HL Deb 12 March 1970 vol 308 cc923-63

4.38 p.m.

BARONESS PHILLIPS

My Lords, I beg to move that this Bill be now read a second time. It may assist noble Lords if, in introducing the Bill, I began by giving a few facts about the film industry in this country. The growth of television in the last twenty years has brought about a very big decline in the numbers of people going to the cinema, not only in this country but throughout the world. The days when people went regularly to the cinema two or three times a week are gone. Nevertheless, in 1969 there were about 220 million attendances at the cinemas in Great Britain, and a visit to the cinema continues to be one of the principal forms of entertainment enjoyed by the public. We are dealing here with an industry which, despite the loss of its former pre-eminence, provides one of the main media of mass communication, and our task is to furnish a legislative frame-work within which it can flourish.

It may be asked why any legislation is needed. Why not let the industry work out its own salvation without support from the Government? The main reason lies in the fact that our industry has to face competition from the powerful American industry, which has a home market about eight times the size of ours. However confident—and rightly so—our industry may be that on grounds of quality, both artistic and technical, it can hold its own against competition from any source, the fact remains that a huge home market puts its American rivals in a dominating position; and this has been recognised by successive Governments ever since 1927. Along with other Western European countries—and I should add that in our case American competition is intensified because of the common language—we in this country have recognised the need of our native industry for some measure of support from the Government.

I should like to emphasise two things. The first is that support means support, and not interference. The Government's function is to provide a framework within which the artistic and technical skills of those engaged in the industry can have free play. Secondly, Government support to this industry does not contain any element of subsidy. The money made available to the National Film Finance Corporation is not a grant but a loan, on which the Corporation is required to pay interest at normal commercial rates. The levy scheme is a device for redistributing a portion of the box office receipts. Nor do the costs of administration, either of the screen quota or of the levy, fall on the public purse. The expenses of administering the quota are met from the fees charged for licences issued under the quota, and the cost of administering the British Film Fund is a first charge on the Fund itself.

My Lords, the industry has enjoyed a modest measure of support from our films legislation, and I am glad to say that within this framework it has made this country one of the most important centres of film production in the world. The legislation governing the support measures —that is to say, the screen quota, the levy and the National Film Finance Corporation—is all due to expire this year, and the main purpose of the present Bill is to extend its life for another ten years. The opportunity is being taken to make a number of amendments to the legislation, many of which are of a purely technical nature.

Noble Lords will recall that the present legislation was previously due to expire at the end of 1967 and that its life was extended for three years by the Films Act 1966 so as to afford time for a review of film legislation. The present Bill reflects the Government's decisions in the light of the review. Ample opportunity was given for all sections of the industry to express their views, and I am glad to say that they responded with enthusiasm. Not unnaturally, the emphasis varied according to the particular interests of the various branches of the industry, but there was a general consensus of opinion that the existing support measures had stood the test of time and ought to be continued. Though there was (and I do not complain about this), a good deal of special pleading on behalf of particular sectional interests, there was little support for the dismantling of the present framework.

The views and recommendations submitted to the Board of Trade were made fully known to the Cinematograph Films Council, which conducted its own review and made recommendations to my right honourable friend the President of the Board of Trade. The Council's report was presented to Parliament and published in March, 1967, as Cmnd. 3584. Noble Lords will find the Council's recommendations listed on pages 10 to 12 of that report, and these recommendations have, with one exception, been accepted by the Government and are embodied in the Bill at present before us.

My Lords, I will now summarise briefly the provisions of the Bill. As. I have said, its main purpose is to extend for another ten years the life of the present legislation affecting the quota, the levy, and the National Film Finance Corporation. It is our view that the assurance of the continuance of these arrangements will enable the industry to plan confidently for the coming decade, but at the same time will not afford it undue protection from the winds of competition. Nor will the legislation in any way interfere with the content of films. The encouragement of the film as an art is part of the Government's policy for the Arts generally, and is the concern of the Secretary of State for Education and Science, and noble Lords will know that under that policy, the Arts, including the film, have received more encouragement than at any previous time.

I now turn to the clauses in the Bill. Clauses 1 to 3 concern the National Film Finance Corporation. This Corporation was established in 1949 when the film-making industry in this country was, because of shortage of finance, at a very low ebb. At present, this country is a major centre of film production, and the National Film Finance Corporation can rightly claim to have made an important contribution to this development. During the last twenty years the Corporation has contributed towards the financing of about 700 feature films. In the process about £5 million of the £6 million loaned by the Government to the Corporation has been lost. But nearly £2 million of this loss is attributable to the loan of £3 million advanced, at the Government's request, to British Lion in 1949. Excluding this, the losses of the Corporation have averaged only about £150,000 a year. Moreover, in recent years the bulk of the Corporation's losses have been attributable to its liability to pay interest on moneys, advanced to it by the Board of Trade, including interest on what is virtually dead money. For the last full year for which figures are available (that is, the year ending March 31, 1969), if we exclude payment of interest on money which the Corporation regards as irrecoverable, the National Film Finance Corporation broke even.

My Lords, we shall have an opportunity later on to consider one by one the provisions of the Bill affecting the National Film Finance Corporation, and it will perhaps suffice if at this stage I summarise briefly their effect. First, the powers of the Corporation to lend money to film-makers are to be extended until the end of 1980. Secondly, the Corporation will be given a wider field in which to operate, though I would repeat here that in all its activities the Corporation will be required to judge projects and proposals on a commercial basis. In all that it does, the Corporation must be governed by its duty to pay its way.

Thirdly, the Bill authorises the loan of a further £5 million to the Corporation. At present, its finances are depleted, and this fresh loan is needed to enable it to play an effective part in assisting the industry by providing finance, or part finance, for new films. The money will not be lent to the Corporation all at once. The timing and size of advances will be determined in the light of the Corporation's needs and of prevailing economic circumstances and will be controlled administratively. The Corporation will remain bound to repay loans in full, and to pay interest on them. Finally, as regards the National Film Finance Corporation, the Bill relieves the Corporation from liability to pay interest on dead money. As the Corporation has pointed out in several recent annual reports, and as I have already explained, in recent years the bulk of its annual loss has been attributable to its obligation to continue to pay interest on money which it has been forced to regard as irrecoverable.

Clauses 4 to 8 of the Bill concern the British Film Fund. The governing legislation, the Cinematograph Films Act 1957, as extended by the Films Act 1966, is due to expire in October of this year. Clause 4 of the Bill extends for a further ten periods of fifty-two weeks—that is, until September, 1980—the duty of the Board of Trade to provide for the imposition of a levy on exhibitors. It is necessary to provide for extensions by 52-week periods instead of by calendar years because as a rule most cinemas change their programmes weekly, and levy payments are calculated in relation to weekly takings.

The 1957 Act sets a maximum and minimum yield for the levy. The Board of Trade are required to set the rate of levy so that, in the Board's estimation, the yield will not be more than £5 million nor less than £2 million in any one levy year. It is possible that during the life of the present legislation which we have under consideration some adjustment may be desirable, and Clause 5 of the Bill empowers the Board of Trade, after consulting the Cinematograph Films Council, to vary these limits by order made by statutory instrument. Any such order would need to be laid in draft before Parliament and approved by resolution of both Houses.

Clause 6 authorises the making by the British Film Fund Agency, with the approval of the Board of Trade, of payments to the British Film Institute Production Fund and to a national film school to be established with the approval of the Secretary of State. I know that the main trade associations in the industry are now opposed to these proposals, on the ground, consistently urged by the exhibitors, that the levy should not be used for any cause, however deserving, that springs up in the industry. But opinions on this matter have been divided and the Cinematograph Films Council recommended that the running costs of a national film school should be met partly from the levy and that a modest grant should be made to the British Film Institute Production Fund. I believe that the implementation of these recommendations will in the long run prove to be in the best interests of everyone concerned in the industry.

The 1957 Act already provides for a grant from the levy to the Children's Film Foundation, without specifying any precise amount. The Board of Trade have regularly consulted the Cinematograph Films Council, and there has been no difficulty in arriving at an agreed figure annually. The Board had in any event proposed similarly to consult the Council as regards the new grants, but we are happy to accede to the wish expressed in another place that such consultation should be a statutory obligation on the Board of Trade, as regards all three grants. Clause 6 of the Bill as it stands does not achieve this object, and a Government Amendment will be moved in Committee.

The third part of the Bill deals with the screen quota legislation. The most important clause is Clause 9, which extends its period of operation until the end of 1980. The other clauses in this part of the Bill (Clauses 10 to 20) are of a technical nature, and I do not think that I need to weary the House by going into them in detail now. Although all engaged in this industry have the same purpose—namely, to attract as many people as they can to the cinema, and as frequently as possible—there is of course plenty of scope for discussion as to the best ways of setting about the task, and in the heat of argument it is not surprising that one or other section of the industry may overlook, or appear to be overlooking, the main purpose in pursuit of its sectional interest. In my view the Cinematograph Films Council in its review of legislation attempted, and attempted successfully, to reconcile such conflicts, and its recommendations were framed in the best interests of the industry as a whole. I know that all members of the Council gave a great deal of their time to careful consideration of the matters before them, and I should like to take this opportunity of thanking them for their help. They will, I know, not take it amiss if I pay special tribute to their independent chairman, Mr. Morris Finer, Q.C., whose thoroughness and impartiality have played so valuable a part in the Council's deliberations. During the passage of the Bill in another place proposals were put forward with a view to altering the terms of reference and the constitution of the Cinematograph Films Council. We appreciate that the different sections of the industry which are represented on the Council would like to strengthen that representation, and that a constitution completely satisfactory to all defies man's wisdom to devise, but experience has shown that the Council has acted on the basis of what is best for the industry as a whole. We therefore propose leaving the terms of reference and constitution of the Council as they are.

I commend this Bill to the House. It continues for another ten years the operation of the existing legislation, with the changes which experience has shown are needed to take account of new developments in the industry. Against the background of this legislation there is every reason to hope that British films will continue to enjoy, and to deserve, their present high reputation throughout the world. I beg to move.

Moved, That the Bill be now read 2a. —(Baroness Phillips.)

4.55 p.m.

LORD ERROLL OF HALE

My Lords, I should like on behalf of noble Lords on both sides of the House to thank the noble Baroness for introducing this Bill in such a competent and delightful manner. Indeed, she is now speaking to us so often on Board of Trade subjects that I begin to think of her as a Board of Trade Minister. If the noble Lord, Lord Brown, is not careful he may find that he loses his job at the Board of Trade and that his place is taken by the noble Baroness, Lady Phillips; and I am sure we should all be very glad to see that, as she affords us so many courtesies in your Lordships' House.

I think we should realise that, although this Bill is before us, the Government no longer attach very much importance to the British film industry. If they did attach importance to it they would by now have transferred the departmental responsibility away from the Board of Trade to another Department. It might well have gone, as so much else has, to MAXTEC or MINPROD. Personally I think that a good home for it would be SOSIC, Mr. Crossman's great empire; but we must leave that for the Government to decide.

There is enshrined in this Bill a continuation of legislation which began, as the noble Baroness pointed out, in 1927 with the establishment of the quota for the showing of British films. I think there is always danger in a quota arrangement, because it permits the less good producers to have more or less guaranteed showing time, and therefore the traditional way of dealing with imports, the imposition of a tariff, would at first sight seem a more acceptable arrangement. But it would be quite impracticable to impose on imported films a tariff that would be meaningful; either it would be much too low and would not have a deterrent effect, or it would be very high which would result in such films, not wholly successful, failing to come in or in there being considerable losses to those importers. There is no doubt that the Government of the day in 1927 were right in fixing a quota. Perhaps it erred on the high side, but certainly before the war we who were regular cinemagoers had to watch what were called "quota quickies", cheap and nasty films run up at a minimum of costs in order to get in under the quota.

I thought the noble Baroness particularly interesting in pointing out how this unique example of Government support and not intervention is achieved without any call upon taxpayers' money. Under the quota there is no question of money. The levy, which was for many years a voluntary levy by the industry, was turned into a compulsory levy only under the Act of 1957, at the request of the industry, so that a few laggards who refused to pay would be brought to book and everybody would be on an equal and fair basis. It is interesting, too. that the cost of raising the money, and of everything else connected with it, comes out of the levy itself. That is the second of the three legs supporting the British film industry; the first is the quota and the second the levy.

The third leg is the provision of finance by means of the Film Finance Corporation. Here is the only matter on which I would slightly disagree with the noble Baroness in regard to the money side. She said that there was no charge to public funds because it is only a loan to the Film Finance Corporation. But, of course, where money is loaned and never recovered, that constitutes a form of subsidy to the industry as a whole, because the industry has benefited from that money, which was lost and not returned and which would otherwise not have been available. To that extent there is a small element of public subsidy.

By and large, I think the Corporation is doing a very good job in the provision of finance. It is no longer restricted, I understand, to the provision of the so-called "end money", but can be a lender of first resort, which gives it more flexibility and more opportunity to intervene helpfully in the fortunes of the film industry. This three-legged system of support, which is a unique feature of Government support for what is, after all, a unique industry, has developed in a traditionally British way, with nobody quite knowing what the next step was going to be. But in the end a good system has been devised which is probably as effective as any in the world: and certainly proof of that is to be found in the success of the British film industry at the present time. I am very glad the noble Baroness gave some figures about what the industry is doing. In general I would say that the provisions are working well. We have a viable and lively industry, and it has very successfully surmounted the drastic fall in admissions during the 1950s and 1960s and the wholesale closure of cinemas.

There are just one or two points that I should like to put to the noble Baroness. I am a little concerned about the new arrangement for disposal of the levy; I think it is possibly going a little wide to use levy money for the film school and other activities. I know she quoted the precedent of the Children's Film Fund, but I think that was conceived in very different circumstances. It was conceived to meet a particular need and, indeed, if was suggested by the industry itself at the time; whereas here we have new proposals which are not wholeheartedly agreed by all members and where the film school, in training people for the film industry, might in fact be training people for its rival, the television industry. I should prefer to see rather more close control over such new forms of disposal than are envisaged in the Bill. Although such arrangements are to be approved by the Board of Trade I think that possibly a little more Parliamentary control might here have been retained by means of the Statutory Instrument procedure or something of that kind.

The next point I should like to make is a feature of the Bill at page 2. Clause 1 (3) says that the National Film Finance Corporation is now empowered to go a good deal wider than hitherto in that they may act as agents in disposing of the right to distribute the film to exhibitors, whether within or outside Great Britain. I hope that in giving the Corporation these additional powers we shall not find it entering the field of distribution. If it merely acts as helper and catalyst, so to speak, that is fine; but if it actually enters the distribution business I think it would be most unfair on the existing distributors, and also, as this is a highly hazardous activity, it might also mean that it will make rather substantial losses which will not please the noble Baroness or her advisers at the Board of Trade.

There is one point the noble Baroness did not mention which I think it is worth referring to. It is that, curiously, the levy is collected by the Customs and Excise. This was a reasonable arrangement at the time because there was then an entertainment duty payable by cinemas, and as it was the task of the Excise officers to collect the entertainment duty weekly, monthly or quarterly, it was thought sensible that they should at the same time also pick up the levy money from the cinemas, and one checking of the books would ensure the accuracy of the entertainment duty to be collected and of the amount of the levy. But now there is no entertainment duty, I wonder why we should continue to use the time of Excise officers, who axe rather highly skilled and hard to get, on a routine levy collection when nowadays we have so many other examples of statutory levies which are collected without the aid and assistance of the Excise officers. I have in mind industrial training levies and research levies in regard to various firms, the wool research levy and others. These levies are collected without the need to bring in the Department of Customs and Excise. I realise that it is self-financing in that the cost of the Excise officers' work is charged against the levy. I feel that an unnecessarily high calibre of official is being used on a routine task when, with our much greater experience nowadays, the collection of statutory levies could be done by a different method and probably more economically.

I do not see in the Bill any power to change the system of collecting the levy. It might be a good thing to consider that point in Committee. Perhaps the industry is quite content with the present arrangement. I am sure it is done efficiently and well by the Excise officials; but it might be better if in the Bill we at least had the power to change the method of collecting the levy so that if in a year or two another method was deemed desirable by the industry, who are footing the bill, it should be possible for them to do that.

I will resist the temptation this afternoon to talk generally about the film industry and film production. It is a fascinating subject, but I know that there are others who are to follow me who may wish to carry the debate rather wider into this interesting field. I merely wish to give my endorsement to what the noble Baroness has said about the method of support, particularly as yesterday I was talking about letting market forces have their play. Here, I seem to be contradicting myself in recommending this support. But I do not think I am, because it is a support of a special kind and has been a great success. So I hope that this Bill will provide the film makers with the structural support that they require and, as an enthusiastic cinemagoer myself, I wish them well for the future.

5.5 p.m.

LORD BEAUMONT OF WHITLEY

My Lords, this legislation seems to me to be a good example of a good relationship, and a good adaptation of both the principles of free trade and the relationship of Government with private enterprise. Indeed, the principles that arise from it are not so different from those that we were considering in Committee earlier this afternoon. Basically, of course, Liberals are free traders and also believe that private enterprise produces the most economical and democratic method of rationing resources. Obviously, however, both those things need to be modified from time to time in order not to create hardship for individuals or institutions and for good and over-riding reasons. I think the Bill does this admirably.

The question of free trade is one which is brought into the argument by the first purpose of the Bill, which is the continuing of the quota. If there is an over-whelming need for a quota, there should be no objection to one in principle, provided that it is a fairly small one and does not cover the whole of the market. Indeed, in the case of the British film industry it covers a fairly small proportion. The cause is, I think, extremely good. We want to continue to have a flourishing film industry contributing to British art and culture—to use a slightly ugly word which I am going to use several times during the course of my speech—and, moreover, this is most important if England wants to play a part in the world.

I think that we still tend greatly to underestimate the power of the English language and British culture throughout the world. In the past we have been so used to depending on the power of empire, the power of military force, that we have not particularly turned our attention to this most important point. I think that part of the gap, part of the vacuum, left by the disappearance of the Empire should be filled by quite conscious concentration on what we can do in the way of culture, example and art throughout the world and by the use of a language which, more and more widely, is being used in different parts of the world. Therefore I think that the case for a quota is a good one.

There is only one question that I would ask in connection with this particular part of the Bill. In all the arguments I have heard for the quota I have not yet heard anyone say that if the quota was not there the number of films shown would be less than the quota. The fact is that over the last few years the proportion of British films shown has been healthily above the quota in every year. I do not know whether that is merely because in order to achieve the quota you have to overshoot a little, and that there is a real danger at the moment that the quota would not be reached if it did not exist (if your Lordships will forgive that rather Irish way of expressing it) or whether in point of fact it is becoming a little unnecessary. I feel that this matter should be kept under review, and that we should know what the Government's view is on this particular point.

The second main item in the Bill has to do with the film levy. This, I believe, is also a good institution and a good way of making certain that private enterprise, while preserving its essential functions, behaves responsibly towards industry and towards society in general. Rather than letting competition run completely uncontrolled and subsidising what you want for social reasons from Government funds, the alternative idea, which is involved in this Bill, is that there should be a natural cycle within the industry itself whereby the more profit-making parts of the industry finance the educational and socially desirable but possibly less profitable parts of the industry. I believe that to be a good principle and one which might well be adopted on a wider scale in different parts of industry. It follows from that that we applaud the Government's support of the Minority Report in Cmnd. 3584 about retaining the particular reference to the necessity for, and the importance of, film production and its support, and we also support the extension of the levy to the film school and the British Film Production Fund. I was very interested in the suggestion of the noble Lord, Lord Erroll of Hale, on the subject of greater Parliamentary control over this particular point.

Turning to the National Film Finance Corporation, the third major part of this Bill, I again think this is an extremely good idea, but I have one or two questions that I should like to ask about it. In the various speeches that have been made about this measure, the various Reports that have been made and the various speeches in another place, there has been a continual emphasis on the fact that it is very important to have this fund for use in those areas where other finance runs out. It is, to a large degree, a fund of last resort. This is absolutely right, because we want to attract as much private capital into the industry as is possible. At the same time, however, the Government have been anxious to explain that the Corporation is going to act commercially. It seems to me that to a certain extent these two things are contradictory, because if you are a fund of last resort it seems to follow that that means that a certain amount of commercial resources have already refused to contribute, and presumably the reason they have refused to contribute is that they do not think the provision of this money is commercial. Therefore, I do not quite see how the Corporation is expected to be both commercial and a source of capital of last resort.

I should like to make it quite clear that I think one of the purposes of the Film Finance Corporation is that it should be able to take considerable risks of a commercial nature, and that if this apparent contradiction is to be resolved it should certainly be resolved in the direction of allowing the Film Finance Corporation to take greater risks and, at times, to operate in ways which certainly could not be called commercial.

Those are the main provisions of the Bill. There are one or two other minor points I should like to mention. I do not think that, in the quite long Committee stage debates in another place, the case for allowing films made on behalf of Commonwealth or Republic of Ireland Governments to count as part of the British quota, in the absence of reciprocal agreements, has been made out, and I hope that in this House we may have an opportunity to look at that point again.

Again, this legislation provides an excellent opportunity—and it is not often that we get film legislation coming through the Houses of Parliament—to help the British Film Institute and the National Film Archive to build up its archive. There were two Amendments put down in another place at the Report stage, the object of which was to make it a condition for exhibiting in this country that a print of each film should be made available to the National Film Archive at cost price. This seems to me to be on a par with the copyright laws, which ensure that a copy of every book is sent to the British Museum, as well, I think, as to two other libraries in this country.

There is, I believe, a very real need for a good and prosperous film archive to be built up. The film industry has already suffered from the fact that many early films have been lost. I had hoped that we might have been able to raise this matter in Committee (my noble friend Lord Norwich and myself were hoping to do it), but I am afraid that it looks as though we shall not be here when the Committee stage is reached. I can only hope that some others of your Lordships will take up this particular matter.

The matter of representation on the Council is one that has come up several times in debates on this matter. As the noble Baroness said, it is impossible to please everybody. There are obviously anomalies in the present situation, but I think that rather than involve oneself in an intolerable wrangle as to how one ought to alter it, the best thing is to leave alone what appears to be, on the whole, a fairly balanced body. If there is going to be a change of Department—and this is a new thought that was thrown into the debate by the noble Lord, Lord Erroll of Hale—I would put in a strong plea that it should be the Department of Education and Science. Not only would this have the effect that we should have the noble Baroness, Lady Phillips, talking on this matter (which the noble Lord, Lord Erroll of Hale, welcomes), but it would also be fitting because we ought to look primarily on film as an art, and only secondarily as a part of commerce.

In short, my Lords, this Bill can be queried in detail. It seems to me that there are some questions about the Government's thinking where they either have not thought a matter through or have not made it entirely plain to the rest of us. On the whole, however, we give the Bill a very hearty welcome.

5.17 p.m.

LORD STRABOLGI

My Lords, I, too, should like to welcome this Bill, which has been so clearly explained by my noble friend Lady Phillips. As my noble friend says, it has been drafted after lengthy consultation with the industry, and it has the support of the industry and the various trade bodies. I agree with what the noble Lord, Lord Erroll of Hale, said in his speech. The noble Lord has been a distinguished President of the Board of Trade and he therefore knows the industry very well. I think it is clear that the more you study this industry, the more obvious it is that the present structure is really the only viable one, and I welcome what the noble Lord said. I also agree with the noble Lord, Lord Beaumont of Whitley, in his remarks. He has obviously given this matter very close study.

I must declare an interest, as I am associated with a film company and I am also deputy chairman of the Labour Party Films Group, but I speak entirely for myself. I think it is clear to-day that the film industry has its problems. Social habits are changing, and there are other contenders for people's leisure. As my noble friend Lady Phillips said, cinema attendances have declined, I think from 1,500 million a year in 1959 to 300 million a year in 1969. Further than that, in the last twenty years over 2,000 cinemas have closed. In addition, the American film companies, during the last few years, had not diversified sufficiently and had tended to have all their investment in film production, which made them particularly vulnerable to any retraction. As a result, when the retraction came American film investment in this country had to be cut back by over 50 per cent., and that has had inevitable repercussions here. This is not a fundamentally British crisis but an American crisis, which I feel sure is temporary and will soon be overcome.

There are some hopeful signs for the future. The trend is now to the low budget pictures, costing about £300,000. I think the fashion was started by The Servant some years ago, financed by the N.F.F.C. It was an absolutely brilliant film which was a great success. As audiences become more sophisticated, they are asking for something more serious and for some relevant social comment, and recently we have had other brilliant films like Midnight Cowboy, which won a great many awards, and Easy Rider. I believe Easy Rider cost only a quarter of a million pounds to make, and it is expected to gain about £30 million at the box office. What I think is also particularly welcome is the fact that British film finance is beginning to come forward again, with the help of the merchant banks and the N.F.F.C.

Both of the two major British film companies are embarking on extensive programmes of low-budget films. Furthermore, the film industry, which some years ago was a byword for lavish expenditure, has now become much more cost-conscious. I believe that one company is offering a bonus to producers who complete a film below their budget. This is also a change from the one-time essential requirement that, in order to be successful, a film had to employ a top star or stars, who of course had to be paid astronomical salaries. I believe that one famous star once, as a joke, asked for a million dollars—and got it, much to her surprise. To-day the public tend to be more interested in the production and the theme, although of course the stars still have an important place in the bigger pictures.

A great deal is being done by the circuits to modernise cinemas for present-day requirements, by converting them to twin cinemas and also to triple cinemas, and by the installation of Cinerama. I feel sure that this modernisation programme, with the other factors, should help to arrest the decline in audience attendances, and indeed should result in attendances increasing again—something which is already happening in the United States, where I think they have got used to television, rather taking it in their stride, and are now beginning to go back to the cinema. I am therefore certain that this great industry, and this wonderful medium and art, will adapt itself to present conditions. In 1957 there was a film crisis in France, and out of it came La nouvelle vogue. I hope that our American friends and partners in this most international industry will soon be back again in full force, because the British film industry cannot exist in a chauvinistic isolation.

This is an international industry; and, after all, art is international. I therefore particularly welcome the fact that this Bill prolongs the life of the N.F.F.C. for another 10 years, and also provides additional finance. I am also glad to see that the Corporation is relieved of the liability to pay interest on its past unrecoverable loans, and that all sections of the industry are in favour of its being continued. I think it is important to remember that the N.F.F.C. helped to stave off the collapse of British film production in the 1950s, as I am sure the noble Lord, Lord Erroll, will recollect. It has helped to finance over 700 films, and while it has advanced more than £27 million, it has lost only £5 million over a period of 20 years, which I think is a pretty good record. We must also remember that foreign currency earnings on N.F.F.C.-financed films have far out-weighed the losses, and that over the five years from 1964 to 1969 alone they earned £5 million, which is a considerable sum.

The noble Lord, Lord Beaumont of Whitley, had a few queries about the N.F.F.C. As I understand it. the N.F.F.C. really provides the "front" money, and the fact that the Corporation is backing a film gives confidence to other potential investors. That is the great thing about the N.F.F.C. It is not expected to put up the whole capital— and, of course, could not do so—but the Corporation's participation in a film is extremely important. However, while it is also important that the N.F.F.C. should continue to support films that are intellectually stimulating, as the noble Lord, Lord Beaumont, said, it is equally important that the Corporation should give emphasis to productions of sound entertainment value; and, indeed, the two are by no means mutually exclusive.

I also welcome the continuation of the Eady Levy—or the British Film Fund, as it is called officially. We must remember that this Fund was started by the present Prime Minister soon after the war, when the film industry had to be put on its feet again commercially. With the N.F.F.C., the Fund has helped to make Britain one of the leading centres of film production anywhere in the world. Both the Corporation and the Fund encourage international investors, and particularly American companies, to come here and make films on a co-production basis. This does not mean that the films are any less British in concept. One thinks immediately of films like Tom Jones and A Man for All Seasons, both of which were made on this co-production basis. But American companies do not come here only because of the N.F.F.C. and the Eady Levy: they are also attracted by our costs, which are very competitive. I believe that it is possible to make three low-budget pictures here for the cost of one low-budget picture in Hollywood. The American companies are also attracted by our fine modern studios, with all the latest equipment, and above all by our great wealth of creative talent and technical skills.

The noble Lord, Lord Beaumont, mentioned the national film school, and I should like to say a brief word on that. First, I should very much like to welcome the appointment of the first director, Mr. Colin Young, which was announced in the Press this morning, and I very much hope that under his distinguished leader-ship the school will soon be put on its feet. I still have reservations about the way the running costs of the school are going to be met. As calculated by the Committee which sat under my noble friend Lord Lloyd of Hampstead, they will amount to about £180,000 a year, and the Bill allows this to be met entirely from the Eady Levy.

Two years ago I suggested in this House not only that the cinema exhibitors should be expected to contribute but that the other beneficiaries from a school of this kind should also come in. I really cannot see why the B.B.C., the I.T.V. and the advertising industry, through the I.P.A., should not all be asked to contribute as well. I have ventured to suggest that in this House previously, and I should be very interested if my noble friend could tell us whether this possibility has been explored at all by the Government, and whether, in the consultations that they are to have with the Cinematograph Films Council on Clause 6, it will be possible for the contributions to the running costs of the school to be extended in that way.

I am disappointed that the Films Bill does nothing to help the National Films Archive, which is a part of the British film industry. I agree with everything that the noble Lord, Lord Beaumont, said. The present funds allocated to the Archive by the B.F.I. amount, I think, to £79,000 a year. In actual fact, the Archive needs four times as much as this; and even so this would be only one-twentieth of the total annual allocation to all our museums. This Archive is just as important a social record as the British Museum Library, the Victoria and Albert Museum and the National Portrait Gallery all rolled together. I feel absolutely certain that in a few hundred years' time it is to the Archive that future historians who are studying this century will go, just as much as to our libraries. I would therefore urge the Government to try to do something more for it than they have been doing already.

In conclusion, my Lords, I should like to make a plea in regard to the Sunday charity levy. I am very disappointed that this has no place in the Bill. The Private Member's Bill promoted by the noble Lord, Lord Willis, would have done away with this levy. The Bill was passed by your Lordships but did not get through the other place last Session, and I do not know whether it will get through this Session. I think there is a very strong case for having this small matter put into a separate Government Bill, and not made part of the whole question of Sunday legislation, most of which is very controversial. I think everybody now agrees that it is no longer desirable on any grounds to ask a cinema to pay some conscience money to charity, as required by the local authority, in order to open on Sundays. That may have been necessary in 1925, in order to get the legislation through, but it certainly is not necessary now. The cinema industry has been labouring under this levy and I hope that the Government will give early consideration to bringing in a very short enabling Bill to abolish it. With these small reservations, my Lords, I welcome the Bill warmly, and I hope that the House will give it a Second Reading.

5.30 p.m.

LORD WILLIS

My Lords, I. too, should like to welcome the Bill, in common with other speakers, and congratulate the noble Baroness on what must be a rather unique mother-and-daughter double in the House of Commons and here in the House of Lords. I must first declare an interest, in the sense that I am a director of two or three film companies and am associated as a writer with the film industry. With that introduction, I must say, in agreement with the other speakers, that this Bill comes at a very timely moment for British film production, for we are under-going one of our regular crises.

I have been connected with film production, mainly as a writer, for about twenty-five years now, and this is the third or fourth major upheaval which I have lived through—if "lived" is the right word. The first was in the 'forties, just after the war, when the Rank Organisation, which had embarked on an ambitious production programme, found itself in financial trouble. It is fashionable now in certain quarters to criticise the Rank Organisation for its failure to invest to any great extent in any sort of British film production. There is a great deal of truth in this criticism to-day, and I deplore their long absence on any substantial scale from film production. But, in fairness, it ought to be said that they paid their club membership rather heavily way back in the 'forties and early 'fifties, when they made a spectacular attempt to establish a British film production programme which could compete with Hollywood. They lost millions of pounds in the process; and they lost more money in the mid-fifties, when they had another go on a more limited scale. I think their approach on both occasions was often wrong and that their methods were often wrong— and it is not just hindsight which says this. But I think we ought to give them credit for what they tried to do then.

It was as a result of this first postwar crisis that we saw the creation by the Government of the day of two of the more important bodies mentioned in this Bill, the National Film Finance Corporation and the British Film Fund. Both of those, as my noble friend Lord Strabolgi has said, were the work of the present Prime Minister, then President of the Board of Trade; and it is an indication that this Government at least shows a great interest in the welfare of the British film industry. The outsider might well ask himself why it was necessary at all for the Government to intervene in what, at least to the man in the street, appears to be a prosperous and glamorous industry. You have only to go to a film premier and see the magnificent gowns and the queues of Rolls-Royces and Bentleys to wonder why this industry needed any help, and why it is necessary to continue the intervention to-day.

My Lords, there are three arms of the industry: production, distribution and exhibition. Both the British Film Finance Corporation and the British Film Fund were designed specifically to make more money available for production. The Film Fund, in particular, is a unique institution, for it amounted to a recogni- tion by the Government, and originally by the industry, that the distribution of income within the industry was unfair and had to be re-adjusted in favour of production; and the Government, through the Film Fund, actually intervenes in the financial affairs of this industry to funnel some of the income back to the producers. As I say, that is something quite unique. The truth is that when you look at this curious industry you realise, to quote its own phrase, that it is "a mad, mad, mad, mad industry".

It has taken the people in the film industry a long time to realise that the glamorous old days, when they had a virtual monopoly of mass entertainment, are over, and that the Hollywood concept is dead. It is an ironic fact that the film world, which lives on selling celluloid dreams to the public, has itself developed a chronic tendency to dream and to replace reality with illusion in the solution of its problems. It has sought to rescue itself from successive crises, not by rationalisation and reorganisation but by finding a magic formula, a dream solution. It happened in the late 'twenties when Warner Brothers were almost bankrupt until they introduced the first talking picture and made a fortune. That experience made an indelible impression on the film business at the time, so that since then, at every successive crisis, they have looked for the equivalent in that period of what was then the talking picture.

When television came along and cinema audiences began to decline steeply the film industry, instead of facing up to the fact that we were now in a new era of mass entertainment and making its dispositions accordingly, retreated into its shell like a giant tortoise and refused to have anything to do with this new medium; and as the crisis deepened it looked for another magic formula. For a time, some of your Lordships may remember, it was 3-D. We were going to have three-dimensional films and wear those peculiar spectacles; and this was going to be the answer to the little box in the sitting room. My Lords, 3-D films came and went, and nobody remembers them now. Eventually, the film-makers turned towards another magic formula, the great international block-busters costing millions, as their means of salvation. As I say, they cost millions, and they took years to make. Many of them have been memorable successes, but some have failed; and when you are dealing on this scale, one failure can turn the balance—and that is what has happened. Our present troubles are largely due to what the American President of the Producers' Association has called "the monster of cost" that was created in the film business; and the block-buster bubble has burst. There is an acute shortage of cash-flow for production. The great American companies, as my noble friend Lord Strabolgi has said, are holding back until they see some return from the films that they have already made.

What are we doing in this particular crisis? My Lords, there is a minority section of the film industry (not, perhaps, terribly important, but I think ominous, because in some respects the film industry is judged by it) which, looking still for a magic formula, now seeks a way out of the present crisis by another gimmick, the sex picture. I want to say straight away that I welcome the greater freedom which film-makers have to-day and the breaking down of those stupid codes which prevented any realistic approach to sex and sexual behaviour. But there is all the difference in the world between, say, a film like Women in Love, which is an honest and beautifully made picture, or even the Danish light comedy Seven-teen, and some of the sordid, flabby, so-called sex pictures which are now flooding in. Any of your Lordships who have been in New York recently and opened the paper there to look at what is on at the cinemas will know that it really makes your head reel.

These films are not films, my Lords: they are the cinematic equivalent of the strip-show in a dirty cellar; and the people who show them and the people who make them are not showmen, but pimps. They make sex dirty for the sake of a dollar. From the point of view of helping the film industry, these films are no more than the equivalent of a shot of heroin. They may give us a temporary lift, but in the end they kill or cripple those who indulge in them. I hope that the film industry as a whole, which has remained clear of this, will take a stronger line than it has so far taken to these merchants of the dirty dollar, who are moving in far too fast.

My Lords, I believe that this crisis in film production may well prove to be an opportunity, also—an opportunity to force some degree of sanity and some measure of rationalisation and reorganisation into this industry. But it will not happen if we still look for this magic formula. To-day, the magic formula that everybody is talking about is the low-budget picture. What do we mean by the low-budget picture? It means that the writers' fees are cut, the producer's fees are cut and the technicians' fees are cut, but nobody touches distribution or exhibition. It means once again that the production side is supposed to carry the responsibility for the present crisis. In this Bill, the Film Finance Corporation has been given more money and wider powers. I hope that it will use that money and those powers to influence the essential changes which must be made in films. Above all, I hope that it will be able to do something about distribution charges. The noble Lord, Lord Erroll of Hale, spoke blithely about the National Film Finance Corporation not going into the field of distribution. I do not particularly want it to become a distribution organisation. The noble Lord said that there were great risks in distribution and that we might lose millions. I should like to tell your Lordships that you will have to be an absolute moron of the first water to lose money in distribution. I have not yet met a distributor who has lost money. Practically everybody else loses money but never a distributor. I hope that the National Film Finance Corporation will be able to do something about this.

I recently described film production as a mouse which carries an elephant on its back. I still think that that is a pretty fair description. For every £100 taken at the box office, something like 60 per cent. goes to the exhibitors; about 24 per cent. to the distributors and the remainder, between £16 and £17 out of every £100, goes back to production. What kind of business is it which gives less than one-fifth of its total income to the basic product? I do not think it would be reasonable at this stage to reduce the amount taken by the exhibitors; for, although they have dragged their feet in failing to modernise their cinemas over the years, they now are to embark in the next few years on colossal expenditure in modernising their cinemas. This is very important. But the amount which goes to distribution is altogether too much. It should be reduced. The N.F.F.C. and the C.T.F. must do something about this. From the amount returned to them by the exhibitors, the distributors not only deduct all the expenses for publicity, prints and so on, but they then take 25 per cent. to 30 per cent. off the top for themselves. When you realise that some distributors are also exhibitors and even producers then you can see that there is a rapid transfer from one pocket to another. The man who loses in the end is the independent producer, the creative people associated with the industry and the technicians.

I was connected some years ago with the production of a film which was very successful. My noble friend Lord Strabolgi will be pleased to know that it cost just under £100,000 to make. In order to get that film made, I and my associate producer and director deferred a large proportion of our fees. It took in the world markets about three times what it cost: between £300,000 and £400,000. Everybody got paid. The exhibitors got their money, the usherettes got their money, the barman who served the drinks at the Press showing got his money, the distributors got their expenses, the laboratories got their money and the salesmen for the distributors got their money; but it was seven long years before I and my colleagues saw a penny back of what we had deferred. The last people to be paid were the creative people who made the product possible.

That is the situation which still obtains and will continue to obtain if the way out of this crisis is seen as slashing still further the money that comes to independent producers. These circumstances force up costs. You cannot blame the independent producers if they say, "If I am not going to get my money at the end, even if the film is successful, I will take it up in front, while the film is being made".

The N.F.F.C. is to be given public money to invest and it has been charged to invest it on sound commercial principles. They have a splendid record and I endorse every word that my noble friend Lord Strabolgi has said about them. I hope that they will feel it to be part of their duties to inquire into the inflated costs of distribution before investing and use their great influence to bring those charges down. The Government ought to say to the film industry, "We are renewing all these measures for 10 years; but this is your last chance. Get your house in order now because in 10 years' time we shall not be half so sympathetic to renewing unless you have done so."

I welcome the proposal in the Bill to allocate moneys from the film production fund to the British Film Institute and the national film school. I cannot comprehend the argument that this is a misuse of money intended for production. Film production depends in the ultimate on several factors. Two of the most important are new ideas, new talent and new thinking by young blood and skill and training. This Bill will help to encourage and develop both; and it is therefore making a significant contribution to the quality of production and the long-term continuance of the industry on its present high-quality level.

There are one or two minor aspects which worry me. I am not happy that the Cinematograph Films Council is as representative as it should be particularly on the trade union side and on the in-dependent production side. I cannot understand the reluctance of the Government to take a firm stand here and to widen the representation. It is argued that we do not want to upset something so finely balanced, and that if one side gets increased representation others will demand it and the dyke will burst. Why should it? If the Government agree that the unions and the independent producers have a genuine case, why should not the Government stand firm against the others? Why should they not up-hold that case? Why allow themselves to be blackmailed into submission by demands from other quarters? It is right, I think, that the unions and the independent producers should have greater representation on what is a committee that now has greater powers and greater authority. I think the Government should recognise this and say boldly: "This is what we feel; this is what we are going to do. We do not intend to increase representation of anybody else but we will rectify this weakness."

I take the point that the noble Lord, Lord Beaumont of Whitley, made about the Commonwealth quota. It is a question on which I have not yet made up my mind. I hope that we shall be able to table some Amendment in Committee so that it can be debated. On the question of archives, I support this in principle. It must be remembered, however, that if you send a book to the British Museum Library it may cost you £2 or £3. If you want to supply a print of a colour film to the archives it can cost up to £300. That is a great deal of money to ask people to give. Therefore, if this is going to be taken seriously some way must be found of funding these archieves so that the burden does not fall upon the industry itself, or, at least, not completely.

There are one or two other matters which can be raised in Committee and with which I shall not now trouble the House. I should like to end by thanking the Government again for this timely and important measure and to say that it will greatly help film making. I should like to say that film making has an importance which goes beyond commercial considerations. At its best, it is an art: an art which can influence millions of people, which can present Britain and its people to the world truthfully and honestly. The most important gain in the last twenty years is that British film makers have now broken through and have won immense prestige all over the world. Our films now are accepted everywhere; our directors, technicians, our artistes and writers are in world demand. They are the best in the world. That is the most significant break-through and a cause for the greatest optimism in the future. It provides a solid foundation (if we can get the business problems right) for the long-term future of the film industry. We can make it viable and in the long run we can make it a valuable business asset and an asset to our cultural life.

LORD BEAUMONT OF WHITLEY

My Lords, would the noble Lord agree that the point he made about the cost of providing a print for the British film archive is met by my suggestion that this should be done at cost price, that the print should not be given free.

5.50 p.m.

LORD AUCKLAND

My Lords, there will be widespread agreement with the final words of the noble Lord, Lord Willis. This is a very technical Bill. Indeed, for someone like myself, who— unlike most noble Lords who have spoken in this debate—has no practical experience of the film industry, the Bill is full of technicalities. But I think there is one important point to remember about the film industry, or any other entertainment medium. It is that success or otherwise depends very much on the reaction of the consumer.

The noble Baroness, Lady Phillips, in her very interesting opening speech, mentioned the falling off in attendances at cinemas, due to television. I think it is due largely to the fact that so many old films, and films which not so old, are shown on television at the present time. This Bill does not deal with that point, and to argue too much about the matter would be to get into technical hot water. I think it is rather hard on some distributors and some cinema circuits when a film which is perhaps only two or three years old is shown at a peak hour on the television screen. Be that as it may, my Lords, the average person going to the cinema is unacquainted with terms such as "quota" and "levy" and has no knowledge of the National Film Finance Corporation. But those concerned with the industry and with the making of films obviously regard these as vital matters, because they are the main components in the working of the industry.

I believe that the Bill had a general welcome in another place. It had a fairly long Committee stage, and some of my honourable friends there had a number of criticisms to make on certain aspects. I do not intend to follow them, because most of my honourable friends are more technically appraised of the industry than I am, but I am a little concerned about the arbitrary period of ten years for the loans to the National Film Finance Corporation. This period may be too short or it may be too long. I incline to the view that five years might be a more realistic period, in view of the changing nature of the film industry. But having said that, I am certainly not advocating any change in the structure of the National Film Finance Corporation. It is clear that the film industry needs Government support. The reasons for this are obvious, even to those who are merely consumers.

I consider there is some substance in what was said by the noble Lord, Lord Beaumont of Whitley, about the transfer of the film industry, or at least some part of the industry, from the Board of Trade to the Department of Education and Science. One can see administrative problems, but more and more the industry is becoming a kind of educational centre. More and more films of an educational nature are being made. I am thinking, for example, of the admirable films made by the Rank Organisation in the series, Look at Life. They were made on a fairly low budget and certainly they are films of great interest.

Another problem facing the cinemas is the mushrooming of film clubs. At the new Thorndyke Theatre at Leatherhead, where I live, films are often shown on Sunday evenings. That is a good thing, of course. It might be argued that it kept people from the local cinema, but alas! Leatherhead no longer has a local cinema. One part of the Bill rather puzzles me; it is Clause 11. I do not know what the late night showing really means as referred to in the clause. Speaking purely as a cinemagoer, I cannot help thinking that one of the reasons why there is a falling off of attendance at some cinemas is that a very good first feature film is coupled with a second-rate second feature film. People decide that they are not going to waste time going where there is such a second feature film. Obviously the answer is that they should walk out, but that is not quite the logic of the general public.

The budgeting of films presents a major problem. So many more films are now made on location. Film units go to Spain, to Scandinavia and elsewhere and often they have to wait for the weather to be just right. The days of making a film in a studio, if not numbered, are far fewer; although those who, like myself, have visited Pinewood must pay tribute to the people who designed the highly realistic sets for some of the James Bond films. All this poses a problem regarding the costing of films. The Bill will need examination in Committee particularly with reference to some of the more technical points. I think everyone wishes to see a buoyant film industry and all those connected with the British industry, which has earned this country so much money in invisible exports, deserve the support of your Lordships' House. I think that the Bill will go a long way to provide more useful support.

6.0 p.m.

LORD ARCHIBALD

My Lords, like other noble Lords who have spoken in the debate, I should like to extend a welcome to this Bill and to congratulate my noble friend on the way in which she introduced it. I hope that I misunderstood the noble Lord, Lord Erroll of Hale, when he said that he thought this Bill showed that the Government were showing a lack of interest in the film business. I should have thought that, on the contrary, the production of this Bill shows that the Government have a profound interest in the film production industry. If I misunderstood him, I apologise.

LORD ERROLL OF HALE

My Lords, I was being facetious and was not expecting to be taken seriously.

LORD ARCHIBALD

My Lords, perhaps the noble Lord will agree when I say that from my past experience it is a dangerous thing to be facetious in your Lordships' House.

While I welcome the Bill in general, it contains two or three points on which I have some criticism. First of all, with regard to the National Film Finance Corporation, I am delighted about its renewal and its refinancing but I would ask the Government (this is not a matter for an Amendment to the Bill but probably for the President of the Board of Trade to keep in mind) that on the next occasion they are appointing the members of the Corporation, they might include among the total number two members with some experience and knowledge of the industry, who would be able to keep the Corporation on level ground. In my view, it should not be composed entirely of accountants and lawyers, however gifted in their field, who for the purposes of the film industry are complete amateurs.

My second point of criticism concerns the proposals for the reallocation of the levy funds. I object very strongly to industry money being diverted either to payment of the film school or to a subsidy to the British Film Institute. All the great schools, whether they are of architecture or law or anything else, do not draw their funds from the industries to which they are providing people who are fully trained. Why should an exception be made in respect of the film industry? Why should the film industry be expected to pay for the training of its eventual employees? Many of those who go through the film school may not come into the film industry at all, but may go into television or some other field; and there is no proposal that these other fields should be asked to contribute to the cost of the film school. The same argument applies to the B.F.I.

This is an industry fund. There is no Government money concerned here. The industry agreed unanimously that a part of this fund should be used for the Children's Film Foundation. I hope that we are not going to be told that the Cinematograph Films Council represents the industry, if it approves of these things, because it does not represent the industry. There is at the moment a Film Industry Organisation, with agreed representation from all the different branches of the industry, and if the Government wish to get approval for the diversion of money from the levy towards either the film school or the B.F.I. production fund, then I suggest that they should get the approval of the Film Industry Organisation and not the approval of the rather unrepresentative Cinematograph Films Council.

I speak rather feelingly on this matter, my Lords, because for a number of years I was a member of the Cinematograph Films Council, and I know that it is not really representative of the industry. I suggest that the Government should consider, in the first place, increasing trade union representation on the Council and, in the second place, increasing producer representation. At the moment there is the absurd situation that the industry accepts that the two major organisations, Rank and A.B.C., should naturally be represented on the Council. The Exhibitor's Association includes in its list of nominees for selection by the Board of Trade, a representative of A.B.C., and in the same way the Producers' Association includes in its list of nominees the name of a Rank representative.

So we have the absurd situation that there is an A.B.C. representative, supposed to be representing the exhibitors, with a vast interest in production, and a Rank representative, supposed to be representing the producers, when in fact his organisation is not doing anything in the production field at all. It would be much better, if it could be done, to give these two major organisations representatives on the Council and to let the producers and exhibitors have a free choice of those whom they nominate to represent them. Then they would be really represented, and not by people who are wearing three different hats at the same time.

LORD STRABOLGI

My Lords, I am sorry to interrupt my noble friend, but from the point of view of accuracy I do not think it is true to say that Rank are completely out of production. He may have seen in the Press recently an announcement that they are embarking on a programme of seven low-budget films at Pinewood, so that they are not by any means out of production.

LORD ARCHIBALD

My Lords, my noble friend is looking forward. I am talking about what has been happening over the past few years, and what I have been saying applies with strict accuracy. Over the past years Rank have not been engaged in production. I hope that my noble friend is right, and that they will be substantially engaged in production in the near future; but in this context seeing is believing.

The only other point to which I wish to refer is one that was raised by the noble Lord, Lord Beaumont of Whitley, about the Commonwealth quota. I think it is rather ridiculous that Commonwealth films have full quota and levy rights in this country while there are no reciprocal rights for British films in Commonwealth countries. I hope that at the Committee stage this point may be looked at again. But, having made these criticisms, may I still say that I welcome the Bill. I think that by and large it is an extremely good Bill.

6.10 p.m.

LORD LLOYD OF HAMPSTEAD

My Lords, this Bill contains a number of miscellaneous provisions, all of which I think will be of great benefit to the film industry. I wonder whether consideration may not be given to a consolidation measure to bring together all the loose ends which this Bill and some eight or nine other Bills now contain. But that is entirely by the way. What I wish to concentrate on is the provision in Clause 6, but before coming to that I wish to express strong support for the decision to extend the life of the National Film Finance Corporation for another ten years and to increase its funds by a further £5 million. I think the Corporation has done a remarkable job, notwithstanding its very straitened resources during the last few years, and tribute should be paid to its managing director, Mr. John Terry, whose invaluable services to the film industry are widely recognised and whose power to influence the future well-being of that industry will be greatly enhanced by the provisions of this Bill.

Having said that, I now turn to Clause 6 of the Bill. Here I would warmly support the proposal to permit the British Film Fund to make a contribution to the national film school and to the Film Production Fund. One might have hoped at this stage that it would no longer be necessary to emphasise the great help which each of these can give to the future development of the film industry, but in view of the speeches which have been made in another place, and to some extent elsewhere, it would seem that some reiteration of the argument is called for. The film industry is unique in many ways, and not least in the fact that it requires a combination of commercial expertise combined with a high degree of creative talent and ability. It is also an international industry, in the sense that films can be made in any country which offers the appropriate resources, supported by capital from wherever it can be found, and the end product can be, and frequently is, a valuable item of export.

Many voices have been raised to deplore the fact that in recent years capital for film making in this country has largely been American. Now that that source of capital has shown some signs of drying up, those voices are perhaps somewhat less strident. Personally, I have always thought it an excellent thing for us to be able to attract American capital, though I should like to see a somewhat larger proportion of British capital involved. I should like to express perhaps somewhat belated pleasure at the removal of the selective employment tax from film-making. A number of Members in this House, including myself, pleaded for this when the matter was first introduced, and one is pleased to see that at last this plea has been recognised.

The film industry, as my noble friend Lord Willis pointed out, has always been lurching from one crisis to another and surrounded by prophets of doom fore-telling its extinction. I do not think there is any more substance in those predictions now than heretofore. In fact, there are many healthy signs of revival. For example, there is a new venture in film-making on a large scale by A.B.C., under the able direction of Mr. Bryan Forbes; and there are a number of indications that the Americans are still very interested in film-making in this country. We may well ask the question: Why do the Americans come here to make films? Of course, the Eady money is an inducement; the English language as a common language, is of great value, as also are our studio facilities and so on. But the crucial attraction, as my noble friend Lord Strabolgi pointed out, is the wealth and diversity of talent, especially creative talent, which is at the disposal of the film-maker here—as long as this reservoir continues to be available.

It is a fallacy to think that there is less need for this creative talent at a time when the industry is in a declining rather than a rising phase. The contrary is true, I would suggest. At the present time film-making is moving over to new types of film, mostly, as has been said, of a relatively low budget kind which appeal to the imagination of a new class of filmgoers, especially the young. The industry, therefore, is not unnaturally reversing the trend of pouring huge sums into "block buster" films, the failure of which can spell virtual ruin.

This is just the period when we must ensure that we have the means of channelling and exploiting all available talent. The problem is how to find out what talent we have and to ensure that it is made available and properly employed. It is here that a high grade national film school has a considerable role to play, because it can provide an indispensable arena for real talent to prove itself and enable experts in film-making to sift out those who are genuinely talented from those who merely have enthusiasm and a misguided belief in what they can do. Furthermore, having established and developed their talents, they can then be channelled into the industry in the place where they are most needed.

A complementary function can be ascribed to the Film Production Board. Even when young people have been trained in film-making and secured suitable places in the industry, it may still be some time before they can show what they can really do. It can be of great advantage, therefore, if at that stage some of them can be provided with modest sums to make a film of their own. The Board performs an indispensable role, but one that has been sadly circumscribed by the totally inadequate funds available. This is no fault of the British Film Institute, which has worked manfully on a shoestring to keep this enterprise alive. Great tribute must be paid to Sir Michael Balcon and his colleagues for the work they have done in developing the Film Production Board, despite the meagreness of funds available. No better example of the value of their efforts can be given than the remarkable and extraordinarily successful film made by Mr. Don Levy, Herostratus, which has had such an astonishing world success.

It seems to me that nothing could be more natural and appropriate than for a small portion of the Eady money to be used for these purposes. On the committee dealing with the national film school, 16 of the 17 members agreed that at least part of the income should come from the Fund. Of these none favoured less than 50 per cent. That committee, as is well-known, included important representatives from all spheres of the industry. Since then the Cinematograph Films Council has also resolved in favour of some contribution coming from the Fund. I know that there is some opposition to this proposal, which comes mainly, though certainly not exclusively, from the exhibitors. The arguments, how-ever, are it seems to me quite misconceived. It is said that the Film Fund is really industry money which was to be allocated solely to encouraging the production of commercial films. Therefore it is argued that it should not be allocated to any other purpose, at any rate without the consent of the industry. Some speakers in another place even went so far as to talk about the Fund being "raided" or "robbed" for these purposes.

I suggest that these arguments are unsound, for three reasons. First, the levy is raised from box office receipts, but it is a statutory one, raised from payments made by the cinema-going public, and clearly can be properly used for the benefit of the industry in accordance with the terms of the controlling legislation. Secondly, the attempt to divide up the industry into compartments and to suggest that what may benefit film makers is harmful to exhibitors is really idle. The whole of the industry, including exhibitors, has an overwhelming interest in keeping up the supply of films. There would not be much for an exhibitor to do—except transfer to bingo, perhaps—if the flow of acceptable films dried up. I have already endeavoured to show how both these enterprises, the film school and the Production Board, by fostering young talent, can assist in ensuring the continuing supply of suitable film makers; and one cannot have films without film makers.

Thirdly, it is futile to try to distinguish between what is commercial and what is non-commercial, especially at the present lime when repeatedly it is being found that exceedingly unlikely films, for instance, Easy Rider, If, Bonnie and Clyde and Midnight Cowboy have proved great box office successes. The idea of these two enterprises as being for the long-haired fringe characters, cut oil from commercial objectives, is totally unrealistic.

I want, as briefly as I can, to mention some points of detail regarding Clause 6. An attempt was made in another place to limit the amount which can be allocated. It would be a mistake to fix an arbitrary ceiling. It can surely be left to the reasonable discretion of the Board of Trade, after suitable consultation, to see that an appropriate allocation is made. It is extravagant to talk about "raiding" money from the Fund as if it is proposed to extract from that Fund (now in the region of about £5 million a year) a substantial proportion of it. In fact no one has ever contemplated for either purpose more than a very trifling percentage.

In our report on the national film school, we suggested about 3 per cent., although there is no reason why this should be imposed as an arbitrary limit. Moreover, as my noble friend Lord Strabolgi pointed out, money might be obtained from television, the B.B.C. or any other source, and if so it will be exceedingly welcome. But this is another matter. It is not a reason why Eady money should not make some contribution. Lastly, on the question of the wording of the clause, I am bound to say that I have felt some reservation about whether the reference to any school … which may have been established with the approval of the Secretary of State". and the related wording is entirely appropriate to give effect to what is clearly the intention of the Government and has been made plain in both Houses; namely, that this envisages specifically the national film school when it is set up. I have had discussions with officials in the two Departments, and I hope that the noble Baroness, when she replies to this debate, will indicate that she is prepared to consider the purely technical question of the wording of this clause to make sure that it gives effect to the avowed intentions.

I am happy to say, so far as the national film school is concerned, that the work of the planning committee is now well under way. As my noble friend Lord Strabolgi pointed out, the crucial decision as to the first director has now been resolved and his name has just been announced. As the present head of the leading film school in the United States, he is admirably—indeed, uniquely—qualified to get our project successfully off the ground. We are hoping very shortly to establish the school as a legal entity and to take further vital steps in getting the project started.

In conclusion, the film industry may not be a major one in this country, but it is still one of immense importance and one which not only brings great benefits to us in economic terms but is also a vital factor in terms of international prestige. The quality of films produced by a nation can command the attention of the civilised world and greatly add to the standing and attraction of our national image. British film makers have always stood high in international opinion, though they have not, unfortunately, always received the support and recognition in their own country which is their due. This Bill will do much to help develop and foster that image, to the growing benefit of the British people, and I congratulate the Government and the noble Baroness upon it.

6.26 p.m.

BARONESS PHILLIPS

My Lords, with your Lordships' leave, I will attempt to reply, as briefly as possible, to the points that have been raised by noble Lords. I apologise for the somewhat deep note in my voice: I am not, so far as I know, undergoing a sex change. First of all I should like to thank your Lordships for the general welcome you have given to this Bill. This is probably unique, because all noble Lords who have spoken have welcomed the Bill and made very constructive suggestions for dealing with it during the Committee stage. I am sorry that the noble Lord, Lord Erroll of Hale, is not in his place at the moment, because I should have liked to thank him for his suggestion that there should be some reshuffling which would enable me to move up the ladder of promotion. I will see that this is taken to the appropriate quarter. I see now that the noble Lord has returned to his place.

Your Lordships tempt me to go into the field of "quota-quickies", which I also suffered, and indifferent second-feature films, as well as the eternal problem of the sex film. I am an inveterate cinemagoer myself, mostly to late shows, as this is the only opportunity one gets when one is a junior Minister in this House. Nevertheless, it is noticeable that the technical advances that have been made, and also the sophistication of the audience are having a great influence on the sheer quality of the films—British films in particular.

I might suggest to the noble Lord, Lord Willis, that the sex film will probably die of its own volition, because there can be nothing more boring than to see a repetition of the same thing when it adds no point to the story concerned. The noble Lord, Lord Erroll of Hale, raised the point about the Customs and Excise collection, a very useful point that might well be discussed during the passage of the Bill. He said that the collection cost is a charge on the levy itself. So far there has not been any complaint, but I take his point that these may be useful officers of high salary calibre whom we can utilise in another way.

On the question of the wide powers which are given in the Bill to the National Film Finance Corporation, they are as the noble Lord will appreciate, powers which may not be invoked; as he will have noticed, they cover several events which may not take place. There is, however, one point: the Bill does not authorise the National Film Finance Corporation to go into the distribution business, but only to act as agents of the company or consortium owning the film; and then only in respect of a film in which the Corporation itself has a financial interest. That is the difference on the point which the noble Lord has made.

The noble Lord, Lord Beaumont of Whitley, with whom I would at once agree, made the point that we have of course something to sell the world: the British language, the British culture, the British way of life. Indeed, I would go along with him at once in saying that the film is an art form. The question of the quota is kept under review, and I think I should remind your Lordships that the Cinematograph Films Council has all sections of the industry represented on it. I am sorry that several noble Lords appear to feel that there should have been a stronger representation, on the one hand, of certain interests of exhibitors, and so on, and, on the other hand, of the employees and the unions. This matter will be looked at, obviously, but I think I must make the point that there are in addition six independent members, and one would hope that they would exercise the balance.

The noble Lord, Lord Archibald, made a point in connection with the membership of the National Film Finance Corporation. I have to remind him that the Board of Trade is required by Section 1 of the Cinematograph Films Production (Special Loans) Act 1949 (which set up the Corporation) to appoint members from among persons having experience in finance, industry (and I suppose he will come back at me and say, "Why not the film industry?"), commerce, administration or law. The persons appointed are thought to have experience of that kind. But again there is no reason why the points made by the noble Lord should not be looked at by my honourable friend. I might suggest that the Second Reading debate in this House has taken a much more constructive turn than the debate in the other place, because the points made by each speaker are points which could well be taken for consideration.

The noble Lord, Lord Willis, of whom I am an inveterate admirer, expounded not only the history of the film industry and its problems, but the reasons for bringing into being this legislation, in such a brilliant way that I wish he were taking the Bill through the House instead of my doing it. I am glad he gave some credit to the Rank Organisation, because I feel, like him, that we are a little too quick nowadays to have hind-sight and not to accept the contribution that was made in those very difficult years. I take his point about membership of the Kinematograph Films Council, but I must remind him that this has recently been reconstituted and I think it would be holding up false hopes if I suggested to any of your Lordships that there is likely to be an immediate change in the representation on that body. I think, if I dare say this to the noble Lord, Lord Archibald, that both my noble friend Lord Willis and the noble Lord, Lord Lloyd of Hampstead, replied to him very effectively on the value of the National Film School. I hope he will accept that in both cases they are experts in this field, although I know that his own contribution to this industry and also to the Corporation, has been a remarkable one. The noble Lord nods his head. Perhaps we shall return to this matter during the passage of the Bill through the House.

I should like, and I know your Lord-ships would wish it, to pay tribute to the work of the noble Lord, Lord Lloyd of Hampstead, which he modestly has not mentioned himself. He was of course Chairman of the Planning Committee which set up the National Film School and he has done a remarkable job. To him I would say that consolidation of the Statutes is a matter for the Law Commission, and there is already agreement that there is a need for consolidation. His other point on the drafting ambiguity (perhaps I shall be in trouble if I say that) has been taken; it will be looked at, and I shall return to it during the passage of the Bill through the House.

I think I am correct in telling the noble Lord, Lord Auckland, that films on television have to be five years old. I must say that, judging from the few I see, they seem to me more like 95 years old. Perhaps he has been rather more fortunate. I feel certain all your Lordships will agree that "the box" will never in any way be a substitute for the cinema, any more than it is a substitute for the soccer match or the ballet. Involvement of the audience in the particular art form they go to view would never allow a substitution. I think we can take the point of the noble Lord, Lord Willis, that the industry is moving through a crisis. We find that people genuinely learn a lesson from any difficult period through which they pass, and we hope that this industry will learn in this way.

I was rather interested in the noble Lord's point that this looked a glamorous industry when one saw the final product being shown at a premier. Perhaps he would take the point that when we have the Opening of Parliament here we all look very glamorous; but I am never quite so sure whether we are a very wealthy industry, or whether in fact we are having to meet the needs of the populace on a very small budget.

My Lords, I am very grateful for the general welcome given to this Bill. I know that as we go through the Committee stage there will be detailed investigation, and I am sure there will be some useful Amendments. No legislation can save an inefficient industry from itself. But I believe that this industry is not inefficient, and that it still has a great contribution to give not only to the world but also to the British people. I hope, therefore, that this Bill will enable the industry to emerge from this difficult period and move forward into the future.

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