CINEMATOGRAPH FILMS (DISTRIBUTION OF LEVY) (AMENDMENT) REGULATIONS, 1958 (Hansard, 12 February 1958)

§ THE MINISTER WITHOUT PORTFOLIO (LORD MANCROFT)
My Lords, these amending Films Regulations cover a narrow but important point concerning the definition of "television films." These, as your Lordships may remember, form one of the classes of films which are excluded when calculating the payments to be made to makers of British films out of the proceeds of the levy. I should like to emphasise that this is not a change of definition but a clarification which the British Film Fund Agency, as well as organisations in the trade, have requested, on the grounds that the existing definition is not absolutely clear. This is a matter of importance for the Agency, as the payment of substantial sums of money may be involved. It was also found that the Regulations might unfairly penalise films on account of actions taken prior to the publication of the Regulations, and we have also taken steps to close a small loophole.
No point of controversy arises on these Regulations. The Act provides that the Board of Trade shall consult the Cinematograph Films Council before making Regulations. This has, of course, been done, and I would add only that the British Film Fund Agency was also fully consulted, and that the representations made by trade organisations have been taken into account. I hope, therefore, that the House will be able to approve these Regulations. I beg to move.

§ EARL WINTERTON
My Lords, I must, as I have done on previous occasions when speaking on matters connected with the cinema, explain that I have a personal interest in the matter, in that I am a director of the Rank Organisation and have for many years past, except when I was in office, been connected as a director with the trade. As the noble Lord the Minister has said, no controversial issue arises here, and I may say, in passing and in parenthesis, that, happily there is in the cinema trade no 643 political difference of opinion. In fact, so far as the difficulties of the industry are concerned, the representative of labour, in the shape of an honourable Member in another place, Sir Tom O'Brien, is in complete agreement with the rest of the industry.
Even within the very generous permission given in your Lordships' House to deal in debate with some matters which are perhaps not strictly relevant, it would be wrong for me to say more than a word or two on this particular point, but I think it right to say that the industry welcomes the change which is embodied in the Regulations. It would, however, I think, be legitimate to mention just one or two other matters in connection with the levy. The industry was grateful to the Government for making the levy, which was originally known as the "Eady Plan"—so called after Sir Wilfrid Eady, then a civil servant, who was the originator of the plan by which there was a voluntary levy upon exhibitors in order to enable film production to be carried on—a statutory matter. There is some slight disappointment, in that was hoped that the Fund would raise some £3¾ million a year. In fact, I think I am right in saying it raises only £2,½ million. But without this levy it would be quite impossible to carry on film production in this country, and it is a satisfactory fact that, despite all the difficulties of the industry, there is a growing export trade in certain British films which earn dollars and other foreign currency and without the production of British films it would, of course, be impossible to supply the theatres with films.
The Government assist the production of films in another way, through the grant given to the Film Finance Corporation. But I must make the point (I can refer to it only briefly, otherwise I shall be obviously out of order) that what the Government give with the right hand, they take away with the left. While there is this financial assistance, given through the Finance Corporation on a small scale and while there is this statutory system, so to speak, which causes money to be raised through exhibition for production, the Government take the astronomical sum of £26 million in entertainments tax from the industry. That is a tax not on profits but on takings. It has been condemned alike, not only by the leaders 644 of the industry, but by Sir Tom O'Brien, representing an important part of the trade unions connected with the industry. I hope that it is not improper to say that the cost of this tax to the organisation with which I am connected is, I think, £10 million a year. It is the view of the industry—and I am sure it is the right one—that if this tax could be abolished, the troubles from which this important industry is suffering at the present time would largely disappear.
That is all I have to say but, if I may do so without impertinence, I hope that the noble Lord, Lord Archibald, whose views I think coincide with mine and who has had a long connection with this industry, will also say a word on this matter, because we who are connected with the industry are anxious to bring to the notice of your Lordships' House the difficulties from which we suffer.

§ LORD ARCHIBALD
My Lords, I hope it is unnecessary for me again to declare my interest, which is not as direct as that of the noble Earl, Lord Winterton. I am only the chairman of an association of film producers. I must confess that I am surprised that the noble Earl should have raised such wide issues on a Motion on such an extremely narrow point. I do not speak for the industry, but I think I am correct in saying that the Amendment Regulations which have been moved by the noble Lord, Lord Mancroft, have the approval of all sections of the industry. I had therefore assumed that they would go through this afternoon without any comment whatever.
I must, however, as I have been invited to do so by the noble Earl, say that it is common ground in the industry that it is at the moment in an extremely parlous condition. The effects on its fortunes of the development of television and the hampering effect of the burden of entertainments tax on what the industry might do to meet that challenge combine to make an extremely difficult situation.
I feel that it would be quite improper of me to develop the argument about that matter this afternoon, and while endorsing in general what the noble Earl has said about the industry, perhaps I may make one correction. He referred to the fact that there was either slight or mild disappointment in the industry about the 645 shortfall in the amount raised by the statutory levy. I can assure the noble Earl, and the House, that there is the most intense and deep disappointment in the industry about that shortfall. But I would suggest, my Lords, that this situation would be much more appropriately dealt with if the noble Earl, Lord Winterton, would put down the normal type of Motion to call attention to the situation in the film industry, so that we might have a proper debate on it, when the various matters could be gone into much more fully than would be appropriate on this occasion.

§ VISCOUNT ALEXANDER OF HILLSBOROUGH
My Lords, I must say I very much agree with that last sentence from the noble Lord, Lord Archibald. I have found that the intervention of our very respected friend Lord Winterton has raised all sorts of matters in my mind instead of giving merely formal approval to the Order, and it makes me inclined, before the noble Lord replies, to ask one or two questions. After all, I have some interest in the welfare of the British Broadcasting Corporation. This is a levy which has no doubt been agreed, but I see it is to be retrospective to October 20 last, although this is not statutory until these Regulations are approved. They are to come into operation on March 1. Perhaps we can know why it is so retrospective. I suppose it is a matter of periodic contracting. The second question I should like to ask is this: what is the levy per unit performance? Thirdly, what is the estimated cost per annum to the British Broadcasting Corporation? I leave the I.T.V. to look after itself, but what is the cost to the British Broadcasting Corporation?

§ LORD MANCROFT
My Lords, the House will appreciate that, with the Budget not so far off, I am not in a position to make any comments about entertainments duty. Not only am I not in a position to make any comment about entertainments duty, but if I were to do so I should probably find by to-morrow that I should not be in a position. I must say in answer to the noble Lord, Lord Archibald, and my noble friend, Lord Winterton, however, that the serious effect on all sides of the film industry of the unexpectedly severe falls in attendance at cinema entertainments, which was nearly 18 per cent. lower last year, has 646 indeed been engaging the Government's attention for some time, as also has the fact that over 190 cinemas closed last year in this country.
The All-Industry Tax Committee has in the last week or two made the most urgent representations to the Government about the incidence of the entertainments duty, and these, of course, are being studied. I can say, however, that the Government, which for so many years has supported the film industry in a variety of ways—for example, quota legislation. the operations of the National Film Finance Corporation, and now the statutory levy—is naturally giving earnest attention to this current development. The noble Lord, Lord Lucas of Chilworth, told me yesterday that he was contemplating putting down a Motion on the Order Paper on the whole subject as soon as he is fully restored to health. We can properly discuss it then. The noble Viscount, Lord Alexander of Hillsborough, asked me for a figure, which I cannot give without notice, but I will find out what it is and give it to him as soon as I can.