THE FILM INDUSTRY

HL Deb 21 July 1952 vol 178 cc40-88

4.45 p.m.

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 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- 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 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- 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, 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 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 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- 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 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 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 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.

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 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.

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 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 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. 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 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 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 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 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 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 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- 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 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 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 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, 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 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 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- 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 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 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 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 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 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. 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: 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 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 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 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 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- 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 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 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.