HL Deb 09 February 1960 vol 220 cc1030-64

Order of the Day for the Second Reading read.

3.0 p.m.


My Lords, I beg to move that this Bill be now read a second time. The Bill proposes to continue until the end of 1967 the quota provisions in the earlier Cinematograph Films Acts which would otherwise expire in September of this year. Under those provisions every cinema is required to devote a certain percentage of its screen time to British films. The percentage is fixed by Board of Trade regulation which is subject to an Affirmative Resolution in Parliament. Since 1950 the quota has been 30 per cent. for first-feature films and 25 per cent. for second features, shorts and documentaries. For more than 30 years since the first Act was introduced in 1927 it has been recognised that this quota is the only practical method of giving protection to the British film industry, which would otherwise be swamped by the dumping of films from the enormously more wealthy and powerful American film producers.

Since the war this quota protection has been supplemented by two other measures to help the development of the home industry. First, there was the setting up of the National Film Finance Corporation in 1949. That is a body which has power to issue loans guaranteed by the Treasury for the production of British films. Secondly, there was the establishment of the British Film Fund Agency which distributes the levy. The levy was at first a voluntary one, but since 1957 it has been statutory. It is collected from the exhibitors by Customs officials and distributed by the British Film Fund Agency among producers in proportion to their receipts, which may be either a proportion of box office takings or a fixed rent. In the case of first-feature films it is usually a proportion of box office takings; in the case of second-feature and short films it is usually a fixed rent. But when it is a fixed rent that rent is multiplied by 2½ for the purpose of ascertaining the amount of the levy to which the producer is entitled—the"2½ times multiplier" it is called—to bring those films whose receipts are in that form more into line with the first features. Both these bodies—the National Film Finance Corporation and the British Film Fund Agency—come to an end in 1967, and the reason why the quota provisions in this Bill have been given a similar term of duration is to enable all these related matters to be reviewed and reconsidered together when the time comes.

My Lords, this Bill makes a number of changes—a number of improvements, I hope your Lordships will consider them to be, but certainly a number of changes—in the application of these quota provisions. None of them is a fundamental change. Two of them, I think, are of considerable importance, on which your Lordships would probably like me to say a word or two. There is the inclusion of newsreels in Clause 2; and there is the provision about co-production films in Clause 9. When the levy was first introduced newsreels were not included in it because they were doing so well and making so much money that it was considered they did not need it. Now newsreels are earning no money at all; they are, in fact, making a loss, and the number of them which are shown has of course fallen very heavily. It is proposed in the Bill that they shall now be introduced for purposes of quota into the quota legislation and therefore entitled to receive their share of the levy. But they will not benefit from the"2½ times multiplier" which is enjoyed by other features which are shown at a fixed rent; they will count only the actual figure of their rent for the purpose of ascertaining the amount of the levy to which they are entitled. I think this is the only part of the Bill to which there has been any considerable opposition. A number of people are against bringing in newsreels for the benefits of the quota and the levy provisions; indeed, I think there was a Division on it in Committee in another place.

The arguments against bringing in newsreels are that they are a declining feature of cinema production; that the public do not want to see them; that the exhibitors do not want to show them. It is also said that the residue of British newsreels which are now being shown are very bad productions. It is therefore represented that it is mistaken and unfair that we should prop up this dying part of the industry which is soon going to expire by giving it a share in the screen quota and also a share in the proceeds of the levy at the expense of other features which might make better use of them and which would deserve them better.

It is certainly true that in recent years the number of newsreels shown in cinemas has greatly declined. That is no doubt partly, if not wholly, due to the great increase in television. I believe that within the last six or seven years the number of television sets in this country has increased from about 1 million to about 10 million—certainly a vast increase—and, of course, people who can see news on television every evening are much less inclined to want to see news which is not quite so up to date when they go to the cinema. That is no doubt the main reason why the exhibitors feel that the public do not want to see newsreels. Of the five companies which used to produce them, three have stopped doing so. Only two still produce them, and I understand that newsreels are shown now only at about one-third of the cinemas in the country. As for the quality of newsreels, that is of course a matter for individual taste and judgment into which I do not want to enter.

What I feel, my Lords, is this. The reason why newsreels were originally excluded from the levy was that they were doing so well that they did not need it. Now that they are doing so badly that they are in danger of coming to an end it seems a little unfair that we should say to them,"We refused you the levy to begin with because you did not need it. Now we are going to refuse it because you do need it." It is rather as if a man were to come to you and ask to be given some food, and were refused because you saw that he was well-nourished and prosperous and did not need it. If the same man comes a year later, obviously in the last stages of starvation, it is perhaps a little unreasonable to say to him,"No. I refused to give you food before. I still refuse to give you any because I can see you are so under-nourished that you will soon die, which is probably the best thing that could happen to you."

I think, my Lords, that if British newsreels are going to disappear (which I should personally regret, though that is a matter of opinion), then at least we ought to allow them to disappear without suffering any adverse discrimination. What we are proposing to do here is to remove a discrimination against them; to give them a chance; not to put them on a par with other short features, because they do not get the benefit of the"2½ times multiplier", but to give them the levy on the basis of their actual rent. It is estimated that, out of a total levy of £3¾ million, the newsreels would be likely to receive about £150,000. We have made this proposal on the advice of the Cinematograph Films Council, and we think it is a reasonable proposal in accordance with natural fairness.

The other innovation which I thought your Lordships would like me to say a word about is in Clause 9, which deals with what are called"co-production films". It is becoming more and more usual now, owing to the difficulty of financing films, that they should be shown in as many countries as possible. Consequently, there has developed in Europe a great deal of co-operative film production from which British film producers have been excluded because our laws, as they have been up till now, would debar such co-production films from qualifying for the British quota. This clause, if it is passed, will enable the Sovereign, by Order in Council, to provide that films which are made in accordance with international agreement between Her Majesty's Government and any other Government may be treated as British for quota purposes, even although they do not conform to the strict requirements of an exhibitor's quota as laid down in the previous Act. Of course, at present there are no such international agreements: there cannot be until this Bill becomes law. But we think that this is a reasonable proposal which will help in the future development of our film industry, and I think it is generally acceptable to most sections of opinion. It has not, in fact, encountered any opposition.

My Lords, the other changes in the law made by this Bill are of a relatively minor character. I think that perhaps your Lordships would expect me merely to mention them very shortly. Clause 3 enables the Cinematograph Films Acts to be made to apply by regulations to films recorded by new techniques, such as on magnetic tape or wire, which did not exist at the time when this legislation was first passed. The definition of a film which is now proposed is: In this section 'film' includes any record, however made, of a sequence of visual images, which is a record capable of being used as a means of showing that sequence as a moving picture". I hope that the noble Lord, Lord Conesford, will agree that that definition is better than those that we sometimes find in Acts of Parliament.

The clause goes on to define the meaning of a standard film. I should perhaps explain that a standard film automatically comes under the quota levy provisions; a non-standard film does not, but can be brought under them now under this clause by regulation of the Board of Trade. We consider that it is sometimes an advantage that a film which is not a standard film should be allowed to run, and should not be brought under the quota provisions. For example,"Cinerama" was not a standard type of film. I hope your Lordships will not ask me why it was not, because the answer is so intricate that, even if I succeeded in getting it right, I am afraid that it might only puzzle your Lordships. It is obvious, I think, that when a new three-dimensional innovation of this sort is introduced it costs an enormous amount of money to produce. It is therefore reasonable that it should have the longest possible run in order to recover its expenses; and it may be a good thing, although it is entirely an American production, that the British film industry here should be given every opportunity of learning the technique of a wonderful new invention like this. Therefore it may be desirable not to bring it under the quota regulations, at least for some time.

Clause 4 introduces a little flexibility about the length of time for which films may be shown. It allows the quota to be spread over two years instead of one. That is to make provision for exceptionally long runs, which may be very reasonable and desirable. Clause 5 introduces quite a different element of flexibility into the regulations. It is really intended to help small exhibitors in small country towns, who may have great difficulty in keeping going if they are obliged to adhere strictly to the quota regulations. It therefore enables those regulations to be relaxed in certain respects after consultation with the Cinematograph Films Council. The sixth clause, about labour costs, is designed to stop up certain loopholes, or to put an end to certain devices, which experience has shown can be used to evade the intentions of Parliament about the percentage of British labour (either 80 or 75 per cent., as the case may be) which must be used in the production of a film in order that it may rank as a British film.

Clause 7 brings in a provision that sound recordings as well as photographs taken in a foreign film studio will disqualify a film from British registration.

Clause 8 makes it obligatory for each long British film to include in the credit titles the name and address of either the maker of the film or the studio where it was made. The reason for that is that we have found that some of the best British films, which have the best runs abroad, are sometimes shown by foreign exhibitors under conditions which give the impression that they are American films and not British films. Now we can make sure, as we are doing by this Bill, that the name and address of the maker or studio shall be included in the credit title. Of course, we cannot make sure that the foreign exhibitor will not alter the title and leave that out; but at least we can make sure that he cannot give the impression that it is an American film unless he is guilty of an active piece of dishonesty and not merely a passive one.

Clause 9 about co-production films, I have already dealt with. Clause 10 defines the proportion of old material which may be used and brought again into a film without disqualifying it from being registered as a British film. The remaining clauses, from 11 to 17, are concerned almost entirely with registration and with licensing, except for Clause 15, which substitutes the playing time of the film instead of the actual physical length of the film itself for the purposes of determining how much of the quota it shall be deemed to have fulfilled.

The enormous growth not only of television but also of sound broadcasting since the war has had a continual adverse effect, both on the newsreels and cinema attendances as a whole. In 1946 the number of cinema attendances in Great Britain was no less than 1,635 million, which means that every man, woman and child in Great Britain, on an average, must have gone to the pictures 33 times in that year—and of course that included all the babies too small to go and all those who lived in places where there are no cinemas. In 1959 the figure had gone down to only 600 million attendances, a drop from an average of 33 attendances to about 12 for each person during the year.

In spite of that reduction, the production of British feature films has, in general, been maintained. It goes up and down; the lowest level actually was reached in 1952, when 64 films were made, and the highest peak was in 1958, with 105 films. In 1959, the figure was 80. But in general the number has been maintained. Moreover, British producers have taken advantage of the protection which Parliament has given to win foreign markets. At present, their earnings from overseas are about £5 million a year. At home, in the last year for which figures are available, they actually exceeded the quota by about 5½ per cent. in respect of first-feature films and by 4½ per cent. in respect of second-feature films. That does not mean, of course, that the quota is no longer necessary. On the contrary, it has been and will continue to be the foundation of progress and of security in the British film industry.

My Lords, I think that the changes which this Bill makes, except for the provision about newsreels, on which there is a difference of opinion, are generally acceptable. I think that in general these changes bring our present legislation up to date and I hope that this Bill will be of some help to the film industry in improving both their fortunes and their reputation in this country and abroad.

Moved, That the Bill be now read 2a.—(The Earl of Dundee.)

3.23 p.m.


My Lords, I have always admired the clarity of speech of the noble Earl, and I am sure that once again your Lordships will share with me my appreciation of the manner in which he has presented this complex Bill. Art, I suppose, plays as great a part in filmmaking as the vast sums of money required, and art, we all understand, is something that should be free. I doubt whether there is any industry in this country, or for that matter in Europe, that is bound by so many regulations and Acts of Parliament. The film industry can hardly be regarded as a basic industry, but it is of considerable importance, if only because it gives a pleasure to approximately 12 million people every week, as the noble Earl told us, and because it employs a considerable number of workers. Your Lordships will recall the full and interesting debate we had last Session, when we heard from a number of noble Lords of the great difficulties facing both producers and exhibitors in this industry. In some cases the difficulties stemmed from one cause, and in other cases they were peculiar to the particular section of the industry.

In dealing with the producers' difficulties, I think that we should first recall the achievements of the producing section of the industry. In recent years, they have made some notable films, which have received world-wide acclaim; and, as we heard from the noble Earl, they have increased their amount of screen time in this country to a figure of approximately 35 per cent. The difficulties of the producing side stem basically from the keen competition of American producers. The Americans are able to offer films at very low rates, principally because their type of films seems to appeal to a world-wide audience, while unfortunately our films, particularly our humorous films, seem to attract only a relatively small percentage.

I was in Washington recently and was told that Washington had only one cinema which showed British films. I was taken to it. The first thing that struck me, on entering the cinema, was the large Royal Coat of Arms displayed. I asked the manager whether Her Majesty the Queen had visited the cinema and given permission to put up the Coat of Arms. He said,"No, we are the only cinema in Washington that shows British films, and because of that we feel we are entitled to put up the Royal Coat of Arms." I hope that the fact that I have mentioned this in your Lordships' House will not result in efforts being made to bring it down, because it certainly attracts the attention of people who visit the cinema.

The difficulties of the exhibitors appear to be increasing. The figures that I have show that in 1946 over 1,600 million people attended cinemas; in 1958, the figure was 755 million. If the indications given are correct, the number is steadily falling. I do not wish to anticipate the speeches that will be made, but I am sure that the greatest handicap to the prosperity and development of the cinema industry lies in the Government entertainments tax. I understand that, taking both statutory levy and entertainments tax, approximately 22 to 30 per cent. of what the cinemagoer pays at the box office is received by the Government. This is a considerable sum of money.

I understand that the Treasury maintain that entertainments tax cannot be regarded as a reduction of revenue to the cinema and that it is a direct tax on the cinemagoer. In my view, this holds no water whatsoever. If the duty is on the ticket, that means either that the cinema-owner is charging a higher rate for the ticket than the public are prepared to pay or that you have a figure which the public are prepared to pay and you are denying that amount to an industry which is in most difficult circumstances. In view of the undoubted and well-known difficulties of the industry, I believe that there is a case for the scrapping of entertainments tax. So far as I know, the film industry is the only entertainment which has this tax. So far as my friends on this side of the House are concerned, it is our Party's policy to scrap entertainments tax because we believe it to be wrong. However, I propose to leave that point on one side for other noble Lords more connected with the industry to deal with.

I should like to say just a few words on the Bill itself. First of all, we shall not oppose the Bill, but on the Committee stage there will be one or two matters on which we shall need to move Amendments. I think it should be said that the Bill which comes to your Lordships' House is an infinitely better Bill than that which the Government presented to the other place, where, thanks to a considerable amount of work by Members, it was changed. It is recognised that the Government did give way, and I hope that when we move Amendments on the Committee stage they will continue to move in the right direction.

I feel that we should recognise that the Bill tries to maintain a delicate balance of conflicting interests, that is to say, those of the exhibitor and those of the producer, and there are highly technical points that have to be taken into account. As the noble Earl has said, the Bill broadly, extends the previous legislation. It includes, however, at least two new provisions, one of which we on this side of the House shall oppose as a matter of principle—and I refer to Clause 2 which brings newsreels within the scope of the Bill. We have heard from the noble Earl that in the past newsreels required no aids, but that, through the advent of television and the amount of news material that television puts across every evening, cinema news is no longer popular; that now we are back to two producers of newsreels, and that many of the leading circuits are not now showing news.

The noble Earl's case, as I understood it, was that because the newsreel section had fallen into bad times we should extend the benefits of the levy. I grant the noble Earl that point. But as I understood it, the reason why the Government felt that newsreels should continue was that they played a most important part in portraying what we call the British way of life to overseas countries. I think there is a good point there. I have lived for quite a number of years in an overseas country, and I always remember the joy I received in seeing news of the home country. But if the Government's case is that newsreels should continue, in spite of their unpopularity in this country, for national reasons, I personally should say that it would be unfair to put the burden on to part of an industry which is already struggling. I should have thought that the Government's case would be far better if they said that these newsreels are an important part of putting British news before overseas countries and that they would give them a subsidy from the information services. I would ask the Government whether they would reconsider this point.

We shall try to persuade your Lordships to delete this clause, but if it should remain, then I feel I should draw your Lordships' attention to the fact that newsreels have hardly any definition. We know that newsreels will be admitted to quota without having to present costs. It is possible that this arrangement will be open to abuse. It is possible for a newsreel, as I see it at the moment to be turned into a second feature. I have in mind the possibility that a newsreel of a world beauty competition, the Grand National, the Derby or riots in Algeria might be shown for, say, 30 or 35 minutes, and that these newsreels would receive the whole benefits of the levy. To my mind that would be completely wrong. Therefore, I ask the Government whether they will consider, assuming that they do not accept our Amendment on the Committee stage, to delete the clause, the definition of a newsreel as being of ten or fifteen minutes' duration. I do not ask the noble Lord who is to reply to give an answer on that point this afternoon, but perhaps he would bear it in mind for the Committee stage. I should also like to ask the noble Lord why it is that the Republic of Ireland are being specifically mentioned and included in this Bill. Perhaps he can give an answer to that question when he replies.

I would now draw the attention of your Lordships to Clause 9 of the Bill. That clause is completely new, and it was well described by the President of the Board of Trade in another place on November 5. Speaking of the intention of this clause, he said [OFFICIAL REPORT, Commons, Vol. 612 (No. 11) col. 1218]: We have in mind co-operation with some other European film makers. No country in Europe can provide a market on its own adequate enough to sustain more than a very small number of highly successful productions. There is a growing practice in Europe for producers in two countries to collaborate on a film which is then shown in either country and given national treatment… This, to my mind, is a very good suggestion, but I have two points to make on it. First of all, I would stress that, having made these agreements, we should watch carefully to see that we get the same treatment as we extend to other countries. When one sees certain trade agreements, how often do we come out rather unfairly? My second point is to ask the Government that, before they finally make agreements with other countries, they will consult with the Cinematograph Film Council. At the present moment I understand that the Board of Trade would consult the various sections of the industry; but here we have a statutory body, and I should like to see it included in the Bill that before an agreement is made the Cinematograph Film Council should be consulted. If possible, I will put down an Amendment to that effect.

That is all I have to say on this Bill. I have one great regret—namely, that the Bill contains no provision in respect of the sale to the television contractors of films for which levy has been received. I am sure the House is aware that television is a direct, if not mortal, competitor with the cinema industry. The cinemas pay a statutory levy to the producing side of the industry for the sole purpose of giving help and encouragement, and particularly for making first-class feature films. It is therefore hard that films on which payment has been levied at the box office can be sold, as they are at present, to television contractors. Recently 53 films were sold. I understand that these films were comparatively new, and had all received levy contributions. There was nothing wrong in law. I wonder whether the Government would consider making provision whereby a film that has received a levy shall not be sold to outside television interests for a period of five years, and that when a sale is made the levy that that film has received shall be paid back to the general pool? I am raising this point now in the hope that the noble Lord can tell us the Government's views.

In conclusion, may I say that we shall not oppose this Bill; we shall try to improve it at the Committee stage. We recognise that the provisions in the Bill give safeguards to the industry, but we also recognise that, although in the main the provisions of this Bill have been in existence for a number of years, the difficulties of the industry remain. I personally believe that the abolition of entertainments tax would have the greatest effect on the industry. In closing, I should like once again to compliment the producers upon their notable productions in recent years, and sincerely trust, as did the noble Earl, that these may long continue.


My Lords, before the noble Lord sits down, may I ask what I think is rather an important point? The Opposition seems to accept the statement that newsreels are unpopular. Has the noble Lord any information as to what has determined that unpopularity? I have in my district one cinema on the A.B.C. circuit which still goes on with the newsreels. I have not noticed the slightest objection to them. The cinema is as full as any other cinema, and the newsreels seem to be quite as popular. What is the principle which determines it?


My Lords, I am not in the industry, but I understand that the exhibitors have undoubted proof that newsreels are no longer popular. As the noble Earl said, the news that can be seen in a cinema to-day is a week old, whereas if you look at your television set you have your news very well portrayed in a matter of hours.


That does not answer my question.

3.45 p.m.


My Lords, as is the usual custom in your Lordships' House, I have to declare an interest in this afternoon's debate by telling you that I am a national officer of the Cinematograph Exhibitors' Association and, like the noble Lord, Lord Archibald, I have had many years' experience in the film industry. When this Bill was debated in another place it was described by my right honourable friend the President of the Board of Trade as a modest but important measure to continue to improve the protection given to the British film industry. I agree that it is an important measure, and I can say in general terms that the whole of the industry gives it support, but there are one or two points about which I should like to say something. I may say that the points I make are the considered views, not only of myself, but of most of the leading people in the film industry.

Let us take Clause 2, which has been mentioned this afternoon. That is the clause which relates to newsreels. It is suggested that newsreels should rank as quota films. With that I have no quarrel, but I object to the participation by newsreels in the production fund levy which, as your Lordships have been told, is now a statutory levy on all cinema exhibitors with the exception of the few who are exempted by reason of the fact that their receipts do not reach a certain figure each week. I agree that newsreels used to be a vital and important part of a cinema programme, but with the advent of B.B.C. television and then, at a later date, commercial television, I submit that the cinema newsreels are no longer news. In some of the smaller cinemas which showed newsreels a few years ago—and this will answer the question of the noble Lord, Lord Amwell—it was quite a common sight to witness the departure of a well-known public figure leaving London Airport some five or six days after he had returned.

I venture to say that any news item which is more than 24 hours' old is now classified as history, and not news. The majority of cinema exhibitors do not show newsreels, and it appears to me that if the newsreels are to receive any payments from the production fund then it will mean that there will be that amount of money less available for the making of feature films, which every cinema shows, and for the making of which the production fund was created, first as a trade-operated scheme, and then subsequently as a Government levy.

It was said in another place during the debate on this Bill that it is in the national interest, both at home and abroad, that the production of newsreels should continue, and it was felt that it was right that they should receive quota protection and a share from the levy. If it is the Government's view that it is essential that British newsreels should be shown overseas to let the world see our way of life, then, surely, the Government should subsidise the making of these newsreels through the Central Office of Information or some similar body. Why should a cinema exhibitor have to pay a compulsory levy into the production fund to assist in the making of newsreels which he does not show? Surely, if it is in the Government's view essential that the newsreels should be retained, then it is only fair and logical that the Government should find the money, and not the cinema exhibitors who do not or cannot afford to show newsreels on their programmes.

My noble friend said that the newsreels were at starvation point. I should like to point out and to emphasise to him that there are over 2,000 cinema exhibitors in this country who are in exactly the same condition. I would ask my right honourable friend if he would look into the matter to ascertain whether it is not possible for the newsreels to rank as quota films, but that they be financed from Government funds, and not out of the production levy.

When the Cinematograph Films Bill was being debated in your Lordships' House in December, 1956, I used these words [OFFICIAL REPORT, Vol. 200, col. 1353]: I sincerely trust that financial help will not be given to a British film producer who makes films for the television media, and I would therefore ask that some form of wording be inserted whereby financial aid would be given only to films exclusively made for commercial cinemas. It is only a few weeks ago that no fewer than 55 (not 53 as the noble Lord, Lord Shepherd, said) feature length films which were originally made for the cinema were sold to a large television company for screening on television screens. Those were films which had received levy payments from the fund which is financed by cinema exhibitors, and now the very films which the exhibitors have helped to make are being shown against them free on the television screens of this country. This is indeed a serious matter, and I would urge my noble friend to draw the attention of the President of the Board of Trade to it so that the matter can be fully investigated.


My Lords, may I interrupt the noble Lord for a moment and say, as he is aware with his knowledge of the industry, that this particular deal was done not with the assent of other producers, who were very much opposed to it.


I agree with the noble Earl; that is right. But other film producers may be contemplating similar steps and selling their films to television contractors, and in all fairness to the cinema industry steps should be taken to stop the screening of these old films on television or, alternatively, as the noble Lord, Lord Shepherd, has suggested, for the moneys which they have received from the production fund to be repaid by them.

In the debate in 1956 on the Cinematograph Films Bill every speaker in your Lordships' House who took part expressed the hope that the Chancellor of the Exchequer would abolish the entertainments tax in his 1957 Budget and thus help the industry to re-equip its theatres and to fight back at television on equal terms. Alleviation was given by the Chancellor in order to help the smaller cinemas, but the owners of the medium and large theatres are still carrying the load of this tax and it is still in being. The film industry now call it the cinema tax and not entertainment duty, as the cinema, as the noble Lord, Lord Shepherd, said, is now the only form of entertainment which bears the tax. It is illogical; it is discriminatory and it is grossly unfair. If the film industry is to survive in this country it is imperative that this tax be abolished by the Chancellor of the Exchequer in his next Budget. I know that we cannot anticipate the Budget, but I am happy to say that this very day a deputation was met by Treasury officials and I am hopeful that their mission will be successful in convincing the Treasury of the justice of their cause.

During the last four years some 900 cinemas have had to shut down. In the year 1959 374 theatres in this country closed their doors. In many instances the closing of these cinemas left a town or a village without any form of entertainment. If the closing of cinemas continues at the same alarming rate and in the same proportion, by the end of the present Government's period of office in- stead of there being some 3,300 cinemas in Great Britain there will be approximately 2,000 cinemas. It is impossible to sustain a healthy British film industry on 2,000 cinemas. If this state of affairs does come about, there will be no home market for British films, and without a home market there will be no British films to be shown in the Commonwealth and in other countries abroad.

The Government just cannot stand and watch a once prosperous industry go out of existence, but that is what is happening. Every week a few more cinemas go out of existence and some poor fellow loses his business and in many cases his life's savings. Most of the trouble in the film industry to-day stems from the tax. It was imposed upon it in 1916 by the Chancellor of the Exchequer as a war-time measure, and a promise was given that it would be removed at the end of the war. Well, here we are to-day in 1960, 44 years later, and the tax is still imposed on the cinemas. What a shameful way to honour a promise, my Lords!

Clause 9 in the Bill is a very welcome one to all sections of the industry, and the Government are to be congratulated upon encouraging co-production with other countries. I was informed recently that continental producers are very interested in such co-production and already are asking when they can make a start on this type of film. There is just one other point I would touch upon, and that refers to Clause 14, which deals with licence fees. It is the intention that these fees should be increased to meet higher costs. Let me take an example. The annual fee which a cinema exhibitor will pay for his licence, it is suggested, should be a maximum of 8 guineas. In 1928 it was 1 guinea, in 1938 it was 30s., in 1952 it went up to 2 guineas and in 1957 it was increased again to 4 guineas. It is now suggested in Clause 14 that it can go up to 8 guineas, and in the first quota period of the Act to 10 guineas. It is said that it is not the intention to increase the fees at the moment, but the Government are taking this power because costs of administration tend to rise and the fees must cover the costs. The costs of the exhibitors and the producers have also risen very steeply, but, alas! they cannot recoup those costs by playing that well-known quiz game"Double your Money". It must be obvious that with the number of cinemas falling each year, the remaining cinemas which manage to keep open will be faced with ever-increasing costs of licences. It would be very interesting indeed if we could know just what the costs of administration are and what revenue the fees bring in every year. Perhaps my noble friend who is to reply can give me that information.

Why is it necessary for fees to be paid to the Board of Trade? Do the Board of Trade charge other industries and trades for their services? For example, does the cotton industry pay fees; does the television industry pay the Board of Trade; does the motor-car industry, or the shipbuilding industry? I do not know whether they do or not, but I should like to know whether we—and when I say"we" I mean the cinema industry—are the only people who pay fees. In my opinion these fees should be scrapped altogether. The cinema industry has had a very raw deal from successive Governments since 1916, and it is time that some help and assistance were given to it. Is there any other business or trade which is so tied down by regulations, restrictions, taxes and licences? I will give an example. If you own a cinema to-day you need (1) a licence from the local authority; (2) a licence from the Board of Trade; (3) a Sunday licence from the local authority to open on Sunday; (4) a licence from the Performing Right Society to cover the copyright material; (5) a licence from Phonographic Performance, Limited, to enable gramophone records to be played; (6) a special licence to open on Christmas day; (7) a special licence to open on Good Friday; and (8) a tobacco licence to enable you to sell cigarettes to your patrons—eight licences in all to conduct your business, whether it is a small village cinema or a big super cinema in the West End of London. We are certainly living in days of freedom, but I suggest that the poor fellow who is trying to run a cinema would disagree with that statement.

The main purpose of this Bill is to protect the British film industry. When one considers the first-class productions to which Lord Shepherd referred, which have come out of British film studios during the past few years, I do not think that the industry needs much protection. Every exhibitor in this country is only too eager and proud to screen British films to his patrons these days, and from the recent polls which have taken place within the trade all the leading awards have been won by British films. Given freedom of action, given tax abolition and given some encouragement from the Government, British producers can, and will, beat the world.

The first thing that has to go is the cinema tax. I fervently hope that it will go soon. Next, I would ask the Government to meet all sections of the film industry to examine the operation of the production fund and make some much-needed adjustments to it. The Sunday Entertainments Act should be scrapped, as it is now archaic and out of date. These are all important matters and should be tackled by the Government without delay. The year 1959 was certainly a bad year for the film industry of this country; but, like many others in your Lordships' House, I look forward to the future and hope that the present Government is going to help the British film industry with all its power and, more important still, with its fullest sympathy and understanding.

4.2 p.m.


My Lords, like the noble Lord, Lord Westwood, in a debate on a subject like this I have to declare an interest, because I am chairman of a federation of British film producers, mainly independent producers. It was in that capacity that I took part this morning in a deputation representing the whole of the industry, producers, exhibitors, distributors and trade unions, to the Economic Secretary to the Treasury, to plead with him for the abolition of the entertainments tax. And I shall further be understood to agree with what has been said by the noble Lords, Lord Shepherd and Lord Westwood, with regard to the need for that tax to be abolished.

I find myself in the position that most of the points to which I had wished to refer this afternoon have already been covered by the two preceding speakers, and I can assure your Lordships that I shall try very hard to limit myself to indicating my agreement and to avoid repeating the arguments which have already been so cogently put before you. I may say that the Federation of Which I have the honour to be chairman, in making its submissions to the Board of Trade, now nearly two years ago, about amendment of existing film legislation, took the view that on the whole the Cinematograph Films Acts have proved satisfactory and require no fundamental amendment. And on the whole, I think the view which we expressed has been largely accepted by the Government, because there is no fundamental amendment embodied in the present Bill, although there are one or two new points. As has been said, the Bill was greatly improved in the Committee stage in another place, and I believe that if the Government are as reasonable in the Committee stage in your Lordships' House as they were in the Committee stage in another place, the improved Bill may well leave this House a well-nigh perfect Bill.

Considerable reference has been made to Clause 2. I am not going again over the arguments against admitting the newsreels to levy. It is interesting to recall that there has been quota legislation in effect in this country for 33 years, and this is the first occasion upon which it has been suggested that newsreels should be admitted to quota. That change requires, I think, considerably greater justification than has yet been forthcoming from the Government spokesman. Like the noble Lord, Lord Westwood, I do not much object to the newsreels being admitted to quota, but I do object to their being admitted to participation in the levy. The two companies which still produce and distribute newsreels are not exactly in a starving condition. They are two extremely wealthy and prosperous companies. If for their own reasons they prefer to continue to produce newsreels, that is their concern. If the newsreels are to be justified because of their overseas importance, then it is a matter for getting funds through the Central Office of Information or otherwise.

May I remind your Lordships that the money which is being disposed of here is not Government money; it is industry money—not, as has been said, entirely provided by the exhibitors. The machinery of payment is through the exhibitor, but all sides of the industry pay their share in proportion to the sharing of the box office receipts. But it is industry money, raised within the industry for the purpose of benefiting production; and I think it requires a great deal of justification to take away even £150,000 of that levy from its prime purpose of supporting feature film production, and to give it to newsreels, unless it can be shown that there is unanimity in the industry for such a change, which there most certainly is not.

I come now to Clause 5, which deals with reliefs to exhibitors in respect of quota. I readily recognise, as the noble Earl said, that much of Clause 5 is necessary. I would, however, simply note at this stage that when we come to Committee I will point out that there is still room for further improvement in that connection. The noble Earl seemed to be very pleased with Clause 8. I want to suggest to him that Clause 8 is not nearly so important as he represented it to be. All that it provides is that there shall be a credit title giving the name and address of the maker of the film or of the studio in which the film was made. So far as this country is concerned, that provision is entirely unnecessary, because British audiences know when they are seeing a British film. When it comes to overseas territories there are many cases, as the noble Earl indicated, where the scissors will be brought out and that particular credit title will be eliminated. So that this clause does not really serve any good purpose. I think that, as it stands, it is rather a silly clause and might well be eliminated.

On Clause 9, I would merely join with the previous speakers in welcoming the provision for co-production. Co-production between France and Italy, France and Germany, and Germany and Italy has been under way now with quite considerable success for a number of years, and on practically every occasion when I have met producers from these countries they have indicated their great desire to be in a position to enter into co-production agreements with our producers. I am very glad that that is now to be made possible. But I must say that I disagree with the noble Lord, Lord Shepherd, that these co-production treaties, as they will be, should in any way come under the advice of the Cinematograph Films Council, which seems to me to be a quite inappropriate organisation to advise on what is, in fact, a highly technical matter.

May I refer for a moment to Clause 12, which lays certain restrictions on the renter with regard to advising exhibitors of any change in the title or playing time of a film. By and large, the provisions of this clause are good, but I feel that in one respect, perhaps, they are a little too restrictive. May I give the illustration of a British producer, particularly the producer of a comedy who registers the film at the Board of Trade? It starts to run in the West End of London. The producer is very anxious to see the reactions of the audience to his film, and after attending several sessions he finds that the film tends to sag in one place or another and that a little judicious cutting would speed it up and make it a better film. Within a few weeks he does that cutting, and as a result there is an improvement in the film. I would suggest that changes of that type, which are only changes in running time and which would be of a minor nature, which take place within, say, one month of the first registration of the film, might be ignored so far as the effect of this clause is concerned.

I want to refer to one other point which has not been touched upon: it concerns the composition of the Cinematograph Films Council. It is within the knowledge of all noble Lords that the Cinematograph Films Acts, from 1927 on, have been designed to encourage, protect and build up a British film production industry; and the functions of the Cinematograph Films Council are laid down as including: To keep under review the progress of the cinematograph film industry in Great Britain, with particular reference to the development of that branch of the said industry which is engaged in the making of films. In view of that statement I find it rather anomalous that on a Council of 22 members there should be only four representatives of producers, and I would suggest to Her Majesty's Government that they might look at this point again. I believe I am right in saying that the present composition of the Council is seven independent members, five exhibitors, four producers, four employees in the industry and two representatives of renters—a total of 22. Of those, only four are producers, in a body whose chief job it is to look after the wellbeing of the production side of the industry. Subject to those comments, I join my noble friend Lord Shepherd in saying that we welcome this Bill. We do not oppose it and we hope, with the co-operation of Her Majesty's Government, to improve it in Committee. We shall not be at all difficult, I think, if we are met with anything like reason in the Amendments we put forward.

4.14 p.m.


My Lords, I do not class myself in the category of those noble Lords who declare an interest in this debate in connection with the cinematograph industry, but, like the vast majority of people in this country, I feel that the industry is giving rise to ever-growing concern and I hope that the points which I am going to make this afternoon will explain why. Several noble Lords have dealt with the matter of the cinema tax. Perhaps, strictly speaking, it does not come within the scope of this Bill, but I would say that unless the tax is removed very soon the Bill itself will be rendered null and void because the industry will just be unable to carry on.

On Sunday night I spoke to the manager of our local Rank circuit cinema in Epsom. He has been in the cinema industry for 40 years, abroad and in this country, in London and in the provinces. He told me that entertainments tax is causing him more worry than anything else. The arts, music, the theatre and ballet receive grants from the Arts Council—and rightly so; but the help which the cinema industry gets from the Government is indeed parsimonious. Clause 2 of this Bill has been widely mentioned and I certainly do not intend to go into the technicalities of it, but I feel that there is some reason for applying the quota system to newsreels, provided that feature films, which are frequently shown as newsreels, are also included there. On the Rank circuit there is a particularly interesting series of feature films called Looking at Life. I have seen two of these recently, one a particularly interesting film of the shipbuilding industry and the other of the Army in action at Aldershot. As has been rightly said, newsreels tend to reach the cinemas in a very stale condition, whereas they can be shown on television while they are relatively fresh news. But the newsreel is still a very important part of our way of life as depicted in the medium of cinematograph entertainment, and I feel that steps should be taken to ensure that there is a speed-up in the delivery of newsreels.

Another problem is the very tight hold which circuits have over the release of films. For example, when a film is showing in the north and west regions of the London area it has to be shown, as I understand it, at practically every cinema of that particular designation in the area—be it Epsom, or, say, Mitcham. The people in Epsom may like British films and those in Mitcham may prefer the cowboy film from America. I feel, therefore, that some relaxation within circuits could be of some help.

Something has been said of television and its effect on cinema audiences. I often feel that that is something of an alibi and excuse for those who fail to produce good quality films. I went to see that very good and oft-quoted film, I'm All Right, Jack, in my local cinema the other week. There were long queues every night, and that film could have run for two, and possibly for three, weeks. After all, Epsom is a town of perhaps 20,000 people. So I do not think that the excuse of television can always hold good.

I would say this, however, and I would ask the Government to consider this point very carefully. Have not the television circuits too great a power to show what one might call"canned" films? We have the anomaly, particularly on a Sunday afternoon, where there have been instances of both channels showing films, and on Saturday evenings of both channels showing a film. It is true that old films such as Rembrandt and The Stars Look Down, for example, old British films of excellent character, can perhaps gain tremendous benefit by being shown on television. But I think that perhaps a time limit could be imposed before a film might be shown on television. It is, perhaps, arguable that a film less than five years old should be precluded from being shown on the television circuits. That would give it a far better chance in the cinema, particularly since, as I understand it, the quota system does not apply to films over five years old. I may be wrong there, and if I am I hope that some noble Lord who has experience of the cinema industry will correct me. My Lords, the noble Lord, Lord Shepherd, said (if I quote him rightly) that British films in America were not a great success.


I did not say they were not a great success. I said they were not widely distributed.


My Lords, I apologise to the noble Lord for misquoting him on that point. But it is, I think, true to say that only a limited type of British films really succeeds in America, as it is perhaps fair to say that only certain types of American films succeed here. But I feel that the Government might help here, as they have done in other fields, and sponsor a British Film Week or a British Film Month in America. Commerce has done it with a good deal of success. Lloyd's had a recent exhibition in America, which was a resounding success. It gave a revealing and interesting indication of how British insurance works, and it was widely acclaimed in San Francisco. I am sure the Government would be well advised to try an experiment like that with public funds. It would not be particularly costly, and it might well bring in a quite considerable revenue.

This month's magazine, Films and Filming contains a very interesting article about the German cinema. The article is by a man named Karlheinz Böhm. He is the son of the famous Viennese conductor, and he is appealing for more actors and more British producers to go to Germany. He says: For instance, artists such as Dirk Bogarde and Trevor Howard, who is one of my favourite actors, would, I am sure, be in even greater demand in Germany if they were willing to do German films. My Lords, I feel that that is something which we want to avoid. We do not want to grant Herr Böhm's wishes.

British film producers and actors are going through a particularly difficult time at the present, and, as has been said earlier, the entertainments tax is largely responsible for this. So I feel that the tax must be removed. The Government can surely afford it in these times of relative prosperity, because the film industry in this country is not merely a source of entertainment but has considerable educational value. I hope that the pleas which have gone from this House and from another place will receive sympathetic consideration from the Chancellor of the Exchequer. I would conclude by saying that this is a good Bill, and an intelligent Bill. The removal of the entertainments tax will help to make it an outstanding Bill.

4.27 p.m.


My Lords, I should like first of all to thank those noble Lords who have taken part in this debate, and especially the noble Lords, Lord Westwood and Lord Archibald, who provided their own specialised knowledge in contributing to this debate and so enriched it. I should like to thank my noble friend Lord Auckland for the very thoughtful speech he has just delivered, and I should particularly like to thank the noble Lord, Lord Shepherd, for summarising in a very reasonable way the faults, or what they look upon as faults, which the Opposition find in the Bill as it stands now. I hope that noble Lords will not expect me to deal with every point raised, because some of the points went by so fast that it was quite beyond my mental powers to catch them in mid-air and hope to deal with them so shortly after. Those points I try to deal with I shall deal with not necessarily in the order in which they were made, and I hope I shall be forgiven for that.

I should like to give an assurance to my noble friend, Lord Auckland, on his worry over the changing programmes. He found that programmes changed in his cinema before he was ready to see the film or was able to see the film, and I should like to tell him that there is nothing in film legislation which prevents a film from being played for as long as the exhibitor wishes it to play or considers it desirable from a box office point of view; and I do not imagine that my noble friend would wish for legislation which would oblige him to do so. There is one matter which was raised by a number of noble Lords, I think perhaps by all those who spoke after my noble friend who opened the debate, and that was the entertainments tax or, as it is called by many of your Lordships, cinema tax. Although I am not evasive by nature, I think that that is one point they will not expect me to take up and that they will be forgiving if I use the time-honoured phrase that I cannot anticipate Budget proposals.

The noble Lord, Lord Archibald, found fault with the present composition of the Cinematograph Films Council. He quoted the words in the establishment of the Films Council which I will quote back at him. It is laid down that the Council shall have the function of keeping under review progress of the film industry with particular reference to the development of that branch of the said industry which is engaged in the making of films. That he quoted, and the fact that the Council is made up of 7 independents, including the chairman, 4 representatives of British film makers, 2 representatives of the renters, 5 from the exhibitors, and 4 employees in the film industry.

Now the suggestion that the makers are under-represented on this Council is, at first sight and on paper, apparently valid, but I suggest—and I suggest it humbly, because the noble Lord knows so much more than I do about it—that in practice the balance works out differently. The chairman and the six other independent members must be completely and permanently aware that the Council's task, as I quoted before, is to have particular reference to the development of the production end of the industry. Taking this into account, they know that they must remain particularly alive to its interests. They number seven, which is the largest single group on the Council and only just under a half of the whole Council itself.

Then there are the four representatives of film makers and the two representatives of film renters. I take those together because my information leads me to think that in practice the film renters and the film makers operate very much together. I understand that the normal procedure of making a film is for the producer to go to a film renter and ask him to cover as much as 70 per cent. of the cost of making the picture, in return for the distribution rights once it is made. This implies, I should have thought, that renters and producers are very closely dependent upon each other, and that their interests are closely entwined. They are therefore unlikely to speak with different voices at the meetings of the Council. So that on the Council so far we have seven independents pledged to give particular attention to the makers' interests and six representatives of makers and renters—two elements of the industry whose practice it is to work closely together.

Out of the present five members representing the exhibitors, at least one to-day is connected with a large organisation making films, and it seems unlikely that he would reach or approve any conclusion prejudicial to British film production. There remain the four representatives of the employees in the film industry. These come from various branches of the industry; but, here again at least one of the present body represents workers on the production end. It is therefore, as I see it, the exhibitors who have the minority representation on the Council, and I should not have thought that it was necessary to emphasise this by increasing the producers' representation. After careful thought—and it was given very careful thought—it was decided to leave the Council as it stood.

The noble Lord, Lord Shepherd, mentioned his anxiety about the shape that the co-production agreements might take, and said that he was anxious that reciprocal benefits should be obtained for British films to those given away under such agreements. In order to ensure this, he wished that the Board of Trade should bind themselves to consult the Films Council before finalising an international agreement. In fact he is asking the Government to do something which has never been done before by any Government. The reaching and the implementation of international agreements are the function of Government, and it would be something entirely new, and some might even say quite inappropriate, for the Government to bind itself to consult a body—even a statutory body, as the noble Lord pointed out—before reaching a decision and putting through that agreement. But that is not to say that they do not intend to consult the Films Council. In fact, they have said that they will, and they always do consult the Films Council as closely as possible; and in particular in the reaching of international agreements it is their intention—and there is no reason to suppose that that intention would ever change to keep in the closest touch with the Films Council on whose advice they in fact depend.


My Lords, if that is the case, why cannot they bind themselves to consult this statutory authority?


I do not know how much one should rest on precedent, but it is something which has never been done by any Government, and the noble Lord in putting the proposal forward must appreciate that. Obviously his proposal will be looked at, but the objection to it would be that this is something entirely new and might set very awkward precedents for the future.

He also asked me a question about why the Republic of Ireland was specifically mentioned in the Bill. This, I am afraid, is an example of legislation by reference, and by reference to Bills which in fact have nothing to do with any Films Bill. Under the Ireland Act of 1949 the Republic of Ireland ceased to be a part of Her Majesty's Dominions, but under Section 3 of that Act it is provided that, until some provision to the contrary is made, any Act of Parliament passed before the Ireland Act and containing a reference to Her Majesty's Dominions continues to relate to the Republic of Ireland as if it were one of those Dominions. I cannot put it any more lucidly than that. That was in harmony with the British Nationality Act, 1948; and because both the 1938 and the 1948 Cinematograph Acts were passed before these two nationality Acts, citizens of Eire continue now to be included under the provisions of those two cinema Acts. The new Bill is being presented after the two nationality Acts and therefore in order that the provisions should not conflict with the position under the two Cinematograph Acts it has been necessary to mention specifically citizens of the Republic of Ireland. That is rather lengthy, I am afraid, but that is the reason.


My Lords, if that is the case—and I certainly do not dispute it—does that mean that if a film was made in Burma, which is in rather a similar position to the Republic of Ireland, it would come under the quota and levy?


My Lords, I do not want to stick my neck out over Burma. I checked up on Ireland because it is mentioned. Ireland is mentioned in the Bill: Burma is not. I think I had better be on the safe side and not try to answer that from this Despatch Box now.

I listened with great interest to the noble Lord, Lord Shepherd, and the noble Lord, Lord Westwood, when they were speaking on the question of television and the threat that television represented to the cinema—the"legitimate" cinema. The fact is that television films do not obtain the benefit of the levy, and for this purpose the definition of a television film has been fixed—not fixed under this Bill but fixed under another regulation—as a film shown on television within a year of its registration. It seems regrettable, but perhaps inevitable, that the film industry should regard the television industry not simply with suspicion but with hostility. There is very little thought at the moment of peaceful co-existence between them.


There should be a summit conference.


That hostility is implicit in the name of the body which it has now set up—the Film Industry Defence Organisation, better known as F.I.D.O. Under the F.I.D.O. plan the industry imposes upon itself a voluntary and additional attendance levy, and with the proceeds of this levy it buys up the television rights of films as they appear, with the express object of freezing these rights and therefore of withholding those films from the television screen. Under existing regulations it gets a year's respite in any case—a year's respite from the date of registration of a film. But there is reason to think that the film industry do not regard this as enough. In fact the life of a film in the cinema is about four years and during those four years it can draw much better money than the television authorities can afford to pay for it.


My Lords, the real fear of the cinema industry, particularly the exhibitors, is surely this. Television is going to show on a particular night, with wide advertisement, a film that was popular some two, three or five years ago, and the exhibitors fear that on that night the cinemas will be basically empty. Their real worry is not the age of the film, but the fact that the films are going to be shown on television.


My Lords, I did realise that that was the specific point the noble Lord was raising, and I hope that in the course of what I have to say I can give him a satisfactory answer; but I will give him what answer I am able. The film industry do not regard a year as being enough. They say that good feature films are not"stale," from the box office point of view, at the end of twelve months. This is exactly what the noble Lord has been saying. As a further protection, the film industry would like to see television films handicapped by exclusion not only from the levy, as they are, but also from the quota. The question then arises of fairness to the television industry, and once that has arisen I think it is difficult to ask a Government to take sides. And I should have thought it quite wrong for a Government to be persuaded to take sides; because in this drama—and I hope that I am not unduly fanciful in seeing it as a drama which might well be portrayed on either the television or the cinema screen—both sides see themselves as the"good guys" and the others, if I may say so without offence, as the"thugs".

There is no doubt about the bitterness of this feud, and the bitterness came into the open early in January of this year, when Associated-Rediffusion"rustled" 55 films, mostly under ten years old and in good box office condition, for showing on commercial television. The rancour was all the greater because the existing renters' concern, Independent Film Distributors, controlled by Mr. John Woolf, had allowed themselves to be bought out together with the 55 films they then held, and also with the means to rent further films for commercial television, which was a declared purpose of the operation. The Cinematograph Exhibitors' Association met and announced publicly that in their opinion Mr. John Woolf had displayed"callous indifference" to the future of the industry, and condemned the action of Mr. Woolf and his associate in the strongest possible terms. Members of the Association were recommended not to book any films in which Mr. Woolf or Mr. Angel, his associate, or their respective companies were concerned, or to book any films comprised in the deal with Associated-Rediffusion.

I am sure that all this is known to the noble Lord, but I am making a point at the end of it. The Federation of Film Unions also threatened that if any attempt was made to show any of the 55 films without"adequate consultation with the Unions", they would consider telling their members not to work on any intended transmissions of those films. This was hostility coming out into the open. Although the noble Lord, Lord Shepherd, may be brave enough to step into this battlefield, I am frankly not brave enough to follow him into it to-day. But it has to be remembered that there is an immense difference between the return from a film shown on the television and that shown on the cinema.


My Lords, would the noble Lord permit me to interrupt him? I promise that it is the last time I will do so. As we have a statutory levy on exhibitors of these films, and they are then sold to television contractors, does not the noble Lord think it right that the television contractors should be called upon to pay a levy in the same manner as the cinema exhibitors?


My Lords, this seems to me an entirely new proposal by the noble Lord, arising from the points I am making. I have no doubt whatever that it will be considered with the other points he made, but I do not think that here and now I can very well deal with it. The point that I was making is that the most that it is paid at present by television services in the United Kingdom for a feature film is something like £5,000 to £6,000. The same film shown in cinemas throughout the United Kingdom would be expected to earn from tea to thirty times that amount. For the next few years at least the British film producer of feature films is bound to depend principally on the cinemas, and I think that that is a factor which has not been brought out very definitely in the arguments so far adduced.

The noble Lords, Lord Shepherd and Lord Westwood, dealt at great length with newsreels. Obviously, as my noble friend said in opening the debate, the inclusion of newsreels is one of the most important features, and certainly the most controversial, in the whole Bill. I listened with absorption to the noble Lord's expressed anxiety that newsreels, while being produced far more cheaply than second-feature films, could become, in fact, a second-feature film by being shown instead of it and still called a newsreel. I think that that was the point he was making. But it is not so easy as that. The noble Lord mentioned beauty competitions, but the fact is that newsreels, as such, have to be part of a series to be changed once a week. In point of fact, they are always changed twice a week, but under the law they have to be changed once a week. The noble Lord would be obliged to find 52 beauty competitions in a year or make up a fairly consistent series, changing his programme once a week. It is felt that that would be prohibitively difficult to do, and that the small second-feature makers have no real grounds for anxiety on that score. But, naturally, the argument put forward by the noble Lord will be examined with great care by my right honourable friend.

Much more has been said on newsreels. Clearly, the objections voiced in the other place during the passage of the Bill were taken into account by my right honourable friend in opening the debate and they have been referred to since by other noble Lords. The argument most forcefully used against their inclusion predicates that newsreels, as a genus, are dying a natural death, perhaps mostly due to television, and that the Bill proposes to keep them artificially alive. The counter-argument used by the noble Lord, Lord Shepherd, is that this Bill will give newsreels such a new lease of life that they will endanger short films. I should have thought that these two arguments contradict each other far more directly than I am prepared to contradict the exponents of either argument.

The reasons which persuaded us to propose this change have already been described. Newsreels are not paying their way. One large organisation has ceased making or showing them, and the remaining two have expressed doubts about their ability to continue unless these films are given quota protection and a share of the levy. The Government take the view that newsreels are important and their continued existence desirable, and they feel that at this time, with newsreels facing difficulties, it would be wrong to discriminate against them.


My Lords, what is meant by newsreels"paying their way". How would they, or should they, pay their way?


My Lords, I think that that point has been dealt with in the course of the debate. When the previous Cinematograph Films Act went through, they were not included because they were profitable undertakings. Now they are not, and the makers are simply stopping making them because they are not paying their way.


My Lords, is there any evidence that the public do not want them?


The evidence is in the box office.


But cinemas are just as full as before.


The renters and exhibitors are not wanting to take them. That is the critical factor. I am afraid that I gave the wrong answer to the noble Lord. The fact that the two newsreel makers to-day are components of larger and more prosperous organisations is not in any way, to my mind, a valid reason for withholding these benefits from the newsreels themselves. These large organisations, and the newsreel companies within them, have a perfectly clear duty to their shareholders, and if one ramification of their business is doing badly they have every right to request a form of help which another is receiving.


How is that registered? Do they hiss or express disapproval in some way?


The exhibitors do not hiss but they do not take the newsreels, which is a more effective method.


That is not what I am talking about.


If the noble Lord wants to clear my mind I should like him to do so.


I merely want to clear my own mind. We are told that newsreels do not pay. Surely we should know, and those responsible should tell us what is meant by"not paying". In what way do they come to the conclusion that they do not pay?


It does not pay the producers to make them because the exhibitors will not buy and show them.


That does not prove that they do not pay.


It proves it to the producers who cannot get paid for them. Under the provisions of this Bill it is sought to help the newsreels. But I should like to make the point that this Bill has a life of seven years, and this particular clause should offer newsreels a new lease of life during those seven years, at a comparatively small cost, as my noble friend pointed out, of some £150,000 out of the levy of £3,750,000, which, if my arithmetic is correct, is a little under 4 per cent. of the whole levy. At the end of that period, Parliament will see what they have done with that new lease of life and measure their success or failure. Their future existence in the light of that success or failure will then be reviewed, together with the other provisions of this whole family of Bills. In the meantime, it does not seem just or wise to condemn them to extinction without given them this encouragement to save themselves by their own endeavours.

We hope that this Bill will give encouragement to the industry as a whole, and it seems to be generally accepted that it will. Its provisions have been worked out in the closest co-operation with the industry it seeks to benefit, and although perhaps it is too much to hope that each section of the industry will consider that a fair share of those benefits has come its way, I hope your Lordships will feel that, as has already been expressed, a balanced assistance is being offered not to keep a failing industry alive, but to revitalise it for an impressive future. With those remarks I ask your Lordships to give the Bill a Second Reading.

On Question, Bill read 2a, and committed to a Committee of the Whole House.