CINEMATOGRAPH FILMS BILL [H.L.]

HL Deb 05 February 1957 vol 201 cc471-532

5.44 p.m.

Order of the Day for the House to be again in Committee read.

Moved, That the House do now resolve itself into Committee.—(Lord Mancroft.)

LORD LUCAS OF CHILWORTH

My Lords, on the Motion that this House do resolve itself into Committee on this Bill may I make a suggestion to the noble Earl the Deputy Leader of the House—I can assure him that I do so more in sorrow than in anger? This is the third occasion upon which we shall detain your Lordships late to discuss the Committee stage of this Bill. I make no complaint whatsoever about the reason for this. The Business that has detained your Lordships upon other occasions has been of vital importance to some people, just as this Bill is vitally important to others. I would ask the noble Earl whether he will discuss with the noble Marquess who leads the House and my noble friend who leads Her Majesty's Opposition the prospect of engaging your Lordships longer than two days a week in attempting to get through Government Business. The people who suffer are the Opposition. I know there are schools of thought which would rather have your Lordships' House as a rubber stamp, although I would not make that accusation against the noble Earl, the Deputy Leader of the House. But if the Opposition are to play their part in a democratic assembly, and if your Lordships' House is to fulfil its function as a Revising Chamber, it must be given adequate time, within reasonable hours, to do so.

I want to ask whether the noble Earl will consult with those I have mentioned. Your Lordships will see that there are heavy days before your Lordships' House. You have only to look at the forthcoming Business on the Order Paper to see the highly controversial measures that will have to go through a Committee stage in your Lordships' House, to realise that it will be impossible, within the reasonable limit of your Lordships' time, to get through this Business by sitting for two days on Government Business, on one day from half past two to seven or seven-thirty, and upon the other from three o'clock to seven or seven-thirty. My suggestion is that we consider the advisability of meeting upon another day during the next few weeks, thus preventing the Opposition from having to curtail their activities. I am afraid I shall have to ask your Lordships to sit rather late this evening. If the noble Earl, Lord Home, will consider my suggestion, I am sure that we on this side of the House shall be most grateful to him.

THE EARL OF HOME

My Lords, the noble Lord has made a suggestion and has asked only that I should consider it, which I certainly will do. As we look at the programme to come, it is true that we have some complex legislation in front of us; and we shall certainly bear that in mind. He said that the Opposition are the first to suffer. That is true. I will certainly undertake to consider his suggestion, if he will realise that sometimes Governments suffer, too.

LORD LUCAS OF CHILWORTH

My Lords, I am most grateful to the noble Earl. I said that the Opposition suffered only because of our sparsity of numbers, and because such a heavy burden falls upon so small a number. I am grateful to the noble Earl, I knew he would meet my inquiry in the spirit in which it was made.

On Question. Motion agreed to.

House in Committee accordingly.

[The LORD MERTHYR in the Chair]

Clause 3:

Payments by Agency to makers of British films

3.—(1) The Board of Trade shall by regulations (made by statutory instrument) provide for the making by the Agency to, or for the benefit of, makers of British films of such payments as may be determined by or under the regulations.

(2) Regulations under this section may—

1. (a) define the classes of British films in respect of which payment may be made;
2. (b) specify the rate of the payments or the method by which they are to be calculated and provide for different rates of payment or different methods of calculation in relation to different classes of films;

LORD LUCAS OF CHILWORTH moved, in subsection (2), to add to paragraph (b): provided that any regulations under this paragraph shall provide that the maximum rate of payment so specified in relation to any class of film shall not be made to or for the benefit of makers of films who, by virtue of arrangements made with the approval of the Treasury under the Exchange Control Act, 1947, or otherwise, have the opportunity of utilising foreign currency or employing foreign actors and actresses to a greater extent than the makers of other films in the same class in respect of which payments may be made under this section and foreign currency' has the meaning assigned to that expression by the said Act of 1947; The noble Lord said: We now come to what I consider to be the most important Amendment in the Marshalled List, but may I tell the Committee straight away that I do not intend to press it to a Division. I put it down to obtain from the noble Lord, Lord Mancroft, who is in charge of the Bill, some expression of Government opinion upon the great problem that is facing the film industry, especially upon the production side.

This clause deals with those who shall receive this levy. In the previous clause we decided how it should be collected. The object of this levy, as its name is supposed to imply, is to give to the producer of British films a suns amounting, us the first year to £3 ¾ million and, later, to anything between £2 million and £5 million in any one year. The reason for this levy is that the British producer cannot exist and cannot be kept in existence by his home market. That has been realised by successive Governments since the War. The reason was clearly stated during the Second Reading debate by my noble friend Lord Archibald. The British home market is 15 per cent. of the world market but American-produced films have, in America, a home market representing 65 per cent. of the world market. The remaining 20 per cent. is spread over other countries. The British producer, therefore, cannot hope to compete in the world market with the profit which he gets from his home market. It was realised by successive Governments that the production side of the British film industry was of great importance, not only because of the entertainment value at home; not only for the reason that it employed a fair number of people, and not only because it could be a valuable export, but because it could show, throughout the world, the British way of life. That was the reason for the action of successive Governments in establishing a quota for exhibition on home screens. It was the reason for the foundation of the Film Finance Corporation and the Eady levy.

I think it is as well, therefore, to examine briefly how the British producer is going to fare under this Bill in the conditions that exist to-day. The Government of the day decided upon a definition of a "British film" for the purpose of the 30 per cent. exhibition quota on cinema screens; and when the Eady levy came into existence the same definition was used for that levy—a vastly different purpose. A clause in this Bill continues for a further ten years the definition of a British film as in the Cinematograph Films Act, 1948; and it may seem rather strange when I tell your Lordships that it is possible for a film designated and registered as a British film to have not one individual working in the United Kingdom employed in its production.

The object of the Amendment is to draw attention to the very grave and unfair difficulties facing what I might call the all-British producer. Through the passage of time there has been built up in this country a system of Anglo-American producers. That has happened because of the arrangement made in 1950, under what is known as the Johnson Agreement, whereby American films can come into this country without paying any duty. I ask your Lordships to mark this fact: they are on no quota whatsoever, and they show to the extent of 70 per cent. on the screens of this country—I make no complaint whatsoever about that.

Under the Memorandum of Agreement of 1950 between the Government of the United Kingdom and the motion picture industry of America, the American industry is allowed to take out of this country 17 million dollars a year. The balance of its earnings from the exhibition of films in this country has to be retained here for use in this country for diverse purposes. It is known to-day as "unremittable sterling." It can, however, turn into dollars£17 million worth of dollars to go to the United States of America. The unremittable sterling is used for the production of films in this country. The dollars which are remitted from this country to America are used, quite frankly, to the disadvantage of the British producer—for this reason: an American film made in this country can rank, first of all, as a British film for levy; then it can go to the United States of America, and none of the earnings in America from that film have to come back to this country. That is the position that has arisen. There the British producer is at a great disadvantage.

As I have tried to explain to your Lordships, the one hope for the survival of the British film producer is to export. He must get into the markets of the world. He cannot expect any great increase in his home market. He starts off with the great disadvantage that, if he wishes to engage international American stars for his picture, he has to go to the Bank of England for dollars, whereas if an Anglo-American company in this country make a British picture, the dollars for that purpose can be found from the remittances of the earnings in America.

Perhaps the best way I can explain this to your Lordships is to give an example. To be registered as a British film for quota purposes, a film must be technically produced by a British company but can be wholly financed by American money. On Second Reading, I brought up the case of what I said was an American film, when I offered a modest protest about a certain poster; and I was then under the impression that the film which the poster advertised, Zarak, was an American film. I learned, to my astonishment, that it was a British film, produced with American money by, technically, a British company in this country. That film has already been shown in the United States, and all the dollars earned by its showing there remain in the United States. I am informed that if, when that film is shown in this country, its box-office receipts reach the optimistic estimates of its makers, it will take out of the levy anything up to £100,000. I do not know whether any of your Lordships has seen the film. I have not, but I have seen excerpts from it on television, and by no stretch of imagination would I say that it depicted the British way of life. The chief stars of that film were paid in dollars.

Another film which is going to be made by a technically British concern will be filmed in Ceylon. I doubt whether any part of it will be made in this country. The chief star will be an American and, I am informed, will receive a quarter of a million dollars for payment. And that film will be shown in this country as a British film. It will rank for levy, and immediately it gets out of this country it will sail through the world as an American film. There is a clause in the 1950 agreement that, technically, a "British" film must employ either 75 per cent. or 80 per cent. British labour; but two stars of foreign birth are allowed and their payments can be taken out of that. That may enable these companies—in fact, it does enable them—to employ American stars. They need not go through the ordinary channels of the Bank of England for their dollars. While the agreement states that the salaries of all artistes, as well as the payment for labour, is to be either 75 per cent. or 80 per cent. of the film cost, it does not say that they must be paid in sterling. And these American stars require payment in dollars.

I do not quarrel with any of this, but what I do quarrel with—and, I submit, on good grounds—is the fact that the British producer cannot do the same thing. If the British producer produces a film and wants au international star, an American star, and that international star says, "I require payment in dollars ", the producer has to go to the Bank of England. And the Bank of England do not like giving dollars. Yet the other company, technically British, all their production costs guaranteed by an American circuit, have a resource in unremitted dollar earnings—dollar earrings that they do not have to remit back to this country—to pay to these stars. Successive Governments have said that the British film production industry must stand on its own feet, and if that is anything other than a pious expression, surely this industry should be enabled to stand on level terms with its competitors. There is no doubt that the American film is the chief competitor of the film made by the British producer.

May I make it perfectly clear, beyond any argument whatsoever, that I am not averse to the making of American films in this country? It brings valuable currency to this country; it employs Britishers in this country. I do not object for one instant to the showing of an American film in this country—indeed, we should never have any cinemas if there were not American films. I should like to see London the centre of the film-producing of the world. But while the object of this levy, and the avowed object of successive British Governments, is to encourage the British British producer, it may well be, if we go on as we are going on, that in the last analysis the only producers of films left in this country will be the producers of the British films that are financed by America. Why is that allowed?

I hope I am making myself clear. I do not want any of the advantages that the American-financed British company enjoy at the present time taken away. But what I do want to ensure, if possible, is that the British producer who is not financed by American money, who has not built up reserves in America of dollars to pay these stars, shall not be at a disadvantage. I trust that I have made that clear. You may say: "Why cannot the British producer hire American stars". In the first instance, if they insist—and they do insist—on being paid in dollars, the British producer has to go to the Bank of England and if the Bank of England say: "No"—as they invariably do—

LORD JESSEL

Surely not.

LORD LUCAS OF CHILWORTH

I am told that that is so.

LORD JESSEL

What about the case of the Palladium?

LORD LUCAS OF CHILWORTH

I am glad that the noble Lord has raised that point. I am going to deal with it in a minute. The only way in which the British producer can get the necessary dollars in America to pay an American star who wants payment in dollars is to sell his distribution rights to an American circuit, so that the American circuit will be enabled to make—if they can—profits out of exhibition in America. But a hard bargain is always driven in such cases, because the American circuit know that the British producer is in a quandary. He must have the star, and the bargain is usually such a hard one, from his point of view, that it is not worth entering into.

A question in this connection is asked by one trade paper, a copy of which came into my possession this afternoon. It says: Treasury policy allows transfer of payments of royalties on all literary, artistic, dramatic and musical material. It does not include films. The article continues: Under this ruling Val Parnell can bring in Danny Kaye as a top-liner at the Palladium paying him in pounds which can be converted into dollars. TV is allowed to spend what it likes in dollars—though doubtless places a self-regulatory quota on its exuberance. (Latest published figures show that between July, 1955, and March, 1956, they did spend three million dollars.) That was the amount spent on the import of American material. Now what the paper asks is: why should precious currency go out like this? It mentions a name, the name of Mr. John Davis, and asks why Mr. John Davis should not be allowed to employ Danny Kaye in a film—a project which could reasonably he expected to earn far more dollars than would be expended upon it? I hope the noble Lord will give us the Government's answer to this question.

One last word, because I have explained the point as well as I am able. When I was in Hollywood, I discussed with film producers why British films did not get on so well in America. One day I said to a big producer of American films, "What do you think of the British actor?" He said, "The British actor, as a character actor, is the finest in the world; but the British cinema actor cannot make love; and that is "Box Office' in the United States and the rest of America." I am not saying whether I believe that this is true or not, but the British film industry has found that international stars are necessary to break into the American market, as they must, if they are to survive the future. I would repeat, in case your Lordships have not quite understood, that I do not want to do anything that will prevent American films from coming into this country, or American money from coming into this country. All I ask is that the British maker of films shall have precisely the same advantages as the British-American maker of films. I beg to move.

Amendment moved— Page 3, line 25, at end insert ("provided that any regulations under this paragraph shall provide that the maximum rate of payment so specified in relation to any class of film shall not be made to or for the benefit of makers of films who, by virtue of arrangements made with the approval of the Treasury under the Exchange Control Act, 1947, or otherwise, have the opportunity of utilising foreign currency or employing foreign actors and actresses to a greater extent than the makers of other films in the same class in respect of which payments may be made under this section and foreign currency' has the meaning assigned to that expression by the said Act of 1947;").—(Lord Lucas of Chilworth.):

6.12 p.m.

LORD ARCHIBALD

I do not think that I would go quite so far as my noble friend and say that this is the most important Amendment we have to consider, but I certainly would agree that it is probably the most complex that we have before us this evening. It deals with a matter on which it would be difficult to find unanimity. I know that there is not unanimity on this matter even within the ranks of the British film producers. I am going to say a few words about the Amendment, because I feel that if I do not, my silence is likely to be misinterpreted. The situation is more complicated than that described by my noble friend, and that was complicated enough. When I come to look at the terms of the Amendment, I find myself in considerable difficulty. If my noble friend will permit me to say so, he appears to me to have created a new offence in law—I am no lawyer and the noble Lord, Lord Man-croft, will correct me if I am wrong—the offence of having a better opportunity than someone else. At some time or another we all have an opportunity of committing a crime. Providing we do not avail ourselves of it, no punishment can fall upon us. But, speaking strictly within the terms of this Amendment, it seems to me that the producer who is deemed to have better opportunities for certain things than others is to be penalised, whether he uses the opportunity or not.

Let us look to see who it is who might be deemed to have this greater opportunity of employing American talent in films. Looking at the structure of the industry, we naturally look first at the two giants. I am sorry if I have to name companies; I do not like doing that, but I do not think that the situation can be made clear if I do not. I particularly do not like doing it because it may savour of advertising. I am told that my noble friend's reference to a certain film was worth something like £100.000 in advertising value. I do not want to hand out gratuitous prizes of that kind, and I will take the names of companies rather than the names of films. Warner Brothers of America are well known to have a laree interest in the Associated British Picture Corporation and the managing director is an American. On the surface one would say that there is an American association which ought to give Associated British an ample opportunity, greater than that of the small people, perhaps, of getting American talent. When we come to the other giant, the Rank Organisation, we find that 20th Century Fox of America have a large interest in the Gaumont Company, and the Rank Organisation are well known to have some affiliation with Universal Pictures of America. It would seem, therefore, that they would be in an advantageous position to get American talent. But, by that strange contrariness which sometimes seems to operate in the film industry, they do not use so much American talent, and in fact seem to find it difficult to get American talent.

On the other hand, there are film producing companies, which do not come within my noble friend's definition of technical British companies, but which are actual British companies, set up by British people and using British finance, which are using a higher percentage of American talent—and they have no particular or special opportunities. There is a company called Romulus—and I believe that there is also one called Remus, but I am not sure—who have made a number of outstanding British films. They are a British company, with British people and British money; yet they use a lot of American talent. Why? Because they use the process that my noble friend has described. They get a subject which they think is worth a film and which will be of much more value if it has an American star. So they approach an American distributor and make a deal for the distribution of the film in America. The American distributor advances the dollars to pay for the American star, or star and director, whichever it may be. It is true that the British producing company have to surrender a share of the profits arising from American distribution, but it is a matter of bargaining, and obviously they will not surrender a bigger share than they think is worth while to give up in order to get American talent in the film and increase its profitability throughout the world. In a deal of that kind, it would not mean that none of the earnings of the film in America come back to this country. A share of [he American earnings will be retained by the American distributor who has taken the risk of putting up money in advance, but the remainder of the profits will come back to this country.

Let me give a hypothetical illustration which I think will show something of the complexity of this matter. Let us assume that a British company who set out to make a British film are in the unique, almost unheard of, position of having enough money of their own to finance the making of the film, so that they do not make a distribution contract before production, as is usually the case. They finish file, film and then it is their job to show it to British and American distributors to see who will offer the best deal. If the best deal conies from a British company, then the film is British in every particular. But if the best deal comes from an American company, is the film less British because it is now going to be distributed by an American company? If that American company says to the producer: "We are quite willing, now that we have taken the film, to advance you 75 per cent. of its negative cost against the receipts from distribution, and it will make it easier for you to make your next film," then does that American association make the film less British, and subject to discrimination in any respect, so far as British law is concerned?

Take another example. There is a British production company which has been in continuous production in this country for over twenty years and has made some of the best of British films. It has at one time or another had its own distribution, been distributed through an American company, been distributed through a British company and has to-day gone hack to distributing through the American company. But the nature of its production has been consistent. It is entirely British in its set-up and in its attributes, and it has recently been described as being "as British as a bowler hat". Under the terms of this Amendment, as its products are being distributed by an American company, it comes into the category, presumably, of having greater opportunities than some other British producers to get American talent. Its films are no less British than they have ever been, and I think it would be absurd to try and make out differently.

I give one final example. My noble friend Lord Lucas of Chilworth referred to the company which made the film whose poster he did not like, and from the excerpts he has seen of the film he does not think it shows the British way of life. I think we have all seen films made by purely British companies whose representation of the British way of life left a great deal to be desired. But the same company—it is no secret that this is operated by two Americans who have been resident in this country for some six years and are consistent makers of films—made "Cockleshell Heroes", which was as British a film and as good a representation of the British way of life, of British character and heroism, as anything that could be made by a purely British producer. Their films are not made entirely with American money—here I would correct my noble friend—and the earnings from their films in America are not wholly left in that country. So that, even in their case, the verdict, so far as his charge is concerned, at least, would have to be "Not proven".

My final point is this. Under the Anglo-American Film Agreement we restrict the American companies to the remittance of 17 million dollars. They are not only permitted, but were originally encouraged, to make films here with their unremittable sterling. I think it would be rather unworthy if we were to say: "You cannot remit your money. You may make films with it. We shall be glad to have these films count as British for quota purposes, but they will be regarded as 'second-class citizens' for certain other purposes." I do not think that that is a fair and proper method. All I am arguing is that if we start to discriminate I just do not know where we can draw the line, because the different categories, classes, terms of appearance, and so on, are so infinite in their variety.

I think there is only one test. I can think of only one category of film which I should like to see excluded. In the past occassionally we have had the situation where an established American producer, working in Hollywood, having, in effect, got the whole set-up for a film—script, cast, director and so on—decides that that film could be better made in England, and he, so to speak, puts the package under his arm and brings it over here and a technically British company is supposed to make that film. That is really an American film being made on location here. But it may be possible for it just to "get in under the wire" and qualify as a quota film. It should not in all cases qualify as a quota film.

I have recently had my attention drawn to the decision of the Board of Trade a few years ago, which was upheld by the courts, in the case of a film called "Monsoon", where it was held that, because the arrangements for the making of the film had been carried out other than in this country and other than by a British company, the technical making of the film by a technically British company did not bring it within the category. It may be that the exceptional case I speak of, where it is really an American film being made on location, could be covered by the operation of the decision embodied in the "Monsoon" case. If there is any doubt about that, then if a formula could be found, either legislative or administrative, to exclude such a film both from quota and from Eady participation, I should say that that is about the one case where discrimination would be justified. But, taking it by and large, my view is that the complexities of the situation are so great that discrimination would create more difficulties than it would do good.

LORD STRABOLGI

Before the noble Lord replies, I should like to raise one point that was made by my noble friend Lord Lucas of Chilworth. I have listened with great interest to his argument, but there was one matter that he raised with which I am afraid I cannot agree, if I understood him aright; that is, when he said that he thought that British films should, for the best part, portray the British way of life.

LORD LUCAS OF CHILWORTH

I did not intend to say that. I said that one of the prime reasons why successive Governments always wanted to keep alive the British film producing industry was because it did portray the British way of life.

LORD STRABOLGI

I am sorry if I misunderstood my noble friend, and I am grateful to him for his explanation, because this is a kind of parochialism that I am afraid I cannot agree with. We had that argument on the Television Bill, when I think it was suggested that all television programmes should be thoroughly British. Without wishing to go over the ground again, I should like to say that the aim of British film producers should be to make good films, whether they are about the British way of life, the French way of life or the Eskimo way of life. If they can keep that end in view, then I think they will have much more success than they have had in the past. One of the best British films that the British film industry has ever made was "The Third Man". That certainly did not portray the British way of life, but, nevertheless, it was a first-class film.

LORD MANCROFT

I think the Committee will have gathered by now that this is a difficult and complicated subject. We have had three interesting speeches from noble Lords opposite, none of whom wholly agrees with the other. That only typifies how many and how divergent are the views held on this subject. I am glad that the noble Lord, Lord Lucas of Chilworth, has indicated that he does not intend to press this Amendment, because I think it would hardly be suitable for inclusion in a Bill like this. He has made it quite clear that he merely wished to take this opportunity of ventilating a difficult subject, upon which he clearly feels strongly and upon which others feel equally strongly in divergent ways.

I may say that I do not disagree with many of the remarks of the noble Lord. This is not a problem of black and white and one cannot always draw a clear line, I think probably that the noble Lord, Lord Archibald, has the right solution when he says that if you depart from this principle and attempt to discriminate it is difficult to know where to draw the line. That is the real problem. We naturally want to preserve many of the virtues emphasised by the noble Lord, Lord Lucas of Chilworth, but I think the noble Lord, Lord Strabolgi, was right when he mentioned "The Third Man" which is probably the best film that many of us have seen since the war, as being the perfect example of the current scheme working well.

I do not deny for one moment that many of the points which the noble Lord, Lord Lucas of Chilworth, raised are, on the face of them, a little difficult to justify. In a flexible scheme like this, there must inevitably be some lack of consistency and sonic lack of logic. I am going to suggest to the House that, with all its faults, the present scheme is probably the best, without suggesting for one moment that what the noble Lord has said is wholly wrong. If we were to take his view, we should be producing a whole new principle in the Government's policy towards film production in this country. The 1938 and 1948 Cinematograph Films Acts expressly make provision for some foreign participation in British quota films. Broadly speaking, 75 to 80 per cent. of the labour costs (excluding one or two, as the case may be, foreign directors or actors) must be in respect of British labour, and the studio used, if any, must be within Her Majesty's Dominions. The terms of the Anglo-American Film Agreement, to which the noble Lord, Lord Lucas of Chilworth, referred, provide specified uses, including film production, for the earnings from American films which could not, under the terms of the agreement, be remitted to the United States. I think the noble Lord's tongue betrayed him at one moment. It was 17 million dollars which could be remitted and not £17 million worth of dollars.

LORD LUCAS OF CHILWORTH

I meant 17 million dollars can be converted, which means about £6 million.

LORD MANCROFT

The noble Lord made a slip of the tongue. I quite agree with the noble Lord. We have always realised that the British film industry must look to the export markets for additional earnings. It is for that reason that I welcomed wholeheartedly in my Second Reading remarks the decision of the Rank Organisation to set up their own distributing organisation in the United States. The noble Lord also produced the argument about a small market compared with that of the Americans. The argument that our market is a smaller one than that of the United States could, I suppose, be applied to the whole range of British industry. Nevertheless, we have been pretty successful in many of those markets, and have more incentive than ever.

The present voluntary British Film Production Fund, the Eady levy, which has been operated for five years by the industry itself, admits as participants films which qualify as British registered quota films. It is this flexibility which has allowed such a rich diversity of material to be used in the making of films in the United Kingdom—those films to which the noble Lord, Lord Strabolgi, has referred, and which my noble friend Lord Westwood remarked en Second Reading had been made in collaboration with American companies, and are so much welcomed by exhibitors in fulfilling their quotas. If the British filmgoer were to be deprived of those, I think it would prove to be a real hardship. Why, then, should we think it necessary or desirable to impose a very difficult discrimination of the sort which the noble Lord has been advocating in his remarks? Film making is a creative occupation and, I suggest, must be allowed greater freedom than other trades.

As the noble Lord, Lord Archibald, and the noble Lord, Lord Strabolgi, have suggested, these hard and fast rules would, I think, end in chaos and disaster. We have hitherto sought to provide minimum requirements about the British content of a British film. Those requirements may not be wholly justifiable in logic, but they have worked well. They have allowed a high level of productive activity and employment for our actors, technicians and directors, and have provided films of remarkably high entertainment level for the picturegoer. Again, I say it is not a hard and fast rule, but if we depart from this, and if we start to draw the line as we know the noble Lord wants, we might get to more logical waters, but probably more difficult ones.

The noble Lord will find himself in trouble with the British film actors, having informed your Lordships that, in the opinion of some, they cannot make love. I am quite certain that the noble Lord will find angry deputations from the Film Actors' Federation calling on him in the next forty-eight hours. He may or may not be right. But I think he will agree that the present system has not worked too badly and, unless he can produce an alternative system a great deal more promising than the one he has put before us, we would do best to go on with the existing one.

LORD ARCHIBALD

Before my noble friend Lord Lucas of Chilworth replies, I wish to ask the noble Lord, Lord Mancroft, whether he will consider the point I made, about the rather exceptional case of the film which is made here, and which may be technically British, but which it is apparent to everyone is really an American film made here on location. I am not asking that the noble Earl should reply now, but I ask him to consider whether, if no formula can be found to meet the difficulty, it cannot be done by a word from the Board of Trade to the Motion Picture Producers' Association of America, pointing out to them the impropriety of a film of that kind making application for a benefit under the production levy. I think that might be an effective method of dealing with the trouble. As I said, it is a complicated matter, and I have a great deal of sympathy with what my noble friend was aiming at in his Amendment. If I appeared to controvert it, it was because I saw the difficulties and not because I was deficient in sympathy.

LORD MANCROFT

I had made a note of what the noble Lord said. I was not wholly concerned with the deficiencies of it, but to see if we could do something about it.

LORD LUCAS OF CHILWORTH

I am not in difficulties: difficulties are here to be overcome. I made it abundantly clear that I had to find some words to put on the Order Paper in order to raise this matter at all. I could have moved to leave out the whole clause. I can find quite an easy definition, and it is this: that some regard should be paid to the film, the foreign earnings of which have to come back to this country. This is the only industry in this country that has to bring its foreign earnings back here. Surely, in the availability of dollars, the British producer should not be placed at a disadvantage with any other producer. All I have been asking, all the way through my argument, is that the noble Lord, on behalf of the Government, or the Government, or the Board of Trade, or whoever it is, should give this matter some consideration. This is operating, and it has a "snowball" effect. After all, the noble Lord is not so hidebound to believe that what was a good thing in 1950, is necessarily equally good in 1957 or 1958. The world goes on.

I want the noble Lord to take into consideration this fact: the British film producer is doing a real job for this country; yet the more he does it—the more he exports—the greater is his disadvantage, because more foreign earnings have to come back to this country, whereas his competitor does not have to return the earnings to this country. Why should the British film producer be practically the only individual who cannot have dollar availability? My noble friend put his finger on the problem in the first sentence he used, when he said, "What I want is equality of opportunity for everyone." I am not going to continue the matter now, because the Amendment has served the purpose I intended, and with your Lordships' permission I will withdraw it and leave the matter for the Government and the film industry to consider.

Amendment, by leave, withdrawn.

LORD LUCAS OF CHILWORTH moved, after subsection (2) to insert: (3) Regulations under this section shall not be made save after consultation with such bodies as appear to the Board of Trade to be representative of makers and exhibitors of British films. The noble Lord said: I shall not say more than two words upon this Amendment. The noble Lord, Lord Mancroft, and I have argued this particular point about four times, and I do not intend to bore your Lordships with another dissertation upon it. I will await the Amendment which he has promised to put down at another stage of the Bill to see what it looks like before I return to this particular subject. if noble Lords will prefer, I will not move the Amendment.

LORD MANCROFT

I should prefer the noble Lord to move it.

LORD LUCAS OF CHILWORTH

I will move it and then see what the noble Lord has to say, in view of my conciliatory attitude over this. I beg to move.

Amendment moved— Page 3, line 38, at end insert the said subsection.—(Lord Lucas of Chilworth.)

LORD MANCROFT

I asked the noble Lord to move the Amendment only to give me an opportunity of replying and still being in order. The Amendment which he refers to is already in draft I shall be happy to show him a copy of the draft the moment the House rises. He asked that he should be shown it to see what it looks like. I assure him he will see that it looks very pretty.

LORD LUCAS OF CHILWORTH

Nothing that the noble Lord ever does or has any connection with is other than pretty. With those remarks, I beg leave to withdraw my Amendment.

Amendment, by leave, withdrawn.

Clause 3 agreed to.

6.42 p.m.

LORD LUCAS OF CHILWORTH moved, after Clause 3 to insert the following new clause:

Power of Agency and their officers to obtain information

".—(1) The Agency shall have power, for the purpose of enabling it to perform its functions under this part of this Act, by notice in writing served on a maker of British films, to require him—

1. (a) to furnish to such person as may be specified in the notice such return or other information relevant to his entitlement to receive levy payments as may be specified;
2. (b) to keep such records relevant to his entitlement to receive levy payments as may be so specified;

and any member, officer, servant or agent of the Agency may at all reasonable hours enter any premises occupied for the purposes of his business by a maker of British alms and may require him or any person employed by him in connection with the business to produce for examination by such member, officer, servant or agent of the Agency such books or other documents relating to the business of the maker of British films and relevant to his entitlement to receive levy payments as may be reasonably specified.

(2) If any person on or to whom a notice or requisition is duly served or made under the foregoing subsection fails to comply with the notice or requisition, he shall, sinless he proves that he had reasonable excuse for the failure, be guilty of an offence under this subsection and he liable, on summary conviction thereof to a fine not exceeding one hundred pounds.

(3) If any person in purported compliance with the requirements of a notice under subsection (1) of this section to furnish returns or other information makes a statement, or furnishes a document, which he knows to be false in a material particular or recklessly makes a statement, or furnishes a document, which is false in a material particular he shall be guilty of an offence and shall be liable, on summary conviction, to imprisonment for a term not exceeding three months or to a fine not exceeding one hundred pounds, or to both such imprisonment and such a fine.

(4) Any offence under this section may be tried by a court having jurisdiction either in the country or place in which the offence was actually committed or in any county or place in which the alleged offender resides or carries on business."

The noble Lord said: If your Lordships will be good enough to turn to Clause 4, you will see that the Customs and Excise, who have the task of collecting this levy, are given some very wide powers to see that the accounting of the people who have to pay the levy is in proper order and that whit they gain from their collection is the right amount. The noble Lord, Lord Fairfax of Cameron, speaking, if he will permit me to say so, so ably for the first time in a debate of this kind, said it was Government policy—at least, he could not have said it was not Government policy—that "what is sauce for the goose is sauce for the gander." This Amendment seeks to insert a clause, in precisely similar terms to Clause 4, to give the Agency the same powers and the same right of investigation and search in respect of the claims made upon them for payments out of the Fund, as are given to the Customs and Excise to see that their job is done correctly. I cannot for the life of me see anything wrong with a principle like that. There may be one thing wrong with my Amendment. Perhaps it would have been strictly correct to include with producers, renters and distributors. If the noble Lord likes to alter it at the next stage, I shall not mind. That is the simple purpose of this Amendment. Why should the Customs and Excise have all these powers to see that they collect the right amount, and the Agency have no powers at all to see that they distribute to the correct beneficiaries the money that is collected? I beg to move.

Amendment moved— After Clause 3, insert the said new clause.—(Lord Lucas of Chilworth.)

LORD MANCROFT

The noble Lord is quite right in saying that his Amendment is simple, but it really is not at all a nice one. Let us look for a minute, if you Lordships will be good enough, at what the noble Lord is seeking to do. I believe he is really putting down this Amendment to "pull the Government's leg". I do not believe that he honestly has it deeply at heart. What this Amendment does is this. It gives the Agency the power to require makers of British films to furnish returns and information and to keep such records as are necessary to show their entitlement to receive payments out of the proceeds of the levy; and it also gives power to the Agency to enter premises and require the production of books for the same purpose. Failure to comply with such requirements and the provision of false information are made criminal offences.

I cannot think it is necessary or desirable to give such wide and important powers to the Agency, and I do not really believe that the noble Lord, Lord Lucas of Chilworth, on reflection, would wish to add such powers to the Statute Book and give them to a statutory body of this kind. There is one important reason why it is quite unnecessary. The regulations, which we have frequently discussed, to be made under Clause 3 of the Bill, will provide that no maker of a British film shall be entitled to a payment out of the proceeds of the levy unless he has supported his claim with such evidence as the Agency may require. That is the situation. The film producer cannot come to the Agency and say, "I want money for my new film." The Agency will turn round and say, "I want to see your books, your budget and your prospects", and the film producer is not in a position to turn round and say, "Oh no, you cannot", because he will not get the money unless he provides the information which the Agency wants. If he does not provide all the information which is required, he will not get what he wants. Most of the information he desires is set out in the noble Lord's Amendment which seeks to impose penalties if the information is not provided.

LORD STRABOLGI

Can that information be checked?

LORD MANCROFT

If the Agency is not satisfied with the information, it will not give the money. It can check it up hill and down dale. The Agency can take any steps it likes before producing the money to satisfy itself that it is a good case.

LORD STRABOLGI

Has the Agency the right to check the books under Clause 3 (2) (c)?

LORD MANCROFT

The Agency has the right to refuse the money unless it is satisfied that a proper case is made out for the money. If it thinks that it is necessary to check certain books or look at certain accounts before allowing the money, then certainly it can do it. But no criminal offence is involved. That is the difference.

The noble Lord, Lord Lucas of Chilworth, referred to "sauce for the goose being sauce for the gander" over the question of entertainments duty and the Customs and Excise. That is not an accurate parallel. The noble Lord has talked about the powers which are accorded, under Clause 4, to which the noble Lord, Lord Fairfax of Cameron, has already referred, to the Customs and Excise in the collection of the levy. These powers, however, march with the powers for the collection of entertainments duty. They do not amount to the widening of the number of people enjoying powers of this sort. Apparently we shall get between us exactly the same result. Information which the noble Lord wants to be compulsorily produced will be produced voluntarily, because the money will not be forthcoming unless those who are to provide it are satisfied of all the things which he has put in his Amendment. I am sure that on reflection the noble Lord would much rather it were done that way than by the creation of a new power. No money would be forthcoming unless the information required by the Agency were also forthcoming.

LORD ARCHIBALD

I want to take only a moment on this matter. From what I know of British producers, there is no reluctance on their part to provide all the information that may be required of them. This is a fairly simple matter. The producer now has to produce to the Board of Trade full and complete information about the costs of production of his film, broken down over a number of categories, and I think I am right in saying that the statutory declaration he makes before he gels his film registered for quota must provide that information in a complete form. After the film is made and is shown in the cinemas, the distributor of the film is really responsible for building up the data with regard to film hire on which the Agency, presumably, will calculate the payments to be made to the film. The Amendment, I think, as the noble Lord, Lord Lucas of Chilworth said, does not include the renter, but no doubt the Agency (and on this I should like the assurance of the noble Lord, Lord Man-croft) would require not only the producer but the distributor of the film to provide evidence of whatever was needed. I take it that if they were not satisfied they would say they wanted it investigated by a chartered accountant and have his certificate as to its accuracy, and that would be the line of procedure. I am completely at one with my noble friend that the Agency should be in a position to get all the necessary information for its purposes.

LORD LUCAS OF CHILWORTH

If have the noble Lord's categorical assurance that the Agency will not part with any money until it is perfectly satisfied with the validity of the claims made, and that it has powers under this Bill to make all proper searches, I shall be satisfied. I do not say that the producers of films who are going to be the beneficiaries under this Bill are any less honest than the exhibitors who have to pay the money, but it has come to light in the operation of this levy on a voluntary basis that there have been malpractices. I know of one that has been publicised in a printed document. It is the contract which some renters insist producers shall sign whereby the levy goes is effect to the distributor and the producer is not the direct beneficiary. This Fund is for the benefit of British producers. Will the noble Lord tell me whether there are powers whereby, if the Agency have their suspicions that these things are done, they can call for the books and make an investigation, and unless they are given all the information they want they will withhold the levy? I am coming back now to one of the things I clearly stated to the noble Lord. Such are the tortuous ways of some of these things that this Agency would have been well advised to have had upon it a representative of the producers and a representative of the distributors, so that it should be advised—I think I used the expression at the time I was arguing this point—of all the "tricks of the trade."

Then there is the dual booking, where a programme is booked. Although under the 1948 Act the renter is supposed to apportion the rent as between, it may be, a first and a second feature film, it has been known that the British film is carried on the back of an American second feature film, but the renter has so put the story over that the British film, which has not contributed so much to the box office as the American film, is assumed to have earned more, so that it qualifies for the levy. These are some of the things which happen. If the noble Lord will give me his assurance that these things will be looked after and will not slip through, then I have no desire to put this Amendment on the Statute Book; but I want the noble Lord's assurance. Can he give it?

LORD MANCROFT

I am firmly under the impression that the Board of Trade consider the powers they propose give sufficient safeguard and avoid the creation of further offences. I cannot give that assurance without checking my information. The Board of Trade are, with all due respect, a cynical and tough body of men and women, and l do not believe they would say that unless they were satisfied. I ask the noble Lord to withdraw his Amendment in consideration of the promise I give him that I will make certain I have my facts right before the next stage of the Bill.

LORD LUCAS OF CHILWORTH

I feel we are at one in our desire on this matter. I was not trying to pull the Government's leg. I have tried many things but I have not tried to pull its leg. I will withdraw this Amendment.

Amendment, by leave, withdrawn.

Clause 4:

Power of Commissioners of Customs and Excise and their officers to obtain information

4.—(1) The Commissioners of Customs and Excise shall have power, for the purpose of enabling them properly to perform their functions under this Part of this Act, by notice in writing served on an exhibitor, to require him—

1. (a) to furnish to such person as may be specified in the notice such returns or other information as may be so specified;
2. (b) to keep such records as may be so specified;

and any officer of theirs may at all reasonable hours enter any premises occupied for the purposes of his business by an exhibitor and may require him or any person employed by him in connection with his business to produce for examination by the officer such books or other documents relating to the exhibitor's business as the officer may specify.

6.55 p.m.

LORD LUCAS OF CHILWORTH moved, in subsection (1) (a), after "information" to insert "relevant to his liability to levy". The noble Lord said: I hope the noble Lord will do something for me here, because subsection (1) of Clause 4 seems to me to be a 100 per cent. snoopers' charter. Remember that this clause gives or seeks to give, or should give, the Customs and Excise the right to collect the levy from the exhibitor. These are the powers it gives: the Customs and Excise may serve a notice in writing on an exhibitor to require him:

1. "(a) to furnish to such person as may be specified in the notice such returns or other information as may be so specified;
2. (b) to keep such records as may be so specified;

and any officer of theirs may at all reasonable hours enter any premises occupied for the purposes of his business by an exhibitor and may require him or any person employed by him in connection with his business to produce for examination by the officer such books and other documents relating to the exhibitor's business as the officer may specify"

and if he does not do it he can be fined £100. All these Amendments of mine, Nos. 22, 23, 24 and 25, have as their object to see that the officer can do all these things only so long as he is seeking information relevant to the exhibitor's liability to pay levy.

According to the clause as it stands, however, the Customs and Excise may demand documents and accounts about his ice cream sales, his chocolate sales, his sweet sales, and, I should almost think, without much stretch of imagination, if the man's wife is a co-director, the marriage certificate. Surely the noble Lord does not want those powers. All he wants is for the Commissioners of Customs and Excise to have powers as far as they are relevant to the collection of this levy, and for no other purpose. But this clause does not say so. It relates to anything. The powers are wide. I am at one with the noble Lord in wishing to give the Customs and Excise sufficient powers to collect the proper amount of the levy, but, as I have said, this is a snoopers' charter; the officer can do anything. It is no good for the noble Lord to shake his head. This officer can do anything.

I should like to consider all these Amendments, Nos. 22, 23, 24 and 25. The first one is to insert "relevant to his liability to levy". That applies to line 6, line 8 and line 13. On page 4, in line 14, I seek to put in the word "reasonable". I think that is perfectly all right. It is at the end of the first subsection: …to produce for examination by the officer such books or other documents relating to the exhibitor's business as the officer may specify. I should have thought that was a most reasonable thing, to ask. I beg to move.

Amendment moved— Page 4, line 6, after ("information") insert ("relevant to his liability to levy").—(Lord Lucas of Chilworth.)

LORD ARCHIBALD

As I have down an Amendment which is on the same point as that of my noble friend, for the convenience of the Committee may I say a word in support of his Amendment? That will enable me to leave mine unmoved when we come to it. I think the point at issue here is one which the Government should reasonably accept in some form or another. The really alarming words in the Bill as it stands are, to my mind, those at the end of Clause 4 (1) which have just been quoted by my noble friend: that the officer may demand the production of such books or other documents relating to 'the exhibitor's business as the officer may specify. No doubt it is intended that the officer should specify only such documents and books as are relevant to the payment of the levy, but the Bill does not say so. As the Bill is drawn, there is no doubt that the officer, if he were an awkward, difficult officer, wanting to make things as troublesome as possible, could, as my noble friend has said, ask for the books relative to chocolate, cigarette and ice-cream sales, those relative to the revenue from advertising on the screen, and to any ancillary business carried on by the exhibitor. I am sure that is not the intention. It would be a simple matter to put in a few words, such as those suggested by my noble friend, or as suggested in my own Amendment, to make it quite clear that it should be a restricted field of inquiry and not a general "fishing" inquiry that is to be carried out by the officer. The exact form of words should not be difficult to find. I hope that on this occasion we shall not simply be told that it is the intention, but that it will, in fact, be put in the Bill.

LORD JESSEL

I should like to support the noble Lord, Lord Lucas of Chilworth, in his four Amendments, and also the Amendment of Lord Archibald. The noble Lord, Lord Westwood, who is, unfortunately, unable to be here to-day, and who, as your Lordships know, has had at least twelve years' practical experience as an exhibitor, has asked me to say that he has had experience of Customs and Excise officials who have entered cinemas in order to check records concerning entertainments duty and have demanded to see and to examine the staff wages book and the private ledgers of the company. I understand from Lord Westwood that these matters were subsequently brought to the notice of a superior officer and instructions were given to these inspectors that they should examine only such books and records as applied to the collection of entertainments duty, and that there has been no further trouble in this respect. Of course, the same considerations will apply in connection with the levy. I suggest that this clause is far too wide, and I trust that the Amendments will be accepted.

LORD FAIRFAX OF CAMERON

It would be convenient to deal with Amendment No. 22 and the Amendments down to No. 26 together, as the two noble Lords opposite have already suggested, because they are. rather on the same point. In reply, may I point out that the powers given by Clause 4 may be exercised only for the purpose of enabling the Commissioners of Customs and Excise properly to perform their functions under part I of the Bill I should like to refer your Lordships to the words which appear early in subsection (1): for the purpose of enabling them properly to perform their functions under this Part of this Act. That is the safeguard; and it is, I think, the answer to the point of the noble Lord, Lord Jessel. These Amendments seek to restrict still further the powers given to the Commissioners of Customs and Excise, but their effect might well be to make the exercise of the powers difficult, particularly in those cases in which their exercise is most necessary. The addition of any of these limitations might make it possible for a person determined to avoid payment of the levy to refuse to make returns, or to produce books, on the ground that such returns or hooks were not relevant to his liability to levy or were unreasonably required. Without the making of the return or the production of the books, it would be virtually impossible to disprove this contention. I believe that is a strong point, because if these Amendments were to be accepted it would make the task of the Customs and Excise officers difficult, if not almost impossible; and as I have pointed out. I believe that in the two lines hat I have read there are already ample safeguards to meet the point raised by noble Lords.

Lastly, I should like to refer to the point touched on by the noble Lord, Lord Jessel, that the Customs officials are already empowered in this way in regard to the collection of entertainments duty. This is not a new power. It is given to them under Section 2 of the Finance (New Duties) Act, 1916. Clearly, it would be somewhat impracticable for a Customs official to have power to inspect the same or similar records for one purpose and yet not be able to do so for the other purpose. In both cases, the information required is the same, and if these Amendments were to be accepted, one would certainly feel that a somewhat anomalous situation had arisen. I hope, therefore, in view of what I have said, and in view of the safeguards I have pointed out to him, that the noble Lord will feel able to withdraw his Amendment.

LORD BURDEN

Before the noble Lord leaves the point, may I say that I find it difficult to follow his reasoning. It may be all right, but the plain question I should like to ask is this. Would the records of a cinema in regard to the sale of ice-cream, chocolate, and things of that kind, come within the purview of the examination of Customs and Excise men? Would they be able to demand their production? That is the point we wish to clear up. I think it admits of a plain and straightforward answer.

LORD FAIRFAX OF CAMERON

I think the reply to that is: not on the face of it. Not being a lawyer, I would ask the noble Lord not to press me further at the moment on that particular point.

LORD BURDEN

That makes us most cautious in regard to the matter. Broadly speaking, the reply of the noble Lord means that he is doubtful and that the Customs and Excise man might, by virtue of what he thinks to be right, do what we do not think he ought to do.

LORD ARCHIBALD

I must confess to being deeply disappointed at the reply which we have just heard from the Government. I am bound to say that I thought the reply lacking in substance and not what we had a right to expect. It is perfectly true that in subsection (1) the Commissioners' power is limited to that "for the purpose of enabling them properly to perform their functions under this part of the Bill" and to require certain things. But the noble Lord will see that it goes on to say that any officer of theirs may enter premises and demand certain books. There is no interpretation of that limitation, and it is doubtful whether it could be argued that a limitation which is expressed with regard to the powers of the Commissioners can be taken administratively to apply to the definition of the powers of officers. We have heard from the noble Lord, Lord Jessel, of occasions when officers have demanded books which, clearly, were outside the purpose of their inspection. All that we are asking is that the books which they have power to examine should be books that are relevant to the purpose of their examination. No reason has been given to show that these Amendments would in any way hamper the officers in the performance of their duty. There has been not a single argument, but simply a blank statement that these Amendments would hamper them. In what way would they hamper the officers? The exhibitor could not refuse to produce his books. He would be open to process of law if he did so.

LORD MANCROFT

I am advised that if the Amendments were inserted in the Bill, he would be in that position.

LORD LUCAS OF CHILWORTH

No, he would not.

LORD ARCHIBALD

I am saying simply that the books and documents which the officer may demand must be relevant to the calculation of payment of the levy. It should not cover books or other documents relating to the exhibitor's business and not to the payment of levy. If the officer specified books which have nothing to do with the levy it would be wholly unreasonable but at present we have no guarantee that he will not do so.

LORD MANCROFT

Who is to decide?

LORD ARCHIBALD

I do not think it would be difficult to leave the decision with the Customs and Excise man.

LORD MANCROFT

If he cannot see the books, how can he decide?

LORD ARCHIBALD

If he asks to see the private ledger or the wages book, clearly that is not relevant to the levy.

LORD MANCROFT

But he should not ask.

LORD ARCHIBALD

But he can ask. Under the Bill it is open to argument whether he has the right to ask for books relevant to the sale of cigarettes, chocolates and ice cream, the private ledger and the wages book—books having nothing to do with the matter.

LORD MANCROFT

But there he is on quite the wrong track. Subsection (1) says: The Commissioners of Customs and Excise shall have power, for the purpose of enabling them properly to perform their functions under this Part of this Act … Clearly, the Commissioners have no right to ask for what was referred to as "marriage lines," for that would not be part of their duty. Nor could they ask for anything else which would not enable them to perform their duties. There comes the problem of the borderline case —the book which the cinema man says is not really necessary for the performance of the Customs and Excise Officer's duty and which the officer says is necessary. Unless the officer can see the book, how can he tell whether it is or not? The Bill lays on him the stern duty to keep within the bounds of his proper function, but unless he can see the book he cannot judge it.

LORD LUCAS OF CHILWORTH

The clause does not say that at all. It says—these are the words on which the noble Lord relies: The Commissioners of Customs and Excise shall have power, for the purpose of enabling them properly to perform their functions under this Part of this Act, by notice in writing served on an exhibitor, to require him—

1. (a) to furnish to such person as may be specified in the notice such returns or other information as may be so specified;
2. (b) to keep such records as may be so specified; "

and then it goes on—and mark the wording: and any officer of theirs may at all reasonable hours enter any premises occupied for the purposes of his business by an exhibitor and may require him or any person employed by him in connection with his business to produce for examination by the officer such books or other documents relating to the exhibitor's business as the officer may specify. In my view any interpretation gives the Customs and Excise power to serve notice in writing requiring the exhibitor to furnish such returns or other information —and any officer can do all these other things. All I seek to put in the Bill is that any search of that kind shall be relevant to the purpose of the Bill and no other purpose, such as the exhibitor's liability to pay the rent.

LORD BURDEN

Perhaps the noble Lord can answer both our points.

LORD MANCROFT

We are at one in that clearly we do not want officers prying here and there. I do not think this clause gives them any such power. I believe the two lines which we have discussed reflect down to the point which the noble Lord has made. If not, they clearly should do so, and if the noble Lord is worried on that point, I am perfectly prepared, since we are it one in what we are trying to do, to get the lawyers to look at the noble Lord's point and to make certain that the first two lines of subsection (1) do reflect on to the last line, and make certain that the Customs and Excise have not the power to look at "marriage lines." I believe that they have not and that this particular clause confines them; but if I am wrong we must put it right. I will not at this stage force it upon noble Lords. If we can draft it more clearly to meet the point that he has now made, we will certainly do so; but I hope that the noble Lord can see the logic of my argument, not the legal aspect of it. If there is any doubt in the course of investigations, then unless someone has power to look at all the books it is impossible to whether or not there are any grounds for doubt. That is why I quarrel with the Amendment. If, by redrafting, we can meet the noble Lord's point we will certainly do so.

LORD LUCAS OF CHILWORTH

I am glad that the noble Lord has conceded the point. I only want what he wants. I will therefore withdraw my Amendment now, and perhaps we can have discussions when he has had consultations with his legal advisers. If I am not satisfied with what the noble Lord then intends to do, I will put down an Amendment on the next stage of the Bill. In the meantime, I will accept the noble Lord's offer and ask leave to withdraw my Amendment.

Amendment, by leave, withdrawn.

LORD LUCAS OF CHILWORTH

In view of the offer which the noble Lord, Lord Mancroft, has made, with the Committee's permission I not move Amendments Nos. 23, 24 and 25, but perhaps when the noble Lord is looking at the point I have just raised he will take into consideration my Amendment No. 25, relating to the words, such books or other documents relating to the exhibitor's business as Me officer may specify. I believe those words are as important as the others. With the Committee's permission, I will not move either this or the other Amendments I have mentioned.

7.20 p.m.

LORD ARCHIBALD had an Amendment on the Marshalled List to add to subsection (1): and which are relevant to the calculation of the amount of the levy due to be paid by the exhibitor or to the payment thereof.

The noble Lord said: In view of what the noble Lord, Lord Mancroft, has said, I do not move this Amendment, but reserve the right to return to the point at a later stage.

Clause 4 agreed to.

Clauses 5 and 6 agreed to.

Clause 7 [Accounts and audit]:

LORD FAIRFAX OF CAMERON moved in subsection (3) (b) to leave out "and Auditors". The noble Lord said: I rise to move this Amendment on behalf of my noble friend. It is a drafting Amendment. The Bill, as at present drafted, describes one of the bodies from amongst whose members the auditors of the Agency's accounts may be appointed, as "the Society of Incorporated Accountants and Auditors". This title is incorrect and should be:" The Society of Incorporated Accountants". This Amendment makes the necessary correction. I beg to move.

Amendment moved— Page 6, line 1, leave out ("and Auditors").—(Lord Fairfax of Cameron.)

On Question, Amendment agreed to.

Clause 7, as amended, agreed to.

Clause 8 [Interpretation of Part 1]:

LORD LUCAS OF CHILWORTH had an Amendment on the Marshalled List to add to the clause: (3) in this Part of the Act the expression ' Government films' means—

1. (a) films of which the earnings become payable either wholly or partially to a Government Department whether in the United Kingdom or elsewhere; and
2. (b) films originally produced by or for a Government Department notwithstanding that the right to receive the earnings of the same shall have become vested either wholly or partially in some other person or company; and
3. (c) any film which has been made by or on behalf of a Department of Her Majesty's Government in the United Kingdom or by or on behalf of the Government of any other part of Her Majesty's Dominions."

The noble Lord said: This Amendment is part of the interpretation of a previous Amendment. The noble Lord has given me his assurance that the points dealt with are covered, and that there is no intention that the films to which this Amendment relates will rank for levy. Therefore it is not worth while my moving the Amendment. With your Lordships' permission, I propose to adopt the course of not moving the Amendment.

Clause 8 agreed to.

Clause 9:

Expenses and receipts of Commissioners of Customs and Excise and Board of Trade

9. Any expenses incurred by the Commissioners of Customs and Excise in collecting the levy imposed by virtue of this Part of this Act and any expenses incurred by the Board of Trade under section six of this Act in making loans to the Agency shall be defrayed out of moneys provided by Parliament, and any sum retained by the said Commissioners out of the proceeds of the said levy or received by the Board by way of repayment of, or payment of interest on, loans made under the said section six shall be paid into the Exchequer.

LORD LUCAS OF CHILWORTH moved to leave out "retained by the said Commissioners out of the proceeds of the said levy or". The noble Lord said: I wonder whether the noble Lord, Lord Mancroft, is feeling in a more generous mood to-night than he did when I previously argued an Amendment similar to this. Clause 9 of the Bill deals with expenses and receipts of the Commissioners of Customs and Excise and the Board of Trade. Under Clause 9, the Board of Trade may receive money back in payment of loans that they may at any time make to this Agency. That is quite in order. They may have to make loans and it is in order that they should be paid back. What I object to once again is that: Any expenses incurred by the Commissioners of Customs and Excise in collecting the levy imposed by virtue of this Part of this Act… shall be retained by the said Commissioners out of the proceeds of the levy before the money is paid out. This really, I think, is iniquitous.

We learnt when we debated this point before, that £18,000 approximately is going to be the cost to the Customs and Excise of collecting this levy. Frankly, I think we have come to the state where industry now has to pay for tax collection and P.A.Y.E. It is a tremendous burden. There is no political point in this. Successive Governments have sought to get this levy changed from a voluntary to a statutory levy, for the purpose of underpinning—I could almost say "subsidising" but I will not, because I know what an aversion noble Lords opposite have to that hateful term; but, in fact, it is nothing but a hidden subsidy—the production of British films. And the Departments concerned are going to collect some £18,000, or less than one half of one per cent., for their services. I should have thought that the Government could make a gesture in this connection and say nothing about the cost. I do not suppose that this collection will be done by the same people as those who collect entertainments tax. Why do not they charge for their services? I am not going to say much more about this now: I am simply going to ask Lord Mancroft whether he has had a change of heart about it, while satisfying myself by just formally moving this Amendment. I beg to move.

Amendment moved— Page 6, line 41, Leave out ("retained by the said Commissioners out of the proceeds of the said levy or").—(Lord Lucas of Chilworth.)>

LORD MANCROFT

The time is getting late and I will not argue again on the same lines that the point was argued upon two or three days ago. The point, briefly, is that since the levy is intended to operate as a film industry measure, rather than as a subsidy—that is where the noble Lord and I pant company—it seems to us appropriate that any expenses incurred in the running of it should be met out of the levy rather than out of the general revenue. That is the long and short of it. The noble Lord makes the sum £18,000, but I make it about £15,000. It is a small sum. I am sorry that I cannot accept the Amendment. I brought to the notice of the Board of Trade the remarks made by the noble Lord when we first debated this matter. All I can promise to-day is to bring them again to the Board's notice on this particular point. We have not had time to discuss it in any detail because we have been pressed on other matters relating to the Bill. I cannot accept the Amendment nor can I hold out any promise except that I will make certain that the matter is carefully discussed with my advisers before the next stage of the Bill is reached.

LORD LUCAS OF CHILWORTH

May I ask how the accuracy of the figure can be disputed? This cause gives the Customs and Excise carte blanche—a blank cheque. We have heard that it is their usual practice to charge less than a half of one per cent. The noble Lord says it is £15,000. I have not troubled to work it out; I have heard noble friends behind me murmuring certain figures. I suppose there is nothing in the Bill to prevent the Customs and Excise from saying "£50,000". In what document is the amount going to be disclosed—the amount they have charged for collection? And by what process does Parliament dispute the fairness of it? Can the noble Lord tell me or does he want to give the Customs and Excise a blank cheque to charge this fund with any sum they think fit to charge? I can understand that the Board of Trade should charge interest on their loans, but how are we going to cheek the amount deducted by the Customs and Excise for the amount of the levy?

LORD MANCROFT

I should like to confirm this point, but my impression is that the Agency, having to produce their accounts to Parliament, must disclose the figures and so open their accounts to public scrutiny. I think that that must be so.

LORD LUCAS OF CHILWORTH

Do the Agency have to produce their accounts to Parliament?

LORD MANCROFT

Yes. Clause 7 says: The Agency shall keep proper accounts and proper records in relation to the accounts, and shall prepare in respect of each financial year of the Agency a statement of accounts in such form as the Board of Trade, with the approval of the Treasury may direct, being a form conforming with the best commercial standards.

LORD LUCAS OF CHILWORTH

The "best commercial standards" have to make a note of payments, so we may take it that if the noble Lord's persuasive powers with his right honourable friend the President of the Board of Trade are not strong enough, that is where we shall see them. But I think it would be a nice gesture on the part of the Board of Trade to say that these expenses shall come out of the public funds. However, I withdraw my Amendment, so that perhaps between now and the next stage the noble Lord will provide me with an answer.

LORD MANCROFT

May I draw the noble Lord's attention to subsection (5) of Clause 7 which says: The Board of Trade shall lay a copy of every such report before Parliament. There it is in the Bill.

Amendment, by leave, withdrawn.

Clause 9 agreed to.

Clause 10:

Extension of time within which, and purposes for which, loans may be made by Corporation

10.—(1) For paragraph (b) of subsection (1) of section one of the Cinematograph Film Production (Special Loans) Act, 1949 (which, as amended by the Cinematograph Film Production (Special Loans) Act, 1954, empowers the National Film Finance Corporation to make, during the eight years beginning with the passing of the first-mentioned Act, loans to be employed in financing the production or distribution of cinematograph films to persons who, in the judgment of the Corporation, while having reasonable expectations of being able to arrange for the production or distribution of cinematograph films on a commercially successful basis, are not for the time being in a position otherwise to obtain adequate financial facilities for the purpose on reasonable terms from an appropriate source) there shall be substituted the following paragraph:— (b) to make, during the period of eighteen years beginning with the passing of this Act, loans to be employed in financing the production or distribution of cinematograph films to persons who, in the judgment of the Corporation, have reasonable expectations of being able to arrange for the production or distribution of cinematograph films on a commercially successful basis".

7.32 p.m.

LORD ARCHIBALD moved to omit subsection (1). The noble Lord said: Although I will be as brief as possible in moving this Amendment, I shall have to take a little time to develop my argument because I regard this Amendment as dealing with an important point of principle in the Bill. Coming up in the train this morning, I was reading the delightful Portraits from Memory of Bertrand Russell—or should I say, in your Lordships' House, the noble Earl, Lord Russell? Describing the eccentricities of the Cambridge dons of his young days, he writes of one who, whenever a new proposal was brought up at the University, would say, "When a measure of this kind is suggested, I ask myself two questions: Has the old system worked badly? Is the new system likely to work better? I see no reason to answer either question in the affirmative, and I shall therefore vote against the proposal." That is not an attitude of mind which I would normally share. I may say, I hope without offence, that it is an attitude more often found on the other side of the House. But when I come to deal with Clause 10 of the Bill I am bound to say that I find myself in considerable sympathy with the attitude of the Cambridge don. Actually, the Amendment is the new clause and the onus is really on the Government to justify the new clause, rather than on us to oppose it.

May I remind your Lordships of the background? The Cinematograph Film Production (Special Loans) Act, 1949, which was agreed broadly by both sides, here and in another place, was introduced for the specific purpose of providing finance for British film producers who were unable to find finance elsewhere. My noble friend Lord Lucas of Chilworth was responsible for piloting the Bill through your Lordships' House, and I have just been reading it up. I find that on that occasion he said [OFFICIAL REPORT, Vol. 160, col. 423]: It is not the intention of this Bill to provide finance for the large producing companies, but for the independent or free-lance producer who is not directly linked with exhibiting circuits.

He went on to say: …loans may be made only to qualified borrowers who are not able to obtain adequate finance from alternative lenders. So that, for the last eight years, the National Film Finance Corporation have been limited to lending money to prospective film producers who could not find alternative sources.

Like the Cambridge don, I am entitled to ask: Has that system worked badly? If it has not worked badly, can the Government spokesman give us any solid reason for changing it? At that time, the argument was that public money should be put at risk in this field only if there were no other method available of keeping British film production going. If by no other means could a sufficient volume of British films be maintained, then in that situation, and only in that situation, should public money be put at risk. Now we have a complete change in attitude, and the National Film Finance Corporation are to be allowed, presumably, to lend to any producer they think fit. They will be able to lend to the big integrated combines, to the Anglo-American companies, or to the British producer who is self-financed. Surely we are entitled to some solid reason for this change.

What is wrong with the old system? In what way has it broken down? Until we have heard the Government case for making this change, it is difficult to develop the argument for my Amendment, because what I am saying in effect is: Tell us why you want this amendment in existing legislation, so that we may find out whether your reasons are valid. With all respect to the noble Lord, Lord Mancroft, he dealt very slightly with this matter in his Second Reading speech and we are still waiting to hear the Government's justification for this amendment of the Cinematograph Finance (Special Loans) Act. When we have heard that, it twill be possible to say if they have a good ease. In the meantime, I beg to move.

Amendment moved— Page 7, line 6, leave out subsection (1).—(Lord Archibald.)

LORD FAIRFAX OF CAMERON

I think this Amendment has been prompted by certain anxieties in the noble Lord's mind which have come through his remarks. In form, the noble Lord's Amendment is misconceived, as its effect would be to bring to an end on March 9 the loan-making power of the National Film Finance Corporation. However, I understand that it is not the noble Lord's intention to bring this power to an end but to prevent the extension of the Corporation's powers to the lending of money other than to film makers who cannot obtain capital elsewhere.

LORD ARCHIBALD

Would the noble Lord explain why my Amendment would bring those powers to an end? My Amendment seeks to delete subsection (1), not to amend or leave out subsection (2), which extends those powers from eight to eighteen years.

LORD FAIRFAX OF CAMERON

I am advised that the noble Lord's Amendment, as it is drafted, would bring the Corporation's powers to an end. Perhaps I can go into that point more fully in a moment. I understand, however, as I say, that it is not the intention of the noble Lord to bring those powers of the Corporation to an end, but to prevent the extension of the Corporation's powers to lend money otherwise than to film makers who cannot obtain capital elsewhere. The intention of Clause 10, as at present drafted, is to enable the National Film Finance Corporation to accept propositions for films which seem likely to be commercially successful, and not to refuse such propositions because the applicant for the loan can obtain financial consideration elsewhere. The clause should be considered together with Clause 11, which makes it clear that the Corporation should in future so conduct their business as to seek to save further losses of their loan capital; or to put it another way, to prevent erosion into capital. That is an important point which I would particularly draw to the noble Lord's attention.

The principal Act which defines the loan-making powers of the Corporation is perhaps somewhat difficult, in that it defines a person eligible for the loan as being at once in a position to make a film on a commercially successful basis, but not in a position to obtain finance for such a venture. The Corporation have thus virtually been forced to accept only those propositions which do not commend themselves to other finance houses. It is now proposed that they shall be able to accept any application which seems to them likely to be commercially successful. But the terms upon which they are prepared to make loans are considered by some film-makers to be quite onerous, so there seems little likelihood that financially strong organisations which can readily obtain accommodation elsewhere will seek their services. I think that touches on the point which the noble Lord, Lord Archibald, made in his Second Reading speech: that the resources of the Corporation can be absorbed by one large organisation.

Especially in view of this latter point, I cannot accept the contention of the noble Lord that such financially strong organisations as have been mentioned might absorb the Corporation's loan-making capital, to the detriment of the smaller producers. I think that is what has been going through the noble Lord's mind. These smaller producers might be in a position to make good films if they could obtain the money, and we consider that they will be able to obtain it from the Corporation. If such a situation as that which the noble Lord has in mind were to arise, however, it could be dealt with by a direction from the Board of Trade under section 3 of the Act of 1949. This allows the Board of Trade to give the Corporation directions of a general character as to the exercise of their functions. I hope that this will allay some of the fears that have been in the noble Lord's mind and enable him to withdraw his Amendment.

LORD LUCAS OF CHILWORTH

I do not know whether it has allayed any fears in the mind of my noble friend, but it has only strengthened the fears in my mind. If the noble Lord will forgive me for saying so, he has given a shocking answer. First of all, all that the Amendment of my noble friend seeks to do is to delete subsection (1) of Clause 10. That subsection goes no further than to take out paragraph (b) of subsection (1) of section I of the Cinematograph Films Production (Special Loans) Act, 1949, as amended by the Cinematograph Films Production (Special Loans) Act, 1954.

LORD MANCROFT

Is that not the power to make loans?

LORD LUCAS OF CHILWORTH

No. It is a power to make loans on a special basis; and the special basis upon which Parliament originally agreed to this Act was because it was not in competition with the usual and recognised channels of finance. If the noble Lord now says that the Film Finance Corporation will in future have to conduct their business and comply with the ordinary forms of banking, then why not do away with the Film Finance Corporation altogether?

My noble friend has quoted words from my Second Reading speech on behalf of the Government in 1949. I then said, also: [OFFICIAL REPORT, Vol. 160, col. 424]: As I have already pointed out to your Lordships, these loans will not compete with the present channels of finance; they are supplemental. If you are going to say to the Film Finance Corporation: "In future you must conduct your business along the ordinary banking channels," why have the Corporation at all? I agree with the noble Lord that you would have to read in connection with this Clause 11, which enjoins the Corporation that they have to carry on their business like an ordinary commercial concern and not, if they can possibly help it, make a loss. In other words, they must do precisely what a bank would do. If they do not like the credit standing, or they have a doubt, or even if they think you are cast-iron, they will want collateral. Is have never known a bank lend a person money without wanting security of about four times what he wanted to borrow, as well as a joint and several guarantee, and a mortgage on his house and all his property as collateral. Is that what the noble Lord means the Film Finance Corporation to do? If he does, why have it at all? Why compete with the joint stock banks of the country? It is doing away with the whole purpose.

I cannot address the noble Lord on a close argument like this if he must have consultations with his noble friend next door to him. Perhaps the noble Lord will save your Lordships' time by saying that the Government will reconsider the whole thing. When the noble Lord makes the point that one of the reasons for this is the onerous conditions that have been demanded by the Film Finance Corporation, what did they do? They loaned money, as was their object, at a lower rate of interest, under special conditions which ordinary normal banking would not have; that is to say, that, perhaps without security, they took a percentage of the profits. I know that there was a time when some producers in the industry thought the percentage they wanted was too high.

But do not forget that the original purpose of the Film Finance Corporation was to save the British film industry. There have been many claimants for the privilege and honour of saving the British film industry, but there was one man who deserves 99 per cent. of the credit, and that is my right honourable friend Mr. Harold Wilson, who was the originator of the Film Finance Corporation idea. I remember saying at the time, about the amount of money which the Government were going to put at the disposal of the Film Finance Corporation, that it would be a good day's work if they lost the whole lot, the £5 million, but kept the independent British producer in business.

That is how it turned out—they lost a lot of money. But that was the object. Is the noble, Lord saying that, in the opinion of Her Majesty's Government, there now is no need for the Film Finance Corporation at all? Is he saying that, and, therefore, that there is no need for the Film Finance Corporation and that British film producers are now so strong that they can go to the ordinary channels of banking for finance? Is he saying that? If he is saying that, he is suffering under a delusion. If he really thinks it, why does he not wind up the Film Finance Corporation altogether?

My noble friend's point, and I absolutely agree with him, is that there is as much need to-day for the Film Finance Corporation as ever there was. But there will be no outlet for the energies of the Film Finance Corporation as envisaged when it was first started, if you are going to say that they have to run on ordinary banking lines. That is what the noble Lord is saying.

LORD MANCROFT

Try to, if possible.

LORD LUCAS OF CHILWORTH

You have to read Clauses 10 and 11 together. Clause 11 reads: It shall be the duty of the National Film Finance Corporation to exercise and perform their functions in such a manner as appears to them best calculated to secure the avoidance of default's being made in the discharge, as regards any loan made to them after the passing of this Act, of their obligations with respect to repayment of the principal of the loan and the payment of interest on any sum for the time being outstanding in respect of it. In other words, if I were the managing director of the Film Finance Corporation, I should take it as a directive that I had got to have security plus security, and guarantee upon guarantee, precisely the same as would have to be given to a bank.

I feel as strongly upon this as does my noble friend. The noble Lord says that the Film Finance Corporation should go on precisely in the same way in the future as it has done in the past, and not, as my noble friend said, have all its funds swallowed up by big concerns, because there are hundreds of people who to-day want finance. I think the Film Finance Corporation has done a very good job of work. I hope that my noble friend, if not now, then at some later stage of this Bill, will press this matter to a Division, because I am certain that the Corporation should remain intact without the fetters being placed upon it which are imposed under Clause 10.

LORD BURDEN

May I say one word in addition to what has been said? I suggest that the Department have landed themselves in these difficulties because there has not been adequate discussion with all the interests concerned. The borrowing powers of the National Film Finance Corporation, as I understand it, finished in April of this year. As far back as February last year, the matter was raised in another place, and a little later a letter was addressed to the various sections of the industry. Although some replies were received, adequate consideration has not been given by the Board of Trade to the fact that other sections of the industry, as well as the producers, the distributors, and so on, all have a direct interest in the way in which this Corporation does its job. But since then no steps have been taken by the Department to get the interests together to discuss what is now in this Bill, and that is why the Government have landed themselves in this difficulty. I hope my noble friend will press this Amendment to a Division.

LORD ARCHIBALD

On looking at the Amendment again, I am bound to admit that I think the noble Lord who spoke for the Government was right in saying that my Amendment is technically at fault, and that it would not merely prevent the change of function but would lead to the cessation of function. That is something upon which I shall have to take advice, as to how to frame a new Amendment for a later stage. I warned the Committee at the beginning that all my Amendments were of my own drafting, and I see that on this one I have gone astray.

But the point at issue remains the same, and here I think we have not received a satisfactory explanation from the Government. I may say that I raised this point not as someone associated with the film industry. So far as I know, I have not heard a word from producers that they have even thought about this subsection. I do not know what their views are at all, if they have any views. I do not know the views of any part of the industry about this clause. I raised it, if I may put it in this way, as a Parliamentarian, because here we have what will be an Act of Parliament which introduces something quite new—the provision of public finance for such sections of the industry as are able to get their finance from normal channels. I think it is true to say that the original Bill would not have gone through both Houses by agreement if it had then been proposed that the Film Finance Corporation should be entitled to lend to all and sundry of British film producers, or that it should compete with the banks or other sources of finance. It was an agreed measure because it was a limited measure —because it was providing something that could not be provided from other sources. Now we are having the fundamental conception of its functions changed without, in my opinion, adequate reason therefor.

I thought the noble Lord allayed a number of fears which I had, in fact, neither expressed nor felt—for example, that the big corporations might borrow all the money. The noble Lord attributed that to me in my Second Reading speech, but I made no such suggestion. I put the hypothetical case that borrowers who did not need the money might, in the early part of the year, come along and borrow so much that other producers who could not get money elsewhere, coming along later, would find that the funds were used up. Naturally, that is exaggerating the situation, but it is not a wholly impossible picture, and it is only partly met by the suggestion that it could be dealt with by a directive which might by then be too late.

I also thought that the noble Lord was a little contradictory when he suggested that the conditions laid down by the Film Finance Corporation were so onerous that people who could get their money elsewhere would do so, while at the same time he was arguing that people who could get their money elsewhere would be people who had the more attractive, and likely to be more commercially successful, films in the offing. Their borrowings from the Corporation would enable the Corporation to offset some of the risks in lendings to films that had a less prospect of success. You cannot impose such onerous terms that you frighten off the commercially attractive and at the same time have the commercially attractive to offset the commercially unattractive. You must make up your mind on which leg you are standing. On the ground that an insufficient case has been made for this change of function, I intend to return to it, but, naturally, I shall be unable to press it now. I gather that the noble Lord has something further to say, so I shall not withdraw it until he has had the opportunity to speak.

LORD FAIRFAX OF CAMERON

If the noble Lord is going to move it again, differently drafted, perhaps that might be a better occasion on which to say something about it.

LORD ARCHIBALD

I ask leave to withdraw my Amendment.

Amendment, by leave, withdrawn.

Clause 10 agreed to.

Clause 11:

Duty of Corporation to pay their way

11. It shall be the duty of the National Film Finance Corporation to exercise and perform their functions in such manner as appears to them best calculated to secure the avoidance of default's being made in the discharge, as regards any loan made to them after the passing of this Act, of their obligations with respect to repayment of the principal of the loan and the payment of interest on any sum for the time being outstanding in respect of it.

8.2 p.m.

LORD ARCHIBALD moved, after "secure" to insert "taking one year with another". The noble Lord said: To some extent the ground here has been covered, but noble Lords will notice that in moving the previous Amendment I tried to avoid any reference to this one, although I realised that to some extent the two were linked. Other noble Lords have linked them, but I have not made any reference to this in my previous remarks. I want to make some reference now. Here again, we have to go back to the attitude of Parliament when the original Act was passed. I cannot do better than quote the words which were used by the noble Earl, Lord Swinton, in the Second Reading debate, when he said [OFFICIAL REPORT, Vol. 160, Col. 432]: If we are going into this business at all… then we have to lake a risk. After all… the Government take a great deal of money out of this business already…It is not unreasonable that a little of that money should be ventured back in a risk. In other words, it was accepted on both sides of the House that this money had to be risk money or the Film Finance Corporation would not serve any useful purpose at all.

Now this new Clause 11 puts an added restriction on the operations of the Film Finance Corporation. In effect, it is an instruction to the Corporation to exclude the element of risk as far as humanly possible. When I put this point during the Second Reading debate, the noble Lord, Lord Mancroft, was good enough to write to me. He put the point that it requires the Film Finance Corporation to endeavour to avoid losses, to avoid being in the position that it could not repay its loans to the Board of Trade, but that it did not put any restriction on the Corporation with regard to the loans which it made. I venture to suggest that that is really a quite absurd argument. If the Film Finance Corporation is to be in a position to repay its loans to the Board of Trade, then it must be in the position of recovering all the loans that it makes. Quite clearly, that means that it has, as I put it, to look only for the more or less gilt-edged propositions. It is, in effect, telling the Film Finance Corporation that it is no longer to carry out the purpose for which it was set up, that of providing risk money. It is in future so to conduct itself that it will not make losses, so that it is in the position of being able to repay the Board of Trade in full.

I regard this as a very sad clause altogether. It is a mean clause. In my opinion, it is putting the Film Finance Corporation in an impossible position. No man who is a director or managing director of that Corporation, faced with this clause in the new Bill, can be other than very hard and strict indeed in all his lendings. There may well be films of great artistic merit of which the box office possibilities may be a little doubtful, where the Corporation will have to say, "Sorry; we cannot lend you arty money because we might make a loss; then we should not be able to repay the Board of Trade, and that would not be in conformity with this clause." The Amendment which I have put down is, if I may use an Americanism, only a "gimmick" on which to have this matter discussed. This is probably a clause of which I should have moved the deletion, because I think it sets out a thoroughly bad principle. The Government would be well advised to allow the Film Finance Corporation to carry on under the powers of the original Act. I beg to move.

Amendment moved— Page 7, line 39, after ("secure") insert ("taking one year with another").—(Lord Archibald.)

LORD LUCAS OF CHILWORTH

I do not know whether my noble friend, Lord Archibald, will agree to this course, but in order to be helpful I would suggest to him that he withdraws this Amendment for the time being to let the Government think about Clauses 10 and 11. If not, if he presses it we shall have to go on, but I suggest that it will be better if the Government consider this. Our attitude on this side of the House is this. We desire the Film Finance Corporation to have extended life. It has served a useful function; it will carry on serving a useful function, and we want it to continue on precisely the same lines as it is carrying on to-day. We have no objection to the Board of Trade from time to time giving it directives, as they always have done, but we do not want its powers impaired, as they are by Clauses 10 and 11. If the noble Lord in charge of the Bill would like to do that, and if he cannot accommodate us upon the lines I have suggested, then on the Report stage we can put down either or both of these Amendments again in a different form, because my noble friend said he would do that with regard to Clause 10. It could also be done with Clause 11. I want to make it perfectly clear that we shall press our point of view on this matter. I should like the Government to have the opportunity of considering the attitude we adopt, which we think is reasonable.

LORD MANCROFT

I can answer the noble Lord quickly. This particular Amendment No. 31 would be unacceptable to us for a technical reason—that is, that the words "taking one year with another" have nothing to do with the main substance of the argument. However, if noble Lords are worried about this point (it is a major one, and we do not want to stay till midnight discussing the future of the Film Finance Corporation), we will try to win them over and not "bulldoze" this clause through. But win them over we will endeavour to do. I will certainly give the noble Lord the undertaking that we will think about this matter, and it would be improper not to pay attention to the noble Lords' arguments. I will certainly undertake to consider carefully, between now and the next stage of this interminable Bill, whether we can help the noble Lords to clear up their doubts.

LORD ARCHIBALD

I appreciate what the noble Lord, Lord Mancroft, has said, though I am bound to say that personally I should be quite willing to stay here till midnight discussing this very important point, and I do not regard it as an interminable Bill. This is a Bill affecting quite an important industry, proposing many very important changes, and I do not think there has been an undue amount of time devoted to its discussion. I do not begrudge any of the time we are spending on it now. The point here is that I think the Government are changing a fundamental principle. They are trying to take out the element of risk. May I point out that since the Film Finance Corporation was set up the Government have probably taken over £250 million from the industry in taxes. Compared with that, the losses of the N.F.F.C. are trifling. I do not know why this new clause should have been put in at all, but if it will be thought about again we can discuss it on another occasion. Meantime, I beg leave to withdraw the Amendment.

Amendment, by leave, withdrawn.

Clause 11 agreed to.

Clauses 12 and 13 agreed to.

Clause 14:

Extension of period during which exhibition of British films is obligatory

14. Section one of the Cinematograph Films Act, 1948 (which makes compulsory the inclusion of British films amongst registered films exhibited to the public in theatres in Great Britain during the period beginning with the first day of October, nineteen hundred and forty-eight and ending with the thirtieth day of September, nineteen hundred and fifty-eight) shall have effect with the substitution, in subsection (7) thereof, for the words "nineteen hundred and fifty-eight", of the words "nineteen hundred and sixty-eight".

LORD FARINGDON moved to add to the clause: and in paragraph (b) of subsection (1) of section twenty-five of the Cinematograph Films Act, 1938, for the words 'His Majesty's dominions' there shall be substituted the words 'United Kingdom' The noble Lord said: The first two of the three Amendments standing in my name raise the same point, which I can put very briefly to your Lordships. Lest I should be suspected of any unfriendliness towards any overseas members of the Commonwealth, I would mention that I am one of the small minority in your Lordships' House who have had the pleasure and privilege of being a student of an overseas Commonwealth university, and I am very far from having any unfriendly feelings.

Your Lordships will remember that the first Cinematograph Films Act of 1927 was introduced and passed as a result of a resolution which was passed by the Imperial Conference of 1926. That resolution read as follows: The Imperial Conference, recognising that it is of the greatest importance that a larger and increasing proportion of the films exhibited throughout the Empire should be of Empire production, commends the matter and the remedial measures proposed to the consideration of the Governments of the various parts of the Empire with a view to such early and effective action to deal with the serious situation now existing as they may severally find possible. The United Kingdom only took steps to implement this resolution, and part of the implementation took the form of extending the advantages of being a British film to films produced in other parts of the Commonwealth. I do not think that any member of the Commonwealth who has not taken steps to give to British films the same advantages that their films would receive in this country can possibly take objection to the fact that we should now narrow our beneficence, if I may put it so, our advantageous treatment of British films, to the United Kingdom only. This is the object of the first two Amendments which stand in my name. I apologise if they are really rather clumsy in form, but owing to the structure of the Bill I have no option, and I take it I could not have done better because I took professional guidance on the matter and was helped by the officers of the House.

The first Amendment deals with the use of studio space and the second with labour, but the basic point is the point I was making: that there has been since 1927 no reciprocal action on the part of other members of the Commonwealth, and it seems to me only fair that the advantages we wish to give to British films should, in the circumstances, failing reciprocal action, be limited to the United Kingdom. With your Lordships' permission I will move the first Amendment, and, depending on the treatment it receives, I will either move or ask leave to withdraw the second.

Amendment moved— Page 9, line 4, at end insert the said words.—(Lord Faringdon.)

LORD FAIRFAX OF CAMERON

May I first of all speak to the first Amendment. Do I understand that the noble Lord is going to move each one in turn?

LORD FARINGDON

Just as the noble Lord likes. The point is exactly the same on both, although they apply to different sections of the industry.

LORD FAIRFAX OF CAMERON

I am afraid I must tell the noble Lord I cannot accept any of the Amendments. The effect of the first one is to provide that films shall not be registered as British (and therefore will not get a share of the levy) unless made in studios in the United Kingdom. This would certainly raise difficulties within the Commonwealth, which would have to be examined very carefully before Her Majesty's Government could take a firm attitude on this proposal. In the case of the second Amendment which stands in the name of the noble Lord, its effect would be to provide that in calculating the requisite amount of labour costs for the purposes of registering a film as a British film, persons domiciled outside the United Kingdom (instead of at present outside Her Majesty's Dominions) should not count as British. This would raise serious difficulties within the Commonwealth which would require very careful examination before the Government could take an attitude on this proposal.

In the case of the third Amendment standing in the noble Lord's name, which is slightly different, its effect would be to disqualify a film as a British quota film (and therefore entitled to a share of the levy) unless 95 per cent. of the laboratory costs in making the film were incurred in a laboratory situated in the United Kingdom. At present it is believed that a high percentage of the laboratory work is done here, even for films made on location, but there are some films made on location at a great distance from the United Kingdom: for example, in South Africa and Australia, where it is not reasonable to expect the "rushes"—I am sure the noble Lord is familiar with that word—to be brought back to this country for processing. There seems no need for this Amendment, since it is not thought that there is any tendency for the work to be done outside the United Kingdom. For those reasons—and I hope the noble Lord will appreciate them—I am unable to accept his Amendment.

LORD FARINGDON

I confess I am not enormously impressed by the noble Lord's argument, certainly on the first two Amendments. I do not 'believe it would give rise to very considerable difficulties with members of the Commonwealth. I am certain that members of the Commonwealth would fully appreciate that if they were unable or unwilling to give reciprocal advantages to British films there would be no reason why they should benefit as if they were giving those reciprocal advantages.

I do not intend to press these Amendments. I would ask however that they should be considered. The noble Lord said that very careful consideration would have to be given to the situation which would be caused by the adoption of any such Amendments. I suggest that this attention begin to be given at once, because there is quite a serious point here. Moreover, if, in fact, it would give rise to difficulties with other members of the Commonwealth, I suggest that the advantages which we in this country give to Commonwealth films must be of a certain value. If they are of a certain value, I imagine that it is quite possible that the overseas members of the Commonwealth might he prepared to give reciprocal advantages. I shall, however, not press the first Amendment.

I had not spoken to my third Amendment. The noble Lord took the words out of my mouth. At this late hour I think it is reasonable to cut things down to the shortest possible period. Frankly, I do not accept his point. I am not wedded to the actual percentage in the Amendment on the other hand, even for films which were being shot on location in. South Africa, the time needed to fly them back to England is really quite short. Whilst he says that he is informed that in fact there is no danger that the use of overseas laboratories will take much custom away from our own laboratories, I am informed otherwise—that is to say, I am informed that there has been a tendency recently to have an increasing amount of the laboratory work done outside this country. I am therefore unable to accept his plea. However, with the permission of the Committee, I will withdraw the first Amendment, and, when the time comes, will not move the other two. I suggest, however, to Her Majesty's Government, that these are both points which merit consideration.

Amendment, by leave, withdrawn.

8.22 p.m.

LORD LUCAS OF CHILWORTH moved to omit Clause 14. The noble Lord said: We may be able to deal with this Amendment quite quickly or it may take us a long time it all depends on what the noble Lord opposite has to say. Part III of this Bill, and especially Clause 14, extends the period during which exhibitors are obliged, under the Cinematograph Films Act, 1948, to show British films, and increases the maximum amounts of certain fees payable under the Cinematograph Films Act. 1938. Clause 14 deals with the extension of period during which exhibition of British films is obligatory. To-day, it is obligatory to show on British screens at least 30 per cent. of British films—and the definition of a British film we discussed fully earlier to-day.

When this Bill was mooted, about last February, the President of the Board of Trade said that he wished to discuss with the film industry, in all its sections, three major points. The first was whether the Eady levy should be made statutory or should remain voluntary; the second was the borrowing powers of the Film Finance Corporation, and the third was whether or not the Cinematograph Films Act, 1948 (that is the quota Act), should be extended or altered in any way. He asked the Film Finance Corporation to circularise the entire industry. This they did, pointing out that the first two objects I have mentioned were of prime importance and the Film Finance Corporation would not ask the industry to pass on any comments about the third object until some later date.

I will not go through the whole of this unfortunate history, but it was firmly in the industry's mind that the Government intended to bring forward legislation that would amend the Cinematograph Films Act, 1948. Whilst the Government may not have known that every section of the industry wanted it amended, I do not think there is a section in the industry that disagrees with the fact that there should be a quota. But on the exhibitor's side it is said, quite frankly, that there is not enough latitude to take care of the unfortunate exhibitor who, through no wish of his own, really cannot fulfil the quota. My information is that, of the 4,500 cinemas in this country, the number of defaulters in quota amounts to 1,000 a year: that the law is absolutely unenforceable and, therefore, is brought into disrepute. I am glad that the noble and learned Viscount the Lord Chancellor is here at the moment, because I feel certain that it is one of the most distasteful things for any Lord Chancellor to know, that the law is brought into disrepute because it is unenforceable and because it is so silly. That is on one side. On the other side, the exhibitors have their reason for wanting it altered, and in all there is a feeling within the industry—I say this with great respect—that the Government have not played fair.

I ask your Lordships to take into consideration the fact that the Cinematograph Films Act, 1948, does not expire until September, 1958. I hope that the noble Lord will not tell me that the reason why it is necessary to put through an extension of the quota without any Amendment in this Bill is because there will not be any legislative time between now and 1958. He might "tell that to the Marines," but I hope he will not try to tell me that. That is the stock phrase that is put into the mouth of every Government spokesman. When the Government do not want to do anything, or when it is inconvenient for them to do it, of course they say that there is no legislative time. But if the Government want to do anything, they generally manage to find legislative time to do it. That is the reason why we have not put down any amendment to the Cinematograph Films Act, 1948, because any amendment that would be worthwhile, and acceptable to the Government, would have to be the result of long and careful—I say "long," but at any rate extending over a month or two—consultations will all sides of the industry.

This is a highly technical matter, and I do not think it would have been fair to go into it—I will be quite frank with the noble Lord—because it would have prolonged these proceedings. The noble Lord says that they are getting too protracted. I do not think so; I think we have got through very well. This Bill is of tremendous importance to an important industry. The noble Lord must not get tired because he cannot have his own way all the time. I have not succeeded in one of my Amendments, but I am not tired. The noble Lord should never be tired of well-doing.

What I want to ask the noble Lord is this: will he give me an undertaking that Her Majesty's Government will consult with the industry as soon as may he and get an Amendment to the Cinematograph Films Act, the "quota" Act, within a reasonable time? Frankly, I do not think Her Majesty's Government have played fair. They should have carried out their original intention. They did not tell the industry that they were not going to do so. It was left to a statement made in another place by the then President of the Board of Trade, and it has caught the whole industry on the wrong foot. I have a letter which reached me only yesterday saying that at a meeting of the producers, the exhibitors and the trade unions, a letter was written to the President of the Board of Trade expressing the unanimous disappointment of all four associations represented at the meeting at the decision of Her Majesty's Government to limit Part III of the Bill to Section 1 of the Act of 1948. That is just that one section which specifies the time.

I hope the noble Lord will not tell me that the quota provisions of the Act of 1948 cannot he amended because that matter does not, come within the Long Title of the Bill. One of the advantages in your Lordships' House is that the first Amendment to a Bill proposed by the Lord Chairman is, "That the Title of the Bill be postponed," for the very important reason that, if your Lordships so desire, you can pass any Amendment so long as it is germane to the subject of the Bill. If we so desired, we could have put down Amendments on the Report stage and on this stage and we should have been quite in order. As I told the noble Lord, we did not do so because we felt that it would be jumping the gun". And, as I have said, I feel that the very important Amendments that are needed to bring the quota provisions up to present-day requirements, in the light of experience, require close discussion between Her Majesty's Government and all the interests concerned. That is the reason why I have put down this Amendment. I hope that perhaps the noble Lord is going to be conciliatory about this. I beg to move.

Amendment moved— Leave out Clause 14.—(Lord Lucas of Chilworth.)

LORD JESSEL

I touched on this point on the Second Reading of the Bill, and as a result of my remarks the noble Lord, Lord Mancroft, was kind enough to write me a letter in which he said that he would see whether something could be done to reassure the industry that it is not the intention of Her Majesty's Government to let quota legislation run on unamended until 1968. I know that the exhibitors, who feel that they have been pretty shabbily treated in this matter, will be most anxious to know what he is going to do to see that this does not happen. I would make one further suggestion. If Her Majesty's Government cannot accept this Amendment as it stands, would it be possible, so as to reassure the industry, to accept an Amendment which continued the existing quota system for one year? That would give plenty of Parliamentary time to bring in another Bill, at the end of one year, to put right what most of the industry consider are serious defects in the existing quota system.

LORD MANCROFT

This is an important subject. The noble Lord, Lord Lucas of Chilworth, has begged me not to do two things which I have no intention of doing, and not to do a third thing which I did with some vehemence in the course of my Second Reading speech. I am afraid that I am not going to please the noble Lord. This clause extends by ten years, to September 30, 1968, the period during which exhibitors are obliged to show a certain percentage of British films. It is important to be clear as to what its omission would mean: it would mean that the quota provisions of the Cinematograph Films Acts, 1938 and 1948, would expire in September, 1958, unless legislation were promoted in the present Session, or in the 1957–58 Session.

I would ask all noble Lords who favour this to consider its probable effect on British film producers. We are already devoting a good deal of time in this House to discussion of film production problems, and I was not complaining in any way that we were devoting too much time, or that this was not an important matter which should not be fully debated; I was fixing a self-denying ordinance on myself not to be more "long-winded" than was necessary. By the time the present Bill has been considered in another place, we shall be well into the present Session. I wonder whether, at the moment, it is in the best interests of film producers that time should be sought in the Session beginning next autumn to go over their affairs again.

Words of disappointment have been used, and I was rather discouraged to hear allegations of bad faith levelled against Her Majesty's Government on this particular clause. The noble Lord, Lord Lucas of Chilworth, said that Her Majesty's Government had caught the industry "on the wrong foot." If we have done so, I can assure the industry at once that there is no question of bad faith. If we have embarrassed them, I am truly sorry, and I apologise for any inconvenience caused to those in the industry who would have wished other than what is now done, but I can assure them that there are no evil motives. I appreciate that industry may be somewhat surprised to find that the Bill extends the quota provisions of the 1938 and 1948 Acts, and that this has been done before the consultations which were promised by the President of the Board of Trade earlier this year, on revision of all the clauses of quota legislation; but I think the reason will be understood. Because of pressure of other business, it has not been possible to conclude the work in time for the present Bill. I can say categorically, however, that we propose that these discussions will begin in the autumn this year, just as soon as the present Bill, and regulations made under it, are completed, with a view to legislation as soon as possible after that. I cannot be more categorical than that and I do not think your Lordships can expect a more categorical statement, but that is what we have in mind.

In all those circumstances, I suggest that this programme should prove to be the most practicable and most desirable for the health of the industry. I therefore ask your Lordships not to press for this Amendment but to approve the clause as it stands. I hope that I have given the categorical undertaking which the noble Lord wanted. I wish that I could have gone further, but I think he will realise that to attempt to be more specific would be stupid, because I cannot pledge my successors or put my hand on my heart and say without a doubt what will be done. I can only repeat that we hope this legislation will be introduced as soon as possible after the date I have mentioned.

LORD LUCAS OF CHILWORTH

Did the noble Lord say that conversations with the industry will commence in the autumn of this year?

LORD MANCROFT

Yes.

LORD LUCAS OF CHILWORTH

I quite understand that he does not want them to start while this Bill is going through Parliament. But why wait until the autumn? Is there any point in waiting? Would the noble Lord alter the statement to say that negotiations on discussions with the industry will start, not in the autumn but after the Bill has gone through Parliament? I can quite understand the difficulty of carrying on one set of conversations about legislation while this legislation is going through. Will he say that Her Majesty's Government will undertake to bring in the later legislation as soon as possible after those discussions?

LORD MANCROFT

I do not think the noble Lord is being unreasonable. I will certainly undertake that the conversations shall take place as soon as possible, and that legislation will be introduced as soon as possible after the conversations.

LORD BURDEN

Will Her Majesty's Government stand by this extension till 1968, or will there be legislation to consider that if this Amendment is withdrawn? In other words, would it not be good policy to accept the suggestion which has been made by the noble Lord, Lord Jessel, to have this clause withdrawn, and the quota system as it is to-day continued for another twelve months, to allow the discussions to proceed and fresh legislation to be got through? Otherwise, this ten years is riveted on the industry.

LORD MANCROFT

That would be a very bad idea. We want, and the whole industry want, the quota legislation. If I attempted to meet Lord Burden's requirements, we should only have a year's safety—then we should have legislation again, or the whole thing would go by default and we should have a great gap in the legislation which would be very much to the disadvantage of everyone concerned. I am sure that our proposal is the tidiest way of dealing with the matter.

LORD LUCAS OF CHILWORTH

I take it that by this Bill we extend the quota provisions of the 1948 Act.

LORD MANCROFT

That is so.

LORD LUCAS OF CHILWORTH

If the Government, after discussions with the industry, decide amendments of the 1948 Act are necessary, an Amending Bill will have to be produced to amend the 1948 Act. This Act only carries on the quota provision of the 1948 Act?

LORD MANCROFT

That is so.

LORD LUCAS OF CHILWORTH

I will accept that. If I may say so, I think that the noble Lord has been eminently fair. I am sure that the industry will wait with cheerful anticipation, immediately this legislation has gone through Parliament, for a summons to discuss the proposed Amendments to the 1948 Act. I am sure they will be very satisfied with the Government's undertaking that discussions will start, and that if it is decided to legislate, legislation will be introduced as soon as possible after those discussions.

LORD MANCROFT

Not immediately, but as soon as possible after those discussions.

LORD FARINGDON

I should like to inquire whether these consultations on this legislation will be the occasion when my Amendments to Clause 14 could come under consideration.

LORD MANCROFT

I think that is a perfectly fair question and the answer is, "Yes".

LORD LUCAS OF CHILWORTH

I beg leave to withdraw my Amendment.

Amendment, by leave, withdrawn.

Clause 14 agreed to.

Clause 15 [Increase of maximum amounts of certain fees]:

LORD ARCHIBALD had an Amendment on the Marshalled List to leave out Clause 15. The noble Lord said: As this would have been a consequential Amendment in the unlikely event of the Government's having accepted the previous Amendment, I will not move it.

Clause 15 agreed to.

Clauses 16 and 17 agreed to.

Schedule [Provisions relating to British Film Fund Agency]:

8.45 p.m.

LORD FAIRFAX OF CAMERON moved to add to paragraph 7 (1): , and regulations under section three of this Act may include provision for requiring the Agency to set aside, out of the proceeds of said levy in respect of the last period in respect of which it is imposed, such sum as appears to the Board sufficient to defray the expenses of the winding up The noble Lord said: The Schedule provides that, where there are no further functions to be discharged by the Agency, the Board of Trade may by order provide for the winding up of the Agency. No provision has been made in the Bill for the payment of the expenses of the winding up. These expenses should not be very great but will no doubt include the salary of a liquidator and the normal expenses associated with a winding up, such as the expenses of advertising for creditors of the Agency. This Amendment gives power to the Board of Trade to include in regulations made under Clause 3 (which will relate to the distribution of the levy), a requirement that the Agency shall set aside such sum as the Board of Trade consider sufficient to defray the expenses of the winding up out of the proceeds of the levy collected in respect of the final levy year. On behalf of my noble friend I beg to move.

Amendment moved— Page 11, line 3, at end insert the said words, —(Lord Fairfax of Cameron.)

LORD LUCAS OF CHILWORTH

I can quite see the reason for this Amendment and I am not going to oppose it. But I think I had better have something on the record. I want to get an assurance from the noble Lord on behalf of the Government that this does not portend in any way the winding up of the levy. I do not mind your making provisions for its being wound up, but I cannot foresee, and I do not think the industry can foresee, the time when this levy in some shape or another will not be necessary, because it may well be—and this is what I want to impress on the noble Lord—that the more British film production expands, the greater the amount of levy that will be required. I want to draw his attention to what I said on the first Amendment which I moved—that the British picture industry can never be self-supporting on a home market. I cannot foresee the time when it will not require financial assistance, either direct grant from the Government or a levy of this description. I want it clearly understood that in agreeing to this Amendment we understand that this is not one of those cases of "coming events casting their shadows before" and that it is not the intention that the levy shall be discontinued and the British Film Production Fund come to an end. Can the noble Lord give me an undertaking that that is not what is intended by the Government by this Amendment?

LORD FAIRFAX OF CAMERON

I give the noble Lord the assurance that that is not the Government's intention.

On Question, Amendment agreed to.

On Question, Whether the said Schedule, as amended, shall be agreed to?

LORD BURDEN

On one or two occasions previously I have mentioned the point of the regulations, and this Schedule provides for the making of regulations. These regulations will be of profound importance to every section of the industry, and I hope I can take it, or have the assurance, that in the framing of these regulations, consideration will be given to each section of the industry and appropriate consultations will take place. The next point I should like to make is this. These regulations are usually in draft for quite a long time before they are laid before Parliament, and when they are laid we are not in a position to amend: we have to accept or reject, and rejection, of course, is not a conceivable possibility. Will the noble Lord take into consideration whether it is not possible for a debate to take place on the draft regulations at a stage before they are laid before Parliament for consideration? That is a way which would get us out of many difficulties, and I think would be helpful towards getting an Affirmative Resolution when the time comes for that. May I ask the noble Lord that consideration be given to that matter?

LORD MANCROFT

The answer to both questions which the noble Lord has put to me is: "Yes."

Schedule, as amended, agreed to.

House resumed.