Lords Sitting of 21 July 1952

Preamble
The House met at half past two of the clock, The LORD CHANCELLOR on the Woolsack.
Prayers
The Lord MacDermott—Took the Oath.

GLOSSOP WATER BILL
2.36 p.m.
Read 3a, with the Amendments; a further Amendment made: Bill passed, and returned to the Commons.

FAREHAM URBAN DISTRICT COUNCIL BILL
Read 3a, with the Amendments, and passed, and returned to the Commons.

ROCHDALE CANAL BILL
Read 3a, with the Amendments, and passed, and returned to the Commons.
KILMARNOCK CORPORATION ORDER CONFIRMATION BILL
LEITH HARBOUR AND DOCKS ORDER CONFIRMATION BILL
Read 3a (according to Order), and passed.
PIER AND HARBOUR PROVISIONAL ORDER (BRIGHTON)BILL
PIER AND HARBOUR PROVISIONAL ORDER (GREAT YAR-MOUTH) BILL
PIER AND HARBOUR PROVISIONAL ORDER (SEAHAM HARBOUR) BILL
PIER AND HARBOUR PROVISIONAL ORDER (HERNE BAY) BILL
PIER AND HARBOUR PROVISIONAL ORDER (KING'S LYNN) BILL
PIER AND HARBOUR PROVISIONAL ORDER (MINEHEAD) BILL
Read 3a (according to Order), and passed.

CUSTOMS AND EXCISE BILL
2.38 p.m.
Order of the Day for the Second Reading read.
THE CHANCELLOR OF THE DUCHY OF LANCASTER (VISCOUNT SWINTON): My Lords, I think that if ever consolidation was justified of her children and came as a boon and a blessing to men, it is so with this Bill Until the year 1909 Customs and Excise were administered in two separate departments, with a completely separate administration. But there was not only that complication to face.

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The law of Customs and Excise was scattered over 200 Acts of Parliament which had grown up in the course of 150 years. How anyone could find their way through that forest of ancient timber and dead wood is a mystery to me. It must have involved an appalling waste of time on the part of the staffs in any trade or business, in spite of the help given to them by the Customs and Excise, who I think kept almost a corps of guides to help the ordinary wayfarer through the intricacies of the subject.
Four times in the last eighty years the draftsmen and the experts staged an attack on this maze of trenches and entanglements; but each time the assault failed and the attackers gave up the task, if not the ghost. However, in 1948 the forces of enlightenment were mobilised again, and this time they have won the battle. After three years' work they presented the result of their labour to a Committee of experts presided over by my noble friend Lord Kennet, with the noble Lord, Lord Nathan, as deputy Chairman; and both Houses had the advantage of Lord Nathan's advice on the Joint Select Committee whose Report is now before us. That expert Committee did a very thorough job. Amongst other things, they consulted no fewer than 140 representative associations, and in their Report the Committee say that they are unanimously of opinion that the draft Bill as revised by them and now presented is
"a non-controversial measure long overdue and greatly desired by all the trades and industries concerned in Customs and Excise procedure; and that it will facilitate the work of the Board of Customs and Excise and ease and pressure on their staff."
They also state that they:
"are further of the opinion that the Bill reproduces the existing law subject only to alterations, which are desirable for the purpose of simplifying the existing enactments and bringing them into conformity with modern practice and conditions."
That, I think, exactly follows the rule and the practice which Parliament has laid down with regard to consolidation procedure, on which the noble and learned Earl the Leader of the Opposition and some of us had a good deal of discussion in this House in order to make sure that we had a procedure which was right and convenient. I think this Bill shows how very well that procedure is working.
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The Bill was then presented, read a second time and committed to a Joint Committee of both Houses, on which there sat, from your Lordships' House, the noble Lords, Lord Hawke, Lord Nathan, Lord Saltoun, Lord Stamp and Lord Teviot. Although there were not wanting tempters to tempt the members of the Joint Committee from the strict path of consolidation into the more controversial subject of what the law ought to be, and not what the law is—what the law ought to be must be the subject of substantive Acts of Parliament—the Committee adhered quite strictly to the principles of consolidation, and they made this Report to us. I am quoting from the Report of the Select Committee, on page iv:
"The Bill not only consolidates the law relating to customs and excise, but introduces a number of amendments of that law recommended by the departmental Committee in pursuance of their terms of reference to advise as to such amendments of the existing law as are desirable in order to secure simplicity and conformity with the requirements of modern practice and conditions."
They go on, in paragraph 3 of the introduction to their full Report:
"While appreciating that further reforms in the customs and excise law may be desirable, the Committee have felt that it would not be desirable for them to discuss at length proposals for substantial and controversial changes in the law and that the Committee's amendments should not go beyond amendments calculated to simplify or clarify the law. The amendments made by the Committee are of the character mentioned, or of a drafting nature, or consequential on other legislation; the Committee do not feel it to be necessary to refer to any in particular."
The result of all that is this Bill. It repeals entirely forty-seven Acts of Parliament out of the 200, and it repeals or amends 540 sections of other Acts. I think this has been a monumental job of work, and I commend it with admiration and gratitude to your Lordships. I beg to move that the Bill be now read 2a.
Moved, That the Bill be now read 2a.—(Viscount Swinton.)
2.45 p.m.
EARL JOWITT: My Lords, I should like to add a few words, first of all to assure the noble Viscount who has just spoken that we regard this Bill as completely non-controversial; secondly, to say a word of tribute to both the noble Lord, Lord Kennet, and the noble Lord,

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Lord Nathan, who have done a most useful work in connection with this matter; and also—I will not say to praise myself (that is the last thing I want to do) but, at any rate, to say that I think the machinery we set up in the last Parliament has, by this Bill, proved itself to be of the greatest value. I readily admit that that machinery was assented to by all Parties in the House. I was exceedingly fortunate in getting authority to set up a branch of the Parliamentary Draftsmen's Office who were able to devote themselves to consolidation matters, because for years past the trouble had been that when a draftsman started working on one of these projects he was always called away, off the consolidation, to work on some current Bill. It is really elementary to those of us who have studied this matter at all that you simply cannot get on with consolidation unless you have some very highly skilled person who is able to give all his time, and consecutively, to the work under review.
The first step that I was able to take—as I say, I acknowledge the assistance I received from all Parties—was to set up that branch. I should like, in the first instance, to pay my tribute to the members of that branch, who have done most magnificent work. The next step we took (I do not think it was material to this Bill) was to pass the Consolidation of Enactments (Procedure) Act, 1949. That Act, of course, enables amendments to be made whilst consolidation is going on. The old principle of consolidation was always that the draftsman had to be able to inform the Committee that he had reproduced faithfully everything in the existing Acts—
VISCOUNT SWINTON: The 1949 Act was used to the full with this Bill, and has been quite invaluable.
EARL JOWITT: I thought that might be so. But, as I say, in the old days the draftsman had to be able to say, "I have reproduced faithfully exactly what is in the existing Acts"; and if there was a doubt or an obscurity in the existing Acts, then the draftsman had to say: "I have reproduced that doubt and that obscurity." Only if he could lay his hand on his heart and say that could he get the benefit of the consolidation procedure, which is really conventional, under which these Consolidation Bills
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were allowed to go through. That was the reason why I pressed upon the House the Consolidation of Enactments (Procedure) Act, 1949. I had some doubt as to whether it had been in fact used in this particular measure.
We have another Bill coming on to-day, a Bill of immense importance, the Magistrates' Courts Bill. Looking at the Long Title to that Bill, I see that it is a consolidation of the matters therein considered
"with such corrections and improvements as may be authorised under the Consolidation of Enactments (Procedure) Act, 1949."
Those words form part of the Title of the Bill. If that is so, in the first place I would suggest it would be well that the Parliamentary draftsman should always use that same formula, because that at once calls attention to the fact that the provisions of that Act are being used. Looking at the Title here and not seeing that formula, I rather wondered whether that Act had been made use of in this case.
VISCOUNT SWINTON: May I just intervene to say that, as I understand it, the 1949 Act really did two things, to one of which I think particular attention ought to be drawn—that is, whether, when there was a disputed point of law, it could be resolved. I do not think that is the case here. What has happened here is that in a great many Acts going back one hundred and fifty years, while the law, or certainly the practice as carried out by the Customs and Excise, has not been altered in any way by this Bill, the wording of old law was so archaic and abstruse that it had little application to the facts as they exist to-day. I think it would be true to say (my noble friend Lord Reading will probably bear me out in this, and also, I think, Lord Kennet) that the Committee did not purport to change the law in any respect. They merely said "Here is the existing practice, which is right and convenient, and this Bill now brings the existing practice into proper legal terminology."
EARL JOWITT: It may well be so. The position under the machinery of the Consolidation of Enactments (Procedure) Act—I speak subject to correction; I have not looked up the wording—is this: that it is now possible to consolidate with amendments. It is true that they must be

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minor amendments, and they must be authorised by the Lord Chancellor and subsequently, I think, approved by the Speaker of the other House. That got over this immense difficulty to which I have referred. Previously, the draftsman had to reproduce precisely what the existing law was, with all its doubts and difficulties; and he had to say "There is an obscure point which gives rise to all sorts of difficulties. I have reproduced it and the same difficulties can now arise under my Consolidation Act." Thanks to our Act of 1949, it is now possible to consolidate with minor, though not with major, amendments. All I want to say is that (it may or may not arise on this Bill; I am not quite sure) wherever that machinery has been made use of I think the fact ought to appear in the Long Title of the Bill. If it has not been made use of, the point does not arise here at all. If it has been made use of, then I think the Long Title ought to indicate, just as the Title of the Magistrates' Courts Bill does, that the machinery has been made use of.
My Lords, that is a completely trivial point of which perhaps notice may be taken, if the matter appears in any way relevant. I should like to add that for practitioners this branch of the law has been an absolute nightmare. Particularly when I was a Law Officer, I had sometimes to consider what was the relevant law here. It is really almost impossible to find it out. You could find out about the existing practice by getting some "walking encyclopædia" round from the office of the Customs and Excise, but if you looked at the textbooks and tried to find out what the law was, it was a matter of immense difficulty. I feel that those who have been responsible for this piece of work, which seems to me a very fine piece of work, deserve the greatest thanks. It is surely right that the lieges should be able to find out from some source or other what the law is. Thanks to the draftsmen and those who have studied and worked on this Bill, they will now be able to do so. It does not, of course, preclude the question of amendments to the law in future, but it is a tremendous thing to have stated in this Consolidation Act the principles and the statement of the law as at the present time. I can assure your Lordships, from the point of view of the practitioners, that
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this will prove of the greatest possible value.
I would say to the noble and learned Lord the Lord Chancellor, who no doubt has watched over this project—as I watched over mine in my time—more power to his elbow. May he be able, in other branches of the law, to do what he has done in regard to this branch of the law! It is a great satisfaction to me to think that on this particular day also we have the Magistrates' Courts Bill. I look forward with confidence to the time when we shall have the Summary Jurisdiction Acts dealt with in the same way. Since I started at the Bar, I have seen a book called Stone's Justices' Manual—which I used to know quite well in those days—which started as quite a thin book and which, in the course of time, acquired a nasty middle-age spread, now become an immense tome. Inevitably, there is a tremendous amount in that book which is quite unnecessary. If we can do for that branch of the law what we are now doing for this, again it would be a tremendous advantage, not only to the lieges but also to the practitioners. I should like to join with the noble Viscount in congratulating all those who have had some share in bringing about this happy result.
2.56 p.m.
LORD LLEWELLIN: My Lords, before we finally pass this Bill may I be allowed to say one word, because I happen at the moment to be Chairman of the Joint Committee on Consolidation Bills? I believe that this Bill does not exactly come under that heading. It is an amending Bill as well as a consolidating Bill. It had its special Joint Committee, sitting under the chairmanship of my noble friend Lord Kennet, and never came under the enactment to which the noble and learned Earl has just referred. So perhaps it would be inappropriate to incorporate those words into this particular statute. At the same time I should like to say how valuable we on that Committee have found the 1949 Act, introduced by the noble and learned Earl, Lord Jowitt, when he was Lord Chancellor, and which in practice enables one (here my predecessor on the Committee, the noble Marquess, Lord Reading, will no doubt bear me out) to resolve these doubts, provided that any amendments are approved by both Houses.

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In reference to one remark of the noble and learned Earl, I would say that of course the proposals have to be made to the Committee by the Lord Chancellor of the day, and the proposals made by the Committee have then to be approved not only by the Lord Chancellor but by the Speaker of the House of Commons. In regard to Stone's Justices' Manual, I remember the time when that was quite a handy book to travel about with. Now it has grown so large and fat that it has grown into twins—there are two volumes of the Manual, and one always hopes that one has taken the right volume when going to court for a particular purpose. I am quite certain that this work of consolidation is a most valuable work. Perhaps it would not be inappropriate for me at this moment to refer to the immense amount of work that Sir Granville Ram has undertaken in this connection. Unfortunately, he was unable, because of illness, to serve on the Departmental Committee on the Magistrates' Courts Bill, but those of your Lordships who know him and value his work will be delighted to hear that he is making a good recovery from his illness; indeed, he hopes to be able soon to resume his very valuable public work.
2.59 p.m.
LORD KENNET: My Lords, I would not venture an opinion upon so technical a matter as the Title of the Bill, but I rather think that in the course of this discussion it has appeared that the present Title is probably quite accurate. If I may say so—I think this is a point worth recording on this occasion—this has been most typically a case illustrative of the extreme utility of that extension of the consolidation procedure which admits of minor amendments being made. As a matter of fact, in this enormous business dealing with Statutes extending over two hundred years, those who are engaged on the work of consolidation have had to deal with Statutes passed by Parliament at long intervals, completely forgetful of their previous legislation. Therefore, it was difficult to reconcile those Statutes without introducing an alteration of either one law or other, and the practice followed by those who prepared the ground for drafting was to say: "Let us see what is the accepted procedure to
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reconcile these technically irreconcilable enactments, and see whether there is any convention on the subject. If there is not, then accept that form of legislation which will confirm the accepted practice."
It only remains for me to confirm what has been said in recognition of the extreme efficiency of the labours of those who have been engaged on what has been a great task occupying some years. In the first place, an extraordinary knowledge of the law on Customs and Excise, extreme accuracy and, to use an appropriate phrase, common sense have been vital to the successful enactment of this Bill. In the second place, let me confirm what has been said by the noble Lord, Lord Llewellin, as to the brilliant work of the draftsmen's department, whose members wormed their way through these incredible mazes of history and technicality with a skill which has astonished and delighted those who have benefited by their labours. Finally, let me say a word of appreciation and recognition of the extremely reasonable approach to this Bill of the great interests concerned in Customs and Excise matters. It is, of course, an almost irresistible temptation, when legislation is in progress to advance one's favourite method of reform. Confronted with the alternative between doing that or getting a reasonable Consolidation Bill and postponing their efforts at reform, they have always been content to choose the more reasonable course.
VISCOUNT SWINTON: My Lords, perhaps I may be allowed to add just this. Of course, everything that has been said by noble Lords who have spoken upon this Bill is not only to the point but completely accurate. Your Lordships will be glad to know that the Bill is not only admirable in itself but is also correctly christened, because the long title of the Bill is:
"A Bill to consolidate with amendments certain enactments relating to the customs and excise.…"
and so on.
On Question, Bill read 2a, and committed to a Committee of the Whole House.

PENSIONS (INCREASE) BILL
3.4 p.m.
Order of the Day for the Second Reading read.
VISCOUNT SWINTON: My Lords, I think this Bill will be equally acceptable to your Lordships. As your Lordships are aware, the increases in National Insurance and war disability pensions, and in family allowances, have already been provided for in legislation which has either been passed or is about to reach its final stages in this House. I think that most of it has been passed, and in so far as these pensions fall to be dealt with by Prerogative Instrument, that also has been or is being done. This Bill deals with the much smaller remaining class of public service pensioners. They are people whose pensions are fixed under various Acts. There is one thing common, I think, to all these Acts, and that is that the general principle on which pensions are based is a proportion of retiring salary conditioned by length of service. Therefore, of course, these pensions are fixed: indeed, one might almost say that they are fixed contractual pensions, and they do not vary with the cost of living. But it is fair to say that, when salaries are increased—as a number of salaries have been—then, of course, the pension which is related to the rate of salary increases proportionately.
LORD PETHICK-LAWRENCE: Provided that the pensioner gets that salary while he is still serving.
VISCOUNT SWINTON: Yes, provided he gets it while he is still serving. What I said was that they were not conditioned by the cost of living. Of course, if the man concerned has retired he has become a rentier. If the rate of salary goes up while he is still in service, then automatically his pension is proportionately increased. I am rather glad that the noble Lord said that. Of course, these pensions are fixed and, as I say, the pensioner becomes, if I may use the expression, one of the rentier class. It would therefore not be justifiable to single out public service pensioners, as distinct from any other in fixed income groups, for automatic compensation if the cost of living rises. The principle should surely be this: that if there are cases of real hardship those cases should be met or mitigated.
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That, I think, will be common ground to all of us, because that was the basis and principle accepted in the Act of 1944 and in the Pensions (Increase) Act of 1947. And in the same way, that is the basis of this Bill. When the Bill was being prepared the Government had full discussions with the staff side of the Civil Service, the National Whitley Council and with the Trade Union Congress as regards local government employees and teachers. I am not saying that everyone was satisfied. I have never known anyone fully satisfied with the outcome of one of these discussions. But on the whole I think what has been decided is pretty fair. The increases proposed are up to £26 a year for pensioners who are married, or pensioners with one or more dependants, and up to £20 for single pensioners. The detailed way in which these calculations work is set out in the Second Schedule.
The Pensions (Increase) Act of 1947, of course, dealt with the position as at that date, and made what Parliament considered the right adjustments and improvements as compared with the position at the time of the Act of 1944, which dealt with these pensions after the war. This Bill is intended to deal with what has happened since the 1947 Act became law. The increases which the Bill authorises—if your Lordships pass it—will take effect from October 1, which is the date on which National Insurance pensioners will receive their increment. Pensioners of the Fighting Services are not mentioned; they will receive similar treatment but will get it, as always in the case of Service pensions, by Prerogative Instrument. The pensioners who are to benefit, both national and local authority servants, are specified in the First Schedule of the Bill. Your Lordships will want to know the cost. It is estimated that the increased pensions given under the Bill will cost £4,100,000 from the Exchequer, and £2,300,000 from the local rates. To those figures must be added (and, of course this is an Exchequer charge) £2,000,000 in respect of the increase in pensions for the pensioners of the Armed Forces.
There is one anomaly which has been remedied and which I ought to mention. Under the Bill a civil servant who retired after March 31, 1949, or teachers or local government pensioners who retired after

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March 31, 1951, will benefit from the increases which are given. I think your Lordships will agree that they ought to come in. All this is set out in a rather complicated calculation, but those expert in this matter will understand the Schedule. I have tried to understand it, but I am not at all sure that I can explain it.
Like the Acts of 1944 and 1947, this Bill is intended to deal with cases of special hardship; therefore we must have an income limit. We have been more liberal than in the previous Acts. Under the 1947 Act, the income limit was £450 for a married pensioner and £350 for a single pensioner. Under this Bill, it is £550 for a married pensioner or a pensioner with a dependant, and £425, as against £350, for a single pensioner. The first £104 of income other than pension will be disregarded in applying the income limits. I must admit that the clauses and schedules look complicated, indeed, almost unintelligible, but that is inevitable when framing a Bill which amends a number of other Acts and refers to Acts which, although I have not counted them up, go well into double figures. I have done my best, I hope accurately to translate this Bill into the vulgar tongue and to state the salient features it is right in these days that we should carefully scrutinise all public expenditure, but I think that, on the whole, your Lordships will agree that this improvement in the pensions of public servants is fair and just and that we ought to grant it. Therefore, I commend the Bill to your Lordships and beg to move that it now be read a Second time.
Moved, That the Bill be now read 2a. —(Viscount Swinton.)
3.12 p.m.
LORD PETHICK-LAWRENCE: My Lords, I rise to say on behalf of my noble friends who sit with me on these Benches that, so far as I know, all give their support to this Bill, which does something, and something quite considerable in view of the total cost, to relieve distress which would otherwise continue to press upon the shoulders of those who get humble pensions. Without committing myself to saying that there will not be some Amendments that may be moved later on, I can assure the Government that there will be no opposition to the principles of the Bill and that we shall
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co-operate in securing its passage to the Statute Book at the earliest possible moment.
Having said that, I should like to add that no one who is acquainted with all the facts that lie behind this claim for increased pensions—least of all, I am sure, the noble Viscount, Lord Swinton, who moved the Second Reading, or the Chancellor of the Exchequer or the Financial Secretary to the Treasury, who from the Government point of view are responsible for "vetting" its provisions—will feel that even this Bill, good as it is, does full and substantial justice between pensioners generally. I have been long of the opinion that whenever a contract is made covering a period of years, and more so if the number of years is considerable, with the fluctuating value of money there is nothing like equal justice between the two contracting parties. I used to put it in this way: there can be no justice in any contract expressed in monetary terms unless the pound bought the same basketful of goods to-day. That is essentially true. Whether such a pound can ever be created may be a matter of opinion, but the fact is indisputable.
I would give one or two illustrations of that. When I was a boy, prices were continually falling and a year or two before the turn of the century they reached their nadir. It may be interesting to record that I can remember the time when oranges were sold at six a penny, and even big Jaffas were only 8d. or 9d. per dozen. A whole quartern loaf—a 4 lb. loaf—cost 3½d. or 4d., and prices of other foods were of similar dimensions. After the turn of the century, prices continued to rise, and, with the exception of a short period in the 'twenties and early 'thirties, when they fell catastrophically, they have been rising ever since. We did not have the inflation which occurred in other countries, which went to such an extent that there was a time when a farmer on an extensive farm, with a large part of the purchase price in the form of a mortgage, could redeem the whole of the mortgage by the sale of a single egg. We have had nothing like that here, but we have had a substantial change in the value of money.
It is true that anyone who calculated what he might expect to get when his working life ended and when he became dependent on a pension has been, and is,

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bitterly disappointed in the standard of living which he is enabled to attain by the pension he actually receives. I would go so far as to say that in any community where prices are continually rising, even to the limited amount they have done in this country, the rest of the community is riding on the backs of those who in their latter years receive a fixed pension in terms of money. How does that stand with regard to this Bill? In the first place, I know the limits of this House, and I know that clearly it would be impossible for us to graft on to this Bill any substantial proposal to increase its scope. In the second place, as an old Treasury man, I know the feeling about repercussions and that it would be quite impossible for us to expect the Government to make any firm promise of any further wide increase in future. But I wish to place on record that in my opinion grave injustices remain and my hope that, if and when it proves possible, some further investigation will be undertaken with a view to such redress as may seem expedient. I do not ask for more than that. I ask that all I have said should be noted in the hope that at some future date it may be possible to have an investigation so that the grave injustices existing can ultimately be remedied.
3.20 p.m.
LORD HAILEY: My Lords, I should like to add my support to certain considerations which have been put before your Lordships by the noble Lord, Lord Pethick-Lawrence, as I have been asked my many of my Civil Service pensioner friends to put before your Lordships certain matters in connection with this Bill. I need hardly say that my friends do not find it quite so acceptable as the noble Viscount, Lord Swinton, hopes that it may be to your Lordships; and, as a pensioner myself, I am naturally in sympathy with their point of view. A pensioner—though I am bound to say I had not regarded myself hitherto as a rentier, a term which, in my youth, was regarded in some quarters as one of opprobrium—
VISCOUNT SWINTON: Let me hasten to tell the noble Lord that I was not referring to him as "vermin", but was alluding to the great middle-class with deep respect.
LORD HAILEY: I ought to add that such exiguous pension as I draw from the Indian Government will not be affected by anything done as a result of this Bill. It is quite true, as the noble Viscount said in moving the Second Reading, that this Bill does a little better than was held out in another place by the Chancellor of the Exchequer when he forecast that he might have to make allowances of 5s. to 7s. 6d. a week to pensioners, or about £20 a year. The provision does go up to £26 in the case of persons with dependants, and £20 to those who have no such dependants. Also it does—and one ought to be grateful for it—raise the income limits up to which the pension is admissible, a point also made by the noble Viscount, Lord Swinton. In 1944 the upper ceiling, if I may put it in that way, or the income limits, were £300 a year for a person with dependants, and £224 a year for a person who had no dependants; and in 1947 the figures were respectively £452 a year and £350 a year. Now they are to be £550 a year for persons with dependants, and £425 a year for those without dependants. But, in spite of these advantages, it is not astonishing to find that those who are designated as the beneficiaries of this measure are exceedingly critical of the treatment that has been given to them. All the restrictive features of previous legislation are repeated—the means test and the refusal to correlate the increases to the actual fall in the value of money—and on this occasion there has been added the fact that the increases, instead of going back to January 1, as they did on the last occasion, now come into force only on October 1. But, over and above all this, there is the serious objection felt by the senior members of the Services that the permissible limit of pensions up to which the present increases are available remains as low as £550 in the case of a person with dependants, and £425 in the case of a person without dependants.
As I have said, all these restrictive measures are repeated here. Take, first of all the means test. One wonders whether the Treasury really holds the view that pensions are some kind of eleemosynary grant, instead of being, as they have always been held to be, a species of deferred pay. But the application of a means test to an allowance granted on account of the fall in the value

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of money is, in any case, entirely illogical, in view of the fact that no means test was applied when the actual pension was granted. The Treasury do not say to Government servants: "You have earned a pension by your service in proportion to the pay you have drawn, but, nevertheless, we shall reduce that pension if you have been foolish enough to save money to buy a house, or to invest in the Savings Bank." How is it then logical that a means test should now be applied, when a small increase—and a very small one at that—is being given to pensioners on account of the fact that these pensions are now being paid in what amounts in truth to a debased currency?
Secondly, there is really no relation at all between the pensions and the rate of the fall in the value of money. It will be quite sufficient to point out to your Lordships some obvious facts there. The cost of living index, taken at 100 in 1938, rose to 203 in June, 1947. There was a new cost of living index adopted in June, 1947, and taking the figure as 100 at that date, it rose to 133 in March, 1952. That is, there was roughly a rise of about 35 per cent., not since 1938, but since 1947. Or, to take another method of assessing the progressive fall in the value of money, if the value of the sovereign was 100 in 1938, it was 67 in 1944, and 48 in 1951. I need not attempt to calculate the exact ratio that the increases now given bear to this progressive fall in the value of money. I would only repeat here a calculation made in another place (and I pay great credit to the arithmetical genius who produced it): that the increase now given amounts at the utmost to 2s. 5d. a day, but it may fall, owing to the operation of the Schedule, to 2d. a day. It is not an increase that would make any one die with gratitude.
But the chief point I want to make is that to which I have previously referred—namely, the objection to the legislation provision now proposed which puts the limits up to which increased allowances are permissible as low as £550 or £425, as the case may be. What is the real justification for refusing to extend compensation to pensioners in receipt of more than that amount? The principle of compensation for a fall in the value of money is not in any question. That has been fully admitted in successive legislation, beginning in 1920, repeated in 1924,
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and again, as your Lordships have heard, in 1944 and 1947. One must admit the relevance of the consideration that we must, first of all, take account of cases of real hardship—everyone would be in agreement there. But, while giving first place to cases of real hardship, there seems to me no ground for refusing to admit what is really a question of right, or a question of obvious justice. The pensioners of senior standing have a reasonable ground of complaint. They see their former juniors, or their subsequent colleagues, entitled to a considerable increase of pay, due mainly to the fall in the value of money, and that increase of pay is automatically followed by an increase in pension.
Let me take a typical case. I am assured that the figures are precise, though the dates are representative. It is the case of a man retiring in 1942 after 40 years' service and with a pay of £2,200. If his successor retires in 1953, his salary will be at the greatly increased rate of £3,250. The former incumbent of the post is entitled to a pension of £1,100, while the successor will have a pension of £1,625. There will have been a common period of service of twenty-seven years, but the pension of the second holder of the post will be £525 higher, and it is that much higher mainly on account of the consideration given to the fall in the value of money. I do not grudge the holder of the second post his good luck, but I feel that it is reasonable to ask for some consideration for his predecessor. As the noble Viscount said, it is true that pensions are contractual. But I think—and I take the same point here as the noble Lord, Lord Pethick-Lawrence—that it was of the essence of the contract that the money consideration given by way of pension should bear some sort of relation to the value of money when the contract was concluded. Surely that implication was essential.
One does not want to be extravagant or immoderate in the language one uses on behalf of one's friends in a case like this, but I think one night be permitted to suggest that if the State is going to stand by the wording of its bond, if it is going to adopt the very unenviable historical position of Shylock in that respect, then it would be very unfortunate indeed if it found itself unable to make any concession to those who have given the best

19
of their lives to the service of the State and public. I think it would be creditable to the State if it were to follow the example which has been set by some of the great banks and industrial houses, who are now giving increased allowances at every stage of pension to those of their employees who are suffering from the fall in the value of money. No doubt it is a matter for debate whether the banks have profited by inflation, but one thing is quite certain, and that is that the revenues of the State have immensely increased as a result. I think the State might very well pay some consideration to the case of those of its former servants who have been the victims of the process by which its revenues have been so greatly increased.
3.35 p.m.
LORD AMMON: My Lords, I have one thing in common with the noble Lord who has just spoken—that is, that had I not taken a different course a good many years ago, at this moment I might have been one of those who were pleading for an extension of and an increase in the Pensions Act. I rise to draw attention to some dissatisfaction which exists, particularly among those on the smaller scale of pay and, therefore, with the smaller pensions. At the same time, I am not decrying or minimising in any way the amount which has been voted on this occasion.
There are two or three things of general policy which are of some serious moment. There seem to have been introduced something of the old Poor Law system and almost a denial and a going back on what was fought for and conceded with the passing of the 1912 Act—namely, that pensions are, to a large extent, deferred pay. It is to those things that I wish to draw attention. The application of the scheme has rather an extraordinary effect so far as those receiving the smaller incomes are concerned. While I agree with the noble Lord, Lord Hailey, that those who were on the higher salaries and who retired five, ten or twenty years ago have had no increase in their pensions, their case is not quite so clamant as those on the smaller scales. At the same time, it is worth noting—and attention should be called to it, particularly having regard to the criticism which is sometimes uttered about the Civil Service—that they have not made undue calls on the national Exchequer.
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Now this Bill, unlike others, is on a flat rate, and is not based on percentages, as have been the other Increase Acts in the past. Therefore, its very operation has a hard effect on those on the smaller scale. May I give one or two instances? The Bill provides that in no case shall an increase of pension granted under it exceed one-third of the gross pension. This provision will have the effect of giving the smallest increases to the pensioners with the smallest pensions—for example, to those who, by reason of late entry into the Civil Service, or of discharge at an early age on grounds of ill-health, received on retirement pensions based on very small salaries and on short periods of service. For example, a married man who retired on a basic pension of £45 and has since received an increase of £18 under the Acts of 1944 and 1947 (making his gross pension £63) cannot receive, under the present Bill, an increase of more than £21, whereas, if his gross pension were now £78 or more, he could receive the maximum increase of £26 provided for by the Bill.
Under the escalator clause, as set out in the Second Schedule, this is what happens to some of those on small pensions. In the case of a person who retired on January 1, 1950, on a pension of £150, the amount of increase offered is only £16, which represents 11 per cent. of the 20 per cent. increase in the cost of living since that date. Anyone retiring a year later on a pension of £200 will receive an increase of £11—that is, 5½ per cent. compared with a cost of living increase since January, 1951, of 16 per cent. Those cost of living increases fall heavily on those whose pensions and incomes are as low as £150, of whom there are a tremendous number in the lower grades of the Civil Service and in the other classes who will be affected by the passing of this Bill. I hope that there will be an increase of at least about £30 instead of £20, and certainly some sort of undertaking (and this for wider civil servants generally, as well as those whom I am representing to-day) that there will be an inquiry into the whole question of Civil Service pensions, particularly in their relation to the cost of living, in order that they may be brought back again on an even keel and be more equitable in comparison, one with the other.
3.40 p.m.
VISCOUNT SWINTON: My Lords, perhaps I may out of courtesy reply. The noble Lord, Lord Pethick-Lawrence, made one of his very interesting speeches. He did not. I know, expect me to give a complete answer "off the cuff," so to speak, on what in the present state of the nation, ought to be our attitude towards contractual pensions and other contractual obligations established over the years. It would not carry us a very long way. There might be a claim against Doctor Dalton! I agree with the noble Lord that inflation does fall most heavily upon the man or woman with a fixed income. But my answer to that would be that in the national interest as well as in the interest of every individual, the right way to try to tackle that is not by a complete, or indeed an annual, review of every contractual outstanding obligation; it is by trying to maintain the value of the pound and by trying to prevent any further inflation; and that I certainly promise the noble Lord and the House we will do our best to carry out. I hope and, indeed, from his speeches I know, that we shall have his help in that direction.
There was a claim made by the noble Lord on the other hand—and I think it was also Trade by the noble Lord, Lord Hailey—that people ought to receive increases in pension, however high their pension is, because the value of money has depreciated. It is all very well to argue like that. The noble Lord talks as if this money came out of some inexhaustible purse. He said that all he was asking for was justice. But what he is asking is that the taxpayer should be called upon to find more money in order to give an addition to a contractual obligation. The whole essence of this Bill, as of the Acts which have gone before it, is that nobody is entitled to an increase of this sort as of right. The pension he receives is the pension he contracted for. The noble Lord, Lord Halley, said that if the value of money improves, the Treasury do not say to the pensioner that he ought to get so much less. Of course they do not—because they stand by the contractual obligation into which they have entered. It is the same with the interest on a mortgage: it has to be paid at the agreed rate. So does the rate of interest on bonds issued in the case of
22
nationalised industries. That cannot be altered with the varying price of money. You can alter these things only by coming down on the taxpayer.
Therefore I think we have to be very careful in what we do. It is not a case of right; it is a case of asking the taxpayer, who is very over-burdened to-day, to find more money in order that cases of hardship shall be assisted. But the financial position of this country to-day is not so lush that we can afford to do more. We have in fact been very generous, as both noble Lords acknowledged; the limits have now gone up to £550 and £425. This is intended to meet cases of hardship. It is an eleemosynary payment: it is nothing else; it is not a thing to which anybody has a right. We have to do as far as we can, what is right and just. If, in the event of there being a Budget surplus, we were to say: "Let us pay this money out of that surplus." I cannot imagine how a worse impression could be created in the world at large. Certainly, it was not that sort of attitude that earned us the tribute, only recently paid us, in the O.E.E.C. Report.
Naturally, the man who has served a shorter time will get a smaller pension than the man who has served a longer time, and therefore he will get a smaller increase. But that is the way in which a pension works. The cost of a pension is conditioned by the salary upon which a man retires and upon the length of his service; and so the pension must depend upon the length of time the man has served. I am not expert in this matter, I admit, but I have no doubt that the calculations that the noble Lord made have been worked out accurately. If it is a matter of administration, it can be considered; but I must say frankly that if it is a matter of altering the conditions imposed in this Bill, and thereby increasing the burden on the taxpayer, then, apart from the fact that we have our limitations as to what we can do, I do, not think that in the circumstances it would be a reasonable thing to ask. After all, this is a considerable extension, both in scope and in amount. Some noble-Lords have talked as if this Bill was not worth while. Well, I could easily withdraw it; and if I did the taxpayer would be £10,000,000 or so better off. But I do not think that that would be agreeable.
LORD AMMON: We all thank you.
VISCOUNT SWINTON: Good. And now, Grace having been said, I will bring the matter to a close.
On Question, Bill read 2a, and committed to a Committee of the whole House.

MAGISTRATES' COURTS BILL [H.L.]
House in Committee (according to Order) on re-commitment of the Bill: the Amendments proposed by the Joint Committee made.
Then, Standing Order No. XXXIX having been suspended (pursuant to the Resolution of July 17), Amendments reported. Bill read 3a and passed, and sent to the Commons.

CROWN LESSEES (PROTECTION OF SUB-TENANTS) BILL
House in Committee (according to Order): Bill reported without amendment.
Then, Standing Order No. XXXIX having been suspended (pursuant to the Resolution of July 17), Bill read 3a and passed.

LANCASTER PALATINE COURT (No. 2) BILL
3.50 p.m.
Order of the Day for the House to be put into Committee read.
Moved, That the House do now resolve itself into Committee.—(Lord Mancroft.)
On Question, Motion agreed to.
House in Committee accordingly:
[The EARL OF DROGHEDA in the Chair]
Clause 1 agreed to.
Clause 2 [Consequential provisions]:
LORD MANCROFT LORD MANCROFT: moved to omit "and the filing of a copy thereof." The noble Lord said: There are two small Amendments on Clause 2 which stand in my name on the Order Paper. I think I can dispose of them in a very few seconds. They are really only procedural Amendments, and they have been brought to my attention by the Chief Chancery Master, to whom I am naturally much indebted for his technical help.
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Clause 2 of this Bill says what is to happen when the High Court makes an order transferring proceedings from the High Court to the Lancaster Palatine Court. As the Bill now stands, it provides that, where an order for the transfer of any proceedings to the Palatine Court has been made, the party to whom the order was granted must produce his duplicate order to the proper officer of the High Court, together with a file copy of the order. I am given to understand that this might mean the filing of copies of orders in several different branches of the central office—the Masters' Chambers, the Registrars' office, the filing department and elsewhere, which would obviously be troublesome and expensive.
What the Chief Chancery Master has suggested, and what I propose to effect by these two Amendments, is that we cut out the requirement for filing a copy of the order. It seems to me to be unnecessary anyhow, because the duplicate order will remain on the file of the High Court and be there as a permanent record anyhow. On production of the duplicate copy to the Masters' Chambers, together with a simple request indicating what documents have been filed in the High Court in the proceedings, the Masters' clerks will collect the documents together (whether they are in their own or another department of the central office or Chancery Chambers) and despatch them to the Lancaster Court. It will then be for the authorities of the Lancaster Court to make whatever rules they see fit about the receipt of the documents, and the next steps which they want to be taken. This is purely a procedural Amendment which I think will facilitate the domestic arrangements of this Bill. I hope that the Amendment will commend itself to your Lordships. I beg to move.
Amendment moved—
Page 1, line 18, leave out ("and the filing of a copy thereof.")—(Lord Mancroft.)
THE LORD CHANCELLOR (LORD SIMONDS): The noble Lord has explained this Amendment with his usual clarity. The proper officials have carefully considered the matter and are well satisfied that the passing of this Amendment will, in fact, simplify the procedure upon transfer from the High Court to the Palatine Court. Therefore, I commend the Amendment to your Lordships.
I hope that I may be in order if I may say one thing further, while I am on my

25
feet dealing with this Amendment. When this Bill came before the House on Second Reading, a question was asked of me in regard to legal aid, the question being: what would happen to cases started in the High Court, in which legal aid was given, upon their transfer to the Palatine Court, where no legal aid is at present given? I promised that I would have the matter looked into, for clearly it would be a hardship that a case should be transferred and that the litigant should thereby lose that legal aid which he was getting in the High Court. I have, as promised, looked into the matter and am now in a position to make this statement. There is no legal aid in the Lancaster Palatine Court, just as there is no legal aid in the county court except where cases are transferred from the High Court to the county court and legal aid had been given in the High Court. Some of the cases to be transferred from the High Court to the Lancaster Palatine Court may well have begun with legal aid and they should, of course, be continued with legal aid in the Lancaster Court. The Treasury have signified their agreement to the making of regulations by the Lord Chancellor extending the benefits of the Legal Aid Act, in connection with proceedings in the Chancery Court, to the County Palatine of Lancaster in, or in connection with, any cause or matter transferred thereto from the Supreme High Court. This will be effected by regulations made by me under Section 1 of the Legal Aid and Advice Act, 1949. They will require an Affirmative Resolution of each House of Parliament. The noble Lord, I think, will be satisfied that I have looked into the matter and done my best to satisfy him in this regard.
On Question, Amendment agreed to.
LORD MANCROFT: This Amendment is purely consequential but perhaps I should not be out of order, and I should certainly be lacking in gratitude, if I did not say now what I had intended to say on the Motion that the clause stand part of the Bill. I am extremely grateful to the noble and learned Lord the Lord Chancellor for the care with which he has gone into the matter, and for the extremely satisfactory result which has been arrived at. I beg to move.
Amendment moved—
Page 1, line 19, leave out ("copy together with the others").—(Lord Mancroft.)
On Question, Amendment agreed to.

AGRICULTURAL LAND (REMOVAL OF SURFACE SOIL) BILL [H.L.]
3.59 p.m.
House in Committee (according to Order): Bill reported without amendment.
Then, Standing Order No. XXXIX having been suspended (pursuant to the Resolution of July 17), Bill read 3a, and passed, and sent to the Commons.

AFFILIATION ORDERS BILL
House in Committee (according to Order): Bill reported without amendment.
Then, Standing Order No. XXXIX having been suspended (pursuant to the Resolution of July 17), Bill read 3a, and passed.

HYPNOTISM BILL
4.1 p.m.
Order of the Day for the House to be put into Committee read.
Moved, That the House do now resolve itself into Committee.—(Lord Haden-Guest.)
On Question, Motion agreed to.
House in Committee accordingly:
[The EARL OF DROGHEDA in the Chair]
Clause 1:
Control of demonstrations of hypnotism at places licensed for public entertainment
1.—(1) Where under any enactment an authority in any area have power to grant licences for the regulation of places kept or ordinarily used for public dancing, singing, music or other public entertainment of the like kind, any power conferred by any enactment to attach conditions to any such licence shall include power to attach conditions regulating or prohibiting the giving of an exhibition, demonstration or performance of hypnotism on any person at the place to which the licence relates.
(2) In the application of this section to Scotland for the reference to places kept or ordinarily used for pane dancing, singing, music or other public entertainment of the like kind there shall be substituted a reference to theatres or other places of public amusement or public entertainment.
THE EARL OF LISTOWEL THE EARL OF LISTOWEL moved to omit Clause 1. The noble Earl said: May I preface my remarks on this clause by one observation which I hope will

27
elicit a reply from the Government at a later stage in our discussion this afternoon? I hope it is safe for me to assume that if any Amendments to this Bill are carried this afternoon, the Government will give time for their consideration when the Bill goes back to another place. It seems to me (I hope the Committee concur in my view) that unless the Government are willing to do this, we are really not in a position to carry out our constitutional function as members of a revising Chamber. Therefore, I hope very much that the Government may be able to give us some assurance that any Amendment that the Committee desires will be given consideration in another place. The second general observation I should like to make is that this is a Bill which, in the main, will be worked by local authorities. They will have to decide whether these hypnotic performances are to be allowed and, if so, on what conditions they are to be permitted. All the Amendments I have down on the Marshalled List are regarded by local authorities as making the Bill a more workable proposition, and my motive, therefore, in moving the Amendments is to make the Bill more workable from the point of view of the administrative authority and also, I believe, in certain ways to make it more effective as a protection for the public.
My first Amendment is to leave out Clause 1. In order to save time, I hope the Committee will allow me to cover the subsequent Amendment to Clause 2 by my remarks on this Amendment, because all these Amendments are directed to the same point. In the Bill as it stands, there are two methods of control as applied to hypnotic performances which are given as part of public entertainment. One method covers licensed premises—that is to say, music halls, theatres and so on—and the other covers unlicensed places, such as village halls or community centres in towns. The first method is to attach a condition to a licence, and the second is for a controlling authority to authorise a particular performance. There are two objections to having two methods of control. First of all, if you have two forms of control you are likely to have anomalies—performances will be allowed by one authority in one part of the country,
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while similar performances will be forbidden by another authority in a different part of the country. But, to my mind, the second objection is far more important than the creation of anomalies. The inclusion in a licence of a general rule for providing entertainment for the public by hypnotic performances would fail to protect the public, unless, of course, it was a total prohibition, which would be unfair and unreasonable from the point of view of the entertainment business. The trouble about a general rule is, that it cannot cover all the circumstances of a particular case.
May I give an example? Suppose the general rule was that these performances could be given only by a qualified hypnotist. That would not take into account the length of time during which a person was kept in a trance; it would not take into account the things which a person was called upon to do while in the trance. Therefore, it leaves out precisely the circumstances which are damaging to the health of a hypnotised person. If, on the other hand, every case is considered on its merits and all the circumstances can be taken into consideration by the controlling authority, there is the best possible chance of protecting the interests of the public. My second Amendment—that to Clause 2—is to provide that the controlling authority shall consider very application on its merits. I hope that both the promoter of the Bill and the Government will consider this matter from the point of view of the local authorities, and from the point of view of providing the best possible protection for the public. I beg to move.
Amendment moved—
Leave out Clause 1.—(The Earl of Listowel.)
LORD BURDEN: I am very glad to say a few words in support of the Amendment moved by my noble friend Lord Listowel, although my two Amendments, seeking to omit Clause 1 and Clause 2, go somewhat further than is proposed by my noble friend. It is only right that I should say that my attention was drawn to the provisions of this Bill by the Association of Municipal Corporations, of which I have the honour to be a Vice-President and, to that extent, I suppose that I have an interest to declare. The first point that I would submit to the

29
Committee is that it is somewhat unfortunate that a Bill of this character, with provisions which affect local authorities, was not discussed with the representative associations which are so vitally concerned with the functioning of local authorities. I need hardly call attention to the importance and representative character of the Association of Municipal Corporations, and it is somewhat unfortunate that the vast fund of experience and knowledge not only of that association but of other associations also, has not been taken into account. Even a small Bill of this kind may (if I may be permitted to use a somewhat horrible word) have repercussions throughout the country.
I do not complain so much in regard to the non-consultation (I assume that the time factor has been against the promoters of the Bill), but I do complain because the character of the Bill was entirely changed in another place. When it was submitted for, and passed, its Second Reading in another place, this 'was a Bill to prohibit entirely for entertainment or amusement exhibitions of the kind dealt with, and it was only in Committee that Amendments were accepted making it illegal for demonstrations to take place with those under twenty-one years of age but permitting such demonstrations for entertainment to people over twenty-one. I submit that that Amendment entirely changed the character of the Bill. With all due respect, I say that this is an instance of hasty and ill-considered legislation. There has not been time in another place—and obviously there is not here—to give this measure the consideration that it deserves.
It may be said that the local authorities or the licensing justices will have power to deal with these demonstrations. That is provided for in Clause 2. But, again, I submit with respect that the licensing justices or local authorities have absolutely no experience at all to work upon in connection with exhibitions of this kind, and it will either be the case that the exhibitions are authorised or that they are prohibited entirely. There will be no middle course. I know this quite well. For many years I have sat at the licensing meetings of a local authority, and we have built up over the years a code in connection with the licensing of dancing, stage plays and exhibitions of that kind.
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If there were an application for the licensing of an exhibition of hypnotism there would be absolutely no experience whatever upon which the authority could go and, so far as I can see, there would be no opportunity of attaching any conditions at all to the granting of a licence. It would be one thing or the other—either it would be granted or it would be refused. It may be said that the licensing justices or the local authorities will receive guidance from the Home Office, that instructions will be sent to them on the well-known and accepted principle that "the gentlemen in Whitehall know best." But, again with respect, I would submit that even taking into account the wide-ranging knowledge of the gentlemen in Whitehall, they, too, have absolutely no experience at all to go on so far as the licensing of exhibitions of this kind is concerned.
I would suggest to your Lordships that by this Bill, taking all the circumstances into account, we are imposing on local authorities or licensing justices, a task the implications of which should first be considered at national level. National decisions should be arrived at before a Bill of this kind is passed, and responsibility is placed on the local authorities. In those circumstances, while I agree that my Amendments go further than those proposed by my noble friend, I ask your Lordships to take all the circumstances into account, delete both this clause and the next clause, and send the Bill back to another place for that full consideration which I am sure the circumstances warrant.
LORD MANCROFT: The noble Lord, Lord Burden, is not the only Vice-President of the Association of Municipal Corporations in your Lordships' House and it is in a similar capacity that I should like to address just a few words to the Committee on this Amendment. I must confess that I share the uneasiness which has been manifested by the Association of Municipal Corporations. I also share the uneasiness of the noble Lord, Lord Burden, at the rather jumbled way in which this Bill has come up to your Lordships' House. In that respect, it appears to have something in common, unfortunately, with much of the spate of legislation which lies there on the Table before us and which we have to dispose of, as best we can, before we go away for our

31
holidays. It is our job to make the best we can of this Bill. I share the noble Lord's uneasiness concerning the abilities of the local authorities to judge fairly in this matter. I think this is one of the very rare occasions when the gentleman in Whitehall does know best. It seems to me that if it is wrong that these performances should be held in one town, it must be wrong that they should be held in another. I am all for keeping as much local control as possible in the hands of local authorities over local matters, which they know best. But this is not one of those matters. I believe that this is a matter which should be legislated for centrally in the Bill. I am sorry that the Bill has come up to us in such a confused manner, and I hope that it may be possible to find time to correct these flaws in another place. But I certainly should not agree to follow the noble Lord into the Lobby, for fear of losing the Bill altogether. So, as I have said, I hope that it may be possible to improve it and to deal with these very valid objections before the Bill becomes law.
4.16 p.m.
LORD HADEN-GUEST: I should like to say a few words on this Bill now, as I had the honour of bringing it before your Lordships' House. I think there is a certain amount of misconception in the minds of my noble friends. The Bill received a unanimous Second Reading in the other place, and in view of that it is to be presumed that that House is in favour of controlled hypnotism. I am basing this view on the words of the Joint Under-Secretary of State for the Home Department, Sir Hugh Lucas-Tooth. It is the fact that the Bill was referred on the Second Reading to Committee, and when it passed through Committee it underwent very considerable changes. Those changes, which are set out in the Report of the Committee, were largely due to the efforts of Dr. Somerville Hastings, who brought about alterations of the Bill which substantially modified its character. One purpose of the alterations was to make the Bill less rigid than it was in the first instance. Finally, when the Bill had passed the Committee stage it came again before the other place, and on the day on which it was to be read a third time there were put down a number of Amendments
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which were, in some cases, word for word the same as those which have just been moved by the noble Earl, Lord Listowel, and which have been supported by Lord Burden. I may say that they were not debated, and not inserted in the Bill, although, as a matter of fact, the House of Commons had before them this Paper which I have in my hand.
In the circumstances, it seems clear to me that between the Second Reading of the Bill and the time when it came up finally in another place, there was a considerable amount of discussion as to the proper way of dealing with it. And, in fact, it was because of that discussion with experts that your Lordships to-day have this amended form of the Bill which is calculated to put the matter on the best possible footing. Dr. Somerville Hastings said in debate in Standing Committee B:
"When the Bill was first drafted we thought it best to prevent completely all demonstrations of stage hypnotism, but it was pointed out to us that this was rather drastic at the first attempt and that in many areas local authorities had power to deal with the evil.… The Bill, as we propose to amend it, will accordingly now substitute for absolute prohibition, control by local authorities with power to specify conditions."
That, in fact, is what the Bill now does. I believe that this Bill as it now stands, without these Amendments, will serve a very useful purpose indeed. There have been too many performances by amateur hypnotists and people over whom there is at present no means of control, and a considerable amount of harm has been done to those taking part. I feel that the situation might get much worse than it is at the present time. I find another reason for passing the Bill in its present form and not sending it back to another place. If it is sent back with amendments, it will almost certainly be killed. There is no time now to have the Bill reconsidered, and I cannot think that the other place are likely to change their opinion on the nature of the clauses at present in the Bill. It seems to me that in its present form the Bill gives control of the kind which ought to be given over public hypnotic performances, but does not prohibit other performances being given in public in conditions which are not undesirable. We have a situation which I think your Lordships ought to accept, and I think we should pass the Bill in its present form.
4.22 p.m.
THE PARLIAMENTARY UNDER-SECRETARY OF STATE FOR FOREIGN AFFAIRS (THE MARQUESS OF READING): It might be convenient if I gave some indication of the Government's view on this Bill, particularly because of the question which the noble Earl, Lord Listowel, put to me at the outset of his remarks. At this stage in the Session, I can give no guarantee as regards time. The noble Earl knows well the pressure of legislation upon Parliament as a whole, and certainly I could not guarantee that it would be possible, in what remains of Parliamentary time, to find opportunity to reconsider this Bill. As regards the discussion which has taken place, I confess I was a little uncertain from the course of his remarks whether the noble Lord, Lord Burden, was speaking to his own Amendment, or supporting the Amendment moved by the noble Earl. As to striking out the two clauses, that is a matter which the promoters of the Bill will decide whether they are prepared to accept. I do not propose to put forward any view on the point.
As to the Amendment standing in the name of the noble Earl, Lord Listowel, so far as I understand its purpose, the effect would be to make it illegal to give a hypnotic exhibition anywhere without the special sanction of the controlling authority. The original plan of the Bill was to impose an absolute ban upon all performances of this kind. In another place, it was pointed out that it did not seem right to single out this form of entertainment for a type of prohibition which had no precedent of any kind, and from that point of view it was thought undesirable to introduce such a precedent. Thereupon the Bill took on the shape in which it originally came to your Lordships' House—namely, that there should be no performance unless specifically authorised. From the point of view of my right honourable friend the Home Secretary, there seemed to be certain objections to that principle of specific authorisation. The general principle which governs all these matters is that a man may produce in a place of entertainment such entertainment as he thinks the public will enjoy, subject always to the right of the controlling authority to impose conditions which they may think
34
right in the interests of the area for which they are responsible.
This Amendment seems to indicate that there shall be no performance unless the licensing authority can be satisfied that there is a special reason for giving one. That seems to us to be a wrong approach. I find it difficult to see what could be a special reason in that context for giving an entertainment of this kind. If one had to produce a special reason, the only effect of that requirement would be to ban all performances. If you want to do that, the right thing to do is to say so and do it directly, and not go about it indirectly by putting machinery into the Bill which will have the effect of banning all such performances but will not say so. That is surely the, wrong approach. There are also practical difficulties, in the way of continual applications for licences of this kind and the possibility that if an authority did find that there were a special reason, it would be so out of the ordinary that it might be thought that some responsibility attached to the licensing authority for the performance. This is a private Bill and the decision is in the hands of the noble Lord in charge of it, but I thought it right on these aspects of the Bill to indicate the considerations which at present are in the mind of my right honourable friend the Home Secretary, under whose jurisdiction this matter comes.
THE EARL OF LISTOWEL: I am sure we are all much obliged to the noble Marquess, Lord Reading, who spoke for the Government, for making the Government's attitude so plain at this stage, not merely about this Amendment but about the whole principle of amending the Bill in its passage through this House. May I make this observation? We have a whole series of Private Members' Bills which reach the House at the tail-end of the Session. There must be many noble Lords who would like to amend these Bills in some minor way, in order to make them more effective statutory instruments. It is our function as a revising Chamber to make minor amendments which do not interfere with the principle of a Bill, and I must say that, if the Government are going to take the view that as a general rule they can give no guarantee that Amendments proposed by noble Lords to Private Members' Bills will be considered in another place, it really

35
means that we are not able to exercise our constitutional function of revising Bills when they are Private Members' Bills and when they reach us at the tail-end of a Session. I think this is a matter of extreme importance for the House as a whole. I emphasise it now because it has arisen in connection with this Amendment. I hope your Lordships will consider it from the point of view of satisfactorily exercising the constitutional functions of this House.
THE MARQUESS OF READING: Will the noble Earl forgive my intervening for one moment in a matter of explanation? I used specifically the word "guarantee" and I certainly laid down no general rule. I merely pointed out that at this stage of the Session, with the number of Bills that have accumulated, I could give no guarantee that there would be room for this Bill.
THE EARL OF LISTOWEL: I appreciate the position of the noble Marquess and realise his difficulty, but I think that unless the Government can say definitely that they will give time, or will do their best to give time, or something of that kind, noble Lords will be placed in the position of either withdrawing Amendments, however desirable they may be, or of killing a Bill which everyone wants. This Bill has already passed through all stages in another place and has been supported on Second Reading and subsequently by those noble Lords who have taken part in discussions upon it. I hope the noble Marquess may perhaps make representations to the Government in order that when this Bill reaches a later stage we may have a definite statement as to whether or not the Government will do their best to find time, and that when the Second Readings of other Private Members' Bills are being considered in this House, a similar statement will be made. I do not want to press an Amendment which may very well kill a Bill that everyone wants to see passed into law, and, therefore, with your Lordships' permission, I beg leave to withdraw this Amendment.
LORD BURDEN: I should like to say just a few words more, and to express my appreciation of what the noble Marquess, Lord Reading, has said on behalf of the Government. I admit that I was in the main speaking to my own Amendment, in view of the other matters coming
36
before your Lordships. So far as my noble friend Lord Haden-Guest is concerned, I stand by my point that, when the Bill was discussed on Second Reading, it was a Bill which considered prohibiting entirely hypnotic entertainment and was, subsequently, drastically amended in Standing Committee. However, it is not much use pursuing the point, and I do not want to see this Bill lost. I should like to put this point to the noble Marquess, Lord Reading. Despite what one might have said in a somewhat jocular manner about instructions from Whitehall, it will no doubt follow that, when this Bill becomes law, the Home Office will have to consider its implications, and some instructions will be issued by circular to local authorities or to the licensing authorities. I feel that it would be to the advantage of all concerned if, before those instructions were issued, appropriate discussions took place at office level, in order that the wisdom of all should be used to get the best possible out of the intentions of the Bill. I do not ask the noble Marquess to reply now, but perhaps he will take that matter into consideration.
THE MARQUESS OF READING: I will certainly bring the noble Lord's suggestion to the notice of my right honourable friend.
LORD MANCROFT: Before the Committee give permission for this Amendment to be withdrawn, as I understand is about to happen, I should like to take up a remark made by the noble Earl, Lord Listowel, concerning the crowding of business on the Order Paper right at the end of a Session. Of course, my noble friend Lord Reading could not do more than say, as he did, that he could not guarantee that the Government could find time for this matter to be reconsidered in another place. I must say that I agree with the noble Earl, Lord Listowel, that it is not possible for us to do our job properly as a revising Chamber if we are confronted with this mass of Private Members' legislation right at the end of the Session. I myself am in a particular difficulty, because three of my right honourable friends in another place have been good enough to entrust me with their Private Members' measures all in the same week. It is physically impossible for a private member of your Lordships' House to cope with three Bills in the same

37
week. We have had the whole time lying behind us in which we could have dealt perfectly well with these Bills if only they had not come up in such a mass. I should like to ask my noble friend Lord Reading whether he could possibly initiate, through the usual channels, some discussion that might enable us next Session to have this Private Members' legislation delivered to us in a slightly more leisurely way, so that we can give it slightly better handling.
THE MARQUESS OF READING: My noble friend appealed to me. All I can say for the moment is that what are known as "the usual channels" are here, and are capable of hearing, and I dare say that what has been said has not passed unnoticed by them.
Amendment, by leave, withdrawn.
Clause 1 agreed to.
Clauses 2 and 3 agreed to.
4.35 p.m.
THE EARL OF LISTOWEL THE EARL OF LISTOWEL moved, after Clause 3 to insert the following new clause:
Proceedings by controlling authorities
". A controlling authority as defined in section two of this Act may institute proceedings for any offence under this Act."
The noble Earl said: I put down this Amendment merely to bring this Bill into line with similar Acts. The object of the Amendment is to give the controlling authority the power to enforce the provisions of the Bill. When a duty is imposed upon a local authority to do something in the public interest, the usual practice is for the local authority to have power to see that the thing is done. I understand that that provision is in the Shops Act and the Food and Drugs Act. Ail I suggest here, for the consideration of the promoters of the Bill and the Government, is that this Bill, which imposes a duty on local authorities, should be brought into line with other Acts which impose duties of a different character on those local authorities. I beg to move.
Amendment moved—
After Clause 3, insert the said new clause.—(The Earl of Listowel.)
THE MARQUESS OF READING: May I say a word on this matter? We hope that the noble Earl will not press this Amendment—for this reason. I quite
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see the desirability of having the provisions of the Bill enforced, if you are going to pass them into law. But the noble Earl will not forget that Section 276 of the Local Government Act, 1933, has a general provision that:
"Where a local authority deem it expedient for the promotion or protection of the interests of inhabitants of their area they may prosecute or defend any legal proceedings."
That provision being in existence, it seems to us imprudent to insert in this Bill a special provision which might seem to reflect upon the comprehensive character of the provision contained in the section of the Local Government Act, 1933, which I have quoted.
THE EARL OF LISTOWEL: The local authorities will be glad to hear that they are expected to exercise the power they already have under the Act mentioned by the noble Marquess, Lord Reading. This advice is no doubt given after consulting the local authorities. As, no doubt, they will be in that position, I certainly do not wish to press the Amendment, and I beg leave to withdraw it.
Amendment, by leave, withdrawn.
Clause 4:
Entry of premises
4. Any police constable may enter any premises where any entertainment is held if he has reasonable cause to believe that any act is being or may be done in contravention of this Act.
THE EARL OF LISTOWEL THE EARL OF LISTOWEL moved, after "constable" to insert
"and any person authorised in that behalf by a controlling authority as defined in section two of this Act".
The noble Earl said: I am not sure whether, after what has just happened, and the explanation which the noble Marquess, Lord Reading, has given as to the power of local authorities to institute proceedings, this Amendment is appropriate or not. The purpose of the Amendment is to authorise an official of the local authority to enter premises where these performances are taking place, in order to see whether the provisions attaching to the holding of the performances are being observed or contravened. Again, I understand that this is usually provided for where a local authority are expected to enforce an Act of Parliament. If the noble Marquess, as I think he suggested in his remarks, does expect the local authorities to supplement the police

39
in this matter, he may wish to see an Amendment of this kind in the Bill. I beg to move.
Amendment moved—
Page 2, line 26, after ("constable") insert the said words.—(The Earl of Listowel.)
LORD BURDEN: I would ask the noble Lord in charge of the Bill whether it would be possible to consider this Amendment without in any way impeding the passage of this Bill. May I point out that at any rate within London and the Home Counties, the licensing will be done by the local authorities, and they, as such, have no direct contact with the police force in the carrying out of provisions of this kind? Inspections of places of entertainment are done by the appropriate officers of the local authority. I feel that it is important that we should have the two authorities carrying out whatever inspection is necessary to see that the conditions attached to the licensing of the entertainment are fulfilled. May I put it this way? Under the Bill as it stands, a local authority would lay down a condition as to the performance, but they would have no power to see that those conditions were enforced. They would have no right of entry through their appropriate officer, the only right of entry being that held by a police constable.
THE MARQUESS OF READING: May I again say a very few words on this Amendment? Quite frankly, we have no very strong feeling about this Amendment one way or another. It might be desirable that the representative of the authority should have statutory power. On the other hand, it seems very unlikely that he would in practice have the least difficulty in getting into premises for any performance if he wished to insert himself there. The other objection we feel is that the Amendment is drawn in extremely wide terms—in fact, the words used might be held to give access to any premises. It might even permit entry into a private house, which I do not think the noble Lord who moved the Amendment intended. In view of the criticism which has been made in regard to time, I hesitate to say this, but if this were the only Amendment which was to be inserted in the Bill—the others having, been dropped—the possible consequences are obvious.
THE EARL OF LISTOWEL: It is quite clear to me that the Government do not take any strong view about this Amendment. The local authorities who have to work this Bill say that they would rather their inspectors had the authority to enter premises on which these performances were being given if, as the Government say, they are to enforce the Bill when it becomes law. In ordinary circumstances, this is the sort of minor Amendment which your Lordships would like to see in a Bill. It is an Amendment which is desired by the people who have to work the Bill. They think that they can carry out the Bill best if this is included. Obviously, if we have hanging over our heads this "death penalty" on Bills which are passed by your Lordships at this stage of the Session, then the fear of wrecking the Bill is bound to oblige us to withdraw even these minor Amendments. While I feel that I must enter another protest against a procedure which I do not think is in the interests of your Lordships' House, I shall certainly ask leave to withdraw this Amendment.
Amendment, by leave, withdrawn.
Clause 4 agreed to.
Remaining clauses agreed to.
House resumed: Bill reported without amendment.

THE FILM INDUSTRY
4.45 p.m.
LORD ARCHIBALD LORD ARCHIBALD rose to call attention to the National Film Finance Corporation and the film industry and to move for Papers. The noble Lord said: My Lords, I believe most people after a long day's work go to the films for purposes of recreation. We come to films this afternoon after a long afternoon's work, but not in our case, I am afraid, for purposes of recreation. In submitting the Motion which stands in my name, I have no interest to declare other than that which I am sure is felt by every noble Lord present—namely, an interest in the well-being of a perhaps small but important national industry. Perhaps, however, I may claim a special concern for the industry, having spent practically the whole of my working life in it. Having left the industry two years ago, I do not speak for it to-day, or for any section, group, organisation or association in it. I speak only for myself.
The Motion is obviously not one which raises any Party issue, and I believe that it is one which will not in fact raise even a controversial issue. The Report of the National Film Finance Corporation for the year ended March 31 last is, like the two earlier Reports from that Corporation somewhat brief and not very informative. The Corporation in the three years of its existence, has done very useful and valuable work, and I am glad that the noble Lord, Lord Reith, is with us this afternoon because, as Chairman during the greater part of its existence, he should know that the work of the Corporation is appreciated.
The Corporation has a great deal to its credit, and for that reason it has no need to claim any credit other than that to which it is entitled. It is in my view regrettable that it should again this year give the impression of claiming all the credit for various improvements which have taken place in the film production industry, and particularly for the economies introduced—economies which in fact were already being put into force before the Film Finance Corporation was formed, and which would have gone on being intensified and increased for reasons of financial stringency, if for no better reason. No doubt part of the economy and part of the improvement in cost control is due to the Corporation, but part is due to other causes and other people, and, in my opinion, part is in any case only an apparent economy, due to a different type of film which is being made to-day. If I might expand that point, I should say that if the type of story which is chosen is smaller, is more static, if it needs a smaller canvas, then not only are the costs of production lower but they are much more easily controlled. But whether, in the long run, the making of that smaller type of film is good for the industry is very debatable, and I shall have a word to say upon that aspect at a later stage.
May I invite your Lordships to look at the use which the Film Finance Corporation has made of the £6,000,000 which was at its disposal in the three years to March 31, last? The further £2,000,000 which was provided recently does not come into the period which is under review to-day. Of that £6,000,000, as is apparent from the Reports exactly half, £3,000,000, was lent to one company—to British Lion company. I am sure
42
noble Lords will agree that £3,000,000 is a considerable sum of public money to lend to one company, and I think that after three years it might be well if we were told rather more about it than we have been up to now. May I make it clear that I make no criticism of the Corporation or of its predecessor, the Company, for having made that loan, because it is quite clear from the first Report that the Company were requested by the Treasury and the Board of Trade to make that loan to British Lion as a matter of urgency; and we may assume that a request from the Treasury and the Board of Trade in these circumstances is tantamount to an order to the Company. But the £3,000,000 loan having been made, at the request of the Board of Trade and the Treasury, what do we now know about it from the Report? Has it produced, for example, as good results as the loans made to various companies from the other half of the money which the Corporation had at their disposal? Has it been as fruitful as the other £3,000,000? Has it, in fact, been justified by results?
Let us look first at the number of films which have been produced which are set out in the Schedules to the Reports. In 1949–50 Corporation loans to various companies helped to finance 46 films. British Lion for that year is shown in the Schedule with 20 films. In the following year, 1950–51, the figures are 34 films from other companies helped financially by the Corporation but only 6 from British Lion. Last year, according to the Report, there were 59 from other companies and 14 from British Lion. So that for the three years the figures are: 40 films from British Lion and 139 films from other companies helped financially by the Corporation. But even on that we have to make a further comparison, because footnotes point out that five films which appear in the British Lion list were, in fact, only guaranteed by that company and they appear in the other list as having been financed by the Corporation; so that we have to take that five off the British Lion list. We therefore get a comparison on the three years of 35 films from British Lion and 139 from other companies. It is obvious, therefore, that in terms of numbers the British Lion £3,000,000 loan has not been as fruitful as the other loans made.
It is true, of course, that among the 139 films of other companies there will be a number of second features and, perhaps, a number of first features of a rather minor kind. But even if we assume that half of the 139 are of that character, we still have the fact that the £3,000,000 used to make loans to other companies has produced at least twice as many first feature films. I shall probably be told "Yes, but that is making a comparison only of quantity: what about quality?" Well, my Lords, I have looked at the lists. I am not going to be so foolish as to name films and to make a comparison in any detail. I think it is probably true to argue that in the British Lion list there is a slight balance in their favour in respect of quality, but it is a balance so slight as not in any way to outweigh the argument of numerical inferiority.
I do not want to labour this point too much, but let me look at two other aspects of the matter. In the three years to March 31, there have been repayments on the other loans amounting to £1,114,000 and some odd hundreds—quite an impressive amount in respect of the amount lent; but there has been no repayment at all on the British Lion loan. The 1950–51 Report says that British Lion were asked to submit proposals for repayment, repayments being due in the following year. But the latest Report, the Report for 1951–52, says merely—I quote from paragraph 22:
"As mentioned in the last Report, British Lion had two loans falling due on the same date last year—one to the Corporation and one to another creditor. It was never expected or intended that full repayment would then be made, but it was hoped that some repayment would be possible. None was made. Both loans were renewed without fixed term, the Corporation's priority being retained, and the company has undertaken to prepare a programme of repayment to operate when the full effects of the Eady Plan are being felt."
I do not find that very satisfactory. It seems to me a somewhat casual, if not lighthearted, attitude towards a very large amount of public money. Your Lordships can imagine the attitude which would have been taken on that particular point if the noble Viscount, Lord Swinton, who generally speaks on these subjects, had been speaking from my place on this Report to-day. I hope that the noble Earl who is to reply for the Government will be able to tell us some-
44
thing about it. I hope that at least he will be able to say that some progress is being made.
My next point refers to provision for losses. The Corporation has provided £610,000 in its accounts for losses of outstanding loans to other companies, but it has provided £1,000,000 for losses on the British Lion loan. It may be—I am sure we all hope so—that such heavy losses will not be realised on either set of loans. The Eady Plan, to which I will refer later, may save the Corporation a great deal of loss—and indeed I think it has already done so—but I find this provision for loss somewhat surprising. May I put it this way, as a mechanical thing, so to speak? Let us assume that £45,000 is lent to the "XYZ" film company as the "end money" on a film to cost £150,000. That is a fairly typical transaction. Now the "XYZ" film company probably have little or nothing in the way of assets, and the security for the loan must be the earnings of the film. Generally, there is no security other than a lien on the earnings of the film. In that case, if the film is not very successful the company does not recoup the whole of its cost and obviously, the Corporation must make a loss. It is that type of loss that has been provided for in the accounts to the amount of £610,000. With British Lion the position is quite different. It is a big company with, presumably, substantial assets. Its loan was not for a specific film but was working capital. Its repayment does not depend on the earnings of specific films, although I suppose that repayment will, in fact, depend on the earnings of all the 35 films which appear in the schedules of the three Reports. But the provision of £1,000,000 for loss against the finance which has produced 35 films, as against £610,000 provided for the loss on loans which have produced 139 films, is. I think, somewhat out of balance, and some explanation is required. I hope that, when we get the next Report, it will be somewhat more assuring.
I have drawn attention to the discrepancies in the number of films produced and repayments and provision for loss on the application of these two separate amounts of £3,000,000, not because of any prejudice or feeling against British Lion, but because we are here dealing with substantial amounts of public

45
money. I think we are entitled to more information than we have had up to now. May I turn to another point. A former President of the Board of Trade, Mr. Harold Wilson, described the film industry as being "naked of statistics" and took steps, I understand, to clothe it. I think that he and the Board of Trade are to be congratulated on this action. I understand that we may look forward in the near future to the publication of their first set of figures covering the costs of production and both the domestic and the overseas earnings. I hope that that is so, and that these figures will be published soon, because it will take out of the whole discussion of film production the element of guesswork which has been in it up till now.
But while the Board of Trade are requiring information from film producers, they seem to me to be content with very little information from the National Film Finance Corporation in its Annual Reports. I am not going to advance any great argument about this—in fact, it is quite unnecessary for me to do so, for I find that the argument has, in fact, been put by the noble Viscount, Lord Swinton, in a previous debate, very much better than I could possibly put it. I would refer your Lordships to the report of the debate held on July 24, 1950, almost exactly two years ago (OFFICIAL REPORT, Volume 168, Column 582). I will not read it all, but may I give your Lordships one or two paragraphs, just by way of illustration of what I have in mind as to lack of information in the Report? The noble Viscount said:
"… why should we not know the sum advanced and the proportion of the total cost of the film, the revenue which it produced in the course of its life and the profit and loss of the transaction? Why on earth cannot these four pieces of information be given? I do not think it would in the least prejudice any of the companies, and I am sure that that is information which Parliament are entitled to receive."
THE EARL OF SELKIRK: Would the noble Lord give the reply by the noble Lord, Lord Lucas?
LORD ARCHIBALD: I will leave that to the noble Lord, Lord Lucas, as he is taking part in the debate later. Later, the noble Viscount said, addressing the noble Lord, Lord Lucas, and warning him:
"if he were to ask for further sums, and if Parliament were given no information, I do no think that I should find myself so forth-
46
coming on a future occasion as I was on the last, and as I am prepared to be on this."
Again, he said:
"I am sure that we should pass this Bill, but in saying that I am equally sure that we should in future require more information than has been vouchsafed to us to-day as to how all the money is being spent."
But in April of this tear, the noble Viscount, Lord Swinton, came to this House, and commended to our consideration the provision of a further £2,000,000 for the Film Finance Corporation, without our having received in the meantime one syllable or figure more of information than we had two years ago when he was demanding that more information should be given. I will leave it there. Although I agree that Parliament is entitled to have this further information, I would make just one observation: I think that if it is decided that that information is to be given in subsequent Reports, film producers should be told, because they have now become accustomed to getting their loans without the publication of that information. If it is decided to give the information, they should be warned that in future the information will be published. I do not, therefore, ask for that information to be published retroactively.
May I turn for a moment or two to the film production industry itself, the industry which the Film Finance Corporation was set up to serve? How has it fared during the three years of the Film Finance Corporation's existence? One thing we can do at once, and that is acquit the Corporation of any charge of having started a boom in film production. I do not say that as a sort of inverted criticism. I do not feel that a boom is desirable, for it is too apt to be followed by a slump. But, if we look at the figures of employment in feature film production, we find that in 1948, which might be taken as not the top of the boom but perhaps towards the end of the boom period, there were over 7,700 people employed in feature film production. By March, 1949, which is just when the Corporation was being launched, the figure had fallen to about 5,400; and after a year of the Corporation's existence—I am not quoting this as cause and effect—the figure was down to about 4,200. By March, 1951, it was down to about 3,800 and by March of this year to about 3,670. These figures must be particularly disheartening for all those who are employed in the film-producing industry,

47
showing, as they do, a constant drop in he level of employment.
I am bound to say, in all honesty, that I see little hope of any great improvement. No well-wisher of the industry would want to see any sudden and dramatic increase in the number of films being produced. A steady increase year by year would be much healthier and likelier to be more stable. But there has, in fact, been a decline in the number of films produced in recent years. I think the best figure to take for this—and one has, in effect, to produce one's own statistics—is the number of films of 6,500 feet and over registered with the Board of Trade in each year of the quota. For the last three quota years these have been: for the year to March 31, 1950, 81 films; for the year to March 31, 1951, 76 films; and for the year to March 31 last, 64 films. May I say that I hope that that decline will be arrested and that the next few years will see a steady increase? To hark back to my earlier point, I am afraid that more films could be produced without any great increase in the number of those employed, although I hope and believe that their employment would be more continuous, more stable, and generally more satisfactory.
The situation of employment and output of films falling in these three years obviously calls for some explanation. I think the explanation is to be found in the fact which is stated in the First Report, that
"the lending of money will not bridge the gap between income and expenditure."
In other words, the Corporation provided finance, but film production still remained unprofitable. Then came the first instalment of what is popularly known as the Eady Plan, which provided about £1,500,000 towards bridging the gap. It was not enough. British films were still losing money. The second instalment of the Eady Plan did not come into operation until comparatively late in 1951, less than a year ago, and its full effects are obviously not reflected in terms of output. That second instalment, which is estimated to add £2,000,000 to the British Film Production Fund and therefore to bring it up to about £3,500,000, will provide something like £3,000,000 for feature films, with which I am dealing at the moment; and I would give as my own estimate that if that £3,000,000 does not
48
quite bridge the gap between expenditure and income, it should narrow it down sufficiently to entitle one to ask the industry to make the final jump for itself.
I shall refer again in a moment to the Eady Plan, or, to give it is proper name, the British Film Production Fund: but first I ought to say a word, and only a word, on the quota. I think there is general agreement that the quota must continue: that it is indispensable. But the level of the quota must be related to the volume of production. In itself a high quota will not create a high level of production, and too high a quota will merely bring the law into contempt by the number of defaulters that it will create. The present level for first feature quota is probably about right in relation to present production trends, but I think there is a prima facie case for looking at the quota for the supporting programme, which may be a little on the high side. I am not making that as a specific point; I am merely making the suggestion that it should be looked at.
One might say that British film production to-day rests on three props—the quota, the National Film Finance Corporation, and the British Film Production Fund or the Eady Plan. We are entitled to ask: will it always need these three props? My answer to that would be "No," but at any rate for so far ahead as we can see it will need two of them—namely, quota and the Eady Plan. On the quota, which I think must be retained, there is such general agreement that I think I need not argue the case. The second prop, the National Film Finance Corporation, should, I think, become unnecessary in a few years time, provided—and this is an essential proviso—that the third prop, the Eady Plan, is continued. If as I think is possible the Eady Plan eliminates the loss in British film production, then it should be possible for the industry to find its own finance. The last £2,000,000 voted for the Film Finance Corporation should, I think, be sufficient to see it through until that stage is reached. But I make the suggestion, that if private finance does then come in to take the place of the Film Finance Corporation, private financiers might be well advised to use some machinery similar to that of the Film Finance Corporation as the channel for their lending.
Everything depends on the continuance of that third prop, the Eady Plan. At

49
present it is set to last only until August, 1954—that is, two years more. That means that any film which is released after August, 1953, will get less than a full year's benefit from the Fund. Films take a very long time to produce. The period from first planning to public release is seldom under six months and is often more than a year; so that no film which is planned after March of next year (a very short time ahead from now) will get a full year's benefit from the Fund. That means that if there is not an early announcement that the levy is to be extended, there will be a big drop in production planning from March, 1953, a big drop in production itself from the end of 1953, and the industry will soon again be in a state of collapse. I therefore urge Her Majesty's Government to make an early announcement that the film production levy will be continued, so that there may be no break in the planning and production of films. I go further, and ask that the Government should make the Film Production Fund both permanent and statutory. The sum of £3,000,000 or £3,500,000 a year is not a high price to pay for a stable film production industry. The whole industry produces about £40,000,000 a year in Entertainment Tax, and I think that is a fair comparison. But to provide that £3,000,000 or £3,500,000 a year for a few years, and then to stop it, would, to my mind, be absolute folly.
I am not going to worry the House with the details of how the present voluntary levy works, nor with the detailed arguments for making it statutory, but there are at present some defaulters, as they are called, among the exhibitors. I do not think the amount of the default is serious, but if there should be a serious slump in the cinema business, a large-scale falling off in attendances for any reason, then default under a voluntary scheme might well become very serious indeed. On the assumption that the Government will make the British film production levy a permanent levy, may I make just one suggestion? As I have said, the levy is now providing for feature films about £3,000,000 a year. Last year's register of films numbered 64. If we ignore the older films which are still in distribution and benefit from the Fund, it means on an average just under £50,000 per film. But if, for any reason, produc-
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tion should fall, say to 30 films, then it would average out at £100,000 per film, which I am bound to say I think would be excessive. It is not likely to happen, but I think the Government and the industry should agree upon some minimum number of films—it might be 60 or 65—and if production falls below that minimum, then some proportion of the Fund should be carried forward to the following year and not dispersed in the year of low production. I think that might have very beneficial results.
My final word is this. As I see it, the industry needs its three props for another year. Then one could probably be withdrawn—the National Film Finance Corporation. Given a continuance of the other two, the quota and the Film Production Fund, I see no reason why the industry should not look forward to a long period of healthy development, with the annual output of British films increasing until its optimum has been reached—it might be around eighty or even be ninety films a year. That would help both in dollar earning and dollar saving. And, incidentally, the continuance of the Eady Plan should secure for the N.F.F.C. the recovery of a large amount of the £8,000,000 which would otherwise have been lost.
My Lords, may I go back on what I said, about that being my last word, and bring forward just one further point? There is an important new development which the industry has to face. That is the development of television, which will undoubtedly give the film production industry new problems, as it will give exhibitors in other parts of the industry new problems. They may find that it requires the production of films of a different type, if the cinema is to hold its own. I am not arguing as to whether the cinema should be encouraged or television should be encouraged. That is not my purpose or, I think, the purpose of this House. On the assumption that no undue difficulties are put in its way the industry may find that films of a static type—the photographed stage play type, for example—will have to be abandoned. There is no point in the cinema offering the same type of entertainment as can be shown on television. It may be that the films will have to turn more to colour, to spectacle, or to out-of-door action, or to some other type

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of film with which television is not so competitive.
I do not know what the film "new look" will be, but I do urge that the N.F.F.C. should be forward-looking, and should be sympathetic both to scripts and to budgets which are designed to meet this new challenge. I need not say that we are discussing here a very complex industry. May I say that noble Lords who wish to get a rather better understanding of it might be referred to the recent Report by P.E.P. on The British Film Industry. This is quite the best statement that I know of that has been published about the industry. I should like to conclude by quoting the final sentence of that P.E.P. publication. It runs:
"If the public considers it desirable for political, cultural or economic reasons that British films should be produced, then it must be prepared for the Government not only to protect the industry indefinitely, but also to aid it financially for as far ahead as can be seen."
My Lords, I beg to move for Papers.
5.25 p.m.
LORD SILKIN: My Lords, it has become customary in this House not only to declare an interest in the subject under debate but to declare a lack of interest. The noble Lord, Lord Archibald, began by disclaiming any interest in this subject except a past one. I should like to disclaim any interest in this subject, past, present or, so far as I know, prospective. Nor can I claim anything like the knowledge and experience with which the noble Lord, Lord Archibald, addressed the House. The noble Lord spoke mainly on one aspect of the Motion—namely, the accounts of the National Film Finance Corporation. I propose to devote my remarks mainly to the other side of the Motion—namely, the film industry. But I should like to say in passing that I wish the noble Viscount, Lord Swinton, were here. The noble Lord, Lord Archibald, seemed to me, in one part of his speech, to assume the role of the noble Viscount and to claim that there was not enough information available to the public in the Report of the Film Finance Corporation. And, indeed, he quoted extracts from the noble Viscount's speech, which I should have liked to hear the noble Viscount answer to-day, because he is now on the other
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side of the fence. I understand that we are to have the privilege of hearing from the noble Earl, Lord Selkirk. Perhaps while the voice which we shall hear will be that of the noble Earl, the thoughts to which he will give expression may be the thoughts of the noble Viscount. At any rate, I shall be very much interested to hear what he has to say.
The subject which we are discussing to-day is of immense interest to the general public—and certainly that interest is not to be measured by the number of noble Lords who have found it possible to attend the debate this afternoon. Noble Lords will agree with me that more people go to the cinema than to all other forms of entertainment put together. According to the Social Survey Organisation of the Central Office of Information, of persons over sixteen one in three go to the cinema at least once a week. Of children of school-going age, nearly two-thirds go to the cinema at least once a week. And the trade estimate that 28,000,000 people go to the cinema every week. It is therefore almost superfluous to put forward to this House the view that films exercise an immense influence on the minds of the people of this country—and especially on the minds of the young—for good or evil. We are to-day spending considerable sums of money through the British Council to "put over" to other countries the British way of life.
EARL WINTERTON: The noble Lord surely means the British Film Council. He said the British Council—no doubt in mistake.
LORD SILKIN: No, I mean the British Council. We are providing considerable sums of money for the British Council to spend abroad in order to "put over" to foreigners the British way of life. What I am suggesting, therefore, is that it is of importance that the British way of life should also be put over in this country. We should not to-day tolerate a radio controlled by a foreign concern, or a literature or a Press dominated by foreign countries. Yet we accept a situation in which most of the films shown in our cinemas advertise a way of life rather different from our own. I would suggest, therefore, that from that point of view alone it is essential that we should not only maintain a British film industry in this country but should increase it and ensure that at

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any rate a majority of the films shown in our cinemas are British.
In addition to the social considerations, there is the economic standpoint. I suggest that, in our present economic position, the need for a greater output of British films and, consequently, for a lesser import of American films is self-evident. I do not want to labour that point, because every noble Lord would agree at once that if we could reduce the number of dollars we pay for American films it would be to the advantage of this country. Moreover, the production of British films has two other advantages. It advertises British goods, which is of great importance. It also secures us against a monopoly by American films. If there were no British films produced at all, we should undoubtedly find ourselves having to pay much more for American films than we do to-day. Therefore, it is essential that we should have a substantial number of British films, if only to meet American competition and to destroy any possibility of the danger of monopoly. Yet there is no doubt that the number of British films being produced is declining, has been declining for some years and, in the absence of some definite policy and assistance, will continue to decline
I am not going to repeat the figures given by my noble friend Lord Archibald. He gave the figures showing the number of first-feature films that are being produced to-day, compared with the number produced in recent years, and the amount of unemployment that exists in the film industry. Most of the stars and musicians engaged in the film industry are fortunate if they are employed for three months in the year. That is a most unsatisfactory state of affairs. Many of our studios are being sold and converted to other uses. The Denham studio, one of the largest and best-equipped in the country, has been sold to Electric and Musical Industries. Walton Hall has been sold to the National Coal Board, and Shepherd's Bush to the B.B.C. Gainsborough and Welwyn studios have also stopped producing. All these studios, which were capable of being used in the future for the production of British films, have gone, and noble Lords know that it is a very costly thing to start up studios again. Indeed, in present conditions, one might truly say that it is unthinkable that the studios which have gone can be replaced.
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In the last few years the quota of British first-feature films has been reduced from 45 to 30 per cent., and in practice, after allowing for exemptions and defaults, it is only about 25 per cent. As to shorter films, the quota is even less. While I am on the subject of quotas, I should like to mention that there is considerable feeling that the definition of British films requires reconsideration and tightening up. At present, a film which has an American script, an American producer, American money, an American director and American stars can be accepted as a British film. May I say, in parenthesis, that if I refer to American films, it is not through any anti-American feeling but merely because the American film industry appears to be our chief and only competitor? We can have all these things that I have mentioned and yet a film can qualify as a British film, so long as 80 per cent. of the labour costs are British. The top-ranking stars in film productions of this kind are usually paid in dollars in America and their remuneration does not come into the picture at all. If it did, very few of these films would qualify as British films. This is an intolerable position. In a guide issued recently by the British Film Institute this disclaimer was published:
"In our last month's issue we labelled The River American: we were led astray by the fact that it was produced by an American with American money. The film was, of course, made by a French director in India, qualifies for quota and should have been described as British."
This is a really extraordinary state of affairs which requires no comment from me.
From what I have said so far, there is clearly a crisis in the film production industry. But the crisis is confined to the production of films, and does not extend to their distribution or exhibition. I think sometimes there is a certain amount of confusion when we talk at large about a film crisis or film difficulties. At the present time, the crisis is confined to this one section of the industry, that of production. I am not suggesting that the other sides of the industry have not their difficulties: they have—everybody has his difficulties to-day—but they are much more easily surmounted, and the real crisis is in production. The distributors and exhibitors are reasonably happy, from the financial point of view, in handling American films, and in some

55
cases they prefer American films to British. The explanation is that, having regard to American competition, the British film industry as a whole is unable to produce British films, taking one for another, at a profit.
My noble friend Lord Archibald has made abundantly clear that that is his view, and I am sure that it is the general view of all those who have given any thought to this problem. This is not because American films are better produced or more interesting to the British public in their subject matter. On equal terms we could compete with complete success with the American film. But the supply of American films is so much greater than our requirements that exhibitors are offered a considerable choice of American films and can choose the best of them, whereas the choice of British films is limited, and to satisfy the quota they have to take practically any film which is offered.
EARL WINTERTON: My Lords, would the noble Lord allow me to draw his attention to a fact, with which he is no doubt going to deal, that the reason for that is a physical one—the enormous home market in America? That is no reflection on the British film industry.
LORD SILKIN: That was my next point. The United States of America have an enormous market, compared with our own, and they are able to cover the cost of production by their sales at home; they can afford, therefore, to undercut British films here and still more when we try to export them to the United States. The exhibitors are thus given every financial incentive to prefer to book American films; and they would be more than human if they resisted the temptation of booking cheaper films, of which they can make some choice, rather than take British films purely out of patriotism. In addition, there is the fact, which has been commented on in the Gater Report, that the larger circuits of exhibitors, as well as the renters or distributors, are under strong American influence, and sometimes to-day even domination. For the reasons I have already given, the overseas sales of British films, apart from the United States market, are also limited in scope, although there is a possibility of increasing exports to the Commonwealth countries, a subject which I hope will be carefully explored.
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One of the difficulties of this most intractable industry is that it really consists of three separate interests—the exhibitors, the renters and the producers—whose interests frequently conflict. The Cinematograph Films Council is a most valuable body, whose advice to the Board of Trade is treated with great respect and authority. On that body there are representatives of all sections of the industry. The Council is presided over with the greatest distinction by the noble Earl, Lord Drogheda, whose chairmanship gives complete satisfaction to all sections over whom he presides (that is a remarkable achievement), as it does in this House, though I would venture to say that his task in this House is a much easier one than that on the Cinematograph Films Council. But there are times when the methods of controversy must tax even his great gifts of chairmanship. An example is a recent memorandum submitted to the Council by one of the members, Mr. Tom O'Brien, who represents, and is the General Secretary of, the National Association of Theatrical and Kine Employees. This memorandum, of course, is private and it would not have come to my attention but for the fact that Mr. O'Brien was so pleased with it that he thought it ought to receive greater publicity, and published it in full in the issue of July 14 of a periodical called To-day's Cinema. I am quoting from that periodical, and not from the memorandum.
I gather from the memorandum that there has been a controversy within the Films Council about default. That is natural and understandable, because the Council are required to advise the Board of Trade upon this particular subject. It is only to be expected that there should be discussion within the Council, and that there might be conflicting views, especially for the reason I have already given, that all sections of the industry are represented on the Council. There has been a feeling, which has been voiced in another place, among certain members of the Council that sufficient and vigorous action has not been taken against those who have been in default in their quota. I understand that the President of the Board of Trade is considering this question, and that there may be a certain number of prosecutions in this respect.
I do not wish to comment on the discussions that have taken place within the

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Films Council—indeed, I know nothing whatever about them, and it would be highly improper for me to do so. However, I would say this. It is somewhat unfortunate that there are members of the Films Council who are directly concerned and who may themselves be defaulters. While I am absolutely certain that the noble Earl, Lord Drogheda, would not permit any possible impropriety (and I would ask him to accept that quite sincerely), the fact remains that, so far as the public are concerned, here are people sitting on the Films Council apparently being judges in their own cause, hiving to decide whether, in fact, they should recommend that they themselves should be prosecuted. I accept the fact that they are not physically present when the discussions take place, but I am sure the noble Earl will agree with me that it is vital in matters of this kind that justice should not only be done but that it should be seen to be done, and should be recognised to be done, by everybody who does not happen to be represented on the Films Council. It would be most unfortunate if there were a substantial number of prosecutions of exhibitors who were not on the Films Council, while those who were on the Films Council and equally in default were not prosecuted. I mention that as a background to the controversy in which Mr. Tom O'Brien has been involved, and, as I say, it is perfectly natural that there should be a difference of opinion.
Mr. O'Brien thought it necessary to attack the five trade unions catering for those engaged in the film industry, including Equity, who are naturally more concerned with this question of default than others may be. He refers to the irresponsible and misleading outbursts of Mr. Asquith, who is a highly respected producer, and of Mr. Elvin. He also refers to a pamphlet published by the five trade unions, with an introduction by Sir Laurence Olivier containing a serious and reasoned statement of the problems facing the production of British films, as reducing the Cinematograph Films Council and the film industry to the status of a back-yard. He talks of the five unions as Communist-influenced bodies. He refers to the mechanics of the rabble-rouser, and to market place mendacity. He says that tine tactics used are to dupe
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and to employ distinguished personalities to sell wares that the public would reject from obscure pedlars. He talks of the industry continually being besmirched, as though it were a public convenience—elegant language—and finally he refers to the desire of the unions to use the impending discussions with the American film interests to further the anti-American policy of the Cominform.
THE EARL OF SELKIRK: What has the noble Lord been quoting from?
LORD SILKIN: What I am quoting from is, in fact, the memorandum submitted to the Films Council by one of its members. I am using it as an example of the kind of problem which faces the Films Council. Naturally, the document from which I am quoting is not the actual memorandum, which is private and confidential, but a periodical called To-day's Cinema in which the memorandum has been reproduced in full. Although the language is not such as anybody in this House would commend, nor the method of controversy, there are in this memorandum a number of reasonable points for discussion, and if put in moderate terms one could not seriously quarrel with some of the points that are made. But I am sure that the industry must learn to carry on its discussions in a more urbane and civilised manner.
I have said all this about the industry, but I am sure that the Government are alive to the problem, as were their predecessors—because action was taken in the past which, perhaps, may not have been as effective as one would have hoped. There is, first of all, the Film Finance Corporation. I do not wish in any way to criticise the most valuable work that they are doing. It is a most difficult task to he responsible for distributing public money, and whatever one does one will always be accused of not having given enough here and of having given too much there. But under the chairmanship of the noble Lord, Lord Reith—whom I have had the privilege of meeting in other connections—I am perfectly certain that the distribution of the funds available has been carried out with the greatest and, indeed, with meticulous care in the most responsible manner, and that certainly there can be no question of having given any privileges to one section of the industry as against another.

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I believe that the Film Finance Corporation will have to continue their activities for a long time to come if we are going to keep the industry alive. It may well be that we shall have to feed them with even more money in the years to come, though I hope that the losses will not be greater than was forecast in the last report.
We have endeavoured to restrict payment for American films by retaining the proceeds in this country—I believe not with entire success. We have profited from the experience under the original contract. A new contract is due to be discussed in the very near future, and I hope it will be possible for Her Majesty's Government to ensure that the arrangements that are made for the preservation in this country of the dollar proceeds of sale of American films are really made available wholly for the benefit of British films and not, as happens to be the case quite frequently, for the benefit of American films. There is the Gater Working Party on Film Production Costs. To a considerable extent the terms of their recommendations have been carried out. In spite of rising costs generally, production costs have gone down. But I am sure that more still remains to be done. I feel that to-day, when the film production industry is so dependent upon Her Majesty's Government for loans and contributions, the Government are entitled to take a hand and ensure that this industry is conducted in the most economical manner. I believe that the Film Finance Corporation, when they make their loans, do make efforts to ensure that the films will be produced in the most efficient way; but beyond that I think the Government themselves might play a part.
EARL WINTERTON: I apologise for interrupting the noble Lord again, but I hope he will allow me to point out that the industry would not be dependent upon Her Majesty's Government at all if it were fairly treated in regard to entertainments tax. The arrangements made have all been to assist the industry get over the difficulties caused by the entertainments tax, as was admitted by the Government of which the noble Lord was a member.
LORD SILKIN: Of course I have heard that before, but I am not at all certain that a reduction in the entertainments tax
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would necessarily inure to the benefit of the production side of the industry. The fact remains that the exhibitors do not need any help. They have never asked for it. They do not need it, nor do the renters; and any reduction in the tax might well go mostly to those parties who do not need it and not to those who do. There are still a great many recommendations in the Plant Report which would lead to increased efficiency but which, so far as I know, have not yet been seriously considered by Her Majesty's Government. There are a number of serious facts in connection with the monopolistic structure of the industry upon which I do not propose to enlarge, but which do require the serious consideration of Her Majesty's Government. Those are the steps that have been taken, but everyone will agree that they have not been entirely effective, otherwise the industry would not find itself in the position in which it is.
Therefore what action do I recommend should be taken? I do not claim to be in any way an expert on this subject, and I can put forward only a number of views which have been submitted by people who are experts and who have studied this question—recommendations with which I agree. The first is that there must be some action to prevent any further studios from being let or sold for purposes other than film production. I am not proposing to say at this moment how that can be done, but it should be done. It is a great waste of this country's assets to permit these studios, which cannot be replaced, to be lost to the community, and somehow they should be preserved. There must be a Government decision fairly quickly and action taken on the Plant Report, particularly in connection with the monopolistic structure of the industry. This monopolistic structure is one which is vertical as well as horizontal—that is to say, certain exhibitors are also renters and producers. This is a well known characteristic of the industry, and I do not wish to enlarge upon it this evening. It is a serious problem which ought to be considered, and it is one with which the Plant Report has dealt at great length.
Then we ought to establish a higher British quota. I recognise that before a quota can be enforced we must have the films available, and I do not suggest that the quota should be increased pending a

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greater production of British films. Our objective should be at the earliest possible time to increase the quota of British films—first features, second features, shorts and all the rest—and above all to make the quota, whatever it is, realistic. That is very important. This should be done by a more rigid enforcement of quota requirements, fewer exemptions and, as I have explained earlier, a new definition of of what constitutes a British film, so that what is available for the quota really meets the case and is, in fact, a British film. I agree entirely with what my noble friend Lord Archibald said about the Eady Plan levy, which should he made statutory and its periods of availability extended, at any rate over five years. I should like to see explored the possibility of some kind of discriminatory tax relief. I do not know whether I am in accord with the noble Earl, Lord Winterton, in this.
EARL WINTERTON: Entirely. That is my point.
LORD SILKIN: For the reasons I have given, obviously a general reduction of entertainments tax would not necessarily benefit film production. If the Government could devise some method of giving tax relief which would go directly to the film production industry, that would be of considerable assistance, and if Her Majesty's Government will examine what is being done in Denmark and in Italy to-day, they will find that some attempt is being made to give to the industry this type of tax relief. I should also like to suggest the possibility of redistribution of the net box office receipts. I am not strongly in favour of robbing Peter to pay Paul, and I am not so sure that that is the best way of meeting the difficulties of the industry; but I think it should be looked at again. It was last looked at about three years ago, and whether the position has changed or not since then I do not know. It may be that there are statistics available, but of course I do not know. Lastly, we should do what we can to increase our overseas markets, particularly in the Colonies. I think there is a possibility there of extending the distribution of British films and possibly helping to meet the deficit.
This, my Lords, is a most difficult industry to talk about. There is, I can assure the noble Lord, no question of
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Party politics in this: we are all most anxious to do what we can to suggest ways and means of improving the British film production industry, for both social and economic reasons. I can only express the hope that these observations of mine may receive some consideration from the Government, for they may have some influence in deciding Government policy.
6.3 p.m.
LORD MANCROFT: My Lords, I do not want to be out of the fashion this afternoon, except in the matter of the length of my speech. I feel that I must begin by saying that I have not an interest in the same way as has Lord Silkin and Lord Archibald: indeed, I feel that I owe them an apology for talking in this debate at all, since discussions on the subject of films have become rather a closed corporation. My only interest is that I happen to be fond of going to the cinema. Although both noble Lords who have spoken have done so from the Socialist Benches, there is very little in their words which could possibly be disagreed to on this side of the House. I was happy to note the optimistic tone with which the mover of the Motion, Lord Archibald, concluded his remarks and I hope he is right in suggesting that the future of the British film industry may be a little more rosy: I understood him to maintain that it was so. I have in my hand a pamphlet entitled Crisis in Films to which I think Lord Silk in referred. I do not know exactly when it was published, because it falls into the common failing of so many publications nowadays of not having a date upon it at all. It carries a foreword by Sir Laurence Olivier which says:
"Our crisis has been developing rapidly, like a galloping cancer, over the last two years."
I should imagine that he was writing about the middle of 1951. It is quite clear that the film industry has been passing through a very thin time, and it is equally clear that it is in the national interest that that state of affairs should be remedied as soon as possible.
There are two obvious reasons for that: first, the disaster of unemployment within the industry itself, and second, the artistic attitude, to which Lord Silkin referred. I think that one of the troubles of the industry has been that we tend to forget that it is both an industry and an

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art. We do not talk about the "literature industry," even though we may be thinking of the various processes of writing, bookbinding and printing; we do not lump them all together. It has always struck me as a little illogical to lump together all the aspects of the film and call it an industry. I agree that it would be disastrous, just as it would if radio and television were to be permanently in foreign hands, if British films were to pass completely out of British control.
There is one other aspect that strikes me as even more important, and that is the reaction abroad, as well as at home. I have ventured in the past, on more than one occasion, to weary your Lordships with my views on the state of affairs in Malaya; and that takes me to a point at which Lord Silkin hinted in his concluding remarks. Malaya and films are almost inseparable. In Malaya they have no serious radio worth talking about, no television, poor library services, and hardly any theatre, except for a few interested amateurs who occasionally produce a play—perhaps once or twice a year. The population of Malaya depend upon the film. I was talking recently to a Bar student from Penang and he told me that he regularly visited the cinema over 300 times a year. The supply of films needed to cope with that demand is enormous. A film runs for only two or three nights in Malaya before it is taken off and another is put on. The power for good of good British films showing the British way of life is enormous.
I remember being vastly impressed by the reaction of the people of Singapore to the first night showing of Hamlet—not a film which one would have thought easy of understanding, at any rate by some of the people. A great impression is created by such films as In Which We Serve, San Demetrio, London and others. I hope that we shall remember the debt that is owed to films associated with the name of Sir Michael Balcon and the Ealing Studios in this matter of showing the British way of life. If we do not encourage the production of good films showing our way of life, for exhibition in the Colonies and places where we are experiencing difficulties, we shall lose a great advantage. I cannot help but feel that many of America's difficulties arise from the fact that the American way of
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life is judged largely by American films. These films have not always been judicious so far as the American way of life is concerned. We have not always fallen into that trap, and I hope we shall continue to do everything in our power to show the best type of film illustrating the British way of life, in the Colonies and the Dominions and particularly the smaller outposts of Empire. A quota of good British films in places like Mauritius or Cyprus is almost incalculable in its power for good. I sometimes think that we tend to lose the sight of this in this country by keeping too much in mind the home market. That is why I think, more than the other two reasons I have given, that it would be a disaster if the British film industry were to lapse and were not to show that healthy recovery which Lord Archibald has led us to believe may be coming.
The various suggestions which I had intended to put before your Lordships as to the way in which this may be achieved have been largely covered by the two noble Lords who have already spoken. I should like to make one or two, however, which may be of some interest. The first is on this question of quota. It is absolutely useless to talk about a level of quota higher than can possibly be carried out. I believe that last year something like half the cinemas in this country did not carry out their full quota obligations. I do not believe there have been many prosecutions, and I believe the law has fallen into that state which the law should never be in, a state of disrepute. Let us either have a quota which we can enforce, and a quota that makes sense, or let us have no quota. A quota that does not make sense is worse than useless. I would agree with the noble Lord, Lord Archibald, that about 30 per cent. at the moment is right, but if any more studios are taken over for any other purpose, it will be impossible to keep even to that 30 per cent. figure.
The second important point is the one on which the noble Lord, Lord Silkin, has already touched—that of the British-protected film which is not really a British film at all. He mentioned The River as a good example. I would try to cap that with Captain Hornblower, which went round the world advertised as a British film when, of course, it was nothing of the sort. It was an excellent

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film and excellent entertainment. I think the trouble goes deeper than that. It is not only that films are now tending to be not British films at all but American films with American stars, British technicians and a few British supporting players, but the whole British artistic concept is being dragged out of these films and done away with. We are breeding merely a race of supporting players. I am certain that that is wrong, and I am equally certain that some steps have to be taken to see that what we call the "British protected film" is, in point of fact, a British film. There is no need to accuse one of being anti-American in saying that. We welcome the American stars here; we are delighted to see them and they will certainly increase the prestige of our films, but let us be quite clear in our minds that this type of show is not a British film at all.
My third point is that it is essential that we should encourage good producers to go on making good films. That may sound a platitude, but it is not quite so simple as first appearances indicate. One frequently hears accusations of inefficiency and muddle levelled against the film industry, and certainly some of the more exaggerated Press reports, some of the more alarmist stories, may lead one to think that that is so. I do not think it is so. A large amount of money is made in the film industry, but I am not satisfied that the large sums of money that are made in the film industry always go to the right people. In the words of one producer, when speaking on this subject recently,
"those who actually do the work are not getting enough of 'the gravy'."
That is putting it a little crudely, but I think it is true to say that the men who do the thinking, and those responsible for the really artistic output of the films—the producers, the writers, the scriptmen, the continuity men and the actors—are considered of too little importance when it comes to the actual financial rewards. I should like to see any financial rewards that are given by the State going first to those who have done well, to encourage them to do even better. I agree entirely that encouragement, both financial and moral, there must be from the State in the face of American competition if we are to exist. And for the reasons of which the noble Earl, Lord Winterton, has just reminded the House it is im-
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possible for this great and vital industry to take on a world-wide market unless it has some form of Slate assistance. I myself am normally opposed to State assistance, but this is one of the cases where it is needed. The industry must have assistance. I hope that the noble Earl, in his reply, will indicate quite clearly the assistance which this Government particularly intend to give. And I hope that he will make certain that the assistance goes primarily to those who deserve it.
6.15 p.m.
LORD LUCAS OF CHILWORTH: My Lords, in winding up this debate on behalf of Her Majesty's Opposition, I feel sure that my first words must be of thanks to my noble friend Lord Archibald for once again putting upon the Order Paper a Motion to discuss the film industry, especially at this particular time. This debate has been notable for the fact that we have seen two new rising stars in our film firmament—my noble friend Lord Silkin and the noble Lord, Lord Mancroft. As he says, it has tended to become rather the monopoly of a few of us to discuss films, and I am sure we all welcome the nobly, Lord, Lord Mancroft, who has starred in many comedies, both inside and outside your Lordships' House, and who bids fair to fill the role of "juvenile lead" on the Back Benches of Her Majesty's Government during the coming months. I can make the same point about my noble friend Lord Silkin. Nature never intended either him or myself to be a "juvenile lead." But perhaps both he and I can rest in the knowledge that one does not have to be young to be a success in the film industry, judging by some of the characters I have seen on the screen on the various occasions when I have been to the cinema. I think my noble friend Lord Silkin was less than his usual truthful self when he denied having any interest in films, because surely in his family circle is one of our most charming and talented film actresses. I do not know whether she wrote his script for him this afternoon but, if she did, it was not done too badly.
The burden of the debate which we have had to-day is: what is the present financial position of the production side of the British film industry and what are its prospects. As Lord Archibald quite

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rightly said, we have not yet many figures. Some of us have been trying to find out whether British film production is solvent. The nearest figures we can get indicate that production costs are in the region of about £11,000,000, and the revenue of British producers, including the Eady contribution of £3,500,000, is about £7,250,000, leaving overseas earnings at about £3,750,000. I should like to ask the noble Earl whether he can give any further information on that particular point—whether our estimate of £3,750,000 for overseas earnings is about accurate and whether the producing industry is approximately solvent. But I think the main point posed by noble Lords who have spoken is: have we to make up our minds that the British film producing industry must continue on the basis of a subsidy? I have reluctantly come to the conclusion that it must have a subsidy. I am not so optimistic as is the noble Lord, Lord Archibald. I do not think that the British film industry for as long as we can foresee is going to attract finance through the usual and normal channels. The industry has frightened away finance from the ordinary channels, and that was the reason for the advent of the Film Finance Corporation.
I think the Film Finance Corporation have done a very good job. My noble friend Lord Archibald said that they had attracted to themselves a little more credit than they deserved. Well, if some of us had to rely upon only the credit we deserve, we should not get very much. But I think the Film Finance Corporation have done a splendid job of work. If there had not been such a Corporation I am certain that there would have been little, if any, British film production at the present time. I think they have had a very good disciplinary effect upon the industry. They have cut down taking time. The screening time in a camera day has risen by about 40 per cent., and, on the average, in the last four years, the number of camera days taken in making a film has been halved. I think that that is a very good achievement. I think also that the advent of the group system has been good. It has allowed losses to be spread over the profitable films, which was something that never happened before. There are still matters that can be put right
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with the group system, but some of it is exceptionally good.
I do not share the optimism of the noble Viscount, Lord Swinton, who appears to have departed from our screen—whether or not that is temporary, or whether the noble Earl, Lord Selkirk, is the rising star, I do not know. If the noble Earl is in future to be the spokesman on these occasions for Her Majesty's Government, we welcome him and wish him all success. I wish him more success than his fellow countrymen achieved in the film Bonnie Prince Charlie which, if my information is correct, was one of the biggest "flops" of the British film producing industry. I hope he will not pay too much attention to my noble friend's twitting of his predecessor, the noble Viscount, Lord Swinton, as to what he said when he was sitting on this side of the House and what he now says when sitting on the other side. The noble Viscount, Lord Swinton, always doubled the role of Dr. Jekyll and Mr. Hyde with the greatest possible success, and when he was asking for information and I sat on that side of the House, I knew that had he been in my place he would not have given it. But I do not think the noble Viscount is right when he says that the £2,000,000 borrowing powers which make up the availability of £8,000,000 of capital at the disposal of the Film Finance Corporation is going to be the end.
While I agree that there must be the two pillars mentioned by my noble friend Lord Archibald, the quota and the Eady Plan (I think he used the phrase "the two props"), he thought that the other prop, the Film Finance Corporation, would be needed only temporarily, but my view is that the Film Finance Corporation will be necessary for all time. I base my opinion upon the particular facts that my noble friend quoted—namely, the last two or three lines of this excellent report by P.E.P. on the British film industry. My noble friend quoted them, and I will quote them, too. The report says:
"If the public considers it desirable for political, cultural, or economic reasons that British films should be produced, then it must be prepared for the Government not only to protect the industry indefinitely, but also to aid it financially for as far ahead as can be seen."
As far ahead as I can see, I am certain the Film Finance Corporation will be necessary. The Corporation might be able to dispense with public money and to

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attract money through the normal channels, but as soon as you take away their power of disciplinary action, with which they have done good work, as soon as you take away the budgetary and cost controls that have been the feature of the lending of the Film Finance Corporation, and hand the industry back to the normal channels, once again the wild extravagance is going to start which brought British film production to its knees. I have no faith in the ability of banking circles to discipline the film industry as it should be disciplined.
The Film Finance Corporation has two functions. It is not only a money lending organisation, but an organisation to foster interest in British film production as a national asset. Banks are not interested in the film industry qua the film industry; they are interested in getting a return for their money. So I would say quite definitely that the Film Finance Corporation will have to go on. It is as necessary as the Eady Plan, which is very necessary. I join with all noble Lords in saying that I should like to see the Eady Plan made statutory, but I should not be in agreement with that unless disciplinary action is attached to it in the manner I have suggested. I should not put State money at the mercy of the British film industry without some disciplinary force. I think the noble Lord, Lord Mancroft, hit the nail right on the head when he said that what you are trying to do in the British film industry is to mix oil and water; you are trying to mix the artistic with the financial. If you let the artistes have their heads, then the financial consequences are going to be dire. That was the trouble in the past.
Now I come to what I think is the next most important thing—the quota. That has been mentioned a good deal during the course of the debate. It is now 30 per cent. In 1950–51, though the quota was 30 per cent. for first features and 25 per cent. for supporting films, the actual figures achieved were about 28 per cent. of first feature films and 22 per cent. of supporting films. That is not bad when we take into consideration the fact that in this country there are 4,600 cinemas with seating capacities ranging from 200 to 4,500. I understand that the two largest cinemas in the country are the "State" at Kilburn, and one in Glasgow seating about 4,500,
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and that the smallest is in some obscure little place, seating about 200.
My Lords, I think we have to look at this matter rather seriously from the particular angle that my noble friend Lord Silkin raised. In 1950–51 the first feature defaults were 771 and the supporting defaults were about 2,340, as against first features defaults in 1949 of 2,335, or about 50 per cent. It has now come down from 2,335 to 771, but unfortunately the supporting programme defaults have gone up. Let us look at this problem and try to get it into perspective. The quota reliefs do not apply to the circuits, and the bulk of defaults, in my view, happen on the circuits, but in the smaller circuit theatres that have to run in competition with large ones. Under the Films Act of 1948, those defaulting on quota could be fined up to £250 or £500, but the actual maximum penalties imposed have been in the region of £25. Now that is no deterrent. Without much exaggeration, one could almost say of this matter of quota default that it pays to break the law. The rental of an American film is lower than the rental of a British film, and if you are going to be fined only £25, and through breaking the law you net £100, it is not bad business, is it?
I do not know what is the answer to this problem. Personally, I have always held the view that the Board of Trade themselves have been very half-hearted and lukewarm about the quota imposition. They have a certain amount of sympathy from me, at any rate, because you could almost drive a coach and pair through the quota regulations—they are so loosely knit. I have every sympathy with the solicitors of the Board of Trade, because it is no use going to court unless you have at least a sporting chance of getting a conviction; and I am sure that barristers of the calibre of the noble Lord, Lord Mancroft, could devise a defence to almost any quota prosecution, because the law in this respect is so loosely tied. But I will make the suggestion that perhaps the whole of this quota enforcement machinery should be overhauled and taken out of the hands of the Films Council. I think it is a very invidious position in which to place any members of the Films Council—there are quite a number of exhibitor representatives on that body—that they

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should have to become, as Lord Silkin put it, judges in their own cause.
As regards the quota itself, I am not in favour of its being increased, because it must be related to production. It is no good putting up a quota that the British film production industry cannot fulfil. Let us be honest about this. We tried it, and it was a failure. When the 40 per cent. quota was in force, 50 per cent. of the cinemas of the country did not fulfil it. We have got it down; it is now 30 per cent., and on first features there were 771 defaults, so the matter has got within manageable bounds. The point I would make to the noble Earl—and I hope that he will look into it very seriously—is that this is causing a lot of dissatisfaction in this industry, and it does not take very much to have the members of this ridiculously temperamental industry at each other's throats. They have been at each other's throats for as long as I can remember—it has been a case of producer versus exhibitor, exhibitor versus distributor—and on they go. I am going to say in a minute that the salvation of the British film industry still lies largely in its own hands, but it will be necessary to get more unanimity amongst the units of that industry. It is no good Her Majesty's Government being unhelpful by having quota arrangements at which they wink, and which cannot be enforced. As the noble Lord, Lord Mancroft, says, it merely brings the law into disrepute.
Another point on which I should like to touch—Lord Mancroft has already mentioned it—is that of overseas markets. I know the difficulties. I know the language difficulty. But I am not certain that the British film industry has a sufficiently good organisation for marketing its wares overseas. I feel certain that it could do better in this respect. I do hope that the noble Earl will look into this matter very seriously because, as both Lord Mancroft and Lord Silkin have said, the British way of life is a matter of great importance in this connection. In proper teaching of the ideas which lie behind the British way of life, lies one of the most valuable ways by which we can work for world peace. The American industry is highly organised. Is our industry as well organised as it should be? I do not know. On one side I hear derision expressed at the organisation of the whole film industry and on the
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other the contrary, but all in the industry speak with so many voices. They are voices which are not unanimous. But the Americans have one voice, one organisation, which speaks for the whole industry. I should be glad if the noble Earl would tell me, if he can, what are the current overseas earnings and what are the prospects of increasing them. Does he not consider that one method is by better organisation?
A further point I should like to mention is this. Her Majesty's Government will soon be going into negotiation with the American film industry. I do not expect the noble Earl to tell me very much about that, but there is agitation going on with a view to securing that a greater embargo should be placed on American films. That would be the best way of bringing the British film industry in all its branches to bankruptcy. If you cut down the number of American films—because do not forget they occupy 70 per cent. of the screen time—the Eady Plan goes. It means that you are going to put out of business quite a number of the smaller cinemas, and I do not think that for any space of time which it is worth while to measure the British film industry will be able to produce more films than will fill the screens of this country for about 30 per cent. of the time for which the British public demands screen entertainment. I do not think we want to alter at all the American agreement as it stands to-day. I am not going into the very contentious point as to whether remittable balances should be increased. That is a matter which must be agitating the mind of the Chancellor of the Exchequer at the present time. Remittable balances are 17,000,000 dollars, and the rest of the earnings must be spent or "frozen" in this country. I should like an assurance from the noble Earl, if he would be so good as to give it me, that that agreement has been honoured completely, and that no more than 17,000,000 dollars has been remitted in any one year.
To conclude, what is the future of this industry to be? I believe that the cinema industry of this country is going to face a revolution in the next two or three years. I believe that within a measurable space of time British film production will be largely concentrated on making films for television, and that the majority of British cinemas will be show-

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ing television of the big sporting and other national events. Within a very few years, I am convinced, it will be possible for the noble Earl and me to walk up to Leicester Square and, sitting down in a cinema there, to watch tennis being played at Wimbledon as exactly and clearly as we could see it if we went to Wimbledon. I sincerely believe that these things are coming. I believe that the British film industry has got to face it and face it seriously, because, although I do not think it is going to do them harm, the public demand for the televising of these big national events will grow.
That will be one of the main occupations of the big cinemas of this country. The British film production industry has to get on with the job to be able to fill the available screen time not given up to television I beg the film industry not to ignore this development. I believe that television is going to revolutionise the film industry as much as the film industry revolutionised the theatre, especially in the provinces. I hope that the noble Earl can give me some assurance upon the Government's attitude to the quota, the future of the Film Finance Corporation, and the Eady Plan. I believe that all three are necessary. To take one away would damage the other two. I hope that the noble Earl will be able to give us an assurance that the ears of the Government will not be closed to the pleas to continue support for this industry which all noble Lords have said is so necessary.
6.40 p.m.
EARL WINTERTON: My Lords, unlike the noble Lords who preceded me, I cannot disclaim an interest in the industry, because I have a considerable interest in it; nor can I disclaim a knowledge of the industry as all noble Lords, with the exception of the noble Lord, Lord Archibald, have done. That was very apparent in the admirable speech of the noble Lord, Lord Lucas of Chilworth, to which we have just listened. He gave us a great deal of advice which would have come with even greater authority and expert knowledge had he been addressing your Lordships on the subject of the industry with which he is so honourably connected. I think his knowledge of the cinema industry is slightly slender. Both in this House and in another place, when the Commons sat
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in this actual Chamber, I have heard many discussions on the film industry and have become accustomed, as I am sure the noble Lord, Lord Archibald, has, to all sorts of advice being given from all quarters—Conservative, Labour and Liberal—about what it should and should not do. I am glad to be able to inform your Lordships that I do not intend to add to that advice but only to give a warning to the noble Lord, Lord Lucas of Chilworth, that I may controvert some of his remarks on a future occasion.
The general tenor of the debate has been of great help to the industry. I should like to thank the noble Lords, Lord Archibald and Lord Silkin, for the friendly way in which they approached the subject. I want to make one observation, because I think it is important from the point of view of the, industry. Some impression has been given this afternoon (I think it could be detected even in the speech of my noble friend Lord Mancroft) that the producing side of the industry needs far more supervision from the Government. I think that would be fatal. As a result of long discussions between the various interests affected the Eady Plan was produced. I agree with the noble Lord, Lord Lucas of Chilworth, that it is a difficult industry, and that the various branches quarrel amongst themselves. The producing side of the industry also has supported in general the Film Council, about which the noble Earl, Lord Drogheda, is going to speak in a moment.
LORD MANCROFT: My Lords, I am sure the noble Earl must have misunderstood me. If I said what he attributes to me, I did not mean to put it in those words.
EARL WINTERTON: Nothing could be more fatal to the producing industry than anything in the nature of a disciplinary code. The Eady Plan was reached after long discussions— and in this connection I should like to pay a tribute to His Late Majesty's Government—and is now generally accepted.
There is one other point which I think it is important to make. In both the last two speeches there have been questions, perfectly legitimate questions, about the effect of what might be called the export production industry, the effect of the sale of British films overseas. Here I am in an embarrassing position, because I am

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connected with an organisation largely concerned in that export, and I certainly cannot give away any figures that have not been published before the annual report of the company with which I am connected comes out. But it would be a profound mistake to think that there is not an expanding market for good British films; that advantage is not being taken by more than one film producer, and not only big ones, of that expanding market; and that the British industry has not so readjusted its finance (under, it is true, the spur of the circumstances mentioned by the noble Lord, Lord Lucas of Chilworth) so as to have now a reasonable chance of competing in the film export market of the world. I think your Lordships would like to have that statement made by one connected with the industry, because, as has been said, no Party question arises here. I should not like this debate to give the impression that this industry has not a perfectly good future, provided that it is properly run.
6.46 p.m.
THE EARL OF DROGHEDA: My Lords, I rise for one moment, first to thank the noble Lord, Lord Silkin, for what he said about my work on the Films Council, and to say one word on the quota system. I am quite certain that no recommendation of the Films Council to the Board of Trade has ever been influenced by the fact that the exhibitor members on the Council may have been associated with one or two theatres in default. I am sure of that. The practical difficulties about considering the quotas are very great. Every exhibitor who may be called before the court to say why he is in default can say that his default is due to circumstances beyond his control. That defence is open to him under the Act. Therefore, the Board of Trade have to be very careful before they institute proceedings, and the Films Council have to be very careful before they recommend to the Board of Trade that this or that seems a bad case. We could not proceed to examine these cases at all without the help of the exhibitor members of the Council, because they are the only people who know the facts. By and large, I think it is true to say that the defaults occur in the smaller theatres and not in the bigger ones. That, of course, is important, because the bigger
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the theatre, the more money it takes and the more money gets back to the producer.
On the subject of high quotas, we must always remember the experience of past years. We must be sure that if we have high quotas, we do not lose in quality what we gain in quantity. It is most important to keep up the quality of the films produced. I think that the present quota of 30 per cent. is about right—I am speaking here for myself and not for the Films Council. Defaults must occur, for nothing would ever prevent that, but, as the noble Lord, Lord Lucas, said, in the year ending October last they had been reduced to 771, as compared with more than 2,300 the year before; and that is certainly a step forward. There is one other observation I wish to make. The question of amending legislation has been under consideration from time to time and producers, distributors and exhibitors have been asked to send in their views on the subject. Film legislation springs from the 1926 Act, and I think it is high time that it was revised and made more flexible. I hope that, in spite of the amount of legislation confronting Her Majesty's Government, they may be able before long to take action to amend the Cinematograph Films Act of 1948.
6.50 p.m.
THE EARL OF SELKIRK: My Lords, on behalf of my noble friend Lord Swinton I should like to say how sorry he is not to be present taking his proper place in what has been called the film firmament. I am afraid that I have not the experience of the noble Lord, Lord Archibald, who speaks with such detailed knowledge of this subject, and I can hope only to fill in a few gaps of what he already knows better than I do. There is one thing that has stood out in this debate, and that is the unanimity with which everyone has spoken of the immense importance of this industry. The noble Lord, Lord Silkin, emphasised it with figures which show that here is probably the most popular form of entertainment, not only in this island but in what might be described as all the civilised parts of the world. It is an industry which brings in something of the order of £100,000,000 a year in this country. It has also immense importance from the prestige angle, and the

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point of overseas markets has already been raised by several noble Lords, including my noble friend Lord Mancroft, the noble Lord, Lord Lucas, and the noble Earl, Lord Winterton. That matter is of the greatest importance in every way, and is being investigated fully, as it should be. I was asked what the overseas market was worth. The figure recently given was £2,500,000.
The basic facts of the industry are, of course, well known, and were stated by the noble Lord, Lord Silkin. We are up against competition from the United States, which makes it extremely difficult for the industry in this country to work on a level footing. The domestic market of the United States is something of the order of three times, or more, the industry existing in this country. That gives them a basis on which to work with which, from the purely economic point of view, we cannot hope to compete. It is for that reason that successive Governments in this country have taken special steps to deal with the film industry. The original quota Act goes back some twenty-five years, and was, I believe, the work of my noble friend Lord Swinton. There have been two further quota Acts, and more recently we have had the establishment of the National Film Finance Corporation, which has authority to provide loans up to £6,000,000. I thought the noble Lord, Lord Archibald, was less than generous in his reference to the £2,000,000 that may be added to that—by private money, it is true, and not by public finance. That is not altogether a contribution of this Government, of course, because this had already been broached before we came into office. That emphasises the importance of the steps taken in the past, and Her Majesty's Government are proposing to continue them. That may be an indication of how much attention the industry has received in the past.
But ultimately, however much attention any industry of this character receives from the Government, it is the artistes, and the men of ability and genius who run the organisation, who will make it work. All we can do is to level out the economic disadvantages; it is the creative genius of those men and women which must keep the industry alive and vigorous, not only for us but for other parts of the world where people have the benefit of
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seeing our films. This is a matter on which the Government have no opinion, but, speaking for myself, I feel that I can say, without fear of contradiction, that the quality of British films has markedly increased over recent years. Whereas twenty years ago American films were probably broadly ahead of those from this country, my own view is that that is no longer the case. During a recent visit to America I found those views fairly well recognised in certain respects.
The noble Lord, Lord Archibald, was a little depressing in some of the pictures he gave. I do not want to pretend that the situation is easy, but I have figures of employment which seem to me to indicate that the noble Lord was rather overstressing the trend of events. For instance, the employment in Mardi, 1952, is rather better than it was in March, 1950, according to the figures which I have. I do not want to give the figure in detail, but I have here statistics of the film industry as extracted from the Board of Trade Journal. I do not pretend that the shutting of studios is necessarily a good thing, but one has to remember that to some extent it is a necessary and healthy process in increasing the efficiency of production—I say "to some extent," and I do not pretend that it is entirely the case. But it is broadly recognised that a higher measure of efficient production is absolutely essential if the industry is to be successful.
The noble Lord, Lord Lucas, asked whether the industry is solvent. I could refer him to the Report of the National Film Finance Corporation. I cannot speak for the whole industry—in fact, I do not think anybody can—but so far as films which have been dealt with by the National Film Finance Corporation are concerned, they recovered 106 per cent. of cost; and with the full application of the Eady Plan that would rise to 115 per cent. I find those figures rather encouraging. The question of what constitutes a British film has been raised. As a matter of fact, this is not really a new question. I am given to understand that substantially the same definition of British films has existed for twenty-five years. It may be wrong, but with great respect, the people of India are still members of the British Commonwealth; and, taking that definition which I say is the proper definition of a British film—that 75 per cent.

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of the labour costs are paid to British personnel—that is a basis of definition which, it seems to me, can be defended at a moment's thought. I may be wrong in the long run, but I suggest that it is worthy of careful consideration.
The noble Lord, Lord Archibald, complained that there was not sufficient information available, and with great force and eloquence he made long quotations from past speeches of my noble friend Lord Swinton. I could quite easily quote the extremely eloquent speeches of the noble Lord, Lord Lucas, in reply to those of my noble friend Lord Swinton, but I will not do so. All I would say is this. In the first place, there is more information available in these Reports this year than there was in past years. If the noble Lord looks at Table D, for instance, he will see that production costs are shown over three years. That Table is new, and was not given before. If he looks at Table C, he will find the budget, compared with costs over three years. I must say, as has been said before on these occasions, that the relations between the Corporation and individual companies must be confidential, as are the relations between banker and client. I do not think it would be possible to expect them to approach the Corporation—as I think we should all like—with a full sense of confidence if they knew that anything arranged would be made public. If I may say so with respect, there is the further danger that, by making it public, it might become a matter for political discussion. Taking all these things together, I submit that the present arrangement of omitting any reference to specific relations between the Corporation and individual companies is probably the correct way in which the matter should be handled.
Reference was made by the noble Lord, Lord Archibald, to the loan to British Lion. In case any noble Lord does not know the background of that matter, I feel that I should make it clear that this was a deliberate act of policy of the late Government. I am not criticising it. I am saying only that it was such. I will quote, if I may, from the Report of the Committee of Public Accounts in which the Permanent Under-Secretary of the Board of Trade says:
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"I think that commitment of £3,000,000 was really outside the Corporation's discretion. They had to honour it."
I am putting that on record only so that it is clear that the responsibility for this is not the Corporation's.
LORD ARCHIBALD: I said so.
THE EARL OF SELKIRK: I accept that. I am only repeating it. They had in fact to grant this loan, which has not been repaid. I think it would be quite wrong to assume that British Lion will not repay that loan. I do not want to say any more. Repayment of it must, in fact, be the result of good film production, and those are the bare facts of the case. In the course of the speeches there was a certain difference of opinion as to how much beneficial influence the Film Corporation had exercised on different companies. The noble Lord, Lord Archibald, said that he thought the Corporation had put it too highly. Well, I do not know. I believe it was the noble Lord, Lord Lucas, who said that they had exercised quite a healthy control. I should like to emphasise that considerable pressure has been exercised on British Lion by the Film Corporation, in regard to costs control, standardisation of budgeting and, what is very important, spreading the load between losses and profits. It is no good making big losses on one side and big profits on the other. By spreading the load it is possible to have a much bigger industry and a much bigger range of profitable films at the same time. I think it is fair to say that it has induced a control and discipline over quite a large part of the industry.
In support of those remarks, I should like to quote some figures. It is quite true that they are for that part of the industry to which loans have been made by the Corporation, and as the loans to British Lion constitute something like half of the total loans, obviously they play a considerable part in these figures. But these figures are not simply for British Lion. May I give the figures for the overspending of budgets on individual films? In 1950 the average figure was 9.4 per cent.; in 1951, 5.9 per cent., and so far this year the figure is nil. I think that that suggests that more care is taken in estimating. Another figure I should like to give is that for screen time—that is, minutes

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per day of screen time. In about 1947 it was 92 minutes; in 1951 it rose to 1.18 minutes, and in 1952, it was 1.66 minutes. That seems to suggest that there is a certain tightening of the efficiency of production. It is certainly not for me to say to whom the credit is due. The credit is due to those who have taken part and paid a great deal of attention to problems of this sort.
Much has been said about the Eady Plan, and I have no hesitation in saying that the late Government were extremely wise in starting it. They had every reason to suppose that that plan would work out on the right basis, and I think it is doing so. That, to some extent, meets the point made by my noble friend Lord Mancroft, or the noble Lord, Lord Silkin, on distribution of earnings or profits from the industry. In any case, the Report which we have before us shows clearly that the tendency of the Eady scheme is to reduce losses and increase profits by the spread-over. Accordingly it should have a most desirable and important result.
The view of Her Majesty's Government in regard to this scheme is that it is primarily a matter for the industry. The scheme is a scheme for the industry, it is run by the industry, and it depends directly on the good will of the industry. The Government would welcome its continuation, and they hope that the industry will come to an early decision about the future of that scheme. As we see it, we do not think that this is an appropriate matter for legislation. Whether you have legislation or not, it must be made to work by the industry as such. As guided at present, we think that the industry should be able to work that scheme with no further assistance from the Government. I do not wish to suggest that we are not sympathetic. If we can help we will do so. But we do not think it is necessary at the present time to make the scheme statutory. The noble Lord, Lord Archibald, seemed to suggest that if the number of films produced in any one year were reduced, there would be a larger levy spread over them. I had that impression, but I was not quite certain of the point he was making.
LORD ARCHIBALD: May I help? I was suggesting that if the Eady Plan were made statutory and more or less permanent on its present basis of producing roughly £3,000,000 a year to be distributed over the films in distribution, if
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only half as many films were produced then the average allocation from the Eady Plan to the films would obviously be doubled. If it were a statutory plan and in any year the number of films became too small, it would be undesirable that the whole of the proceeds should be distributed over the small number of films. I suggested that it might be carried forward to a further year to encourage higher production in subsequent years.
THE EARL OF SELKIRK: The Eady levy is not distributed on films produced; it is distributed on films shown. If in any one year the number of films produced falls, it does not really matter—so I am given to understand—because the amount will be distributed amongst the films produced in the previous four years and which are probably being shown that year.
LORD ARCHIBALD: But surely it is a matter of simple arithmetic. If the output of films falls to half, the number of films in distribution next year will be small and, therefore, the proportion of the Eady money they will receive will be higher.
THE EARL OF SELKIRK: The noble Lord's mathematics are impeccable, but it would not have a very great effect. It would probably be one-eighth. I do not think it would be very effective. But I may carry the point one stage further. Suppose that, year after year, the number of films produced falls, then quite clearly the Eady plan is not working, and we shall have to think again. But if the output of films falls just for one year, I am given to understand that the amount to be distributed will not be greatly different. In any case, this is a matter which falls to the industry themselves. They make the distribution, and it is theirs to make the decision. I have little doubt that those responsible will have listened and taken note of the words the noble Lord has said in this matter.
I have only two more points to make, and one is in regard to the Anglo-American Film Agreement. I am not going to say very much about that, because the Agreement was entered into in October, 1951, and we stated—as we are entitled to—that we wished to open discussions again. Discussions will take place between now and the end of September, and I do not propose to say

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anything on that matter whatsoever. In case there is any misunderstanding I should, however, like to say this to the noble Lord, Lord Lucas. It is true that the American film industry are allowed to transfer, out of their earnings in this country, the equivalent of 17,000,000 dollars plus certain bonuses calculated by reference to their expenditure here on film production and on the acquisition of United States distribution rights of British films. In point of fact, the sum which the Chancellor of the Exchequer stated earlier this year had been transferred was £9,000,000. That is roughly the equivalent of 25,000,000 dollars out of the unremittable balance. A substantial part of the balance is spent on production here and on the acquisition of American distribution rights of British films. It would be nonsense to suggest that the American companies have transferred any monies other than those in accordance with the agreement which has been signed.
LORD LUCAS OF CHILWORTH: I am very grateful to the noble Earl for that information. It will clear up many doubts.
THE EARL OF SELKIRK: If the House will excuse me, I will not discuss to-day the question of quotas—for this reason: that the President of the Board of Trade, to whom this is rather a special and personal matter, will be dealing with it in another place this week, and I would rather not deal with a matter which undoubtedly is rather tricky. But, as I think was pointed out, it is not simply a question of violating the law and leaving it as suggested. The matters concerned are rather too involved for any simple proposition of that character.
The noble Lord, Lord Silkin, suggested that he would like to see 50 per cent. of the films shown in cinemas in this country to be British. I think we should all like to see that: the question is, how to do it. I do not know of any political system in the world that can assure the production of good films, nor can anyone say they can give a complete answer. All I can say is that we fully agree that the Corporation, in so far as they have carried out their work, have done a very good job. We are grateful for the work they have done, and hope that we shall be able to ensure them support
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for the future. The Government hope that the Eady Plan will continue, and they are also most anxious that the British film industry shall regain or be restored to the place of strength which it has held in the past. I hope that I have answered most of the questions that were put, and I am sorry to have detained your Lordships for so long. I conclude by saying that we are grateful to the noble Lord, Lord Archibald, for raising this question.
7.12 p.m.
LORD ARCHIBALD: My Lords, I will not detain you for long, but there are one or two points on which I should like to say a word or two in reply to the noble Earl. If I may say so, I think he will not be surprised if I say I am profoundly sorry, and I think the British film industry will be profoundly sorry, that his reply about the future of the Eady Plan should have been so negative in character. Some statement from the Government indicating an intention to make that Plan of a statutory and long-term nature would have been the greatest possible encouragement to the industry. I think it is not quite fair to say that it is a matter entirely for the industry to deal with. It was not the industry who introduced the Eady Plan. The industry had to reach agreement on it. It is the Government who say that the Eady Plan comes to an end in 1954. If I may interpret the noble Earl's statement to the effect that, if the industry is willing to continue it beyond 1954 then, equally, the Government are willing, to continue it, that might give the industry something to work on. But the industry cannot itself decide that, however much the three elements, producers, distributors and exhibitors, may be in agreement, because the matter is related to the entertainment tax, which is very much the concern of the Chancellor of the Exchequer; and the continuance of the Eady Plan depends not only upon the industry but upon the Chancellor of the Exchequer's saying that he is prepared to continue the arrangements under which it now operates. If my interpretation of the noble Earl's statement is correct, then the industry may take some encouragement from that.
THE EARL OF SELKIRK: I think the industry may take some encouragement, but I am merely leaving them the initiative.
LORD ARCHIBALD: I have no doubt that that will be noted, and that the industry will in due course act upon it.
There are only one or two other points to which I feel I should refer. The noble Earl, like the noble Lord, Lord Lucas, on a previous occasion, justified the omission from the Reports of certain information for which I asked and which had been asked for on previous occasions. The bulk of that information is common knowledge in the film industry. Almost anyone in the film industry will tell you with considerable accuracy the cost of the film and the amount of the Film Finance Corporation's loan, whether it would be "end money" or "first money", where it came from, and so on. That is common knowledge in the industry. It appears that only Parliament, which provides legislation for the funds, is to be denied that information. However, I will leave that matter there.
With regard to the £2,000,000, which was the subject of legislation before Parliament, I would remind the noble Earl that, although it is not to be public finance, nevertheless the assurance was given that a Government guarantee would be available for it. I think it is common ground that without a Government guarantee there would be little hope of the Corporation's finding the necessary money. It seems to me that it is to some extent a distinction without a difference whether the Treasury provide the £2,000,000 or whether they provide the guarantee for the £2,000,000. The net effect is that there is £8,000,000 at the disposal of the Film Finance Corporation, either provided by the Treasury or guaranteed by the Treasury—it makes no difference.
THE EARL OF SELKIRK: There is this difference. They are free to get it from private sources if they can. If they cannot get it the Treasury will consider a guarantee. I think there is that difference.
LORD ARCHIBALD: I think, if I may say so, that the difference is quite an academic one.
May I refer to two or three points from the debate in general? The noble Lord, Lord Mancroft, must, I am afraid, have misunderstood some reference of mine when he referred to my saying that the film industry has a "rosy future." The contrast between somebody suggest-
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ing that it has a rosy future, while every other speaker in the debate is referring to a crisis in production, would suggest that we were talking about two entirely different things. As a matter of fact I suggested only that, given the continuance of the three props—the quota, the Film Finance Corporation, whether only for a time or permanently, and the Eady Plan—I felt that the industry would be coming into a more prosperous period than it has had in the past. I think that in the nature of things it must be so. But the Eady Plan came into operation only in the latter pant of last year, and the industry has not begun to get the full benefit. After a year or two, if the Plan goes on, I think there should be greater support; and I suggest that one may take the sober view that the industry has passed the point of crisis and is turning the corner. I think I may say this without being too much of what I think is now known as a "rosy optimist"—I prefer the word "rosy."
May I make one more point with regard to the overseas market? It is not sufficiently well known that before the War the British film production industry was at a great disadvantage in the overseas markets, mainly for two reasons. The first was that there was no British film production company with a sufficiently large output to be able to stand the overhead costs of an overseas distributing organisation; and the second that British production was not stable enough as a whole, year by year, to justify the setting up of any co-operative overseas distributing organisation. Since the end of the war, great strides have been made in the development of overseas distributing machinery for British films. In consequence, the showing of these films overseas is on a very much bigger scale than ever before in the history of British films, and the revenues are considerably larger. Noble Lords who are concerned about that might, I think, feel assured that although the situation is by no means ideal, and may not have developed as much as one would wish to see it develop, nevertheless substantial improvement has been made.
With regard to quota, I deliberately touched upon that matter very lightly. I think the test of the level of quota may be put fairly simply; that it should be high enough to make it difficult for the exhibitors to fulfil it but not so high that

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non-fulfilment becomes a complete flouting of the law. It should be at about the level which has been reached at the present time in respect of the feature quota. If, as I hope, in a year or two the number of British feature films produced increases, then I hope the quota will be adjusted upwards proportionately to that increase. With regard to the supporting programmes, whereas the noble Lord, Lord Lucas, said that the number of defaults is fantastically high, I suggest that the level of the quota needs to be looked at there to find a point where it can be fulfilled with difficulty but where the default will not be too great. There are so many facets to this industry and so many points of interest
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in this debate that I should far strain the patience of your Lordships' House if I tried to cover them all. May I thank the noble Lords who have taken part in the debate and beg leave to withdraw my Motion?
Motion for Papers, by leave, withdrawn.

ESSEX COUNTY COUNCIL BILL
The CHAIRMAN OF COMMITTEES informed the House that the opposition to the Bill was withdrawn: the orders made on the 7th and 9th instant discharged, and Bill committed.
House adjourned at twenty-four minutes past seven o'clock.