinematograph Films Council. That does not prevent the President of the Board of Trade appointing another Scottish representative, if it is deemed necessary, but there are these special representatives.

THE EARL OF ROSEBERY

One is independent; he is not an expert.

VISCOUNT HALL

He might not be an expert but he is a Scotsman which is more important. The noble Earl mentioned something about a special Scottish quota. I hope that he will not think that foreign films are more acceptable to Scotland than the good old British films—I will not call them English films. After all, the actors and actresses are from the three countries. They generally find their way to London and: hey put their best into the production of what I consider to be jolly good British films.

LORD TEYNHAM

You might have a Scottish report committee, which may meet the case.

VISCOUNT HALL

It might. I can assure the noble Earl that a considerable amount of attention was given to this matter in another place, although I do not for a moment suggest that he was not quite justified in raising it here. I have no doubt that the President of the Board of Trade will take note of what has been said. I am sure that all noble Lords join in welcoming the intervention in this debate of the noble Earl, Lord Drogheda. He brought to the debate a great knowledge, based upon a long and valuable experience with the Films Council. It was pleasing to have the tributes paid to him by colleagues of his who are members of another place; and from outside sources we have also heard of the excellent work which he has done. I, too, took note of the suggestion which was made by one of the honourable members in another place regarding the financial assistance which might be obtained from the entertainments tax. That, of course, is a matter upon which the Chancellor of the Exchequer will have to be consulted, and which he will have to examine very carefully.

My noble friend Lord Strabolgi raised the important question of studio space and finance, and also the difficulties which have arisen as a result of the American space in this country not being used. The noble Lord will know that my right honourable friend announced in another place that a Production Committee was to be set up. I think he went so far as to say that he had already issued invitations for the setting up of this Committee. I have no doubt that he will give attention to this question of the proper utilization of space, and to any other difficulty which hinders the production of the films which we hope to see from the full use of these studios. The noble Lord also raised the question of the labour costs for the films, which is based upon a minimum of 10s. per foot. There is some slight difference between the cost of 10s. per foot provided for under this Bill, and the £1 per foot referred to by the noble Viscount, Lord Swinton. The £1 per foot was based upon a renters' quota, whereas this is based upon an exhibitors' quota. It makes a considerable difference which basis is used. I have no doubt that this matter will be raised in Committee, when greater attention can be given to it. I would like to say here that the Government have not been unmindful of the difficulties of studio space. I was informed only to-day that no less a sum than £1,000,000 has been spent upon the repair and building of studios in this country, and licences have been granted for an expenditure amounting to something like another £500,000. So the Government are seized of the importance of this matter.

The noble Lord, Lord Grantley, in his pleasing contribution to our debate, also brought to bear a practical experience on this matter. He mentioned one point about the selection of the seven independent members. I agree with him that there is a danger that the people of great ability may not have the necessary time to give to the work of a Council of this kind. I have no doubt that the President of the Board of Trade will take note of the valuable suggestion which the noble Lord made.

The noble Lord, Lord Teynham, made several points, and he will pardon me if I do not deal with them fully. He raised the question of a change in quotas. I have no doubt that we will be able to deal more fully in Committee with what, after all, is a rather intricate matter, and the points can then be brought out. He also dealt with quota theatres, and the same thing applies to that point. On the question of State studios, the noble Lord will have read what was said by the President of the Board of Trade in another place. He stated, quite frankly, that he had an open mind; that he was going to appoint a Committee to deal with it, and that after the Committee had reported their report would be published. I think he even went so far as to say that it would be presented to both Houses of Parliament. He wants to be quite fair in relation to this matter, and I hope noble Lords do not think that he will in any way attempt to take an unfair advantage. With regard to the setting up of Committees and the Report, the Government are fully seized of the difficulties with which the producers of British films are confronted at the present time. I assure your Lordships that anything which can be done to bring about an improvement in the situation will be done. Again, may I express my thanks to noble Lords for the helpful and kind way in which they have received this measure?

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