Lords Sitting of 20 December 1956

Preamble
The House met at three of the clock, The LORD CHANCELLOR on the Woolsack.
Prayers

HOUSE REMOVALS AND PETROL RATION
3.5 p.m.
LORD PETHICK-LAWRENCE: My Lords, I beg to ask the Question which stands in my name on the Order Paper.
[The Question was as follows:
To ask Her Majesty's Government whether they are aware of the great hardship inflicted on persons who have to move to new houses, owing to the small rations of petrol that are being allowed to furniture-removal firms, and what steps they propose to take to remedy this hardship.]
THE CHANCELLOR OF THE DUCHY OF LANCASTER (THE EARL OF SELKIRK): My Lords, to save petrol at the present time we must ask all those who need transport to use the railways whenever possible. British Railways have special facilities for this type of work and it forms part of their normal services. If, however, the distance involved is very short, or if, for some reason, rail transport is impracticable, furniture removal firms can do the work, using their basic ration and any supplementary ration they may receive. My right honourable friend the Minister of Transport and Civil Aviation has issued general instructions to regional transport commissioners concerning supplementary rations, and these include an instruction that special consideration should be given to traffics which require the use of specially constructed vehicles and which cannot be transferred to other forms of transport.
LORD PETHICK-LAWRENCE: My Lords, while thanking the noble Earl for his Answer, do the Government not realise that, in cases of large masses of furniture, it is really impracticable to use the railways? Would it not be possible in certain cases, to grant to the householder a special permit which he could hand over to the furniture removal agency?
THE EARL OF SELKIRK: My Lords, I think that where the use of the railways is impracticable, there is no reason why the regional transport commissioners, on the instructions which have been issued, should not be in a position to give supplementary rations in certain cases, but I must not under-emphasise that in all cases where the traffic can conceivably be carried in a practical way by the railways, we have to give all encouragement that it should be so carried.
LORD LUCAS OF CHILWORTH: My Lords, may I ask the noble Earl whether the House is to take it that the sole arbiter as to whether a firm is to move its goods, either furniture or any other type of goods, by rail—whether it is inconvenient or not—will be the regional transport commissioner?
THE EARL OF SELKIRK: My Lords, the regional transport commissioner has been charged with the task of issuing supplementary rations in this matter. Whilst I hesitate to use the word "sole" in that matter, he is certainly the arbiter in the first place. I presume that the application might come from the operator of the service concerned.
LORD LUCAS OF CHILWORTH: My Lords, I am grateful to the noble Earl for his reply, because there is great confusion in the country over this matter. May I ask this further question? If the noble Earl says that, although the regional transport commissioner may be the first arbiter he is not the final one, who is the final one? Is there an appeal to the Minister and, if so, to which Minister—the Minister of Transport and Civil Aviation or the Minister of Fuel and Power?
THE EARL OF SELKIRK: My Lords, I do not think I can carry that matter any further at the present time. I said that I did not want to use the word "sole" arbiter, but the Commissioner will certainly give a decision in the first place. I am not prepared to say that, in certain circumstances, the Minister might not review his instructions, but at the present juncture the decision is made by the regional transport commissioners, and I am not in a position to say that there is any system of appeal existing now.
LORD LUCAS OF CHILWORTH: My Lords, this is the last day, until January 22,

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on which your Lordships' House, at least, will have the opportunity of asking for information, and during that time a lot can happen. Would the noble Earl give an assurance that either the Minister of Transport and Civil Aviation or the Minister of Fuel and Power will issue a statement as to which Ministry, after the regional transport commissioner has used his powers to decide whether certain goods have to go by rail or by road, an appeal is to be made, so that the hundreds and thousands of haulage people and industrialists throughout the country will know precisely what the procedure is?
THE EARL OF SELKIRK: My Lords, I will certainly consider the point. I should not like to carry it any further at the moment, but I appreciate the point the noble Lord has in mind.
LORD PETHICK-LAWRENCE: My Lords, if the noble Earl is letting my noble friend know which Minister is concerned, perhaps he will kindly let me know at the same time.

PUBLIC TRUSTEE (FEES) BILL [H.L.]
THE LORD CHANCELLOR (VISCOUNT KILMUIR): My Lords, I beg leave to introduce a Bill to make further provision as to the fees chargeable by the Public Trustee; and for purposes connected therewith. I beg to move that this Bill be now read a first time.
Moved, That the Bill be now read 1ª.—(The Lord Chancellor.)
On Question. Bill read 1ª; and to be printed.

SOLICITORS BILL [H.L.]
THE LORD CHANCELLOR: My Lords, I beg leave to introduce a Bill to consolidate the Solicitors Acts, 1932 to 1956, and certain other enactments relating to solicitors, with corrections and improvements made under the Consolidation of Enactments (Procedure) Act, 1949. I beg to move that this Bill be now read a first time.
Moved, That the Bill be now read 1ª— (The Lord Chancellor.)
On Question. Bill read 1ª; and to be printed.

BUSINESS OF THE HOUSE
LORD HAWKE: My Lords, I have been asked to inform your Lordships that the Motion standing in the name of the noble Earl, Lord Lucan, relating to the revised rules for television broadcasting, will not be moved by him to-day.

BRITISH EGG MARKETING SCHEME, 1956
THE JOINT PARLIAMENTARY SECRETARY, MINISTRY OF AGRICULTURE, FISHERIES AND FOOD (EARL ST. ALDWYN)THE JOINT PARLIAMENTARY SECRETARY, MINISTRY OF AGRICULTURE, FISHERIES AND FOOD (EARL ST. ALDWYN) rose to move, That the Draft Egg Marketing Scheme, 1956, reported from the Special Orders Committee on November 28 be approved. The noble Earl said: My Lords, this Scheme for the marketing of eggs in the United Kingdom has been promoted by the three farmers' unions and was submitted by them in October, 1955, under the Agricultural Marketing Acts. Since then it has been going through the procedures laid down by those Acts. During the very exhaustive public discussions which have been held recently, a great deal was said about the desirability of direct sales from farmers to consumers and from farmers to retailers. I accept the desirability of these two forms of sale, and the Scheme now allows for them. But the fact remains that by far the greater part of the 10,000 million eggs produced in this country every year have to be marketed: in other words, they have to be collected and taken, sometimes long distances, to where they are w anted. The majority of the eggs are not eaten in the locality in which they are produced.
If these eggs are to be marketed efficiently, it is necessary, first of all, to ensure at the start that they are fresh; secondly, that they are graded so that the buyers know what sort of egg they are buying, without having to look at every individual one. Thirdly, the eggs have to be packed, and, finally, transported. A major difficulty to be overcome is due to the inescapable fact that hens do not lay the same number of eggs every week.
LORD LUCAS OF CHILWORTH: Shame!
EARL ST. ALDWYN: We have not yet succeeded in controlling them to that extent. Supplies fluctuate widely; unfortunately, demands fluctuate as well, and equally unfortunately, not at the same time or in the same direction as the production. Somehow, these fluctuations have to be reconciled, and we believe that a central authority would have a useful part to play in this. However, that is not to say that everybody should be organised into one inflexible system, and I hope your Lordships will agree that this Scheme gives all the flexibility that is needed.
The Scheme's main feature is that it provides for the setting up of a Board with full trading powers. The Board will be able to require by far the great majority of eggs produced for the wholesale market to be sold by producers only to the Board. In practice, the Board will employ packing stations as its agents to collect the eggs and to grade, test, and stamp them. The Board will have no power to control wholesale or retail distribution, and normal competitive market forces will continue to rule. The demand for eggs is highly sensitive, and housewives have shown clearly that they just will not pay prices which they think are too high. So the Board will have to pay careful attention to their trading activities.
During the talks which we had with the farmers' unions in 1954, the Government agreed with them on the form which the guarantee arrangements would take if a Marketing Board with full trading powers were to be established under the Acts. These guarantee arrangements will not be part of the scheme, but if the scheme goes through we propose that they should be the subject of a financial agreement: between the Government and the Board. The guarantee under the Agriculture Act would be to the Board as representing the procedure. Similar arrangements to these are already operating for milk and wool. The general form of the guarantee would be a flat rate subsidy on all eggs of first quality passing through packing stations. This would be determined at the Annual Review. The prices to be paid to producers would be for the Board to decide subject to the financial agreement between the Government and the Board. There would also be, however, a profit and loss sharing
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arrangement which would give the Board an incentive to efficiency.
We have been anxious to ensure that this scheme should be both workable and widely acceptable. Like the commissioner who conducted the public inquiry into the scheme, we thought that in the form in which it was submitted it was rather too restrictive, particularly as regards sales to consumers arid to retail shops. We have therefore made a number of important changes which I think have gone a long way towards meeting the great weight of the Objections which were put forward at the inquiry.
We have modified the scheme so as to raise the qualification for exemption from 25 birds to 50 birds. This will exclude most of the backyard and domestic poultry keepers who are more concerned with supplying their own or their neighbours' households.
All producers who want to sell direct to consumers will be entitled to a producer's "A" licence, which will enable them to do so. They will not have to grade, test, or stamp their eggs. A producer who wants to sell direct to retail shops will be able to get a producer's "B" licence, provided that he honours the conditions which may be attached. No condition is to be attached requiring the eggs to be graded and tested, but the producer can be required to mark them so as to identify them as his eggs.
I know that there have been some who object to this scheme in principle. They feel that it is wrong for producers to be given statutory powers of this kind they fear that the Board will use its powers to hold other sections of the community to ransom. But that is a criticism rot of this Scheme in particular, but of the Agricultural Marketing Acts in general. By those Acts Parliament has giver, producers the right to promote this particular form of co-operative enterprise, which is designed to enable producers to help themselves to improve their efficiency in production and marketing. I see no reason why they should not be allowed to exercise that right.
The Acts themselves recognise the possibility that sectional interests may conflict, and that is why there are a number of checks and balances to safeguard the interests likely to be affected—such as the consumers of eggs, trade

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interests, the producers themselves, and the public interest generally.
My Lords, as I see it, this Scheme represents a landmark in the field of agricultural co-operation. I believe the fact that it has been put forward by the producers shows that they are very much alive to the vital need to help themselves to improve their efficiency. The Government have considered the Scheme in all its aspects with great care, and we are sure that, as modified, it should lead to greater efficiency in the production and marketing of eggs. We are also sure that the Scheme maintains a fair balance between all the interests concerned. Egg producers themselves have yet to have their final say on the Scheme at the initial poll, which will be held if your Lordships approve the Scheme. Only when that poll has been held shall we know whether the Scheme in its present form is generally acceptable to the producers. I myself am quite sure that, if and when it comes into operation, the Board will be able to achieve much for this very important section of our home agriculture and for the consumers and others who depend upon it for their supplies. I beg to move.
Moved, That the Draft Egg Marketing Scheme, 1956, reported from the Special Orders Committee on the 28th of November, be approved.—(Earl St. Aldwyn.)
3.13 p.m.
THE EARL OF LISTOWEL: My Lords, we are all grateful to the noble Earl for his very clear exposition of an extremely long and complicated Scheme, which is far more difficult to understand than the average Bill. I shall certainly try to follow his example of brevity. I think that this particular marketing scheme for eggs deserves specially careful attention from your Lordships—perhaps even more careful attention than other marketing schemes we have considered—on account of the exceptionally large number of objections. Most of the 702 objections (the number is given in the Report) were lodged by the Society of Objectors to Compulsory Egg Marketing—commonly known by the curiously appropriate abbreviation "S.O.C.E.M." These objections were all dealt with, at great length and very patiently, at the public inquiry,
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and the answers are given in Mr. Baker's quite admirable, wise and valuable Report. I am sure that the noble Earl and everyone else all appreciate this admirable and excellent Report.
It seems to me that there are two classes of objectors to the Scheme. One of them—I am not sure whether both—was certainly mentioned by the noble Earl. There were the laissez faire economists and the Liberal Party, who are still opposed, root and branch, in principle to interference with the free play of supply and demand. No doubt we shall soon hear from the noble Lord, Lord Grantchester, on these somewhat doctrinal objections to the present Scheme. There were also a second class of objectors—namely, the large middlemen, the co-operative societies and the multiple grocers who, not unnaturally, would prefer to be able to bargain with the producers.
Both these classes of objectors, in spite of their different approach to the Scheme, were opposed, in the main, to two features of it. They disliked the marketing monopoly of the producers' Board, which they thought would keep up the price of eggs against the consumers. The noble Lord referred to this as "holding the consumer up to ransom." They equally disliked the compulsion on egg producers to sell their eggs to packing stations once the Scheme has been adopted. They regard this as an infringement of the freedom of the producer to sell his eggs where he likes. I like this Scheme very much—I am not going to disguise my view about it.
The peculiar merits of the Scheme that Her Majesty's Government are now putting forward, with the assent of the promoters, is that it has taken all these objections fully into account. It has been modified in the light of the objections, and makes important alterations in the original Scheme so as to carry out and carry further the recommendations of Mr. Baker's Report. The present Scheme is a compromise between free enterprise and Government control. It gives the producers, as well as the consumers, as much freedom of choice, and submits them to as little compulsion—and we all dislike compulsion—as is compatible with any plan for the organised marketing of eggs.

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For instance, the exemption which the noble Earl referred to, of poultry keepers with less than fifty birds, will mean, if I am right, that more than half of the total number of poultry keepers in this country (I think they amount to between 700,000 and 1 million) will be able to sell their eggs to their neighbours, if they so desire. As the noble Earl also pointed out, there is this additional freedom for the producer: that poultry keepers will be allowed to sell by licence to retailers in their neighbourhood. It is true, as the objectors have said, that if this Scheme is approved by two-thirds of the producers the rest will have to come in whether they like it or not; it becomes compulsory. But surely, in a democracy, it is not altogether unreasonable that a minority should conform to the decision of the majority. It should not be forgotten, in this context that a minority of egg producers could completely wreck this Scheme by selling to consumers when eggs are scarce and expensive and to the packing stations when they are plentiful and cheap.
There are, in fact, only two alternatives for the marketing of eggs. One is a return to the old pre-war free market, in which people sell at the highest price they can get and buy at the lowest. This "free-for-all" was objected to most strongly, even by those who do not like this Scheme at all. No one wanted a return to the pre-war system of putting eggs on the market. Even the most violent objectors to the compulsory marketing did not want to go back to that chaos of pre-war marketing. But that would happen, I am sure, if we had a voluntary marketing scheme, because the poultry keepers who refused to join the voluntary Scheme would very soon break the packing stations. The other alternative, the one put forward by the Government, is a compulsory marketing scheme. We had such a scheme during the war under the Ministry of Food. The present Scheme, under the proposed Egg Marketing Board, will give much more freedom to producers and consumers than they had during the war. I strongly commend this Scheme to your Lordships, and I very much hope that when the producers are asked to express their views about it, when they vote on it, as they should, they will also approve it, so that the Board can be set up and the Scheme got under way.
3.25 p.m.
LORD GRANTCHESTER: My Lords, I will endeavour to be as brief as the previous speakers. At the risk of being called "doctrinaire" by the noble Earl who has just sat down, and I expect out-moded in the best Socialist terminology of modern Conservatism by the noble Earl who is to reply, I cannot refrain from making a protest against this Order. And I think the protest is more than justified by the admission by the commissioner who conducted the public inquiry that "the case in favour of competition was overwhelming."
Orderly marketing is an admirable conception, within limits, and subject to safeguards. Her Majesty's Government have recently taken strong measures to prevent manufacturers from combining together for the orderly marketing of their products. The Government have made manufacturers' private courts illegal; their private courts of enforcement are now illegal. I would ask on what grounds can the same Govern vent come forward with a Scheme like this, practically constituting a producers' monopoly with coercive powers which are exercisable, if desired, apparently in secret, greatly in excess of any powers given to the courts for similar offences, and with powers to the inspectors of the Board which are greatly in excess of those given to the police, as they can go on their inspections without a warrant? I ask Her Majesty's Government—I am sure it will not be any good—to take this Order back, and to study it in the light of their own expressed views when dealing with manufacturers.
Vast sums are to be collected by this new Board and, as with some other Boards, expensive posts will be created. And large sums, no doubt, will be spent on advertising. I suppose; on ways of preparing egg dishes, with the object of selling or trying to see more eggs. My Lords, let those who will spend their money like this, but none should be compelled to do so, compelled to contribute to such expenditure; and least of all the taxpayer. In this connection, the accounts of the Potato Marketing Board to the June 30, 1956, are perhaps significant. I have managed to get a copy. These reports and accounts are published by the Boards, and so attention is not drawn to them in your Lordships' House, which I think is a pity. These

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accounts to June 30, 1956, by the Potato Marketing Board show that producers contributed something like £687,000 and the taxpayer, via the contribution from the Ministry, £458,000. That means a total which the Board has had to play with of £1,145,000. Of this sum, about £500,000 was spent on administration.
This is not the end of the story, for there is a little note in the accounts about a contingent liability under which the taxpayer is responsible for 95 per cent. of a trading loss suffered by the Potato Marketing Board, which is estimated to work out at something like £450,000. Perhaps the Minister, when he replies, will be able to give us some idea of what this Scheme is likely to cost the taxpayer? He spoke of concluding a financial agreement. Could we have a little information on what the financial agreement will be and under what sort of liability the taxpayer is going to be?
Even with all these powers I understand that the promoters are not very partial to the Scheme. They think that it is not sufficiently watertight, but they are willing to accept in the hope that they can amend it at a later date. Finally, if Her Majesty's Government do insist on going on with this Scheme, may we observe that this is an Egg Marketing Scheme and express the hope, for the guidance of the Board's inspectors and "snoopers." that "domestic fowls," as mentioned in the Order, will be interpreted only as hens and will not include cocks and cockerels, and that "domestic ducks" will be interpreted strictly as ducks and will not include drakes.
3.30 p.m.
LORD WISE: My Lords, with the permission of the House I wish to say a few words about this particular Scheme. Having advocated properly planned and orderly marketing in agriculture for the last thirty years or more, I think it right for me to welcome the Scheme in principle, and to express the hope that, at long last we are to have some orderly marketing system in connection not only with egg production but also with other activities in agriculture. There are just a few points upon which I should like to ask the noble Earl, Lord St. Aldwyn, questions. It probably will not be necessary to amend this particular Scheme in
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respect of the matters which I am going to mention, but in future, when any later representations or later arrangements with regard to the Scheme are under consideration, perhaps what we say in your Lordships' House now will be taken into consideration.
In the first place, I see that in the stencilled report by the Minister of Agriculture, Fisheries and Food and some of his colleagues it is stated that the organisations concerned in the submission of the Scheme were substantially representative of the producers of eggs. I notice that in the formation of this Scheme the only organisations which were consulted were the farmers' unions. Now the farmers' unions are not representative of quite half of the producers of eggs in this country, and I should have thought that there must have been some poultry keepers' organisations which would have been able to speak or to give information to the Minister in regard to this Scheme. Members of the farmers' unions who produce eggs number 223,000, whereas a total of 500,000 producers of eggs come under the Scheme.
With regard to the Scheme itself, I am not quite happy as to the composition of the Board. It is to be composed entirely of producers from various regions, special membership, and members nominated by the Minister. I should have preferred that some consumer interest were represented in the membership of the Board. The Board's agents who are running the packing stations might also be considered for membership, and the distributors. I believe that these producer marketing boards are better if their membership is not concerned solely with the producing end of the business, but includes also representatives of those who either distribute or sell the product of the producers. On the question of special membership, I note that the special members are elected by large producers of eggs. It seems to me that there is no possibility, either in regard to the regional members or the special members of the Board, for a small producer to be nominated and elected to the Board. I think that is a mistake. If special membership of the Board is provided for large producers. I suggest that one place, at any rate,

1325
might be left for representation of the small producers.
Again, I note that there are fourteen regions, and that the regional members will be elected by producers within the regions. Have these regions yet been apportioned? Does the Minister know exactly the boundaries of these fourteen regions, or will that be a matter to be determined later? In regard to the licences to sell eggs, can the present sellers of eggs and the present owners of packing stations be certain that they will be licensed? Will the new Board give an undertaking that existing sellers of eggs will receive licences? Further, will the producers of eggs who are now supporting particular packing stations still have the right to send their eggs to those same packing stations? To enlarge, for a moment, upon that subject, I may say that I have at the back of my mind the fact that there are certain packing stations run by the Co-operative Wholesale Society, and no doubt those stations are used by their members for the sale of their eggs. My doubt is whether or not the co-operative packing stations will still be able not only to collect eggs but to distribute eggs to their shops or sell them as they do in existing circumstances. With respect to "A" and "B" licences in the Scheme before us, it seems to me that the procedure is highly complicated. It is difficult to understand exactly how one obtains "A" licences and "B" licences, or whether one is entitled to have such licences. Possibly in a later scheme there might be simplification in some way or another.
My two final questions are these. First, as to the disciplinary committee. I am not at all in favour of a very strict disciplinary committee in connection with any marketing board. In years gone by, I used to send my milk to the Milk Marketing Board, and I. received month by month their journals. From a study of these, it appeared to me that small penalties which were imposed on producers month by month were in many cases most unnecessary and must have been very irksome indeed. I hope that, whatever disciplinary committee is set up by the Board, the small and trifling troubles which arise between producers and the board will not result in the imposition of heavy penalties. There is one point in this Scheme which arises in connection with paragraph 85. That deals with the question of the arbitrator and
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the award. From that paragraph, as it is published at the moment, it seems to me that the Board assume that if they go to arbitration they will always be right and that the award will be granted in their favour. To me, it seems that there is no provision whatever to protect the producer who may win his arbitration in regard to his costs or otherwise. I think, therefore, that some new clause should be drawn up, or some new arrangement of some kind should be made and published, to show to the producer that if he goes to arbitration it is not inevitable that he will lose the award and be subject to costs. In general, I support the Scheme and wish it a happy life in future. I hope that it may benefit all producers of eggs and that by the carrying out of this scheme and by the protection which producers will receive under it, we shall be able to produce all the eggs we require.
3.40 p.m.
LORD REA: My Lords. I had not intended to address your Lordships on this matter but I am stung to my feet, if I may use that expression, by the epithet used by the noble Earl, Lord Listowel, to describe the opposition from this quarter of the House. The noble Earl spoke of our policy as being "doctrinal". If to be liberal is to be doctrinal we accept the epithet with pleasure, but I cannot help feeling that this measure is definitely illiberal, and I rise for one moment to underline, if I may, the points put by my noble friend Lord Grantchester.
In the first place, the very essence of the Scheme seems to contrast totally with the principle of the Monopolies Act which the present Government have put forward. It is indeed a monopoly, and I am rather surprised that noble Lords on my left should be backing this measure so wholeheartedly. If I may allude to the Potato Marketing scheme, to which my noble friend Lord Grantchester referred, it is, if I may say so, most relevant. If anybody—for instance one of your Lordships—has a small amount of land, he is perfectly at liberty to plant potatoes and to grow them and lift them; but if he tries to sell them in the open market, he is committing an offence. That is exactly similar to what is being done now by the Egg Marketing Scheme. I personally resent not being able to grow and sell potatoes if I wish, whether in large or in small quantities, and I equally

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resent not only the fact that the small poultry keeper is arbitrarily stopped from selling his or her eggs if he or she keeps not more than twenty-nine birds, including cocks, but also the fact that one cannot go to a farm gate and say, "Please can I have three eggs?" The farmer might reply, "Had you come yesterday I would have given you them with pleasure, because then I had only forty-nine birds including cocks, but to-day I have fifty-one including cocks"—or "not including cocks"—"so you cannot have any eggs." I think that that is inherently contrary to liberalism and liberty, and for that perfectly commonsense reason we on these Benches object to the measure which is before your Lordships.
3.43 p.m.
EARL ST. ALDWYN: My Lords, I am grateful for the support I have had from noble Lords opposite. I cannot pretend that I anticipated that I should get much support from noble Lords who sit immediately on the left of the Woolsack. The noble Lords who spoke raised a number of points and I will try to deal with as many of them as I can. If I may say so, the noble Lord, Lord Rea, does not appear to have listened to what I said in my opening remarks. I pointed out that we had raised the limit from 25 to 50.
LORD REA: My Lords, may I apologise for a slip of the tongue; when I said 29 I meant 49.
EARL ST. ALDWYN: The producer who wishes to sell retail can apply for an "A" licence, as I said in my opening remarks. He will receive this licence automatically and will be able to sell retail to anybody who comes to him, and also to deliver direct to consumers if he wishes to do so. The noble Lord, Lord Grantchester, raised the question of the disciplinary committee. I would point out that this committee will meet in public, unless there are special reasons, and there is the right of appeal from their decisions to the arbitrator. Perhaps I can also deal with the point of the noble Lord, Lord Wise, here, and add
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that the arbitrator will determine what the penalty should be. He also has the right to award costs.
The noble Lord, Lord Wise, asked me about existing packing stations. The Board are under an obligation to employ as agents all those who can show that they can do the job of grading and packing eggs efficiently. Packers can go to arbitration if the Board do not agree to employ them. So I can give the noble Lord that assurance. He also asked me about the regions under the scheme. If the noble Lord will turn to the second Schedule he will find the regions set out there. On the question of the membership of the Board, I would say that it is now necessary to have only ten producers to nominate a candidate for election to the Board. The noble Lord, Lord Grantchester, asked about matters of finance. I would point out to the noble Lord that the financial agreement will be coming up for debate in your Lordships' House when an order is made under the Agriculture Act authorising the payment of money for the guarantee arrangements. Perhaps we may discuss questions of finance more fully then. I think I have dealt with most of the points that have been raised, and I thank noble Lords opposite for their assistance.
LORD GRANTCHESTER: My Lords, may I ask whether the noble Earl is satisfied that these drastic powers are really necessary, and whether it is not possible to modify the powers given to inspectors and to these private courts, which are in excess of those given to the normal courts of this country?
EARL ST. ALDWYN: My Lords, these powers are similar to those given under all the schemes made under the Marketing Acts. Inspectors will have right of entry only in the case of large-scale producers who come under the scheme; they will not have the right to enter the property of small producers. In effect, it will only be where they are satisfied that there has been some serious infringement that inspection will be likely to take place at all. We are perfectly satisfied that these powers are reasonable.
On Question, Motion agreed to.

COASTAL FLOODING (ACREAGE PAYMENTS) SCHEME, 1957
EARL ST. ALDWYN: My Lords, I beg to move that this Order be approved.
Moved, That the Draft Coastal Flooding (Acreage Payments) Scheme, 1957, reported from the Special Orders Committee on the 12th December, be approved. —(Earl St. Aldwyn.)
THE EARL OF LISTOWEL: My Lords, I do not propose to comment on the scheme, which is uncontroversial, but I should like to ask the noble Earl one question. Can he say how soon the land that was flooded in the winter of 1953 will be completely rehabilitated?
EARL ST. ALDWYN: My Lords, we anticipate that by the end of the period of this scheme practically all of this land will have been rehabilitated. Maybe a few acres will be left, and they will be assisted, if necessary, under the marginal production scheme. This is the last of the schemes under the present Bill.
THE EARL OF LISTOWEL: My Lords, I am obliged to the noble Earl.
On Question, Motion agreed to.

POLICE PENSIONS (No. 3) REGULATIONS, 1956
3.48 p.m.
THE JOINT PARLIAMENTARY UNDER-SECRETARY OF STATE FOR THE HOME DEPARTMENT (LORD MANCROFT)THE JOINT PARLIAMENTARY UNDER-SECRETARY OF STATE FOR THE HOME DEPARTMENT (LORD MANCROFT) rose to move, That the Draft Police Pensions (No. 3) Regulations, 1956, reported from the Special Orders Committee on Wednesday, the 12th instant, be approved. The noble Lord said: My Lords, these Regulations have been prepared to take account of changes in the National Insurance Scheme introduced by the Family Allowances and National Insurance Act. 1956. Since July. 1948, the widows and children of certain police officers who are not eligible to receive the benefits of the National Insurance Scheme direct have been able to qualify for equivalent awards under the Police Pensions Scheme. The rates of these awards, and the conditions on which they can be granted, are related to those prescribed for the corresponding benefits
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under the National Insurance scheme itself.
As your Lordships will recall, the Family Allowances and National Insurance Act, 1956, has increased the rates of allowance in respect of children, and has extended the conditions on which certain benefits are payable. The present Regulations take account of these improvements. I should perhaps add that my right honourable friend the Secretary of State for the Home Department has consulted the Police Council in accordance with the provisions of the Police Pensions Act, and the Council have endorsed the proposed changes. As have explained, the purpose of these Regulations is to assist the widows and children of deceased police officers, and I commend them to the House. I beg to moved.
Moved, That the Draft Police Pensions (No. 3) Regulations, 1956, reported from the Special Orders Committee on Wednesday, the 12th instant, be approved.—(Lord Mancroft.)
On Question, Motion agreed to.

POLICE PENSIONS (SCOTLAND) (No. 3) REGULATIONS, 1956
THE MINISTER OF STATE, SCOTTISH OFFICE (LORD STRATHCLYDE): My Lords, I rise to move that the Police Pensions (Scotland) (No. 3) Regulations, 1956, a copy of which was laid before your Lordships on November 29, be approved. These draft Regulations are in precisely similar terms to those which have just been described by my noble friend the Under-Secretary of State for the Home Department, and their effect is identical. There are, therefore, no special Scottish points arising from them to which the attention of your Lordships should be drawn. The form of the Regulations has been approved by the Statutory Scottish Police Council. I beg to move.
Moved, That the Draft Police Pensions (Scotland) (No. 3) Regulations, 1956, reported from the Special Orders Committee on Wednesday, the 12th instant, be approved.—(Lord Strathclyde.)
On Question, Motion agreed to.

SUNDAY ENTERTAINMENTS ACT, 1932
LORD MANCROFT: My Lords, this Order is in the usual form and of the usual content, and there is nothing in it to which I need draw your Lordships' attention. I beg to move.
Moved, That the Order made by the Secretary of State for the Home Department, for extending section one of the Sunday Entertainments Act, 1932, to the Urban District of Milford Haven, be approved.—(Lord Mancroft.)
On Question, Motion agreed to.

CINEMATOGRAPH FILMS BILL [H.L.]
3.52 p.m.
Order of the Day for the Second Reading read.
LORD MANCROFT: My Lords, it is some time now since we last discussed the film industry in your Lordships' House and certain noble Lords opposite have suggested that it might be desirable to extend the scope of the debate this afternoon to cover a little wider field than might normally be the case in discussing the Cinematograph Films Bill itself. I think this will be an agreeable course to your Lordships. In any case, it is almost impossible to discuss this Bill without covering the fortunes or misfortunes of the film industry. Therefore I will take advantage of the suggestion which the noble Lord, Lord Lucas of Chilworth, and his friends have made, and open the debate by covering a little wider ground than I would normally do in introducing such a Bill.
The film production industry, despite the ever-present competition from overseas and the increased competition from other forms of entertainment in this country, is, I am glad to say, pursuing a fairly steady course, steadied, of course, by the supports which have been available to it. In this respect, we meet perhaps in a slightly easier atmosphere than when we last discussed films in your Lordships' House. We are not met to discuss a film production crisis, but how best to maintain and strengthen those supports which have proved their worth and enabled the industry to cope with the difficulties which beset it and to enable
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it to face the future with confidence. Complete confidence, of course, can be enjoyed only by an industry which stands completely on its own feet, and the Government hope that over the next decade the industry will achieve this.
Let me begin by discussing production and distribution. In an industry which has the nature of a creative art and in which the production of a feature film takes a full year, it is not to be expected that the flow of production would be as steady as in some other industries where the output is governed by more mechanical considerations. None the less, the number of British films registered in any particular year remains something of a yardstick by which to measure the health of production. The number of feature-length films—that is to say, major films registered for the year ended September 30, 1956, is 82, and that is very close to the average for the past five years, which is, I believe, about 84. That figure should be borne in mind in comparison with the equivalent American figure, which is more like 250.
Another modestly encouraging feature of the situation is that the National Film Finance Corporation was able to record for the year to March 31, 1956, a modest surplus of about £80,000. I do not attach too much significance to this, as the fluctuation in the fortunes of those who finance films are both spectacular and notorious; but, at least, it does not suggest a deteriorating situation. The Corporation, your Lordships will remember, was restricted in its lending powers to companies who were not able to obtain adequate financial facilities on reasonable terms elsewhere, and it is significant that, at a time when, as I say, film production is proceeding on a fairly steady course, the number of films which have been partially financed by the Corporation has shown a marked reduction. But this does not mean that the work of the Corporation has become superfluous. Film production is by no means on so secure a footing as that, and the Corporation recorded in its last report that of the 33 major films released in 1955, which it had helped to finance, the latest revenue estimates indicated that only 15 were likely to be profitable, even with the aid of the Eady levy. Your Lordships will remember that the Eady levy is the present trade-operated levy on the

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number of seats sold—but more of that anon. Without the support of the Eady levy, only 7 films were likely to be profitable. It is clear that, so long as that state of affairs continues, the industry is not able to rely on attracting from the normal financial sources the capital it requires to maintain production.
I would now say a word or two about the British Film Production Fund, more familiarly known as the Eady levy. The Eady levy plays a big part in enabling films to recover their cost. At present, some 20 per cent. of the film producers' revenues comes from this fund, and it is not surprising, therefore, that the Bill which we are considering this afternoon provides statutory form for a device which, in its trade-operated form, has proved so valuable a pillar of production. Without the third leg of the stool on which film production rests—and I refer, of course, to the quota leg—production would he most precariously balanced. Chronologically, this was the first leg of the stool; tit was, I believe, introduced by the Act of 1927. This method of protecting the domestic market has now been recognised in international agreements as the proper method for the film industry.
While there will be agreement on all sides that the quota leg should be retained as a guarantee that British films will receive a fair showing, I am glad to say that experience indicates that British films are taking their place, not only here, but overseas, as the equal of any in the world. Your Lordships will have seen that the film, Reach for the Sky, which is based on Douglas Bader's adventures, has topped the box office poll in the United Kingdom and is earning prestige for British films round the world, as well as Valuable foreign currency. Renewed efforts are being made to enlarge our foreign markets with some success. Your Lordships will welcome the news that producers are looking to their own efforts to an increasing degree to maintain their financial stability, rather than relying on supports at home. The enterprise showed by the J. Arthur Rank Organisation in North America is particularly welcome in this connection. The number of exhibitors who, with or without due cause, have failed to show the prescribed quotas of British films has dropped rapidly during the past few years, and this, too, is an
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indication that British films can fully hold their own.
Perhaps during the last two years public attention has been directed less towards the plight of producers and more towards that of exhibitors. Public references to the closure of cinemas have been more numerous, and the reasons for these have been variously ascribed to a change in the habits of cinema patrons, the competition from T.V. programmes, the scarcity of good films and, your Lordships will not be surprised to hear, the incidence of entertainments duty. In many localities, the curious phenomenon has been observed of what I may describe as deflationary spirals caused by too many cinema seats chasing too few cinema patrols. Perhaps this is even an example of economic phenomena—a disinflationary parabola.
The number of cinema seats per 1,000 inhabitants in the United Kingdom is about eighty as compared with only fifty-five in America, sixty-two in France and seventy-three in Italy. We all know places in which there seem to he competing cinemas on every corner, and it is little wonder that in times of declining cinema attendance some of these must of necessity close their doors. But it would be quite wrong, I think, to see in this a calamitous situation. Cinema attendances at 1,100 million a year are still much higher than they were pre-war, when the number of cinemas was even larger—4,900 then, as against 4,400 today and more visits to the cinema are paid per head of the population in this country than anywhere else in the world.
It was in this climate in which producers, whilst optimistic, were concerned about the continuation of existing arrangements, and exhibitors were anxious about falling attendance, that the Government invited earlier this year the views of the various sections of the film industry on future film policy. Your Lordships will not, I imagine, be surprised to know that the consensus of opinion expressed to the Board of Trade from many quarters was that the three measures of support I have described already, and which are dealt with in the Bill before us this afternoon, should continue to be made available to film producers.
Let me turn to Part 1, the provisions relating to the exhibitors' levy. I think I am safe in taking it for granted that for

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prestige, balance of payments and social reasons, we all consider it important that our cinema screens should not be monopolised by foreign products. But the question that presents itself is why should producers be given the help they need by means of a statutory levy on exhibitors. It has been suggested that a more convenient and equitable method of giving the producers more assistance would be by way of a straight subsidy. This would certainly have administrative advantages, but noble Lords, certainly on this side of the House, and, I think, the public at large, would, I believe, give a very old-fashioned look at a subsidy for film producers. Certainly, many other candidates and aspirants for subsidy would find it hard to understand how an industry which could provide all the glitter and glamour, the swimming baths and the mink bathing suits, that have conic to be associated with the film industry, could be more worthy of help than they themselves.
On the other hand, the Eady levy offered an alternative solution which was not open to the objections of a subsidy. Here was a scheme, operated with considerable success by the trade for a number of years, and which had proved well adapted to the peculiarities of the industry. I know it has been said that to take money from retailers and give it to producers might form an undesirable precedent which would spread to other industries. To this, I can only turn upon the film industry its own well known slogan, "There's no business like show business"—and it is a very remarkable business indeed. This scheme, then is not an innovation or some new imposition on the exhibitors, but rather the statutory form of a well-tried expedient.
Turning now to the details of the Bill, your Lordships will observe that it is an enabling measure designed to give flexibility to the methods of collection and distribution of the levy in order to meet the changing needs of the industry. The regulations are, of course, subject to Affirmative Resolution procedure, which will safeguard the interests of all concerned. Clause 2 provides that in the first year the levy shall be fixed at a rate estimated to yield £3¾million, and subsequently not less than £2 million nor more than £5 million per year. This, I appreciate, is a higher figure than under
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the voluntary scheme, but not much higher than the one-time target figure of £3½ million under that scheme. I do not pretend for one moment that the figure of £.3¾ million is a precise calculation. No one can provide a standard measurement of what a film should cost, not even expert noble Lords like the two who are to follow me in this debate. We all know examples of films that have been made on a shoe string and have proved world beaters, and we all know films that have cost £1 million or 1 million dollars and proved cataclysmic flops. Certainly there is no reason why, if the film is a failure, the Government should guarantee to film producers the return of their costs. The figure represents the amount by which Her Majesty's Government consider it would be sensible to increase the revenues of producers to maintain production at a reasonable rate. The figures, based on the experience of the National Film Finance Corporation, to which I have already referred, show the financial difficulties which still exist.
Now we come to a very important point. Exhibitors, naturally, are asking how they are to be expected to pay £3¾ million when, even with the levy at its present lower rate, some cinemas are having to close their doors. This, not surprisingly, has led to renewed references to the burdens of entertainments duty. Your Lordships will, I hope, not expect me to say much on a taxation point of this kind, but I can and do say that the provisions of the Cinematograph Films Bill are amongst the various factors which are being taken into consideration in the review of entertainments duty which has been promised by Her Majesty's Government and which is now in active progress.
LORD LUCAS OF CHILWORTH: My Lords, would the noble Lord repeat his last sentence about entertainments duty as I could not quite understand it?
LORD MANCROFT: What I was saying to the noble Lord was that I hoped he would not press me too hard on a pure taxation point of this kind. What I was saying was that the Government have made a promise that they will review the entertainments duty, and they will take this particular grievance into consideration when carrying out the review which has been promised and which is, in fact, actually in progress.
LORD LUCAS OF CHILWORTH: I am grateful to the noble Lord.
LORD MANCROFT: My Lords, I should like also to reassure your Lordships that, under the regulations to be made in accordance with Clause 2 of the Bill, there will be provision to exempt exhibitors, in suitable cases, from the burden of the levy.
Turning now to outgoing payments, the intention is to depart as little as possible from the present arrangements, whereby the fund is distributed in proportion to the box office success of the films concerned in the, home market. This is administratively simple. It has been worked already under the voluntary scheme. Few of your Lordships will quarrel with the general concept that the levy should go to support the successful producer, rather than the less successful. Payments will, of course, be made only to British films, tile definition of which is set out in the Act of 1938, which, I expect, is familiar to most of your Lordships. I feel sure that there will be a general welcome for the Government's decision to continue payments out of the levy to the Children's Film Foundation. These were made with the approval of the exhibitors, and the Children's Film Foundation was an experiment which has achieved, and rightly so, I think, wide acclaim.
Your Lordships will expect me to say a word about the new British Film Fund Agency. This is to be a small independent body, without any direct interest in the film industry. It has been suggested, I know, that the trade should be represented on the Agency, but I think your Lordships will recognise that the Agency is not a policy-making body, and it will be to the Board of Trade, who will make the regulations, that the film industry should make their representations.
I must say a word about the extension of the powers of the National Film Finance Corporation. Clause 10 of the Bill not only extends the life of the Corporation for ten years, but will enable the Corporation to assist any persons who have reasonable expectation of being able to produce or distribute cinematograph films on a commercially successful basis, and not merely those who cannot get finance elsewhere. This will, I
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hope, commend itself to your Lordships as a measure calculated to assist the Corporation to avoid further erosion of their loan capital which, your Lordships will note, there is no intention to increase. It should also go a little way to help the Corporation to shoulder the obligation now explicitly laid upon them in Clause 11, to operate in such a way as appears to them best calculated to avoid losses.
The power sought in Clause 12 of the Bill to dispose of the Corporation to a person willing and able to provide similar facilities to those of the Corporation may possibly have caught your Lordships' eyes. I am able to assure the House that there are no immediate plans in mind for the disposal of the Corporation. It was, nevertheless, thought prudent to make provision for the possibility than with the aid of the three measures proposed in the Bill, film production might improve to the point where financing film production would become a fully commercial proposition. Should that stage be reached, there would be no justification for leaving public funds committed in this way.
Part III of the Bill deals with the extension of the quota provisions of the 1948 Act. I do not doubt that the proposal to continue the quota protection for British film production for a further ten years will command general approval, though I understand that the film industry is disappointed that no immediate opportunity is to be afforded to overhaul the 1948 Act. I believe that I shall find amongst your Lordships this afternoon a. ready acceptance of the broad principle that the British film industry will continue for sonic time to need the sure support which this Bill will give. But one thing is certain: no amount of Government aid will turn bad films into good ones. The long-term salvation for producer and exhibitor alike is that more good films should be available—and by "good films" I mean better entertainment on ordinary commercial terms. I commend this Bill to your Lordships as a sensible, straightforward measure which offers a reasonable method of putting British film producers in the financial position to make the sort of films which will bring back the cash customers, in their old numbers and with their old

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enthusiasm. I beg to move that this Bill be read a second time.
Moved, That the Bill be now read 2ª.—(Lord Mancroft.)
4.12 p.m.
LORD LUCAS OF CHILWORTH: My Lords, I feel sure that all your Lordships are grateful to the noble Lord for the comprehensive review he has given us of the provisions of this Bill. Before I come to the direct provisions of the Bill, upon which I shall have some criticism to make, I should like to take the opportunity of following his lead, and of making some general observations on the British film industry, because in my view the British film industry to-day is in a far healthier state than it has been for many years. In fairness, I think that must be said to be due to the influence of the legislation which was passed by a Labour Government and which, in point of fact, is being followed in this Bill by the present Government, to their credit.
One of the reasons for the health of the British film industry is that it has gone in for quality and not quantity. I think—and I agree with the noble Lord—that what I call "well-acted" British films of good stories are as good as any in this world, and better than most. That is because we got away from that terrible era of the British film industry which the noble Lord will remember, the era of the "quota quickie" when any rubbish was good enough so long as it could scramble into the quota. To-day, the British film industry, in good pictures, leads the world. That was brought home to me during a recent visit that I paid to America, when I had the opportunity of discussing films in Hollywood with some of the foremost film producers there. I am delighted to think that the British film industry has not followed the unfortunate course of the American film industry, although the British film industry has had the same conditions—it has had to fight a very powerful competitor in television.
In my view, where the American industry went wrong and the British industry were right is that the American film industry attempted to meet vulgarity with vulgarity. I consider that some of the television programmes presented as entertainment are beneath contempt and consideration, whereas the British film
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industry sought to meet their competition with quality. There is a lot in this, because to-day the noble Lord has mentioned the cinema attendances. The British public are discerning; they do not just "go to the pictures"; they go to see a picture. And unless it is a good picture they will not go. That is one great mark in favour of the ultimate discrimination of the British public. The had entertainment that the British public will put up with for a certain length of time, if it is cheap, has always surprised me. To-day, they sit with their eyes glued to a television screen absorbing a mass of advertising with a nonsense background just because they imagine that it is cheap. Thank goodness! that phase will soon go, and I think there is great advantage going to come to the British cinema industry, if only it will pursue its present policy.
I should like to say one thing which your Lordships may think is a slight digression. I feel that the British film industry needs to do something—I have no "bright idea" to give it. One of the sad things is that it has not attracted what I may call first-class script-writers in sufficient number. In my view, stories are the basis of the British film industry's future success. I remember, when I was in America, talking to the chief production executive of Paramount Studios in Hollywood. I had lunch with him there. He said to me, "Do you know, for the first time in our history we are not at the present time making a picture?" There was not one. He said, "The reason is that we cannot get the good scriptwriters: there are not the stories worth the huge amount of capital that we have to find." From then onwards, I could see that the lack of good stories and the desperate efforts made by some of the American producers to produce films have led to a very sharp decline in the quality.
I want to say a word to the noble Lord on that particular subject before I come to this Bill. I am sorry that the noble Earl the Chancellor of the Duchy of Lancaster is not here, although he listened to the noble Lord's speech, because we have had debates recently in this House, and it has been borne in on us that one of our greatest problems as a country in this next month or two—perhaps a year—will be the question of dollars. I am going to ask the noble Lord whether he

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will convey to his right honourable friend the President of the Board of Trade the advantage of reviewing some of the dollar expenditure that we make on the imports of American films. The Chancellor of the Exchequer has said that the import of American films into this country cost us 20 million dollars in the last nine months of 1955, and some of these films are really not fit to be shown on the screens of any country.
My Lords, there is a poster being plastered over the West End of London today which is supposed to advertise a film which has not yet been shown, but the premiere of which is expected shortly, In my view, this poster is bordering on the obscene. It is the reclining figure, so scantily clad as really to be vulgar, of a lady named Miss Anita Ekberg, an American film star. I do not know whether your Lordships have seen this particular poster, but if that is the kind of entertainment, and if that is the kind of poster that is advertising that entertainment, which is causing us to spend our very short dollars, then I think we might do something better. If the noble Lord cannot persuade his right honourable friend the President of the Board of Trade to take remedial action by stopping dollars for such purchases, perhaps he might consult his immediate superior at the Home Office as to whether the Home Secretary has net the power, on grounds of public taste and public decency, to have these posters removed. I am delighted to be able to say, here and now, as I have in the past criticised the publicity methods of the British film industry, that I think their publicity on films in recent years has been beyond reproach. It is to their great credit that they consider us a country with at least some moral standards.
I come now to the Bill. The noble Lord, in his introduction, said (I noted his words) that it was an enabling measure. That is the first of my complaints. In this Bill there is far too much legislation by regulation. It is one of those exercises in modern legislation which is to be deplored. Nearly everything in this Bill is subject to regulations being made by the President of the Board of Trade. I might tell the noble Lord that on the Committee stage we shall attempt to write some of the more important matters into this Bill, instead of leaving them to be dealt
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with by regulations which will come before the House. Most of the regulations will be subject to the Affirmative Resolution procedure. That is an advance; it is generally the Negative Resolution procedure that is adopted. But even with the Affirmative Resolution procedure the noble Lord knows that there is no chance, either in your Lordships' House or in another place, of altering any one of these regulations—they have to be either accepted or rejected as they stand. I thought it only fair to tell the noble Lord that on the Committee stage we shall attempt to put down some Amendments which will remedy that unfortunate state of affairs.
In Part I of the Bill the principal matter is, of course, the levy, or what is known as the Production. Fund. I would ask your Lordships to bear in mind that in all my criticism of this Bill I. have this background—I was going to say before me, but at least to look forward to; namely, that in this Bill we are legislating for the next decade of one of the most important industries in this country. It is not only one of the main industries from the point of view of entertainment, it is one of the main industries from an employment angle; and it is one of the main industries from the point of view of showing, what is so important, the British way of life, as far over the world as we possibly can. Therefore it is in no light manner that I approach the task of criticism. But I noticed that the noble Lord put on his skates and skated away with that delightful ease with which I knew he would, when, having given us some figures, he said: "I cannot say much about it, of course, owing to considerations that are operating in the minds of the Treasury experts at the present time."
I should like to put a few figures to the noble Lord, and I hope that when he comes to reply he will give the answers to my questions. The simple arithmetic of the proposals in this Bill is this The present levy is producing £2½ million a year on a voluntary basis. The minimum sum aimed at under this Bill for the first year is £3¾ million. That means an increase of £l¼ million, which has to be found from the box office takings of the cinemas of this country. I should like the noble Lord to give us some more

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precise details of just how that figure of £3¾ million was arrived at—by what method of calculation? How did they arrive at that figure, in view of the fact that it has never been reached in the past? The noble Lord said that "everything in the garden is going to be quite nice" when this Bill comes into operation. I cannot really see anything in this Bill that is going to increase the earning capacity of the cinema industry. I can see only that it will take more money out of the pockets of those who go to cinemas.
The other figures are these: that the minimum in subsequent years is £2 million and the maximum is £5 million. I should like to know how those figures have been arrived at. Have the Board of Trade made any calculations upon this £5 million based upon the all-industry representations that were made to them some time ago—that the right amount of levy which would be any use to the producers of this country would be £5 million per annum? Therefore, is the £3¾ million enough? Even if the £3¾ million is enough, can it be found out of the existing prices paid at the box offices of the cinemas? I believe that 142 cinemas in this country have closed in the last twelve months. Can the box offices find £1¼: million out of the pockets of their present patrons?
The noble Lord has said that there will be exemptions or reductions in regard to the payment of levy. But the more the number who will contribute to the levy is reduced, the more it increases the amount the others have to find. Let us be realistic about this matter. Is not this proposal for a £3¾ million levy inextricably tied to an alleviation of entertainments duty? Do not let us burke the issue on this. Do not forget that the Chancellor of the Exchequer takes £30 million a year in entertainments duty through the box offices of the cinema industry in this country, which I understand is computed to be 30 per cent. of their total takings. One of the unfortunate things about this matter (though I have not the slightest doubt that the noble Lord, Lord Mancroft, said this in all good faith) is that while the Treasury are experts, after they have finished with the arithmetic of the petrol tax and its inflationary tendencies, in giving their attention to see if they can implement the
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undertaking given by the Chancellor of the Exchequer that something will be done about the entertainments duty in the cinemas in this country, if we pass this Bill it will become law before the Finance Bill comes into force. The result, of course, is that we shall have saddled the cinemas of this country with an extra levy payment and a total disbursement of £3¾ million without knowing whether or not the Chancellor of the Exchequer is going to do anything. Not even he would say that he would do this before the Budget has been announced.
The noble Lord must consider that fact. I should like him to tell us, when he replies, how these calculations have been made. Have they been made upon the assumption that there will be no alleviation of entertainments duty, because it seems to me that they must have been? If they have, how does he think that this £3¾ million can be found from the patrons and from the box offices without increasing the admission charges to the cinemas of this country? If they are increased shall we not then have arrived at that delightful stage of "diminishing returns." If you cannot, upon this basis, collect even your £3¾ million what are you going to do?
Now, my Lords, this is where I raise my second serious point. In Part Clause 8 gives the word "film" the interpretation adopted in the 1948 Act. Subsection (1) says:
"In this Part of this Act the expression 'film' means a cinematograph film"
as defined in the 1948 Act, which is the subject of Part III in that Act. If that Act is to continue in force, since it also gives the definition of what constitutes a British film, it gives a definition of the participants of the proceeds of the levy. It is in this regard that I think the cinematograph industry as a whole has a very just complaint about this matter and against the Government. In spite of implied assurances, and in spite of the fact that Her Majesty's Government knew the film industry as a whole had some very serious representations to make regarding the definition of a British film, which governs who is to be the beneficiary of this levy, this matter has not been discussed with the film industry at all.
I am going to put this point to the noble Lord, Lord Mancroft, so that he

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can have it in his mind. The matter must be very closely argued, and I should have thought it would have been far better to argue it with experts of the Board of Trade and the film industry than to argue it across the Floor of a House of Parliament. The definition of a British film could mean that the American-financed and owned company which operates in this country is a participator in the levy. If there is one place where the British film industry is fighting—not an unavailing fight but a bitter fight—it is in the markets of the world and in the markets of South America and North America. Under the present definition, a film produced in this country, admittedly employing 80 per cent. British labour and British studio facilities, but American financed and owned, can have part of this Fund to cover its expenses, and can find an easy access into America, owing to its American connections, where a British film can hardly get in at all. That is one case which I think is due for consideration.
Take another case of the same type—let us call it the Anglo-American film. That is financed in this way and goes into the quota for export as a British film; but when it goes abroad, having displaced a 100 per cent. British film in the export quota, it comes out in all its glory as an American film with no British credit at all. That is another case.
We see in subsection (2) of Clause 3 the regulations which the Board of Trade may make under the clause. They can
"define the class of British film in respect of which payments may be made."
There is one class of film which I should think the cinema industry would vehemently protest should not participate in this levy, and that is the film made essentially for its chief competitor, television. When one looks at some of these really serious objections, I think the noble Lord will have to express regret that the cinematograph industry, in all its branches, was not consulted more than they have been about the provisions of the Bill.
I want now to come to this Film Fund Agency. What does it do? The noble Lord said that it will be drawn on an independent basis, but would he mind telling the House what are the precise
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qualifications? Is it just an academic body to do what a few accountants and a clerk could do? It has no powers. It is told precisely what to do by regulations made by the Board of Trade. Cannot the Board of Trade themselves do it? Then, of course, the Agency will cost something, and I suppose the cost will come out of the levy. The levy is to be collected by the Customs and Excise, and the Customs and Excise will charge for collecting the levy. At the present time, the levy is collected on a very small cost basis by the industry itself. Would the noble Lord think it highly improper, or not quite "playing the game," if, on the Committee stage, I put down an Amendment to say that, since the Customs and Excise are to make a charge for collecting the levy, the industry itself should make a charge for collecting the entertainments tax? It appears to me that that would be a fair thing to do. An industry collects, or the box offices of the exhibitors collect, entertainments tax, but as soon as the Customs and Excise have to collect something they are going to make a charge against this fund for so doing. What is the cost going to be? What is the inroad that is going to be made? Will it be so much per cent. on the money collected, or what will it be?
I come now to Part II of the Bill, which think is good. I believe we can say that the National Film Finance Corporation has done a remarkably good job of work. I am very glad that it is to continue. There are two questions I should like to ask about Part II. One relates to Clause 11, and concerns a matter which is rather dear to my heart. We are now going to have a statutory definition of how to make a profit. I hope that the noble Lord can enlarge upon this. We are now going to have it made a duty of the National Film Finance Corporation to pay its way. What has it been trying to do all these years? What was its object? I suppose that it has done its best to pay its way. But if it does not make a profit, what are you going to do? Is this just a pious hope, or is there anything behind it? Now a word on Clause 12. The noble Lord, Lord Mancroft, has said that the National Film Finance Corporation can sell itself to any person. The noble Lord will forgive me for saying so, but I am rather sceptical; I am very

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suspicious when a Government wants to sell taxpayers' assets. Our experience in that direction has not been very encouraging. Can the Corporation sell itself to an American concern, or what? Perhaps the noble Lord will tell us something about that.
I now come to Part III. Here, in my view, we have to do something quite serious. What are we doing by this Part of the Bill? We are perpetuating the Act of 1948 for ten years and—mark these words—in its present form. I think that the quota is good, but we have to see that the quota provisions are maintained. I have no grumble about the quota provisions relating to the home showing. I consider that thirty is a very fair quota, and I do not think I should wish for any alteration to be made in that connection. But I certainly do wish to see the definition of what is a British film lined up more to modern requirements. We shall try to see that no foreign film (I use the word "foreign" in no offensive sense) is carried to success in the markets of this world on the backs of the British producers. I believe that if the provisions of the Bill go through unchanged, then in the next ten years that may be something we shall regret. So we shall give this Bill a Second Reading, but, on the Committee stage, we shall attempt to make, by amendment, those alterations that I have outlined.
4.44 p.m.
THE EARL OF ROSEBERY: My Lords, I have listened with the greatest interest to the speeches of the two noble Lords who have already spoken. Lord Mancroft, in a very able speech, told us of benefits that would be received by the film industry, but he skated over—or, at any rate, I could not have heard him if he did not—what would have been the great benefits to the cinema industry. I listened to the speech of the noble Lord, Lord Lucas of Chilworth, with great interest because of the accounts he gave of the films. I am ashamed to say that I never go to see a film, so the noble Lord educated me to a considerable extent. And may I add that I have no interest at all in cinemas. But I feel great apprehension about the policy of this Bill in its present form, for various reasons, and unless it is considerably amended I, for one, would feel strongly
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inclined to oppose it. I do not intend this evening to occupy much of your Lordships' time. There are several points on which I am in cordial agreement with Lord Lucas of Chilworth and he has expounded them much more ably than I could do; but there are one or two facts which I feel I should bring forward.
The first, and to my mind the most important, objection to this Bill is that it introduces a thoroughly unsound and unjust principle. It is absolutely wrong to force one trade by law to pay a levy to another, and this proposal is totally opposed to this country's ideas of justice and trading freedom. We have, I know, been told that the cinema industry has made a voluntary contribution so far; but we were never told that this voluntary contribution was almost exacted and that there was a quid pro quo from the Chancellor of the Exchequer before the cinema industry accepted the voluntary proposal. What is to happen now is that this voluntary proposal is to be made an Act of Parliament, and the word "voluntary" is taken out for the next ten years. You all know as well as I do that when a tax is put on for ten years it is put on for ever. I do not remember a tax which was put on for ten years ever being taken off. Indeed I cannot think, off hand, of a tax put on for two years that has been taken off. So, in my opinion, this is a tax that is going on for ever.
It is not for that reason, however, that I object to the tax. I object to it for the reason I have given—that it is making one trade pay a levy to another. It means that the Government are benefiting one trade at the financial expense of another. We are told that a very large sum, starting with £3,750,000 a year and ending with £5 million, is being taken for the benefit of the film producers. Those are two sums out of the blue and they are very considerable. Lord Lucas of Chilworth has already asked Lord Mancroft to explain this matter in his subsequent speech, and I hope that he will do so. But this money is being taken from the cinematograph exhibitors for the entire benefit of the film producers. The Government is, in fact, robbing Peter to pay Paul, and I do not think that anyone can controvert that statement, even if I have put it somewhat bluntly. I am not suggesting that there is not good

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cause why the film industry should have this money. As I just said, I never go to the films, but I understand from Lord Lucas of Chilworth that some of them are not very good, and no doubt £3 million to £5 million would benefit them very much indeed. But, if that is the case, if there is to be a statutory benefit to the films, it should be made by the Government and not by another trade.
At the present moment the Government take £30 million-odd from the cinemas. If they wish film production to benefit by £3 million to £4 million, surely They could get that from entertainments tax. They have chosen a most unfortunate moment for this increased levy, when the cinemas are going through a time of hard competition with television. I understand that approximately 200 cinemas have been closed this year. The noble Lord, Lord Mancroft, gave me the impression that he thought there was no harm in that; but I take it that the owners of those cinemas are not best pleased. I understand that more cinemas are being closed every week. They are not closed for fun, but because the owners cannot afford to go on. And on top of their hardships is placed this additional and very large burden by an Act of Parliament.
Moreover, so far as I can make out, the film producing industry have not to prove the need for this money. They do not have to prove that they need assistance, and, so far as I can see in the Bill, after they have received it, there is no necessity for them to give an account of how they have spent the money. I think that a Bill of such a controversial nature as this should be referred to a Select Committee after the Second Reading has been taken to-day. I think that it would be only fair to the public, to the cinema owners and to the film producers, to go into the Bill with greater thoroughness than would be done on an ordinary Committee stage.
4.52 p.m.
LORD WESTWOOD: My Lords, it is with considerable diffidence that I arise to address your Lordships for the first time, but as this Bill is of intense importance to me, I would ask your Lordships to bear with me in a spirit of patience and forbearance. May I say at the outset
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that I have a personal interest in this Bill, as I have been associated with the cinematograph industry for over twenty-five years, and I should like to submit some practical points to my noble friend Lord Mancroft, not with a view of criticising but of helping, or trying to help, him. I thank him for his clear explanation of the Bill this afternoon and also the noble Lord, Lord Lucas of Chilworth, for the points which he mentioned, because they simplify my task enormously.
For the benefit of noble Lords who may not be fully conversant with the different branches of the cinema industry, may I say that the industry is operated on similar lines to those of any other industry. First, we have the producer, who is the manufacturer of the product; secondly, there is the film renter, who corresponds with the wholesaler; and thirdly, we have the cinema exhibitor, who is the retailer of the product. It is his job to show the finished product to the public. Like all forms of business or trade, each branch is fully dependent on the other two branches. The producer, when he completes his film, passes it over to the renter, who in turn hires it out to the exhibitor on a percentage basis. The exhibitor then shows the film to the public, with some varying degrees of success and in many cases, I am sorry to say, at some financial loss. That is the method by which the cinema industry carries on its trade, and this should be borne in mind during the passage of the Bill through your Lordships' House.
My noble friend Lord Mancroft touched on the Eady levy, which started in 1950, but there was one important point which he omitted to tell your Lordships—that was, that the British Film Production Fund has received the sum of £14,790,451 up to July 23, 1956. That is a very large sum of money, and it all came from the cinema exhibitors of this country. In addition, the cinema owners in Britain paid out over £33 million in entertainments duty last year—a duty, incidentally, which was shouldered by the industry in 1916, when a promise was given that it would be abolished at the end of the First World War. During the six years of this levy, the highest amount collected in any one year was £2,971,910, in the year ended August 2, 1952. This

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sum was a great deal less than the £3¾million which it is intended shall be collected under the Bill which is before your Lordships' House to-day.
The cinema exhibitors in this country realise and appreciate the need for a healthy British film production industry, and they will do all in their power to help and support such production, as has been amply proved by the vast amount of money which they have paid into the present British Film Production Fund during the past six years. The Government, too, realise that we must have a healthy and prosperous production. But, my Lords, we cannot have a healthy and prosperous production unless we have a healthy and prosperous exhibition, too. If there has to be a levy, the cinema exhibitors must be put into a position to pay it to help subsidise production, although I am not aware of any other trade or industry in the country where a levy or tax is imposed on the retailer in order to subsidise the manufacturer. In my opinion, the principle is bad. My noble friend Lord Mancroft mentioned the old saying, "There's no business like show business". The way things are going on it will be "There's no business" —full stop.
There is a solution, and only one solution, to the problem, and that is, a drastic slashing of the present heavy and crippling entertainments duty as it applies to cinemas. Unless some very substantial relief is given to cinemas by the Chancellor of the Exchequer in his next Budget, this industry, which brings so much happiness and enjoyment to so many of our people, is heading for disaster and destruction—it cannot survive. It is common knowledge that cinemas are closing down all over the country—25 closed down in 1954, 53 shut down in the year 1955, and there will be approximately between 250 and 300 closed during this year. There are hundreds of owners of small cinemas who are just hanging on to learn what their fate is going to be when the next Budget is presented. I mention all these dismal facts to your Lordships to enable you to appreciate the present position of the cinema owners who, by this Bill, are being asked to find £3¾ million a year, a figure which can be increased, if need be, to £5 million a year, within the next ten years. Practically every cinema in
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the country to-day needs money to be spent on it. Exhibitors have been faced with ever-increasing costs—increased wages, increased rates, higher charges for heating, lighting, and so on. Refurnishing of cinemas has been kept to the absolute minimum, due to the economic position and the high costs and to the fact that most of the exhibitors' bank accounts are in the red.
It is against this background that the Government has introduced the Cinematograph Films Bill which proposes that a statutory levy be imposed on exhibitors for the next ten years. I can say quite emphatically that unless the entertainments duty is drastically slashed, there will be very few cinemas open in the year 1967, when the period of this Bill ends. There are hundreds of little fellows who have sunk all their capital into their village or small town cinema, and although I am aware that exemption has been promised for them in this Bill, the prospects for them are far from bright.
I now turn to the Bill itself, to deal with some of the provisions in it. In Part I of the Bill it is stated that a British Film Fund Agency will be established; that the members of that Agency shall be appointed by the Board of Trade and shall be not less than three nor more than five in number, and the members so appointed shall have no financial or industrial interest in the cinema trade. This Agency will be dealing with a complex and involved industry, and I suggest to my noble friend that perhaps he should look into the possibility of increasing the number of Agency members from five to seven, and that the two additional members be cinema trade representatives. The Cinematograph Films Council, which advises the Board of Trade, has cinema representatives on it, and I think that the people who have to make this levy work should be allowed to have some representation in an advisory capacity. I am confident that the non-trade members of the Agency would welcome their presence and advice.
In Clause 2 of the Bill it is stated that provisions for exemption will be made. Can my noble friend say what the exemption will be? Will a cinema which is losing money be exempt from paying the levy? Will the present exemption of £150 gross per week be increased to help the small owner pay his way and make some

1353
profit, as he is entitled to do? Throughout the whole of Part I of this Bill there is a definite obligation for the exhibitors to pay whatever levy is imposed, but there is no obligation whatsoever on the producers to make the films. Surely there should be some obligation on the film makers to produce the films which the exhibitors need and which they have helped to subsidise. Have we any guarantee that producers will now increase production of good British pictures; or will they decrease output in order to obtain a larger return from each film they make? I suggest that some obligation should be inserted in the Bill to cover this point.
In Clause 3 it is stated that the regulations
"may define the classes of British films in respect of which payments may be made."
I sincerely trust that financial help will not be given to a British film producer who makes films for the television media, and I would therefore ask that some form of wording be inserted whereby financial aid would be given only to films exclusively made for commercial cinemas. I am also presuming, I hope rightly, that there will be no discrimination whatsoever against films which are made in this country by American producers. The exhibitors in Britain are already far too short of product, and they want good pictures, no matter where they come from.
Clause 4, in Part I states that the Customs and Excise authorities will be given power to require exhibitors to supply information and keep records as may he required, and the Customs and Excise officials may enter an exhibitor's premises and call for the books. Failure to comply with this requirement can involve a fine not exceeding £100. My Lords, the exhibitors are not afraid of this clause, as most of the cinemas are visited regularly by Customs officers when checking entertainments duty records. But should not the books and records of the film producers, as well, be open for inspection? How can the Agency assess and verify the needs of the producers? How can the producers prove their need for a subsidy from the Agency? Why cannot the exhibitor who is losing money participate in the subsidy too? Regarding Part II of the Bill, the exhibitors welcome any provision which will assist
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film production in this country and will ensure an adequate supply of good British films.
I now come to Part III of the Bill, and by Clause 14 it is intended to extend the existing quota obligations of the exhibitors by which they must exhibit a percentage of British films each year. The clause extends the quota obligations for a period of ten years from the present Quota Act, which does not expire until 1958. This clause has come as a great surprise to the whole of the film industry, as the various sections were given to understand by the Board of Trade that they would have consultations with them and would consider the matter at matter date. The trade welcomed this assurance, and it was felt that it would afford an opportunity to submit suggestions to obviate many of the problems and anomalies now existing. The present Quota Act is most unsatisfactory, and the number of defaulters grows year by year. Out of some 4,500 cinemas, the defaults number approximately 1,000 per year. I hope that my noble friend will make representations to the President of the Board of Trade with a view to the holding of early consultations, as I am informed that all the information has been collated with this in view.
Finally, my Lords, in Clause 15 it is the exhibitor who is again in trouble. The licence fee is increased from two guineas to five guineas. Up to 1948 the fee was only one guinea per year, and it is now proposed that it should go up to five guineas, an increase of 400 per cent. In addition to the Board of Trade licence, however, the exhibitor must pay for his Sunday licence, his cinematograph licence, his music, singing and dancing licence, and his children's matinee licence; and if he opens his cinema on Good Friday and Christmas Day, as many exhibitors do, then another licence has to be obtained and paid for. It also seems to me to be unfair that the small cinema which seats 300 patrons pays the same licence fees as a theatre which can hold 3,000 patrons and upwards. The increase of three guineas per year may appear a small item to your Lordships, but unless the Government can give some help to all branches of the cinema industry, and not only the producers, then I am afraid that the number of applications for licences will diminish.

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year by year, as the neon signs of the cinemas are switched off, one by one, for the very last time.
5.8 p.m.
LORD JESSEL: My Lords, it is my pleasant task to congratulate the noble Lord, Lord Westwood, on his maiden speech. He is obviously a master of the subject, and he has presented his views with clarity and force. The only thing I have against him is that he has completely ruined my own speech. Many noble Lords will remember his father, who was a popular Member of this House and who sat on the other side. I am sure the noble Lord, Lord Westwood, sitting on this side, if he comes here more often, will be an equally popular Member of the House.
Before turning to the Bill itself, may I say that I was glad to hear the noble Lord, Lord Lucas of Chilworth, make the comment that he thought things were rosy in the cinema industry now, because he is usually a prophet of gloom. It was a nice change. I must also take up the noble Lord on one point, because he is a stickler for accuracy. When referring to Miss Anita Ekberg, whose figure he so much admires, he said she was an American actress. I do not think she is. In the film in which I saw her the other day, she speaks with a strong Swedish accent, and I believe she is married to an Englishman.
LORD LUCAS OF CHILWORTH: The noble Lord is quite right technically. The lady was born in Sweden, but she is an American actress.
LORD JESSEL: That depends on what you mean by "American". To turn to the Bill, I think it is fair to say that this is a producers' Bill at the expense of the exhibitors. The noble Lord, Lord Westwood, has brought that out in all his arguments, although he admitted that he was interested chiefly from the exhibitors' point of view. I think it is arguable, looking at the industry as a whole, that the exhibitors, if they want films and in present circumstances films cannot be produced economically, should be called upon to pay something towards the production. The only question is: what is the figure they can reasonably be asked to contribute? They have their difficulties, and we have heard a great many of
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them. In regard to entertainments duty, I think a good way of looking at the burden of the duty is to take just one instance. A seat that sells for 2s. 9d. pays a duty of just over 1s.; therefore the exhibitor is getting only 1s. 9d., although the public pay 2s. 9d. As the noble Lord, Lord Lucas of Chilworth, said, the levy is producing approximately £2½ million a year. That was in the first year of the levy. Under this Bill £3¾ million has to be raised. Where is it coming from? My noble friend Lord Westwood talked about television. Television is a dead loss to the exhibitors, but it is a considerable help to the producers.
LORD LUCAS OF CHILWORTH: Would the noble Lord forgive me for one moment, because I know he likes accuracy as much as I do? Would he not agree with me that to say that the exhibitors pay this levy is wrong? It is the cinema-going public who pay it. Admittedly, if the exhibitors have to increase the price of the seats, that may have a deleterious effect upon their attendances. But it comes out of the pockets of those who go to the cinema, like the entertainments tax.
LORD JESSEL: I see the noble Lord's point, but my point is that, with cinemas closing at the rate they are, it is a little difficult for them to get it back. That is all I said.
May I return to the subject of the competition of television? Film corn-panics make films for television screens, so that is new business for the producers. They are also able to sell old films for television screens. One or two actors have told me that they have had great pleasure in seeing themselves once again in their old films, which they had thought were dead and buried for years.
LORD LUCAS OF CHILWORTH: Ought to have been dead and buried.
LORD JESSEL: Maybe. Dealing with Part I of the Bill, again I must refer to my noble friend Lord Westwood. As he said, under this Bill the exhibitors are asked to make payments and supply information; yet the film producers, who have the benefit of this money, seem to be under no obligation actually to produce the films. Finally, turning to Part III, Clause 14, I may say that this came as a tremendous shock to the film

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trade, because they had no hint that this quota arrangement, without consultation, was going to be prolonged as it is for another ten years. The exhibitors feel that the existing quota procedure is working unsatisfactorily. For some time they have had suggestions ready for some amendment of the 1948 Act, yet they have not been consulted at all, and this Bill is suddenly presented, giving the impression that Her Majesty's Government are going to rush it through with indecent haste. The exhibitors would prefer a separate Bill to be presented later on this aspect, which deals solely with the problem of quota. But if Her Majesty's Government cannot see their way to fall in with this suggestion, it leaves the exhibitors no other alternative but to try to get their suggestions for alteration put right by Amendment on the Committee stage.
5.15 p.m.
LORD STRABOLGI: My Lords, on behalf of my noble friends on this side of the House, I should like to add my congratulations to the noble Lord, Lord Westwood, for his most interesting maiden speech. He has spoken with a most profound knowledge of his subject. Indeed, as the noble Lord, Lord Jessel, has said, he has taken most of the points that subsequent speakers would have made. We on this side of the House hope very much that we shall have the pleasure of hearing the noble Lord on many future occasions.
Practically every noble Lord who has spoken has voiced his grave disquiet about this Bill. On the other hand, as the noble Lord, Lord Lucas of Chilworth, has said, we do not propose to oppose the Second Reading, although we shall try to amend it in Committee. I should therefore like to mention one or two matters on which I should be glad to hear the reply of the noble Lord, Lord Mancroft. First of all, in Clause 2 (2) (a) and (b) the regulations may provide for the exemption of any exhibitor or classes of exhibitor, and may make different provisions in relation to different exhibitors. I should like to ask the noble Lord whether this implies that an exhibitor who is not a producer may be exempt. I am thinking particularly of the independent exhibitor who does not himself produce films and yet is contributing to this levy and is not able to get the films which are produced
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because they are going into the big circuit houses owned by the main producers of films in this country. In actual fact, the effect is that the independent exhibitor is being made to contribute to making films which he will not have a chance to show. I shall be glad to know from the noble Lord whether such an exhibitor may be exempt under this clause.
Under Clause 4, the Customs and Excise have the right to enter premises and demand books for examination. As the noble Earl, Lord Rosebery, said, why are not similar powers taken vis-á-vis the producers? After all, they are benefiting from the money which is being given to them under this levy, and which is coming from the exhibitors. I cannot see any reason why the same powers should not be taken ?vis-á-vis the film producers. In the past, of course, there was a great deal of extravagance in the film industry. I do not think that is so to-day, although the noble Lord, Lord Mancroft, with his customary wit, referred to swimming baths and mink bathing dresses. Possibly the noble Lord did not intend his remarks to be taken seriously, and they were possibly an exaggeration. At any rate, I can see no reason why, in fairness, under this Bill the producers also should not be required to have their books available for examination. Perusing Part I of the Bill, I note there is no obligation on the producers to make the films that the exhibitors want and need—indeed, so far as I can see, there is no obligation on the producers to produce any films at all. There is also no indication whatsoever of the level of production that is contemplated.
Another point is the question of the figure of £3¾ million for the first year and a sum of from £2 million to £5 million in any subsequent year. On the other hand, there appears to be no provision in the Bill to reduce the levy to below £2 million if the existing production gap can be met from the exports, say, of British films to the United States, a point which the noble Lord, Lord Mancroft, mentioned. I shall be glad to hear from the noble Lord whether any provision can be made for this clause to be amended at the Committee stage so that the sum may be less than £2 million if, in some future year, a lesser sum is adequate. After all, we are passing legislation for a period of ten years.

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Another question I would ask is whether these exhibitors are being asked to contribute to making films that will be shown on television, and Independent Television too, in rivalry with their own cinema houses? What protection will there be in this Bill for exhibitors against this growing menace to their trade? There is also the question of the quota system and the extension for ten years, which the noble Lord, Lord Westwood, mentioned. I must say that the exhibitors feel that there has been a breach of faith on the part of the Board of Trade. We very much hope that some amendment will be made at the Committee stage.
I should also like to refer briefly to the question of entertainments tax. I admit that in 1954 the Chancellor of the Exchequer gave concessions amounting to £3½ million. On the other hand, as other noble Lords have pointed out, these concessions have been largely nullified by decreased attendances and rising overhead costs. As the noble Lord, Lord Lucas of Chilworth, has pointed out, cinema admissions have declined by, I think, 22 per cent. since 1946. During this year, nearly 150 cinemas have closed, and 10 per cent. of all cinemas are making trading losses. This voluntary levy produced in the past, I think, £2½ million a year. Under this Bill, this sum is now to be increased to £3¾ million. The old voluntary levy was heavy enough, but this vastly increased sum will be acceptable only if it is balanced by the Government by some very substantial—and I underline the word "very"—relief on entertainments tax. Otherwise, I feel sure that the figure will not be attained. It will defeat its own object as more and more cinemas will close.
The noble Lord, Lord Mancroft, said that the matter was being gone into by the Treasury. We on this side of the House are glad to hear that. I know that the noble Lord will not be able to anticipate the Budget—it always seems
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to be the case of either not being able to anticipate the Budget or of recovering from the Budget. But, as we are now at a period of not being able to anticipate the Budget, I hope that, when the Budget itself is presented, we shall not be disappointed in this respect. As your Lordships are no doubt aware, this entertainments tax is taking, I think, 32 per cent. of the gross takings and 50 per cent. of the net admission receipts. It totals nearly £33 million a year. I hope that in the next Budget there will be some substantial relief amounting to at least a half of this sum, and not just one or two million pounds. There are also one or two suggestions that I should like to make about the whole question of this levy collection.
THE EARL OF ONSLOW: My Lords, may I intervene? Of course, the noble Lord is fully entitled to continue speaking later, but I would point out to your Lordships' House that there is to be a Royal Commission at 5.30 p.m. As your Lordships know, it takes a minute or two to assemble, so I would suggest that the House do now adjourn the debate during pleasure for the Royal Commission at 5.30 p.m. and then carry on afterwards.
House adjourned during pleasure.
House resumed.

ROYAL COMMISSION
5.30 p.m.
The following Bills received the Royal Assent:
Hydrocarbon Oil Duties (Temporary Increase),
Air Corporations,
Expiring Laws Continuance,
Agriculture (Silo Subsidies).
House adjourned during pleasure.
House resumed.

CINEMATOGRAPH FILMS BILL [H.L.]
5.44 p.m.
Debate on Second Reading continued.
LORD STRABOLGI: My Lords, to resume my speech, there is also the question of the Government payment into the production fund, which was touched on by the noble Lord, who spoke earlier. I have a great deal of sympathy with this suggestion, and I cannot quite understand why the noble Lord, Lord Mancroft, sounded, if I understood him aright, somewhat disapproving of it. It seems to me that, instead of imposing a levy of this kind on the exhibitors, it would be far better if the Government paid a certain sum annually to the producers which could come out of the entertainments tax. It seems to me that it would make for greater stabilisation, greater simplicity in administration—it would be much simpler than this levy collection—and it would also help the exhibitors. I cannot myself see why it is necessary to have an entertainments tax at all. It is really the most unfair of all taxes, because it is paid at the same rate whether you sell a few seats or you have a full house. I cannot we why cinemas, and indeed theatres, should not be treated like any other business and pay a tax on their profits.
A great deal has been said this afternoon about this levy, which will now amount to £3¾ million for the first year, and also about the entertainments tax, which totals nearly £33 million per annum. But of course these are not the only taxes which the unfortunate exhibitor has to bear. I should like to deal for a few moments with the Sunday entertainments tax (its exact terminology is "Sunday charity contribution"), which now amounts to £500,000 and is in addition, of course, to the other two. Two out of three cinemas in England and Wales are open on Sundays, and I believe that about 2½ million people visit the cinema on Sundays during the year. Cinemas are open under the Sunday Entertainments Act, 1932, which allows a cinema to be open in an area where a majority of the electorate desire it. Agreement, of course, has to be given by Parliament—indeed, earlier this afternoon your Lordships approved an Order
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under this Act relating to a certain urban district.
The Act of 1932 gibes the local authority the right to levy on the exhibitor a Sunday charity contribution which the local authority applies at its discretion for certain charitable purposes. No amount is laid down, except that it is stipulated that the amount must not exceed the amount of the Sunday opening profits; apart from that it is left entirely to the local authority. As I said, the sum collected amounts to nearly half a million pounds a year. It seems to me a very unfair form of discrimination. No other kind of Sunday trading—television, newspapers and so on—is subjected to this tax. I am not suggesting that they should be, but rather that the cinemas should be brought into line with the rest of Sunday entertainment.
I know that there are a great many people who feel very strongly about Sunday entertainment; indeed, I myself do not care to go to the cinema on Sundays. But if an Act allows the cinema to be open, provided that a majority of the local electorate wish it, why, if it is wicked to go to the cinema on Sunday, does the payment of "conscience money" make it less wicked —particularly as that money is not paid by the people who go to the cinema, the so-called "wicked sinners," but by the cinema owners? Furthermore, as I have said, the amount of these charity contributions is left to the local authority to-decide, and they also decide the way the money shall be applied. The cinema exhibitor has no control at all—in fact, in many cases he does not know to whom the payment has been made. I feel, my Lords, and I should like to suggest to the noble Lord, Lord Mancroft, that this question of the Sunday charity contribution should receive the serious attention of the Government. If I may use a phrase which Disraeli used in another place arid about another subject, it seems to me to be an organised hypocrisy, and I hope that it will be abolished in the near future.
5.50 p.m.
LORD ARCHIBALD: My Lords, the subject of the Bill which we are considering this afternoon is certainly not one on which the House is likely to divide on Party lines. It is not by any

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means a Party subject, and for that reason I think no one will be surprised if there are differences of opinion, or perhaps differences of emphasis, on these Benches and on the Benches on the other side of the House, because this is essentially the type of Bill to which we have to bring our individual and particular experience and attention to bear. When in past debates in your Lordships' House we have been dealing with the cinematograph industry as a whole, I have generally felt it necessary, even though my main interest was with the producer, to try to put also the exhibitor's point of view. I shall no longer feel that compulsion, because we have now in the House a most able and gifted expositor of the exhibitor's point of view, and I should like to join with earlier speakers in congratulating the noble Lord, Lord Westwood, on his excellent maiden speech.
But though we may have differences of emphasis, perhaps only on aspects of this Bill, I do not think there will be any difference in any part of the House about the desirability of maintaining a healthy and vigorous film production industry. It was so well put in the 1955 Report of the National Film Finance Corporation that I do not think I can do better than quote:
"The maintenance of a prosperous film production industry is of national importance. It limits the necessity for imports, contributes to exports and provides valuable overseas propaganda for the United Kingdom."
That opinion, I think, is something to which we might all subscribe. So, as there is no argument about the necessity for the industry, we have to look at why it is necessary in this, as in previous Bills, to provide some support for it.
I should like to direct, or perhaps re-direct, the attention of the House to what I regard as the background considerations that we have to keep in mind when considering British film production. In any manufacturing industry it is generally accepted that the size of the domestic market is of great importance, and it is of importance to the film industry that the domestic market for the British producer is only 15 per cent. of the world market. His American competitor starts off with a domestic market which is estimated to be 65 per cent. of the world market, and the difference in size of the domestic market is a measure
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of the handicap under which the British producer works. It makes it impossible for him, for example, to recover from the home market the costs of any large, lavish and spectacular film. In the remaining 20 per cent. of the world market the British film and the American film have, of course, to compete, the one with the other and with native production where that exists.
When we come to look at the native market, I think we should have regard for a moment to what happens to the money that is taken in at the box offices of the cinemas throughout the country. There is an excellent compilation of the relevant statistics in the last annual report of the Rank Organisation, and for convenience I am taking the figures from that because they are very well stated. They show that in 1955 total box office receipts were £105·8 million. From that entertainments tax took £33·4 million. and the British Film Production Fund (the so-called voluntary levy) took £2·6 million, making the receipts from the exhibitors' point of view £69·8 million. Of that £69·8 million, £9·3 million went to the distributors, whom the noble Lord, Lord Westwood, correctly described as wholesalers, for their costs and cost of prints and so on. The exhibitors' share was £45·3 million the producers' share was £15·2 million.
These are very important figures because what they show is that the makers of all the films shown in the cinemas—and we must bear in mind that without films there would not be any cinemas and there would not be any audiences, for they are the providers of the basic element in the whole set-up—out of £105 million got £15 million. One seventh of all that was paid by the public to see films went to the makers of the films. It seems to me that there is something very seriously wrong with the proportions there. In view of what Lord Westwood has told us of the plight of the small exhibitor, I am not going to suggest that the exhibitors' share of £45·3 million is too big. Even if there could be some pruning of the distributors' share of £9·3 million, there is not enough in it to make a substantial difference. So I am afraid we are driven back to a conclusion from which there is no escaping, that it is the £33·4 million going in entertainments tax which is an undue proportion—too big a slice of that particular cake.

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I want to narrow these figures down a shade further, because calculation has been made of what proportion of the £15·2 million went to British films in that year. It has been estimated that including contribution from the voluntary levy, from the production fund, the British producers got a total of £6·8 million. I think that no one will suggest that £6·8 million, as a total, out of £105 million taken at the box offices, is an adequate amount to ensure a sufficient supply of worthwhile British films. That is the second great handicap under which they suffer.
Let us then look to see what is the result. The result is to be found in the report of the National Film Finance Corporation, Lord Mancroft was, I thought, painting the picture in colours that were a trifle rosy when, speaking of the situation of the production side of the industry, he said that it is going on very steadily. It would have been more accurate if he had said it is going on very steadily losing money. If we look at the National Film Finance Corporation's report to March of this year, we find on page 4 a table giving the results of the films released in the years 1952, 1953, 1954 and 1955. I will take the total in order not to worry your Lordships with too many figures. The number of films released was 152. The number likely to be profitable was 62. The number thought to have been likely to be profitable without the Eady Fund was only 34. My point is that, even with the so-called voluntary levy, as the result of the two big handicaps to which I have referred—the small domestic market and the fact that, from the takings at the box offices only a very little to-day comes eventually to the producer, who is the basis of the whole structure—only 62 films out of 152 released in those four years were likely to be profitable, even after receiving about £2,500,000 a year from the production fund. That is the background against which we come to consider this Bill.
First of all, we come naturally to consider the statutory levy. May I say straight away that I regard the statutory levy as being an extraordinarily clumsy instrument for the purpose for which it is intended. I am completely at one with its intention of putting British production in a better financial condition, but I think that this is an extremely awkward way of
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doing it. Let us look back for a moment to the inception of the voluntary levy. I believe that the argument at that time (the noble Lord, Lord Mancroft, will correct me if I am wrong) was that we cannot make a direct subsidy to British film production out of entertainments tax or out of the Consolidated Fund in general, because it would be contrary to our obligations under G.A.T.T. So what did we do?—a typically ingenious bit of British manipulation. The exhibitors were persuaded to agree to what was called a voluntary levy in return for a deal on entertainments tax. That was the original small levy.
A little later, when I think the Chancellor of the Exchequer was proposing to increase entertainments tax by a considerable amount, he made a deal again with the exhibitors, that he would increase the tax by less than the amount proposed if they would agree to increasing the levy by a certain amount. If I can strip aside the words with which this is clothed, what does it boil down to? It boils down to a subsidy which until now has been paid out of entertainments tax by the exhibitors under a tax arrangement with the Chancellor of the Exchequer.
Now it is going to be a statutory levy. One appreciates that the noble Lord, Lord Mancroft, had to be extremely guarded in his reference to what the Chancellor of the Exchequer may do, and that entertainments tax is under review at, the moment; but surely (if I may put it in the vernacular) we are "kidding" ourselves in considering this Bill if we are not working on the assumption that there is going to be a concession to the exhibitors to make up for the extra £1¼ million which they are going to be called upon to pay. If that is not implicit in the situation, then this Bill is most savagely unfair to the exhibitors; and I do not think that that is the intention of the Government at all. So that we are having in another form, however it may be clouded or denied, a subsidy paid out of entertainments tax; and I think that it would be much better if the Government could find some means of giving notice under G.A.T.T. that, notwithstanding the arrangement made under that Treaty, we intend to pay a subsidy direct to British film production out of the Consolidated Fund, and mentally mark the fact that it

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is coming out of the undue proportion that the Chancellor of the Exchequer takes of the box office takings of British cinemas. I hope that even at this late day the Government will reconsider getting rid of this befogging and beclouding method of doing it, and put the whole thing on a straightforward basis.
May I say a word about the Agency? Like my noble friend Lord Lucas of Chilworth, I do not see what the Agency is to do except to rubber stamp the decisions made by the Board of Trade. Furthermore, I cannot see what is wrong with the present set-up. Under it, exhibitors, distributors and producers all together appoint certain representatives to a board, of which the chairman is, I think, a chartered accountant. Let the Government take the power to appoint that chairman. It would be much cheaper to appoint a chairman than have a paid board of three or five. Let the board of representatives from the exhibitors, distributors and producers be retained as an advisory panel to advise the chairman, and let the chairman alone be the Agency.
LORD LUCAS OF CHILWORTH: With pensions and superannuation.
LORD ARCHIBALD: If there were to be pensions and superannuation, as my noble friend suggests, I would rather that there should be only one person eligible, and that would be the paid chairman. I think that if the Government are wedded to the Agency, at least they should agree to setting up an advisory panel from the industry to help the Agency to deal with a very complex situation.
With regard to the proposed yield, I do not want to go over the ground, but I hope that we shall get some explanation of how the figure of £3¾ million was arrived at, for I believe I am right in saying that the industry committee presented the Government with ample evidence that £5 million was needed. It looks as though the Government have followed a very old practice. They were getting £2½ million; they needed £5 million; they split the difference, and £3¾ million was the result—and that was the figure they put in the Bill. If there was any other method by which it was arrived at, I think we might be told. Then, in further years, this figure is to be not less than £2 million nor more than
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£5 million. But why have a maximum and minimum at all? There does not seem to be any reason for it.
The Board of Trade are to make the regulations, and they will not, I am sure, make regulations to put it up to £5 million without getting the approval of the Treasury—and they should be sufficient of a watchdog for anyone, without putting figures in the Bill which appear to me to be quite meaningless. Eight or ten years from now, before this Bill expires, £5 million may be a completely inadequate amount, having regard to the number of British films which may be made or to the rise in costs in the intervening period. If costs go on rising as they have been in all departments of life in the country during the eight or ten years from now £5 million may be copletely inadequate; and I suggest that consideration be given to leaving out this figure altogether.
I come to Clause 3 of the Bill. Looking at subsection (2) (a), I am inclined to agree with previous speakers who say that it is not good enough simply to leave this to regulations. We must be told what the Government have in mind when the Bill says:
"define the classes of British films in respect of which payments may be made;"
Are they going to exclude films made solely for television? If so, why not put it in the Bill? I am reminded of what the father of legislation on the cinematograph film industry, the noble Earl, Lord Swinton, used to say, when we were on the other side of the House: "If that is the Minister's intention, put it in the Bill." I say, "All right; what are your intentions on this matter? Tell us what they are and put them in the Bill. Do not have it all done by regulation."
Another possible class that may be defined as either coming in or being excluded has been referred to by my noble friend Lord Lucas of Chilworth—namely, films made by American-owned companies. I think we may be on rather dangerous ground here. I would remind your Lordships, as has been referred to in another connection, that American film companies operating in this country are not allowed to remit the whole of their earnings to America. As a result, they pile up here certain amounts of non-remittable sterling, for which there are

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certain permitted uses: they are, in fact, encouraged to use their non-remittable sterling for the production of British films. I think it would be a regrettable situation if, having blocked their sterling and encouraged them to make British films, you then introduced some definition which said: "That is a British film only for certain purposes." I believe that that type of discrimination would be most unfortunate. If you once start with the concept that a company is an American-owned or American-controlled company, it is difficult to know where you would draw the line between that and the company that was not American-owned but was American-financed. I think it would be much better if we could have some statement in regard to the definitions intended here, and an assurance that there will be no discrimination in this connection against American-financed films. I will say a word or two about that matter in another connection when I come to deal with the quota section of the Bill.
I want now to turn to Part II of the Bill, about which not a great deal has so far been said but about which I am not entirely happy. The first section of Part II takes from the Film Finance Corporation the restriction which has been on it in the past: that the Corporation should make loans only to producers who were unable to find their finance elsewhere. It seems to be a liberal and expanding thing to say that that limitation is removed, but I would suggest that it has its dangers. The finances at the disposal of the Film Finance Corporation are not limitless; they are strictly limited. It could well happen —I put a hypothetical case, I agree—that producers who could have obtained their finance elsewhere would come to the Film Finance Corporation to borrow from them; that halfway through the year the Film Finance Corporation would find that it had lent all its available resources, and that, later in the year, producers who could not get their finance elsewhere, and for whose benefit the Corporation was originally set up, would come along and find that there was no money available for them. I feel that we must have some explanation which we have not had yet as to why this limitation is being removed, and whether there is not some danger in it such as I have pointed out.
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Then I am bound to say that I think the effect of Clause 11 will be to stultify altogether the work of the Film Finance Corporation. If I were the managing director of the Film Finance Corporation, and Parliament passed this Bill in this form, with Clause 11 as it now reads, I should regard it as being rather in the nature of a directive to me that I must not lend any money for any film unless I had an almost gilt-edged certainty of getting my money back on the film. It is impossible to run film production on a "no risk" basis. If the Government are determined to have some limitation, I would suggest that it should be more along the lines that are to be found in some of the Acts dealing with the nationalised industries: that it should' be the purpose of the Film Finance Corporation so to conduct their business that, taking one year with another, their accounts will be in balance. This would not be quite so restrictive as the form which appears in Clause 11 of the Bill, and would be less likely to make the managing director of the Film Finance Corporation in future years play the role of the hard bank manager, which is not intended to he his function.
I would point out, further, that if you look at the Report of the Film Finance Corporation, whilst admittedly they have made big losses, if you segregate these losses and divide them into their compartments they do not amount to a large sum. If you take out the £3 million British Lion losses, which are something separate and apart; the loss that was made, quite properly, I think, on encouraging new talent under Group 3, and subsequently the Beconsfield Group, and one or two other special losses, you find that the total loss in seven and a half years of general film operation is just over £1,200,000, which over the period, having regard to the number of films involved, is not a great amount. And this amount would have been less, of course, if the Eady Plan had been in operation throughout the whole of that period. The losses in the future are likely to be lower, and therefore I do not think it is necessarily a good time for tightening up unduly on the attitude which the Film Finance Corporation is to take in dealing with applicants for loans.
Turning now for a moment to Part III of the Bill, I am bound to say that, in

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my view, the Government would be well advised to delete Part III altogether, and to let us have, at a later date, a full Bill amending the Cinematograph Films Act, 1948. There is no urgency: the present Act does not expire until 1958. It is difficult to see why Part III has been tacked on to this Bill at all. I do not want to take advantage of the noble Lord, Lord Mancroft, but I do not know whether he is aware of a reply which the President of the Board of Trade gave in another place this afternoon. He was asked if there was any intention of varying the definition of British films, to which he replied:
"There is no intention to introduce in the present Session detailed Amendments to the Cinematograph Films Act, 1948, but that does not mean that I shall not be discussing with the industry possible Amendments which might be introduced at some future time."
My Lords, why not have these discussions, get some agreement and bring in a proper Bill, and in the meantime delete Part III from this Bill? In conclusion, I would say that, although I may have sounded unduly critical of the Bill, in so far as it is the intention of the Bill to improve the position of British film production, I am entirely in agreement with it; and on the Committee stage, the efforts that I shall make, with my noble friends, will be directed towards improving the Bill and not in any way towards destroying it.
6.19 p.m.
LORD MANCROFT: My Lords, I am obliged to your Lordships for the careful and detailed, if not wholly uncritical, examination which you have given to this Bill. Your Lordships have asked a number of questions, one or two of which I will attempt to answer. A large number of them were, I think it is fair to say, Committee stage points which we will deal with carefully at the proper time. If some of the points which have arisen this afternoon are of a critical and slightly controversial nature, I can at least begin with one matter that is neither, and that is to join your Lordships in congratulating my noble friend Lord Westwood on one of the most knowledgeable and expert maiden speeches which we have heard for a long time. We always say in your Lordships' House that it is rash to speak on any technical subject because somebody
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will always "pop up" with a greater technical knowledge than yourself. None of us in future will dare speak on the film industry when the noble Lord, Lord Westwood, is in his place, because we know that if we talk rubbish we shall be put in ours at once. We look forward to hearing the noble Lord again, next time possibly in support of a Government measure.
The noble Lord raised one point which I should like to take up. I should have interrupted him were it not for the proper convention that one does not do so during a maiden speech. I think he is wrong when he says that the quota defaulters are increasing year by year. My information is not to that effect, but I will check up to make certain that I am not wrong. I was glad to hear the noble Lord's view that the exhibitors wish to see more films made in association with American firms, because I know that there are divergent views on that subject.
The noble Lord, Lord Westwood, like everybody else, talked about entertainments duty and its effect upon the industry. The noble Lord, Lord Archibald, emphasised this with many data to support his case, and I do not think any single speech was made this afternoon without a reference to it. As your Lordships will appreciate I cannot go further than the remarks I made in my opening speech. I chose my words carefully, and I then repeated them—I hope accurately —for the benefit of the noble Lord, Lord Lucas of Chilworth. All I will say now is that I will make certain that the fears which your Lordships have voiced this afternoon are brought to the notice of my right honourable friend the Chancellor of the Exchequer and those who are with him conducting these investigations which I told your Lordships are going on at the moment. I do not think I can do more than that.
I must say at once to the noble Earl, Lord Rosebery, that I am afraid I cannot agree with his request for a Select Committee. He is perfectly entitled to put upon the Order Paper a Motion that the House should agree to a Select Committee on this Bill at the same time as I put a Motion for the Committee stage. That he will do if so advised. But I am afraid that, if he does, I shall have to suggest

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to your Lordships that this is not a suitable case for a Select Committee. Most of the information that a Committee may need to find out is already well known to Members of your Lordships' House. We are perfectly able, as has been demonstrated this afternoon, to give the most careful and expert scrutiny to this Bill in a normal Committee of the Whole House. We are in a hurry for this Bill, and I am afraid that a Select Committee would add considerably to the delay. But that is a matter for the noble Earl to decide; he must make his decision when the time comes. I thought it only fair to him to tell him at once what I think the Government's reaction will be.
The noble Lord, Lord Lucas of Chilworth, had several points to make. Can we get Miss Anita Ekberg out of the way first, because she does not come within the Long Title. The quarrel is not, I may explain to the noble Lord, Lord Jessel, whether she is American, British or Swedish born. The quarrel is whether or not her picture on the hoardings is indecent. I have had the opportunity during our short adjournment to inquire from other noble Lords what they thought of the picture. One agreed with the noble Lord, Lord Lucas of Chilworth, but thought he was a spoilsport; three liked it very much, and seven said, "Who is Miss Ekberg?"
The Home Office have a certain responsibility in this matter, but that responsibility is delegated to the local authorities —in this case the London County Council who, I understand, do occasionally, on representations being made to them, suggest to the film people concerned that their poster has gone beyond the bounds of decency and good taste. But, after all, it is always difficult to account for matters of taste—one man's meat is another man's Ekberg; and who are your Lordships to decide? As I have not seen the poster myself, and therefore am not able to express any personal opinion, I will draw the attention of the London County Council to this matter to see whether we can unruffle Lord Lucas of Chilworth's susceptibilities. May I now come back to the Long Title of the Bill?
LORD LUCAS OF CHILWORTH: Before the noble Lord leaves that point he will appreciate the real reason why raised it. This is a good example of the dollar expenditure we have to make. I know that the noble Lord will agree with
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me when I say that if I had to choose between the bulk of the poster and a similar bulk of oil from America I know which I should choose.
LORD MANCROFT: I take the noble Lord's point fully, but I think he must also remember that two or three posters erected to which objection has been taken have been English posters.
A point which the noble Lord made, and which I think has caused most questioning from your Lordships, is this question of how the figure of £3¾ million was arrived at. I think the noble Lord, Lord Lucas of Chilworth, and every other noble Lord who spoke raised that point. Let me repeat what I said in my opening remarks. This is not a term of art: it is not a precise figure which can be justified mathematically. It was, quite frankly, as I said, an attempt at a happy medium. There were two or three factors we had in mind which your Lordships might like to know. We thought that the amount by which it would be reasonable to increase the revenues of producers cannot, in any case, be arrived at by an exact formula but must be an estimate of what is necessary to keep production in reasonable health.
The present fund runs at about £2½ million annually, as your Lordships know, and not more than 45 per cent. of films are profitable. On the other hand, it is hoped—and your Lordships have joined in this hope—that the figure of export earnings will continue to increase. The payments of exhibitors and their costs and overheads are rising, and obviously cannot be unlimited. In present economic circumstances, everybody, including film producers, must learn to exercise the utmost economy. I mentioned the point about the swimming baths which was referred to by the noble Lord, Lord Strabolgi, not lightheartedly but because I think the film industry has in the past done itself much harm in the eyes of the taxpayer and the cinema-goer by unnecessarily lavish displays of extravagance. I believe that the industry has realised that and has changed its ways.
The noble Lord, Lord Lucas of Chilworth, then turned, as did the noble Lord, Lord Archibald, and two or three other noble Lords, to the question of imported films. I know that it has been sometimes suggested in one way or another that the number of foreign films reaching this market should be reduced

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or, in other words, that there should be a fourth leg to our support for British films. This view, however, is often advanced with the reduction of American film earnings here in mind. Mere reduction in numbers does not fit the bill, since a smaller number of films might still mean equally high earnings shared between the remainder. This would not provide a fourth leg or assist our balance of payments. What is more important to watch than the number of films imported is the proportion of the American film earnings which is sent back to America in dollars. This is limited by the Anglo-American Film Agreement, which I think the noble Lord, Lord Archibald, would agree is a sensible and valuable compromise.
LORD ARCHIBALD: The noble Lord has attributed this argument to me, but I was not a party to it.
LORD MANCROFT: I beg the noble Lord's pardon. I am glad then that he agrees with me. As for the stimulation of the domestic industry by these methods, we must recognise that our resources for film-making are not unlimited and the quota legislation guarantees a definite proportion of screen time for British films.
The noble Earl, Lord Rosebery, took the point that he was opposed to the whole principle of one industry, as he called it, supporting another. I do not think that is quite accurate. I made the point that the film industry is unique in its complication and ramifications. What will happen here is for the benefit of the industry as a whole by getting more profit from more and better British films. That was the point of view which the noble Lord, Lord Jessel, supported. I do not like the idea of a subsidy which I think the noble Earl had in mind.
THE EARL OF ROSEBERY: Am I to understand that the noble Lord thinks that the cinema industry would profit to the extent of £5 million a year of which they are now being mulcted? They are being fined £5 million.
LORD MANCROFT: I do not think to describe it as a "fine" is the right word at all.
THE EARL OF ROSEBERY: A levy.
LORD MANCROFT: What we are trying to do is to bring money into the right
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place so that good films can be turned out to get more money. The reason why I object to siphoning off money from entertainment duty receipts for the benefit of producers, is partly that this would be a subsidy under a thin disguise, and partly that it would be closely analogous to a hypothecated tax, which I think is undesirable in principle.
I have already dealt with one point made by the noble Lord, Lord Jessel. He mentioned the question of the quota, as did the noble Lord, Lord Archibald. It was decided to take the opportunity presented by this Bill to extend the quota provision of the Act of 1948 for ten years —I say this quite frankly—in case it should prove difficult to find Parliamentary time for another Film Bill in this Session or in the near future. That is the reason for it. I have heard what your Lordships have said about this matter. I will bring your Lordships' remarks, naturally, to the attention of my right honourable friends the Chancellor of the Exchequer and the President of the Board of Trade.
I think I have dealt with the major points that have arisen in the course of this debate, and I can be justified at this late hour in not going into greater detail. However, I do not want to shirk any of, the issues raised or to dodge the points put to me. I will go carefully through what has been said and let your Lordships have individual answers to the more detailed points. I have already dealt, I think, with the bigger ones. I am grateful for the help of the House. If your Lordships have appeared slightly critical, I would only say this. It often happens that when you are looking at a new Bill you pass over the good parts, taking it for granted that the Government spokesman will accentuate them, and you yourself pick out the bits which you do not particularly like and you accentuate them in debate. No Bill is perfect, even from this Government. I hope that those who read this debate will not think from your Lordships' slightly hostile remarks that I am unjustified in suggesting that your Lordships approve generally of this Bill or that the Government are doing well by giving this important industry the security and the opportunity to carry on the excellent work they are doing.
On Question, Bill read 2ª; and committed to a Committee of the Whole House.

NURSES BILL [H.L.]
Read 3ª (according to Order), and passed, arid sent to the Commons.
NURSES AGENCIES BILL [H.L.]
Read 3ª (according to Order), and passed, arid sent to the Commons.

B.P. TRADING BILL [H.L.]
BLYTH HARBOUR BILL [H.L.]
BUCKINGHAMSHIRE COUNTY COUNCIL BILL [H.L.]
DURHAM COUNTY COUNCIL(BARMSTON-COXGREEN FOOTBRIDGE) BILL [H.L.]
EAST HAM CORPORATION BILL [H.L.]
HASTINGS TRAMWAYS BILL [H.L.]
LIVERPOOL HYDRAULIC POWER BILL [H.L.]
LONDON COUNTY COUNCIL (GENERAL POWERS) BILL [H.L.]
MILFORD DOCKS BILL [H.L.]
NEWPORT CORPORATION (WATER) BILL [H.L.]
PORT OF LONDON BILL [H.L.]
WAKEFIELD CORPORATION BILL [H.L.]
Presented, and read 1ª.