PROBLEMS OF THE THEATRE AND THE CINEMA

HL Deb 14 May 1975 vol 360 cc776-826

5.49 p.m.

Lord WILLIS rose to call attention to the serious problems now facing the theatre and the cinema; and to move for Papers. The noble Lord said: My Lords, after what the noble Lord, Lord Houghton of Sowerby, has just said I am beginning to think I am in the wrong place because I tend to generate in myself, if not in other people, a certain amount of emotion. I should like to welcome to the speakers' list so many distinguished speakers, particularly the noble Lord, Lord Gibson, who is to make his maiden speech. I am sure we shall listen to him with interest and delight. I have been asked also through the usual channels to point out, in view of the number of speakers, the limits on this sort of debate. We have 2½ hours and I believe it is customary to leave the Government speaker 20 minutes towards the end of the debate, which roughly means that at eight o'clock the noble Lord, Lord Strabolgi, should be on his feet.

I must declare an interest, in that I am both a writer for the theatre, and a writer and producer of films, so I clearly have an interest in some of the matters I shall cover. I realise also that I have given myself a rather impossible task this afternoon in trying to link together the theatre and the cinema, each of which would on its own warrant an afternoon's debate in this House. But the problems are so urgent that I felt it was necessary at least to take advantage of this occasion to raise some matters concerning both. I am aware also that this is not the easiest time for special pleading for the theatre, the cinema, or for anything else, because we are told that this is a time when we must tighten our belts. My point is that the theatre has already tightened its belt, and if it has to tighten it much more, it will either cut itself in half or strangle itself. This is why I think some of the problems are so urgent. I hope to show that neither the theatre nor the cinema come before your Lordships' House in the form of beggars rattling the begging bowl. I shall put forward some of the economic arguments on their side which warrant the attention of the Government.

My Lords, both the cinema and the theatre have a case that makes sound economic sense. One could argue that, if there is a case for British Leyland, there most certainly is a good case for the theatre and the cinema. Only two things are required from the Government, Parliament and, indeed, the people. From the Government, in particular, we need a little Parliamentary time, because there are measures in the pipeline, agreed by all Parties, but held up because of lack of Parliamentary time. Secondly, we need a little more money for the theatre—not too much, a sum equal to the cost, for instance, of building 20 miles of motorway, or perhaps half the subsidy we already pay on cheese.

Perhaps I ought to add that the vision and the will are also necessary; the vision to see that our theatre is one of our greatest traditions, and that poverty of the spirit is the worst and the most degrading poverty of all. The vision to see that, if we allow our theatre and its allied art, the cinema, to stumble, falter and weaken, we shall be betraying not only our great cultural past but our future. We are a Great Britain not least because of our culture, which is the envy of many nations and which has earned the admiration of all. To say that our culture is now under attack and is seriously threatened is not to exaggerate.

Let me turn first of all to the theatre. In the last 30 years, there has been a tremendous resurgence in this country of the living theatre, largely due to the pump-priming work done by the Arts Council in association with some enlightened local authorities. Our plays, actors, designers and directors are in demand all over the world. This has helped in turn to fuel the commercial theatre which, until recently, enjoyed a long run of successful production. All this made good economic sense and paid off in economic terms.

Let me give your Lordships a few facts. Out of 21 plays on Broadway in December last year, 11 were of British origin, bringing valuable dollars into this country. In any one week there are about 100 productions of British plays in the United States, and as many in Germany, Scandinavia, and in other countries. In a recent survey, 50 per cent. of all American tourists gave the theatre as one of their main reasons for coming here. If any of your Lordships have been to New York recently, you will have seen the advertisements there by British and other airlines, which say quite boldly. "Visit historical London, centre of world theatre", or, "Go to London and see a play". In other words, in the theatre we are clearly a great tourist attraction, which brings in many millions in overseas currency. In 1973, the figure for tourist spending was £680 million, and a substantial proportion of that must be credited to the theatre. It is so cheap. There is no cleaner export sale than the ticket to a British play—just a piece of paper; no valuable imports have to be brought in, and 100 per cent. of the money received remains in this country. All that is the result of 30 years' careful nurturing by the Arts Council.

It is now in serious danger. The theatre is in the middle of a storm, not of its own making, and is reeling from it. I shall give your Lordships some facts on the other side of the balance sheet. First of all, let us take the subsidised theatre. Out of 60 theatres in the regions outside London, 12 are seriously considering closing. Most are cutting back savagely, turning the clock back to safe plays, with small casts and one set. The right to fail, which is the most valuable right in the theatre, has gone. Nobody dares to fail. New plays have fewer chances because they are too risky. Theatre schools, the theatre in education, the valuable groundwork of the theatre for future audiences, are being curtailed on grounds of economy. I will quote a passage from a letter I received from a woman who, many years ago, established a lively theatre in Leatherhead. She has built it up by devoted work and devoted help. She says: Here at the Thorndike Theatre, we are so close to constant disaster, that the slightest drop in box office from full to not quite full, and the slightest rise in costs, has got to be balanced by increased subsidy. If it is not, then the doors will close and will certainly not re-open in my lifetime. My Lords, all this progress has been made on a modest base. Recently actors had a 15 per cent. rise, well within the Social Contract, bringing them up to the magnificent salary of £30 per week basic, a little less than your Lordships get for attending this House for three days. In London, the opera, the ballet, the Royal Shakespeare Theatre and the National are all in serious trouble. The Royal Shakespeare Company has pruned its productions and may have to close down at the Aldwych, which would be a terrible blow to the West End theatre. Last year, they took receipts of over £1 million, much of it from tourists, yet they are still in the red. The National Theatre is in similar trouble, made worse by the rising costs of the new building and by construction delays.

If I may add here one rather discordant word in parenthesis while talking about the National Theatre, I was very disturbed to read that Peter Hall, the Director of the National, has accepted a job with a television company. He is being paid a very good salary out of public funds to do a full-time job at the National. But now it is reported that London Weekend are to pay him a five-figure fee to work on their programme "Aquarius". Clearly at this figure, the work will be far from nominal; it will soak up energy and time which ought to be devoted to getting the new National Theatre on the road. I hope that Mr. Hall will think again. He has a tremendous talent, a rare combination of artistic and administrative ability. The Theatre needs all of that now, not just a part of it.

My Lords, to turn to the commercial theatre, we see that its prospects are little better. Almost all the established West End managements are running at a loss at this moment. Some are simply not producing because of the difficulty of raising finance. For example, there is the play at the Haymarket based on a book by the noble Lord, Lord Snow, which received wonderful notices, is playing to crowded houses but, I am told, is actually losing money. Modernisation, and even routine maintenance, of London theatres is becoming an impossibility.

This is a hurried picture. I hope others will fill it in. But I hope I have said enough to indicate that the problems are really serious. What can and should be done? The first and the most important matter on which the Government can help is the abolition of VAT at the box office. We fought for many years to get rid of entertainment tax, enjoyed a short period without it, and now have VAT. I know that the right honourable gentleman the Chancellor of the Exchequer is sympathetic to our case and that he has found it difficult so far, but I believe that he should act now. He should not leave it much longer, otherwise a great tourist attraction and one of the foundations of our culture will be closed down or severely hit.

In the case of the subsidised theatre, to remove VAT would be a book-keeping attraction, since the Exchequer is supposed to increase its grant to the Council to compensate to some degree for VAT. This would, to some extent, restore the situation to what it was before there was entertainment tax in the commercial theatre. It would not solve all the problems, but it would release a flow of funds for production, help to attract new investors and check the rise in seat prices. I would say at this point that we already have evidence that there is resistance to increased seat prices. Although the theatre has put its prices up much less than any other commodity in this country, people are finding it difficult to pay out the increased cost. At least all that would give managers a fighting chance. All we are asking in short, is that the theatre should be given a status similar to publishing. It is really rather extraordinary that you can walk into a shop and buy a magazine like Playboy without paying VAT, you can go into the sleaziest shop and buy the dirtiest book without paying VAT, but you cannot go into the theatre without paying it; we have to pay tax for Shakespeare.

The second priority is to increase the level of grant to the Arts Council. This to some extent has been done, but it has not kept pace with inflation. The result is that the Arts Council, as I am sure the noble Lord, Lord Gibson, will be able to tell us, is in an entrenched position, fighting a desperate action and only just holding on by cutting down, cutting out new work, refusing to take on new clients and making old clients suffer. It really cannot hold that ground much longer; it needs help and it needs it urgently.

I now turn to the cinema, and in particular to British film production. All I have said about the quality of our writers, artists and directors in the theatre may be said also of the cinema. They have a worldwide reputaion. Over the years, except for an occasional spring flowering of production, we have shamefully neglected that talent and forced it abroad to find employment. One of the great tragedies of British cinema is that we have always nourished the celluloid illusion that we speak the same language as the Americans. The result is that over the years we have chased the dream of making films which would satisfy both the British and the United States markets, with our eyes on the pot of gold at the end of the Hollywood rainbow. The result has often been the production of mid-Atlantic films, weak imitations of the American product and not really British, and they have sunk, as they deserved to do in many cases, in mid-Atlantic.

The French, on the other hand, have no such illusions, because their language is clearly different. They make films for their own market in their own way. The result is that they have a small but truly national and very viable film industry, which gives a tremendous cultural bonus to France. I believe it must be our aim to establish something like that here. The Americans who, up to a couple of years ago, provided almost 90 per cent. of funds for British films, have now largely pulled out of production in this country, as many of us warned they would some years ago. They have gone home, leaving a vacuum. The result is that film production here is at its lowest ebb for many years. It is a vacuum that has been partly filled by the ponces and pimps and some occasional madams who pedal vice and obscenity, and who make sex dirty for a celluloid dollar.

I am totally opposed to censorship and am not altogether against pornography, but I think you have to believe in what you are making and you do not simply go out to make a dollar, which is what many of them are doing. The racketeers have moved in and that, I think, is a dangerous thing. The irony of the situation is that the habit of watching films has never been so popular. The difference is that people now watch them indoors on television. Films are now a staple and popular diet on the small screen. But in this field the danger is that we are rapidly using up our stocks, living on our capital of old films. Insufficient are being made. These have to be replaced.

There is, I believe, my Lords, a strong case for making a fourth channel on television available to film makers on a pay-as-you-view basis. This is being experimented with in the States, and I think it is something that could come here. I know that the Annan Committee have received submissions along these lines, and I hope they will consider them seriously. But film production cannot wait until the Annan Committee report in 1979; it needs some help now. What is needed is for Parliament and the Government to take steps to stimulate local production now. As I said at the beginning, this calls not so much for money as for a little Parliamentary time.

Specifically what we want is legislation to amend the Act setting up the British Film Production Fund, known as the Eady Levy. This Fund is a kind of tax on every seat sold in the cinema, the money from which is supposed to go back to stimulate British film production. In fact, most of the money has gone back to the distributors; very little of it has been used to finance production. A great deal of it never goes back into films at all. I should like to see some of that Eady Fund, just a small proportion, used specifically as seed-money to encourage writers and independent producers and help finance a British presence at overseas film festivals. The Government have already agreed in principle to much of this. We now need the Bill and the time. I am much reassured by some news that came to me this morning, that Parliamentary time may be found in the autumn. This idea of a script development and pre-production fund put forward by the Writers Guild, and which has the support of all sides of the industry, would at least help to get the wheels turning again but long-term finance is also necessary.

There is a source of finance which is not being used, money that comes from television, money that really ought to be recycled back into the entertainment industry. Every year the television companies pay a levy on their profits, some millions of pounds over and above their normal taxes. This money goes to the Exchequer, where it drops like a stone into the great pool of finance. I believe it should be paid into something like a development board for the film and for the Arts, where it could be recycled back into entertainment. It would be some kind of recompense to the industry for the extensive use of films on television, films that are badly paid for and which help to keep technicians and writers and other people out of work. A development board of this sort, financed from this profits levy, would mean that no money need come out of the Government's purse directly, and it would help to set the British film industry on the road again.

There are two further points that I should like to make in conclusion. I believe it is time we ended the rather absurd situation in which responsibility for film is divided between the Department of Trade and the Arts Ministry. It should be brought together under a Ministry of the Arts and the Media, which in turn ought to be given an enhanced status. I think that is something that makes common sense. The second point is this. For years British film production has staggered along from crisis to crisis with no real coherent strategy. It has gone up and down like Tower Bridge, but for reasons which are less convincing. I believe it is time we took a long look at the scene and planned for the future. I should therefore like to ask the Government to consider setting up a committee, similar to the Annan Committee, to investigate the industry in depth and to make long-term recommendations. I should like to see that committee charged to make a report within one year. I think if we surveyed the area properly we might at least make some sense out of this rather chaotic jungle that we now call the film industry. I often think it would be better if we could wipe out the film industry tonight and start again tomorrow on a really logical basis, knowing what we are looking for. But since that is not possible, I think it would be useful if a committee did sit down, almost for the first time, and examine this very important area.

My Lords, I have rushed through my speech. I am sorry to have taken so long, but the subject is important and we give too little time to it. I hope that the Government will listen. We have a good record in these matters from Labour Governments, from Harold Wilson who gave very great help to the film industry in 1949, through to the noble Baroness, Lady Lee, and the present Minister; and the noble Viscount, Lord Eccles, for the other side, also contributed a great deal at a critical time. Nobody is asking for much, just a little time and a little money to save the art of the threatre and film in Britain from stagnation, and perhaps even worse. As a nation we are at present rich in culture but poor in material resources perhaps, by Western standards at least. But there is an old Chinese proverb that we might hold in mind. It goes as follows: If you are poor and hungry and have only two pennies, spend one penny on bread and the other on a bunch of hyacinths. My Lords, I beg to move for Papers.

Lord ANNAN

My Lords, may I reassure the noble Lord before he sits down that, modest as I am in my expectations of the speed at which committees work, I sincerely hope that the Committee on the Future of Broadcasting will have finished its labours considerably before 1979.

6.10 p.m.

Lord AUCKLAND

My Lords, the House will be very grateful—and I mean that literally—to the noble Lord, Lord Willis, for having initiated this debate this afternoon. Seldom has there been a more opportune time than now for two of our most precious assets to be discussed. It is a time when many people feel gloomy about the economic situation of this country, and it is for this reason that any Government are in a difficulty about providing money for the Arts. At the same time, these are days when the people of this country need to be cheered up. They need relaxation, they need escapism; and by what better vehicle than the theatre or the cinema can they be given to the people of this country. The noble Lord has, of course, vast experience of the Arts in general; in writing, in the cinema, and in the theatre. I cannot claim any of these attributes except as a consumer, and as a former trustee of the theatre which the noble Lord mentioned, the Thorndike Theatre at Leatherhead. I shall return to that in a moment.

Turning first to the cinema, the British film is still a hallmark of quality. As the noble Lord rightly said, problems are such that more British films of the calibre that we have known cannot be turned out. I have had the privilege of visiting Pinewood Studios on two or three occasions, and to have seen several very fine British films being made. I should like to pay a tribute to all concerned with these and other British film studios who are at the present time working under the most difficult conditions—largely financial—which have been discussed in considerable detail by the noble Lord, Lord Willis. Therefore it does not need me to dwell on them very much, except to say that of course high taxation is the bugbear of so many aspiring British artistes in the cinema and the theatre.

It is difficult to calculate, for example, how many millions of pounds the Carry On films have made overseas. There is an enormous export potential. These are films which may not be to every taste but, at a time when we are striving to increase our exports, it is important to realise the enormous potential of these films. At the other end of the scale, historical films such as Cromwell and Nicholas and Alexandra, to mention just two, have brought enormous amounts of currency to this country. They have been shown in many countries, and have been extremely well received. But I should like to put to the noble Lord, Lord Strabolgi, who I know has done so much himself for the Arts, one point which may not be a Government matter. It is really disturbing to see, particularly at what might be called "tripartite" cinemas where one has three films showing at the same time, that all too often not one of the films is suitable for family showing. I wonder whether any sort of market research has been done into how many people really go to see these often very obscene and badly made films. Surely at least one of these three films could be of the calibre of some of the historical films or recent quality films from British studios. I know that this is not necessarily a Government responsibility, but I sincerely believe that if this were done it would bring people back into the cinema, and particularly those with families. After all, often the family unit makes the cinema what it is, or what it ought to be.

I turn now to the theatre. I declare an interest, although not a financial one, as a former trustee of the Thorndike Theatre at Leatherhead. I make no apology for spending a moment or two in talking about this particular theatre. It is, as the noble Lord, Lord Willis, has mentioned, a theatre of quality. The director, Hazel Vincent Wallace, whom I have known for some years, has turned this theatre into a place where plays of the highest quality can be seen. Every season there is at least one Shakespearian play, or a play by a great dramatist, such as Henrik Ibsen. I do not know the present average figures of attendance at this theatre for the season which is about to finish because I have not consulted the theatre management before this debate, but, on average, the attendance per season ranges between 85 per cent. and 90 per cent. of capacity. I believe that that is on the low side now; it may well be above that. For many of their productions it is 100 per cent.

In the year 1973–74 the Arts Council grant to this theatre was £46,400 and for that, of course, the theatre is very grateful, but it in no way compares with what is needed at the present time. The theatre started as a slummy little building—the Leatherhead Theatre Guild—in 1948, and the Thorndike Theatre moved to its present site about 10 years ago. Recently, on the occasion of the anniversary of the repertory theatre, we had a visit from Princess Alexandra and her husband. It was a most memorable evening, which of course did the theatre a great deal of good.

When compared with the West End theatre the prices are still extremely reasonable; but they will have to rise for reasons which the noble Lord has already put forward, and which will be quite apparent to your Lordships. Of course this goes for all repertory theatres. The important point about this particular theatre is the great loyalty of the actors, the designers, the producers and the stage hands to their theatre. This applies throughout to repertory. Certainly we at Leatherhead have the same actors and actresses coming back year after year, and they are subsidising the theatre. This is a point which has been made before in your Lordships' House in debates of this kind, and it is not unreasonable to make it again.

I now turn to Scotland. Another theatre I have had the pleasure of visiting is in the lovely Scottish town of Pitlochry. Here the Arts Council grant is somewhat lower. The productions there too are of a particularly high standard. Many tourists from all parts of the world are now going to Pitlochry and one of the first places they visit is the theatre. The invisible earning in dollars and other currency are enormous. I hope that the Government will give thought to this factor, even in a time of financial stringency such as we must all recognise.

The Theatre Royal at Stratford brings in an enormous amount of foreign currency. Americans and people from all parts of the world visit this theatre, a pleasure which I enjoy normally at least once every year. The standard of production in the British theatre today is as high as ever it was. Certainly in the repertory theatre it is, if anything, increasing in quality, despite the enormous difficulties which are placed on it.

In a debate of this kind, one cannot possibly explore everything. I hope that what I have said will get home to the Government that the theatre and the cinema provide an enormous source of income into this country from foreign visitors in spite of the fact that, for obvious reasons, they will find things more and more expensive this year, and possibly in the years to come, which is something common to most countries. My Lords, the House will be very grateful to the noble Lord, Lord Willis, for I believe that this debate could scarcely have come at a more opportune time.

6.23 p.m.

Lord BEAUMONT of WHITLEY

My Lords, I, too, welcome the debate, and I particularly look forward to the speech, as the noble Lord, Lord Willis, said, of the noble Lord, Lord Gibson. I had the pleasure of listening to him the other day at the Academy dinner. Although I did not entirely agree with all he said I was most interested and impressed with it, and I know that in this House we have a notable addition to the spokesmen on the Arts and on other matters. My gratitude to the noble Lord, Lord Willis, is somewhat tempered by the fact that if he had not been successful at this moment, I should be watching the new Pinter play at the National Theatre. However, I know my duties, and in fact it is against that background that I want to make my remarks. I find very frustrating the few nights I am able to go to the theatre, because it seems to me that this is the most brilliant theatre season we have had for a very long time.

We have gone through a slightly sticky patch in the recent past. There is hardly a bad play in the list, whether in the subsidised or the commercial theatre. The National Theatre is having a big comeback at the moment with Pinter, Shaw and Ibsen plays this season. The Royal Court seems to be having a terrific comeback; so many people are grateful for the season of Orton revivals, particularly those, like me, who were abroad when Orton was first writing and his work was being produced. There is the Aldwych with the magical production of Love's Labour's Lost. There is the commercial theatre, with plays like "A Family and its Fortune", and the fringe theatre now producing really good plays like Kennedy's Children. There are productions of real quality, and this is what we should keep our eyes on. This is something tremendously worth while; it is a flowering of British culture.

There are financial problems which are common to the whole nation, and no one pretends that the theatre must not take its own share of the burden. Nevertheless, I agreed with the noble Lords, Lord Willis and Lord Auckland, when they referred to exports and dollar earnings. The ways of the Treasury, not only in this area but in many others, have always seemed most peculiar to me. Not nearly enough attention seems to be paid, particularly at a time when we have run into considerable trouble with the balance of payments, to the industries which are earning money. If they were given a little help this could bring on a flow of dollars and keep it going. There is a tremendous case for the support of both the theatre and, to a lesser extent in this context, the film industries. I want to say something about VAT later, but I suggest that we really must make this a top priority.

In the short time at my disposal I should like to raise some minor points where I think we must plug away, because they are points where one can see that something can be done immediately. First, the provincial theatres must not be allowed to close. This is almost the first priority. Of course, the stars and the limelight are all in the West End, but it is based on this great new network of good provincial theatres which, 20 or 30 years ago, were not there. They are there now, although, as has been said, if one or two have to close their doors they may not open again. We must not allow this to happen. We all pay lip service to decentralisation and to encouraging the Arts in the Provinces. This is one way in which we can see it can happen.

Secondly, I should like to raise the point about the new National Theatre building. At last Parliament has recently passed, with support from all sides, a Motion willing the means to bring this almost unending saga to an end. I have just finished editing the diaries of James Agate for a new edition. Back in the 'thirties the same arguments were going on. Now we have nearly reached the end. Somehow matters seem to have become bogged down again. I do not know at whose door the blame is to be laid. The building is nearly finished; we must find some way of getting the National Theatre into its own premises. The shortage of finance must not be allowed to stand in the way.

I should also like to enter a plea for the Theatre Museum which has been the Cinderella for a long time, looking if not for a palace at least for a roof over its head. Now that Covent Garden has space available, backing should be given to the Theatre Museum people who have a desire to move into the flower Market in Covent Garden. It would be a much more suitable site than Somerset House, which is better than nothing; but the flower market would be much better and more suitable for the kind of exhibit which the Theatre Museum, by its nature, ought to have.

My Lords, I now turn to the film industry. I have the honour to be the President of the British Federation of Film Societies, a body which at this moment is celebrating its 50th anniversary. We discovered the other day that the noble Lord, Lord Goodman, was a member of the original Film Society in Regent Street which then became the London Film Society and which had Bernard Shaw and H. G. Wells as founder members. We now have over 600 societies all over the country, really interested in the film, keen on the film as an art. I have one or two remarks to make on behalf of that body. First, the problem of censorship which is bound to arise on the occasion of a debate like this although it is not the centre of it. I should like to make the point that the Federation is totally opposed to censorship of films for adults and bitterly regrets the GLC's decison not to abandon censorship in London. I make this point because I think it significant that a body of people who are not trendy, not "way out", who are very much educated in the difference between good and bad films, are themselves involved in the only real form of censorship which is self-censorship by self-education. They know there are plenty of bad films about and that there are plenty of films which are wrong; but who can you trust to make a decision like this? This is the point against censorship and it is a point on which the Federation feels strongly.

We feel also that a certain amount more help might be given by local authorities to film as an art. I think there is a feeling among local authorities that, because there are commercial cinemas, they need not do anything about film as an art. It would help if they could do so; because film is an art and needs help for those people who want to study it carefully. I remember a play some time ago in which there was the immortal line—at least, immortal to me; it has lived with me ever since—"We do not see many Hungarian films in Bury St. Edmunds." With the cutting clown of cinemas all over the place, one still does not see many Hungarian films in Bury St. Edmunds. I apologise to Bury St. Edmunds if I have selected a bad example. But it is true and I think that, if we are to have mature and responsible audiences for films—the kind of audiences which will choose in the market context to go to see the kind of films the noble Lord, Lord Auckland, wants without being forced to do so—if we can educate such an audience we shall be doing something worth while. The money produced by local authorities to help local art in the film world is as important as in any other world.

I should like to make one or two other points about films; first, the Film Archive. I still think—and no doubt the noble Lord, Lord Lloyd of Hampstead, will say something about this—that we must do more to improve the quantity and quality of the film we have in the National Film Archive. There is still considerable need for action. On 12th March, 1970 (in column 941) the noble Lord, Lord Strabolgi, said in this House. I am disappointed that the Films Bill does nothing to help the National Film Archive … There still is not enough being done to help the National Film Archive. I think there is still a need for action. We ought to have a situation where the National Film Archive can have a copy, a print, of every film just as the British Museum has a print of every book. I know that we are told that the expense for the print of a film is £300 or £400, as opposed to that of a book, but there are far fewer films produced. I do not think this is an overriding argument. Somewhere there appears to be a lack of willpower in dealing with this.

I welcome what the noble Lord, Lord Willis, said about applying money to writers and scripts and the seed-bed of the creative cinema. This is tremendously important because, as he said in another context about the theatre, when you get financial stringency then the thing which goes out of the window is experiment and people go for what is safe. There is a risk, I think, of this happening in the film industry at the moment. I am delighted to hear the hints that the noble Lord, Lord Willis, has dropped about what may be happening about this at the moment.

In closing, I come back, as I suppose we must all come back, to the financial position. I think that there is a very strong case for exemption from VAT. I myself—I do not speak for my Party—have always believed that VAT made sense only if it were applied without exemptions of any kind. I think that it rather destroys the nature of the tax by having any exemption. But we have exemptions; and if we have exemptions for books then there is no reason why we should not have them for the theatre. I would make the point, at the risk of undermining the plea for the theatre by widening the scope, that there is a very strong case for taking it away from films as well. After all, the old entertainment tax, which the noble Lord, Lord Willis, spoke of, was for both and it was removed from both. It is the better end of the film industry; it is the voluntary side where people are really interested in film as an art which finds it difficult to struggle on under the financial burdens. It is the people producing the easy and possibly not very good films who can shrug off the extra money. I hope that this will be sympathetically looked at. I am delighted to learn that the Chancellor of the Exchequer is personally sympathetic on this point.

Lord HARMAR-NICHOLLS

My Lords, my name is not on the list; but there is a point on which I should like to support what has been said by the noble Lord and by the noble Lord, Lord Willis. In another place I moved an Amendment to the Finance Bill to have the theatre excluded from VAT. For one fleeting moment we thought we had won, except that at the last minute in a Statement we were told that in terms of administering that tax it was vital that it should be all-embracing, with no, or hardly any, exemptions. But the promise was given—and I am raising the matter in the hope that it might reach the ears of the Treasury Bench at some time—and a very clear indication was given that, while it would not be included when VAT was inaugurated, if it could be seen that the fears that we expressed came into being, in future Finance Bills it would be looked at in the knowledge that the point had been proved by its operation. I felt that the speech by the noble Lord, Lord Willis, and now the speech of the noble Lord, Lord Beaumont of Whitley, makes the point which should be taken heed of by the Treasury Bench.

Lord BEAUMONT of WHITLEY

My Lords, we are grateful for the information that the noble Lord has given the House. I hope that the Ministers responsible will bear in mind this assurance that they have given, because the need is present. I am not pessimistic at all about the theatre or films, despite the problems that people on the ground must meet every day. There is this tremendous vitality at the moment, a vitality which comes from real quality going right throughout the theatre and the film world. It is right that all these worlds will have to play their part in the burdens we are facing now and which, unfortunately, I fear are going to be greater over the next year or two. But they must not be asked to bear more of their share of the burden and particularly so in view of their ability to earn foreign currency of every kind, visible and invisible, and the currency of prestige for this country. They must not be allowed to suffer in any irrevocable way.

6.40 p.m.

Lord GIBSON

My Lords, I am very glad that the theatre should be the subject on which I have the honour to address your Lordships' House for the first time, and I am very grateful to the noble Lord, Lord Willis, for making it possible. I am glad not because I am any authority on the theatre or, indeed, on any other art form. A few years as chairman of the Arts Council does not make a man an authority on anything. But it gives me a particular opportunity to appreciate the vitality in the Arts in this country to which the noble Lord, Lord Beaumont of Whitley, referred, and to note the development and spread of the Arts which has been made possible since the war by the injection of public funds.

This is especially true of the theatre. Your Lordships may recall that before the war Bernard Shaw always argued for a national theatre and wrote compellingly about the need for it. On one occasion he wrote that in England we had municipal morgues and national racecourses, but no municipal theatres and no national ones. He went on: In England you can get money for sport, for religion, for politics and for charity, but never for art, least of all the art of the theatre. He wound up: We are barbarians, which means not that we are indifferent to art, but that we actively dislike it. All that has now changed and is no longer a charge which could conceivably be levelled at this country and its people.

There are now some 60 repertory companies throughout this country. I should like to say how much I agree with the noble Lord, Lord Beaumont of Whitley, about their key importance as the core on which the whole thing rests. They have been built up with Arts Council and local authority support—not always in the proportions we should have wished, but I think it can be called a great success story. The quality is not even, but in many places it is extremely high, and in very few does it fall below a level which can be regarded as acceptable. In London the National Theatre has been created. There is the Royal Shakespeare Company at the Aldwych and at Strat ford, the English Stage Company, and a number of fine touring companies as well. All this, allied with much that has been done in the commercial theatre, is a great success story of which this country can be, and I believe is, very proud.

My Lords, there is only one main point I wish to make this afternoon—the only point I have time for in what are the right conventions of your Lordships' House for a maiden speech; obviously I must be short. I want to say, on the one hand, that I acknowledge absolutely the need for the utmost economy in public expenditure at this time. But there is a parallel need to invest, and it is very important in this country that we invest in the things we are good at, in the successes, and not in the failures. The theatre is a roaring success in this country, and it is renowned for its success all over the world. As has already been said in this debate, it brings in countless visitors, together with the foreign exchange they bring with them.

Therefore it is worth investing in the theatre. But if we are to invest successfully in the future of drama, the Arts Council, for its part, needs two things. It needs enough money to see its supported companies through difficult times, and it needs enough planning time—by which I mean enough advance notice of the amount of our grant in aid—to be able to give adequate warning where a grant to a particular company (perhaps because of higher priorities elsewhere) ought to be reduced or, in some cases, stopped. While often we need to provide funds to tide over a period while something which has gone wrong can be put right, the essential aim is to back success. By that I mean not only backing the successes of today, but to back the experiments which one thinks will be the successes of tomorrow. Otherwise we have a frustratingly static situation.

There are many new groups, often talented, which deserve help and feel keenly the injustices of too static a situation, whereby if you are not already on board it is extremely difficult to get on board. We have to avoid this, and to help new enterprises to come into being; and it is quite an explosive situation. It is possible to put this right only if the grant is increased in real terms and notified well ahead. We need, like the universities need, to get back toa—in our case triennial; in their case, I think, quinquennial—planning period, which broke down when this crisis broke upon us.

I am glad to say that I see signs that we are beginning to get back. Unfortunately, in the domain of the theatre our situation is complicated by the enormous cost of running the building on the South Bank which is to be occupied by the National Theatre. I regard it—I want to emphasise this—as a magnificent building and a huge national asset. But it is very costly to run, even before you get a company into it and performing plays. Our situation this year will be further complicated by the deficits which I fear many of our supported theatre companies will face, especially if audiences react un-unfavourably to higher seat prices, coupled, I am afraid, in some cases with less service.

If, my Lords, I say very little about the commercial theatre it is partly due to lack of time, but partly because my main responsibility is with the subsidised Arts; and certainly not because I disregard it. I want to make the point that the commercial and subsidised theatre are fully interdependent. Actors cross from one to the other. Shows which begin in the subsidised theatre often end un in the West End, and so on. Their interests are in no way opposed, and in that connection perhaps I can refer to the fact that the Arts Council has pledged its support to the Theatre Investment Fund—originally an idea of the noble Lord, Lord Goodman, who is the chairman. After endless delays, occasioned by technical matters, it is due to get off the ground towards the end of this summer. The purpose of it is to back commercial managements in taking risks with interesting plays; in other words, trying to safeguard the right to fail, which is in such jeopardy, and any profits will be ploughed back into the fund to enable further risks to be taken.

Meanwhile, all of this is in peril from inflation, which threatens the theatre as it threatens everything else, all our other national achievements. I give as one example of this problem perhaps the best example, the Royal Shakespeare Company. To keep it going this year at the same level of operation of last year would cost just over £1 million. This we cannot let it have. The company is therefore working to reduce the scale and level of operation, and it has got it down to a level which would cost about £880,000. But we cannot let it have that either. The most we can let it have is £680,000. The company tells me that if the extra money cannot be found somewhere, then at the end of the year it will have to close the Aldwych. While it will still operate at Stratford, it would be a great tragedy for it not to operate in London; and, if we are talking in purely material terms, a great deal of foreign exchange would be lost in consequence.

I do not want everything I say in this debate to be a moan, because I think that a great deal which is very encouraging is going on, and what we are saying this afternoon should be seen in proper perspective. Nevertheless, it is important to tell your Lordships that reports come to me from all over the country which indicate cuts in programmes and reductions in staff. I assure your Lordships that actors are not among those who price themselves out of jobs. In fact I very often ask myself whether they are not subsidising the theatre almost as much as the Government are. There are smaller casts, and tours to towns which are not provided with theatres are being reduced. There are fewer performances in schools, and so on—above all, playing safe by eschewing new plays.

But if we do not do new plays now there will be no theatre tomorrow. I need hardly labour that point to your Lordships. There are people who say that in times when you are up against it the theatre must take its share of the cuts with everybody else, and the immediate reaction might be to favour that point of view. But the fact is that whereas a siege economy helped us to win the war, the peace-time objective requires different weapons. I am all for austerity where it will help. But what we need now is to invest in those things which make this country a civilised place in which to live and an attractive place to come to. I think that the theatre is a powerful weapon in that fight and we should not neglect it. I should like to add my support to the plea for zero rating for VAT. I believe that the Chancellor will do it. It will cost the country very little when it is done, and it will relieve the theatre of an intolerable burden.

In short, my Lords, we must not let our theatre wilt. Our theatre is an asset which we have created and it will repay nourishment. We must make sure that that great building on the South Bank is not what actors call "dark". Frankly, the problem is to find enough money to enable the company to go there without depriving other theatres up and down the land of their fair share of public funds. So it all comes back to the need to ensure adequate finance and enough advance notice to enable the Arts Council to plan selectively.

Before I sit down, I should like to make a brief reference to what was said in another place last week by the Minister for the Arts. In answer to a Question, he stated that the Arts Council had got what it asked for in the way of grants in aid for the current year. He added, encouragingly for me, that if it was not enough no doubt we should be letting him know. As regards the first part of his reply, I have absolutely no wish to contradict the Minister, but I should add a little something from the Arts Council's point of view.

We did of course discuss with the Department of Education and Science last summer and autumn our likely needs based on the figures received from our supported enterprises. At that time, it seemed as though£25 million as a revenue grant might just see us through. We made it absolutely plain that we should have needed a great deal more to do what we wanted, but we were assured that £25 million would be extremely hard to get and that there was really no hope of going for any more. Your Lordships will not be surprised to learn that by the time £25 million was granted in March this year, it no longer looked enough. However, I am very much encouraged by the Minister's having said that we must let him know if it is not enough. I need hardly assure your Lordships that we are letting him know and, as he understands the theatre very well from his own experience, I have no doubt at all that he is doing all he can to help us. We must hope that he will succeed.

6.54 p.m.

Viscount ECCLES

My Lords, I count it one of the happiest occasions since I have been a Member of your Lordships' House to be the first to congratulate my noble friend Lord Gibson on his maiden speech. I remember that, when the noble Lord, Lord Goodman, expressed his desire to retire from a distinguished tenure of the chair of the Arts Council, I had many sleepless nights wondering whom we could invite to follow him. How fortunate we were that the noble Lord, Lord Gibson, came forward and has done three years of most remarkable service. Having heard his speech today, your Lordships will realise what a grasp he has of the whole business of the Arts Council. I know that he is an expert on other subjects as well and I hope we shall hear him on many occasions, both on the Arts and on other topics.

The noble Lord, Lord Willis, certainly deserves thanks for opening a debate in which the critical position of many theatres and cinemas is being exposed. I must say straight away that I think the financial position is perhaps worse than has been suggested to your Lordships. We all know that businesses like the theatre and the cinema are bound to be among the very first and worst victims of inflation. Of course they are not the only victims. One has only to put a stamp on a letter, to pay the rates or to order a ton of coal to know what is happening to everybody and every business in the country, and to realise that these are the kind of costs which not only have already afflicted the live Arts and the cinema but which are going to afflict them much more before long.

They are bound to be peculiarly vulnerable, because they so soon find that it is self-defeating to go on raising the prices of their seats in step with rising prices. Resistance sets in very much faster than it does with the consumption of the products of nationalised industries. The state of the finances of the theatre and cinema shows what wounds we give ourselves by surrendering week after week to wage demands far beyond the levels that would hold inflation at bay. Unemployment in these two arts is being created by those who are, with a nonchalance one cannot understand, deliberately stoking up inflation.

On the other hand, inflation is not the whole difficulty which the theatre and the cinema are facing. The larger theatres, the opera houses and the making of films have for some years provided examples of rocketing payments to the ancillary services on which the artists and performers depend. Comparing the pay of authors, actors, musicians and designers with the pay of the technical grades in the theatre, it is astonishing how far the performers are trailing behind. I must say plainly that it is not the business of any Government to find whatever money scene-shifters, electricians and camera crews choose to demand before they will allow a ballet to be put on or a picture to be made. I think we ought all to support those responsible for the Coliseum in their endeavours to knock sense into their union.

Having made that important point, it is now all too obvious that the present rate of inflation will soon bankrupt many places of entertainment, because their present difficulties are nothing like what will happen in the next six months. One asks: what can be done to help them? More than one noble Lord has suggested the removal of VAT. My noble friend Lord Harmar-Nicholls gave us some interesting information from the other place. I think the Government might make this gesture, but we need to look closely at its results. In the first place, it is very difficult to define what is and what is not Art; what qualifies for exemption and what does not. Secondly, though removal of VAT would bring some financial relief and, I would guess, still more relief from anxiety in the reduction of bureacracy, it would not meet the need.

For example, if one takes Covent Garden, which is the house which draws most money, the removal of VAT would add £170,000 a year to its budget and, provided that its total grants from the Government were not cut, that would be merely 4 per cent. of its expenditure. It may be—though I rather doubt it—that for some of the commercial theatres removal of VAT would represent a full 8 per cent. of their revenue. Even so, with inflation running at 20 per cent. and very likely to go higher still, a relief of 4 to 8 per cent. will not pay the bill. However, I hope the Government will find a tolerable way to exempt theatres and cinemas from VAT, especially because it would be a notable climb-down on the part of Ministers and would therefore represent a clear discrimination in favour of art.

For a moment or two, I now turn to the reasons why such discrimination is desirable. In spite of the optimistic things which have been said by the noble Lords, Lord Gibson, and Lord Beaumont of Whitley, our society, taken as a whole, still puts a low rating on art. Even the last war, H-bombs and all, did not change the general opinion that science is a necessity and art a luxury. How else can one explain the advice which Mr. Prentice, the Secretary of State for Education and Science, has just given to the universities to sell their treasures in order to keep up with inflation? One cannot doubt that Mr. Prentice thinks the teaching of science and technology and all the millions spent on scientific research much more important than the Arts. I also want the university science departments to be maintained, but not at the expense of the Arts—and that for some new and powerful reasons.

For decades our people have been taught to expect, year after year, a higher material standard of life. Now, with a sudden jolt, the process is coming to a halt. Nature's resources are not sufficient to allow consumption to rise indefinitely. It is not conceivable that the enormous populations of Asia, Africa and Latin America will ever be able to consume per head what the North Americans and Western Europeans consume today. Our old priorities of ever-increasing consumption of material goods will therefore no longer stand up, and we are compelled to reconsider the pattern of growth rather than continue staking everything on the rate of growth. It is this which thrusts into the centre of a policy-making those values and their related activities by which man must live, if he is to find satisfaction beyond the pursuit of money and what money can buy in terms of material goods.

There are many ways in which one can learn more about those values, and about ourselves and the world we live in. Art is one of those ways, and the theatre and the cinema are two potent forms of art. Drama, in whatever form it may be expressed, tells a story about the human condition. Quite recently, Mr. Huw Wheldon remarked that we learn much more about ourselves from stories than from statistics. The theatre and the cinema, if the scripts are written and performed by artists of talent, can help us to get inside other people's heads, to look at the situation with their eyes and to think for ourselves whether the story tackles the situation in the right way. We should not now be consenting to the disastrous rate of inflation if we had more concern for each other and a better understanding of how human affairs must be handled.

Very well then, my Lords. What forms of communication are we to choose? On which are we to put more emphasis, now that it is impossible to continue year after year with material growth? I think that rather than try to maintain the financial situation of art in its different forms, we have to discriminate in favour of forms of communication which can bring home to the widest public what we ought to be learning about the world and ourselves. The theatre ranks high among such means of communication. Let us ask the Chancellor to give up the revenue from VAT and add to the grants through the Arts Council, but not unless he cuts some other subsidy somewhere else. We cannot afford it. In the short run, there is really nothing else to be done than give larger subsidies in order to provide cash for companies on the edge of closure; but I submit that that will not do as a permament solution. Government subsidies carry no guarantee that the Arts will be spread across the population. They add one more dose of paternalism, of cash and control from the centre, whereas what we need is more participation by the public everywhere and less dependence on London and on the taxpayers' money.

I can think of a number of ways in which the Provinces and the London suburbs might be drawn into partnership in the spread of adult education and culture of all kinds. But any such suggestions are hardly worth making until inflation is stopped, the unions concerned with theatre technicians act reasonably, and a much higher place is given by Parliament and public to cultural policies that cannot be reckoned in material terms. I hope that this debate may do something to alter our priorities in that direction.

7.6 p.m.

The Earl of LONGFORD

My Lords, it is always a pleasure to follow the noble Viscount, Lord Eccles, and it is particularly agreeable to join in the cordial tributes given to the noble Lord, Lord Willis, who made such an arresting speech. I should also like to join in the congratulations to the noble Lord, Lord Gibson, who is such a deeply valued addition to our strength. I must keep within the limits imposed by an availability of 53 minutes for five speakers, and not exceed my ration. If I fail to develop some themes in a way which might have been hoped—or perhaps feared—let it be put down to lack of time.

I should like to submit four propositions, and if I do so a little dogmatically let time also decide that. First of all, I shall speak entirely about films and not the theatre—although when my brother died there was a minute's silence for him at the Dublin Theatre, and if any noble Lords (including myself) are likely to have a minute's silence for them when they die, they will be lucky. Therefore, I am not uninterested in the theatre but must confine myself to films. My first proposition is that a number of revolting films are being shown. Personally, I have no doubt that we are all deeply influenced by what we see, hear and read, and if we are subjected to a flow of filth over a period we are morally and psychologically damaged. The noble Lord, Lord Beaumont, may not altogether agree, but I am afraid I cannot stop to argue with my various friends and adversaries in the House. Leaving aside the effect of unpleasant films, can anyone doubt that a number of the films now being shown are a discredit to the film industry? Even those who are libertarians and therefore do not want to interfere with them call them "trashy". Personally, I would use much harsher words, such as "obscene and pornographic", the first two which come to mind.

Some of these films, though not all of them, certainly introduce an element of sadism or cruelty, which the noble Lord, Lord Willis, in a debate here in 1971, selected as a distinguishing mark of pornography. Today the noble Lord appears to be not altogether opposed to pornography, but I think he was using the word today in a slightly different sense from that in which he used it in 1971. He said clearly that the racketeers have moved in, and so he must be as disturbed as most of us are about the effect of these racketeers and the films which are their means of livelihood. I am certainly not denying that a number of excellent films are being shown: they are often high-class films, completely immune from this kind of criticism. I would surmise, after taking some advice, that the clean films are getting cleaner and the dirty films are getting dirtier—though they cannot get much dirtier than they are now. That seems to sum up the situation more or less accurately.

I read with interest a letter in Cinema/TV Today for Saturday 3rd May, in which Mr. Kevin Francis, managing director of Tyburn Film Productions Limited, Pinewood Studios, made a strong protest at the failure of the BBC to distinguish between the British film industry as a whole, and what he called "the gutter end". He referred to the regrettable operations of the "sexploitation film makers". That is the opinion of Mr. Francis who ought to know something about it. However you like to quantify this "gutter end", there is no denying that it exists and is very prominent in the minds of some of these very expert gentlemen.

My second proposition fits in closely with the complaint made by Mr. Francis. I submit that bad money, here as elsewhere, drives out good, and that dirty films are a threat to clean ones. Some members of the industry will rate the threat higher than others, but it can hardly be denied that the threat is there. It can overate in various ways—either directly by cutting into the market, or indirectly by driving out of the profession a number of talented actors and actresses who refuse to participate in this unhealthy kind of fun.

Thirdly, I would point out that the law affecting films and our film censorship arrangements are quite beyond the understanding of the public; in fact, they are in a state of palpable confusion. But I must not go into that subject at any length. It is imagined by most of the public that the Board of Film Censors have the last word as to whether or not a film should be shown. We sophisticated people know that that is not so, but that the last word rests with the local authority who, of course, are subject to the law of the land. In practice, the public idea is not far from what occurred until just recently, when the decisions of the Board of Film Censors were generally accepted. Films were exempted wholly, mainly because this issue cannot be said to have been finally settled in the courts. For this reason they were exempted from the application of the Obscene Publications Act 1959. We were already supposed to have effective film censorship.

More recently, the majority of the viewing board of the GLC have set out deliberately, explicitly and sincerely to make nonsense of the existing film censorship with a view to getting it removed altogether. The attempt to induce the GLC as a whole to reject all forms of censorship for adults was narrowly defeated, but I do not live in a fool's paradise and I am aware that the battle continues. What has emerged more recently, which to some of us is more encouraging, is a clearer recognition of the existence of powers under Common Law to prosecute indecent films. These powers were referred to in 1959 by the Solicitor General of the time in supporting the Obscene Publications Act, but pointed out explicitly that the Common Law against indecency would continue to apply. That conception seems to have faded. It was not clear to most of us when we were involved in a prolonged inquiry into pornography between 1971 and 1972.

When I look back to what I said (with a good deal of official assistance) in this House in 1971 I could not be said to have laboured the existence of these powers, though I used words which could cover them. Now, however, this power to prosecute an indecent film at Common Law seems to be generally accepted. A case (the first of its kind) is being brought under the Common Law against a film publicly exhibited. It follows a complaint to the Commissioner of Police made by a friend of mine, Mr. Raymond Gladwell, with my support as long ago as last August. I believe the case is to be heard on 4th June. That itself is rather extraordinary. It will have taken from August when the complaint was made, until June for the case to be heard. That delay is more encouraging to the exhibitors of pornographic films than to those who want to bring them to book. But in fairness to the police I would remind the House that the film was, in fact, seized and has not been shown since.

My time is nearly up so I will state my fourth proposition even more dogmatically than the others. We need a clearer and firmer law with regard to obscene and indecent films, and with those, of course, I include those whose appeal is more cruel than sexual, though quite a number of films possess both defects. We need effective arrangements for censorship in which the public interest is represented much more widely than it is now. Those are changes which would require a great deal of discussion and argument to bring them about, but I hope we shall see them effected. I put to the Minister who is to reply to this debate that the immediate necessity is for much more positive recognition than existed until recently of the fact that Common Law does indeed apply to indecent films. We need a much more active policy of making use of those powers. As regards these points, particularly the last one, I hope there will be general agreement not only among the public, but among the vast majority of the British film industry with their high professional standards and their artistic ideals.

7.17 p.m.

Lord COTTESLOE

My Lords, I shall not attempt to follow the noble Earl, Lord Longford, into the field of the pornographic film. I am very glad that the noble Lord, Lord Willis, has raised this matter in your Lordships' House. It is a particular pleasure that we have thus been enabled to listen to the noble Lord, Lord Gibson, making a most admirable maiden speech on which we should all wish to congratulate him. My Lords, if I am not mistaken, the Arts Council, of which he is the chairman, is required by its charter to spread the knowledge of the Fine Arts and to raise the standards of performance. That function, which it has so admirably performed for the last 30 years, makes it especially important that it should just now flourish in the face of all our economic difficulties. The world in which we live, balanced as we are on a knife-edge between severe inflation and hyper-inflation—inflation out of control—is for nearly all of us alarming. Inevitably it induces in those who are able to see beyond the end of their nose a mood of severe anxiety and depression. This makes it a matter of especial importance at present that the Arts should be enabled to exert their civilising influence, not indeed as escapism from the critical state of our economic and political affairs, but to buoy up our spirits through a difficult and depressing time.

In my view the wage inflation from which we suffer today gives us a great opportunity to widen the public for the Arts—a public already much enlarged in recent years in the field of the visual Arts. The crowds and the queues that flocked to the Turner exhibition, to the Chinese exhibition, to the Tutankhamen exhibition, for example, bear witness to that. That could hardly have happened 15 or 20 years ago. There is now a great opportunity in the fields of music and of drama. I will exaggerate for the sake of illustration. If the rich who have no money, taxed as they are to 98 per cent. and about to be taxed to over 100 per cent., can no longer afford to go to the theatre or to the opera as often as they once did, and if the middle classes, who were once their greatest support, are now largely being squeezed out of existence, there is nevertheless a vast potential public in the working man—to use that monstrous phrase which implies that manual labour is the only form of work—with his £50, £60 or £80 a week; and no less in what I may call the secretarial classes, too—those young ladies, particularly, many of whom live at home on what a few years ago would have been regarded as princely salaries; and many others. There is the opportunity and it is up to the Arts Council and up to the theatres and concert halls up and down the country to seize that opportunity and attract these new audiences. This is indeed already happening, but the process must be accelerated and reinforced. High-powered salesmanship is the modern idiom, and the Arts must be sold to the new audiences, to the new rich.

May I turn now to a facet of this problem, the National Theatre, in which I have a special interest—not indeed an interest of any kind that requires me to declare it to your Lordships but an interest as chairman of the board commissioned to design and build the National Theatre, that superb architectural concept of Denys Lasdun, the realisation of which is now approaching completion on the South Bank alongside Waterloo Bridge. I have heard it said that when the National Theatre Company expands to fill the new building, a building that will house in three auditoriums audiences that total some 2,400, three times as many as can be seated in the Old Vic, that will have a disastrous effect on the audiences for the other London theatres. I do not believe a word of it. The effect of this company playing repertory to standards as high as any in the world, sending their productions on tour, receiving productions from elsewhere, can only be to stimulate and enlarge the audience for the theatre generally. It will, in my belief, be wholly beneficial. This makes me all the more anxious that the move from the Old Vic to the new building, a move that will necessarily be phased over a period, should begin as soon as possible.

Before the end of the year one of the two main theatres in the new building, the Lyttelton Theatre, will be available for use. There will be dressing-rooms, rehearsal rooms and facilities far superior to those at the Old Vic. There are already available offices a great deal more commodious and comfortable than the subhuman hutments in Aquinas Street in which Peter Hall and his National Theatre Company labour, doing marvellous work despite severe physical limitations. Early next year the Olivier Theatre, with its open stage and arena seating and every modern technical device, will be available; and it is, in my view, essential, both to the morale of the company and also to the most rapid and economical completion of the building itself, that the process of moving in should begin as soon as may be and pressed forward to completion as quickly as possible.

Of course, the move from the Old Vic will cost something, indeed a considerable sum. Of course, the larger and more commodious buildings, the more flexible theatres, will cost more to run. They will also draw more money to the box office, though not enough wholly to offset the increased costs, and more subsidies in our present financial straits must go much against the grain. But to spend £14 million or more (when it is complete the public will see they have value for their money) on a building to enable the finest dramatic company in this country, that is to say the finest in the world, to be so housed that it can operate to the most modern standards, and then to say that the relatively minor sums to enable it to do so cannot be found—to leave the great new building standing empty, and costing some thousands of pounds a week even standing empty—would be lunacy. I can use no other word.

I hope that the Minister when he comes to reply will be able to tell us that the phased move into the new building may start to go forward this year, for if not I very much fear that the financial stringency next year will be still greater and the cost of the move will certainly be a great deal more. My Lords, I sometimes suffer from an unhappy nightmare in which I see this great and splendid building standing empty for a decade—another Centre Point, a public scandal for all to see and to reflect on the false sense of values that puts the Arts at the end of the queue. But, mercifully, bad dreams do not always come true; and I should like to leave this thought in your Lordships' minds: that the more miserable the state of the nation, the greater is the need for the Arts.

7.26 p.m.

Lord BIRKETT

My Lords, I am pleased that the noble Lord, Lord Willis, should have linked the cinema and the theatre in this debate, because I have come to believe more and more that today the Arts must always be considered as a whole. I am no longer much of a practising film maker, but it depresses me enormously to see the state of the film industry as described so graphically by the noble Lord, Lord Willis, and indeed by the noble Lord, Lord Beaumont of Whitley. It may be said in the future that an art is not without honour save in its own century. The cinema is indeed the only great new art of the 20th century, the only invention, and yet it is the one that receives probably less support and less attention than any other.

Of course the Archive is in need of support; the film societies are in need of support; the art of the film—and it is, of course, an art—is in need of support up and down the land. But without a flourishing commercial film industry these things are merely the periphery. It is true that the commercial film industry, which is in a state of near collapse, has in many ways only itself to blame. It has been often unrealistic, often plainly greedy. It has relied for far too long upon the apparently irremovable American dollar, which, when it was removed, left a great, gaping hole in British film finance. Nevertheless, the lack of genuine British film finance is something which is, perhaps, more easily understood than blamed.

Statistics have shown almost throughout the life of film-making that the chances of making a successful film, with the best will in the world—I am excluding all those unpleasant films to which the noble Earl, Lord Longford, referred—are about one in five. It therefore stands to reason that if you are to finance films you must finance five at once if you want to be successful. Yet, of course, it is only human, if somebody offers you a bottle of wine, to say: "Before I order a dozen, let me have just a sip of that one." That has been the way with films. So many potential sources of film finance have been tempted into making one film. They have failed and have shut their doors for ever upon the idea of film-making. So it is natural that any form of scheme which will make a film industry again a viable proposition in Great Britain must be on a nationwide scale. That is why I beg your Lordships to take note of the nationwide schemes to which the noble Lord, Lord Willis, referred as being the only way of looking at the recovery of the British film industry. It must be on a nationwide scale.

So far as the theatre is concerned, I must indeed declare an interest, for I am the Deputy Director of the National Theatre. I wish it were possible without distorting the meaning of words to declare a passionate interest, because it is, as the noble Lord, Lord Cottesloe, has pointed out, a very exciting moment in the history of the National Theatre. I stood yesterday in the Lyttelton Theatre, the one most far advanced, It was carpeted; the seats were in; the theatre was warm; the lights were on. It was tempting to whisper a line from the footlights and feel one had already opened the theatre. It is that close. And, indeed, we are surrounded with good will. In another place the Minister for the Arts has repeatedly stated his own excitement with the project, his determination that the building shall be occupied and fully used. Today, the noble Lord, Lord Gibson, expressed his own excitement with the building. It is a great pleasure to be able to join other speakers in congratulating the noble Lord on such an eminently sensible and well-informed maiden speech. I do not wish to terrify the noble Lord, but I think it is only reasonable to say that from this moment forth no debate in your Lordships' House on the Arts will be complete without him.

Support and, indeed, warmth towards the new project comes from all sides—from the Arts Council itself and from all its officers. Yet about the dire question of when and how the National Theatre is to move into the new building there is what can only be described as a deafening silence. We are all more than aware of the financial stringencies. This afternoon we have heard far more authoritatively from the noble Lord, Lord Gibson, and the noble Lord, Lord Cottesloe, about the way things stand. However, it is only fair to point out that in the subsidised world of the Arts in relation to the rest of Europe Britain has a fairly proud record. It is not only the amount of money which is important but what is done with it. I suppose the easiest instance to give is not the world of the theatre or of the cinema but the world of orchestral music. For example, the great orchestras of Paris, Berlin and Amsterdam receive an enormous subsidy which represents 80 per cent. of their annual income. They rely upon the public and upon earnings for only 20 per cent. of their income. In England, it is quite the other way around. It is we who are subsidising the Arts to the tune of 20 per cent. We must look to the public and to other forms of income for the other 80 per cent.

To take three particular orchestras is a slightly extreme example; when one comes to the theatre it is much more down the middle. However, the target of the British theatre, from Covent Garden to the National Theatre and all the great subsidised companies of, pound for pound, making the subsidy work for you, is something which would surprise a number of far more highly subsidised Continental theatres belonging to towns which are infinitely smaller than London. I say, therefore, that this country has a proud record in the way that it uses the subsidy which it receives from the public purse. Indeed, so far as the South Bank is concerned, we aim for the same target. Although we shall have three auditoria, we still aim towards a pound for pound subsidy. Although we have three times the playing capacity, we have to cope with 10 times the building space. The noble Lord, Lord Gibson, referred to the alarming prospect of the expense of the building, but that is now beyond alteration. Indeed, it has always been known that the building would be more expensive. We are also urged continually to earn more money, if we canto spin out the public pound as far as it will go—and it is only right that we should be urged to do so.

It is asked why we do not exploit our work more on television and on film. I can probably speak for the other subsidised theatres as well when I say that we are all keen to do so. The BBC and the ITV are very co-operative, but they have their own problems. The BBC has a repertory of its own. It cannot rely simply upon the subsidised theatres of Great Britain to provide it with its drama. ITV has to look to its advertisers, its billings and its ratings, and very often is interested in our work only if it is a guaranteed success or contains a star name. Often, therefore, we find that, however much we desire to exploit our work, the means are not there to do so. Although I should hate to take issue with the noble Lord, Lord Willis, about what to do with the fourth channel—particularly in the absence of the noble Lord, Lord Annan—before the question is decided I think serious consideration ought to be given to whether the fourth channel might not find an enormous reservoir of talent in the subsidised Arts of Great Britain, and, indeed, a reservoir of product which could keep it going for a considerable amount of its time. Nobody should be monopolistic about the fourth channel, but it is something to which serious consideration must be given before any decision is made.

Apart from anything else, the cross-fertilisation of the Arts—between television, between film, between theatre—is something which is growing every day. In this connection I am sad and, indeed, slightly alarmed that the noble Lord, Lord Willis, should be so perturbed about the connection of my colleague Peter Hall with the television programme "Aquarius", which I am sure everyone will agree is one of the most distinguished television programmes about the Arts ever to be invented. From the point of view of the National Theatre, I regard this move as beneficial. I can see nothing but good coming from a direct connection with a friendly neighbour whose interest in the Arts is growing all the time. I regard "Aquarius" and similar programmes as a kind of artistic crossroads, and the artistic traffic that passes through that studio, both in the form of pre-recorded film and "live" personalities, is such that I cannot but believe that both London Weekend Television and the National Theatre will be much enriched by this connection.

It is important to point out that the amount of time involved is not as alarming as the noble Lord, Lord Willis, implied. This confusion may arise simply because of the immense distinction of Mr. Hall's predecessor on the programme, Humphrey Burton. Humphrey Burton, who made such a distinguished programme out of "Aquarius", not only introduced it but half invented it, half wrote it, edited it, produced it, acted in an executive capacity and was, indeed, the only begetter of the programme. He had a very good staff with him, but he was the only begetter of the programme. That is not so with Peter Hall. He will not be the producer of it; he will not be the writer of it; indeed, he will not be the maker of the programme. He will merely be the presenter of the programme. That is to say, he will introduce those items which have already been filmed or recorded and will chair those discussions and events which are "live" as the programme goes out once a week or once a fortnight, as the case may be. Therefore, I do not believe that the amount of time involved will be alarming.

Thirdly, it should be said that Mr. Hall has had an enormously distinguished career and has worked under enormous pressure in every known media. He flourishes in these conditions and, what is more important for us, his talent flourishes in these conditions. It is unthinkable that he would accept any job which could for a moment prejudice the completion of the task before him of leading the National Theatre into the great building on the South Bank. For him, as for the rest of us, this is surely the most exciting theatrical project with which we shall ever be faced.

7.37 p.m.

Lord LLOYD of HAMPSTEAD

My Lords, I propose to concentrate my brief remarks upon the cinema. Nevertheless, I should like to express my gratification that my noble friend Lord Willis has brought the two subjects of the cinema and the theatre together, because it seems to me that they are very closely connected. Although I have no intention whatsoever of seeking to arbitrate between my noble friend Lord Willis and the noble Lord, Lord Birkett, on the subject of Mr. Peter Hall, I should like to say that this close connection between the film and the drama was very well brought out by the fact that at the London Film Festival we had the great advantage of having Mr. Peter Hall's distinguished film Akenfield as our opening film. And very well received it was—as, indeed, one would expect, coming from so distinguished a director.

My interest in the film comes not exclusively but to a large extent from being chairman of the British Film Institute and also of the National Film School. In those capacities, I am very well aware that the main problem facing the cinema in this country at the moment is the vanishing supply of British films, especially films of quality. This is the fundamental problem. The British Film Institute is not directly concerned with trade matters. Nevertheless, as the noble Lord, Lord Birkett, pointed out, the art of the film and the industry of filmmaking are so closely connected that it is a matter of the deepest concern to the British Film Institute that there should be this tremendous decline of the industry in the last few years, because without a healthy indigenous film production the art of the film cannot possibly be adequately fostered in this country.

So far as the National Film School is concerned, that is a body subsidised by the Ministry for the Arts for the purpose of providing a supply of creative talent and skill for the film industry, and naturally it is of the deepest concern to all those who are connected with the film school that it is in the present state of the industry that it should have begun its enterprise—a very imaginative enterprise the origin of which is owed to the previous Labour Government. It was in fact implemented by the subsequent Conservative Government, and the noble Viscount, Lord Eccles, gave it the most valuable support in its early years. Clearly, that enterprise is seriously threatened if there are no adequate outlets for the creative talents which are now beginning to emerge from that school.

The cinema has long been recognised as rather the Cinderella of the Arts in this country, very different from most other film-producing countries, such as France, Germany and Italy. But attitudes are changing in this country, and indeed there is an immense demand for quality films at the present day, and particularly among the younger generation. This again makes it particularly tragic that at this time, nevertheless, there is such a manifest decline in the production of British films. When the present Government came into Office in March 1974 a very hopeful note was struck, both by Mr. Deakins on behalf of the Department of Trade and by Mr. Hugh Jenkins, the Minister for the Arts. Mr. Deakins declared that he had been an enthusiastic member of the British Film Institute since 1965 and regarded film as the greatest art of the 20th century. Mr. Jenkins also expressed great concern over the future of the film in this country.

I feel it may be appropriate to remind your Lordships of the existence of some legislation which is still on the Statute Book and which was passed in the last Labour Government's term of Office—the Films Act 1970, one provision of which was to provide for the possibility of advancing a further £5 million to the rolling fund of the National Film Corporation, a body which was initially set up by no less a person than Mr. Harold Wilson in 1949 with the direct object of fostering the making of films in this country. Therefore in 1970, at any rate, the Labour Government were clearly strongly in favour of making further funds available, particularly in view of one unhappy factor which had been anticipated by many people in this country, but which somehow seemed no less dramatic when it actually occurred—the sudden departure of American finance from British film-making.

Unfortunately, following the General Election which then occurred the incoming Conservative Government did not see fit to make effective use of that Act, in fact advancing only £1 million to the industry. This sum was totally inadequate. Now we have the virtual collapse of serious film production in this country because of a lack of adequate sources of finance. Every important film-making country in the world realises that filmmaking cannot survive without some form of assistance. In France, for example, in 1974 a sum of £16 million was provided by the Government to a fund to assist the industry. All over the world in filmmaking countries it is realised that assistance must be given. Those who are familiar with the film scene in Canada and Australia, for example, will know that there are active moves afoot at the present time—and I know that my noble friend Ted Willis is closely familiar with the Australian scene—to make available funds to assist film-making and to help to establish the film industry in those countries.

In this country there is a vast fund of creative talent directed towards the film and anxious to participate in it. We have outstanding directors—people like Karel Reisz, John Schlesinger, Joseph Losey, Lindsay Anderson and many others. Unfortunately, one finds that at the present time they either go to other countries to make their films or they abandon filmmaking altogether, though not from choice. British film-making has played an honourable role in the whole history of the cinema and has greatly contributed to our international prestige. I venture to think it would be a tragedy if we were to allow the art of film-making to die in this country.

My Lords, there have been many proposals of varying merit as to the way in which the situation might be met. I have not time this evening to discuss these various alternatives. For example, it has been suggested that there might be a levy on television money in order to support film-making, and the use of the Eady levy has been suggested. My noble friend Lord Willis made reference to this. The detailed scheme put forward by Mr. Leon Clore not very long ago excited a great deal of public interest. Again, there is the question of possible recourse to the balance which is still tied up under the Films Act 1970. I cannot evaluate or appraise the matters this evening, but I should like to ask whether we can have some assurance from the Government that these matters are being carefully considered and appraised, and that a plan is to emerge that will afford some important relief to the film industry and get it going again, which is the essential thing.

Some of your Lordships will possibly have been encouraged, as I have been, by the rumours which appeared in the Press and elsewhere a few days ago that some discussions which were alleged to be about to take place at No. 10 Downing Street might possibly produce a solution. I was encouraged because as late as this afternoon I discovered an article in the Evening Standard—I hasten to say that I do not believe everything I read in the newspapers, but this originated from a gentleman who can usually be regarded as a reliable source of information, the Evening Standard film critic, Mr. Alexander Walker. He indicates that this discussion has taken place and that certain concrete proposals (and I have not time to go into the details) have been put forward. It is my hope that this debate will not conclude without some information emanating from our Front Bench by way of confirming or explaining what apparently is under consideration, because this is a matter of the very greatest moment to the survival of the film industry. It is no good a rescue plan being brought along after the patient has already died, and the patient is certainly in the very last stages as things stand at the present moment.

I urge that the House should be given some authoritative revelations as to what the Government foresee as the appropriate policy. Equally, we should like to be told whether the Government have had any further thoughts on these matters which have been much discussed, as to whether what is needed is some more comprehensive Ministry to deal with the whole range of the Arts, including matters such as film-making. At present matters are spread among different Ministries. The Minister for the Arts deals with the art of the film as well as the Arts Council; we have the Department of Trade which deals with film as a piece of celluloid in a tin can; we have the Home Office which deals with television, and so on. Would it not be more satisfactory and desirable to have all these different aspects of the Arts brought under one Ministry, which should be upgraded to give due importance to the Arts? If we did this, we should be following a pattern well established in most Continental countries.

The noble Viscount, Lord Eccles, will recall the visit a few years ago of M. Druon, when he was Minister of the Arts in France. I remember his astonishment, and that of his officials, too, that our Minister for the Arts was not concerned with aspects of film production because this was regarded as a trade and not as an Arts matter. To the French, this was quite baffling. I suggest that if all these matters were put together as the function of a single Ministry, it would be of inestimable value. My Lords, I think I have exceeded my time, and I make all due apologies if I have. In conclusion, I would emphasise that much gratification will be given to those who have the future of the cinema in this country at heart if the noble Lord the Minister can this evening give some further assurances that what has emerged in the Press so far is not entirely speculative but is based on some solid plan.

7.52 p.m.

Lord VIVIAN

My Lords, my name appearing at the end of the list of speakers, I have the unenviable task of speaking to beat the clock. I wish first to thank the noble Lord, Lord Willis, for having sponsored this debate today. The noble Lord has the distinction of being a craftsman, not only in the world of theatre but in the world of the cinema and in the sphere of television. We are indeed fortunate to have him as a Member of your Lordships' House. From time to time we are also blessed in this Chamber with the advice of the brilliant playwright and author, the noble Lord, Lord Snow, and occasionally we hear from that superb actor, the noble Lord, Lord Olivier. I am smaller fry. I have now retired from the glamorous but nerve-racking world of the theatre.

My Lords, in a few months' time, I shall have reached the age of three score years and ten, and frequently I look back with great pride to the 37 years spent in the world of the theatre. During that time I had the honour to present several large musicals with that grand and greatly revered showman, the late Sir Charles Cochran. Prior to that, I presented intimate revues and musical shows with the gifted impresario André Charlot. My career in the theatre was during a period when we did not suffer the hardships which the theatre has to face today. As things are now, the theatre is finding it very difficult to survive. Your Lordships have heard what other noble Lords have said, but I wish to speak in even stronger terms, for the theatre of today is in dire financial trouble and is proving to be Heartbreak House. It needs a massive blood transfusion from the Chancellor of the Exchequer, the right honourable gentleman Mr. Healey, to stem a head-on crash of great magnitude.

If the theatre is to survive, and survive it must, Her Majesty's Government should bend over backwards to relieve as far as possible the restrictions surrounding it. They should lighten to a major extent, or remove altogether, the high rate of VAT by which the theatre is weighed down. The theatre plays a major role in the life of the community, and for the greater part this factor is grossly underrated. The theatre always shines and gives of its best in times of crisis, such as we are experiencing at the moment. I ask your Lordships to think just for a moment of the great part played by the theatre in the last World War. Not only did it help to keep up the morale of our Armed Forces; it also took out of themselves the people who had to remain at home in the big cities. It allayed their fears and cased their tragedies; deed, it had the power of lifting them from their sorrows, even if only for a few hours. It was with a great sense of duty that the theatre achieved this.

Today the theatre is bravely carrying on with the weight loaded against it. I submit that during the past three years or so, we have been going through a period of bloodless revolution in this country. This has not helped the theatre and all those who are closely connected with it. Mention of revolution reminds me of how the theatre carried on during the French Revolution. Amid the terror of riots, starvation, the fall of the Bastille, and while Madame la Guillotine lopped off heads to the cries of "A bas, les Aristos!", that great French actor M. Talma played to capacity in his own theatre, the Bouffes Parisiennes. But it is not the same story in the theatre today. In a great number of instances theatres are playing to poor houses, except in the case of a few smash hits. Finance in the theatre is now somewhat difficult to raise owing to the high cost of production and the further heavy overheads in the actual running of the show.

To give the House an illustration of what I mean, I would mention a big musical success that the late Sir Charles Cochran and I presented at the Adelphi Theatre a number of years ago. The show was called Bless the Bride, that masterpiece of theatre by the lovable A. P. Herbert, with music written by the gifted composer Vivian Ellis, and it ran for nearly three years. In those days, the cost of production was some £43,000. Today the production costs would be double, well over £100,000, and the overheads of running it would have quadrupled. May I give another instance of the financial problems facing the theatre today? I mention the fact that a successful show at present running in the West End last week took £7,500 at the box office, but it can show a profit of only £123 on the week.

Lord MELCHETT

My Lords, I apologise for interrupting the noble Lord, Lord Vivian, but time is short. I know that my noble friend Lord Strabolgi would like to be able to reply to everyone who has taken part in the debate, which will have to finish at 18 minutes past eight.

7.59 p.m.

Lord STRABOLGI

My Lords, I am grateful to the noble Lord, Lord Vivian, for giving way, and also for giving us such an excellent speech in such a short while. We are grateful to the noble Lord, Lord Willis, for proposing this Motion which has given rise to a very interesting debate. I must say that I was very interested in the Chinese proverb he quoted. I read it many years ago when I was a boy, and perhaps the noble Lord will not mind if I finish it for him. The proverb says that you should spend the remainder of your money on hyacinths, and here I add "because they are food for the soul". I must also congratulate the noble Lord, Lord Gibson, on his maiden speech. I agree with the noble Viscount, Lord Eccles. that it is one of the best we have heard in the House, and I hope that we shall have the pleasure of hearing the noble Lord, who, of course, is chairman of the Arts Council, on many occasions in these Arts debates.

My Lords, this has, as I say, been a very interesting debate and noble Lords have raised many matters. I want to deal first, if I may, with the theatre. It may help the House if I put the difficulties of the theatre—and the Government readily accept that there are difficulties at present, in common, of course, with many other facets of our national life—in a broader context. Commercial or subsidised, all theatres, of course, suffer at present from the difficulties over money that the Arts are experiencing. As has been said, the performing Arts are particularly vulnerable to increased costs at present, because they are labour intensive. They are having to face demands by the performer for a greater financial reward for his efforts, one that is more in keeping with the levels of remuneration elsewhere. In addition, the subsidised theatre accounts for a large share of Arts Council resources, and the Council itself has to act as the main deficit financier of the Arts at a time when existing levels of box office receipts and income from other sources—mainly, of course, local authorities, and some sponsorship—cannot always be taken for granted.

I shall come in a minute to VAT, which has been referred to in almost every speech, and its connection with the theatre. But I must first answer some of the allegations to the effect that the Arts, particularly the performing Arts, are threatening to collapse tomorrow. Indeed, the noble Lord, Lord Beaumont of Whitley, and the noble Lord, Lord Gibson, remarked specifically on the brilliance of the London theatre season. I was particularly struck with what the noble Lord, Lord Cottesloe, said about having to attract new audiences. I am rather surprised, in a way, that the noble Lord, Lord Willis, did not include music in his Motion, because as the noble Lord, Lord Cottesloe, said, there are, of course, many opportunities for attracting more audiences to hear music in which I think London is pre-eminent. Indeed, I think that tastes change, and while I regret to say that many cinemas are empty, I went on Sunday to a concert at the Royal Festival Hall, of the LPO playing Mahler's Ninth Symphony, which was absolutely packed with an enthusiastic audience, mostly consisting of young people. It was indeed a most moving occasion. But in spite of this, and new trends and fashions, the Government are aware of many dangers.

My honourable friend the Minister for the Arts has provided a grant for the Arts Council this year of over £26 million, of which £25 million is for recurrent expenditure. The grant, I must say, is 22½ per cent. larger that that for last year, and the Government's intention, which they have made plain to the Council, is that they could and should manage their commitments within this total, although we will take particular note of what the noble Lord, Lord Gibson, has said, and I will certainly pass this on to my honourable friend. But it is generally a question of striving within these resources to the best of our ability to overcome the present problems in the theatre so far as these impinge on the Council. As the noble Lord, Lord Gibson, as chairman, is aware, he has a ready ear in Belgrave Square.

The Council have undoubtedly been helped by the supplementary grants of £2.5 million which Parliament agreed to authorise for the Council last year and this year, and which have enabled their clients, including the theatre, to start the period 1975–76 without significant debts. Over the last two years the proportions of the subsidy and receipts from the box office, based on a representative sample of theatres, have remained fairly constant, with the box office income increasing in some cases. This, I submit, is not a sign of imminent collapse and closure all round, as some people would have us believe.

My honourable friend and I realise the disappointment felt at the decision by the Chancellor not to zero rate the theatre for the purpose of VAT. My right honourable friend the Chancellor of the Exchequer fully understands, and of course he is also sympathetic towards the arguments which have been put to him advocating that the theatre should be zero rated for VAT. It was clearly not possible for him to give any relief from VAT in the context of the stringent Budget that he was obliged to bring in. However, the Government will continue to keep the matter under review, but any further action must, of course, depend on the prevailing economic circumstances. I regret that I cannot say more than this at present, although it might be worth correcting what appears to be one common misconception. The Arts Council for the subsidised theatre already takes account of its clients' VAT liabilities, since these are naturally included as one of the items in the various budgets which they have discussed with the Council before being given a grant or offered financial guarantees.

I turn now to the film industry, but before I deal with the two main points raised by noble Lords, including my noble friend Lord Willis, I should first like to deal with one question that was raised by my noble friend Lord Lloyd of Hampstead. I am glad to say that what he read in the Evening Standard is absolutely correct. My right honourable friend the Prime Minister invited representatives from all sides of the industry to a working dinner last night at 10 Downing Street, and there was a useful exchange of views. It was also agreed by those present, on behalf of the industry, that a small Working Party should be set up to develop the ideas advanced in the discussions in consultation with others concerned, and report back with specific proposals within a timetable to be agreed. I think, therefore, that that shows the interest and concern that the Government do have in the problems facing the film industry at the present time. Indeed, this is not surprising when one remembers that my right honourable friend the Prime Minister, when he was President of the Board of Trade after the War, was instrumental in formulating and introducing the Eady levy, which I think has been a great success ever since.

On the question of money from the Lady levy to create a better flow of film scripts for British films, a point raised by my noble friend Lord Willis, the House will know that the Cinematograph Films Council recommended in a report a year ago to my> right honourable friend the Secretary of State for Trade that £55,000 should be assigned from the British Film Fund for the production of approximately 20 scripts, and £145,000 for approved preproduction expenses costing not more than £7,500 per project, all this by way of grants repayable if and when the project was financed for production. The Films Council hoped that this would help to arrest the serious decline in the production of British films and help to meet one of the criticisms of the Eady levy; that is, that those who benefit from it are not required to reinvest the proceeds in British films. The Government accept this recommendation, but its implementation will require amendment of the Cinematograph Films Acts.

I have certainly noted the various suggestions made in this debate about how the scheme proposed by the Film Council might be worked, and the Government will certainly be taking these into account. I should like to make clear, however, that commercial considerations would have to be paramount in deciding where to place support, as the intention, as I have mentioned, is that the grants should be repayable. I have also noted the concern expressed by noble Lords that, pending the enactment of legislation, some interim arrangements should be found for running the scheme. I am glad to say that the Government are examining alternative ways of setting up the scheme that would not involve legislation, and they will certainly note the suggestions made in this debate.

It is generally known, too, that the Cinematograph Films Council itself have been discussing with the television interests the proposal for a TV levy which might, it is estimated, bring in up to another £3 million to the film industry. As these talks have been very much a matter between the CFC and the BBC and independent companies, it would not be appropriate for me to attempt to go into details; but it is known that the television interests, I regret to say, do not feel able to go along with the idea of a levy. It will be for the Government now to consider their position in the light of these talks. One alternative approach, which has been aimed at in film and television circles, is the possibility of a co-production of films for showing both on TV and in the cinema. Akenfield, which has been mentioned by my noble friend Lord Lloyd of Hampstead, is one example. Indeed, I was there as his guest at the first showing of this spendid film.

There is also the question of co-production with other countries. Here the Government are trying to encourage the production of more films jointly by producers in the United Kingdom and producers in other countries. Co-production films now are treated in both countries concerned on the same basis as their own national films, with obvious advantages to both countries. We have had co-production agreements now with France and Italy for some years, and 20 films have already been completed under them; 11 in France, and 9 in Italy. I am glad to say that an agreement with Germany has been concluded this year, and one film has so far been made under it.

I must stress that the Government are well aware of the difficulties being experienced by the Arts generally, including the theatre and, of course, the cinema. But both areas are ones of great complexity. As has been said in this debate, there is no easy panacea to the problems which arise. Although the State is now shouldering a greater burden of the expenses of the subsidised theatre than it was 10 years ago, standards have constantly risen, and the complaints that we are not doing enough are stronger, if anything, than they have ever been. The answer for the health of the theatre itself is surely not more and yet more State subsidy. If theatres are locally based, a significant degree of support comes and should continue to come from the regions as well as the box office. Without this support the "response" doctrine that the Government believe is so essential to the Arts, and which the Secretary General to the Arts Council so usefully annunciated in the Arts Council's last Annual Report, simply will not work. As for the cinema, I hope that I have said sufficient to show noble Lords that here also there is no easy solution. The salvation for the film industry must continue basically to lie in its own hands but, as I have said, the Government are ready to consider practicable ways in which they might help, and this is already under way.

Various points have been raised in this debate. My noble friend Lord Longford asked about censorship. The present situation concerning the censorship of films is naturally giving great public concern. I may say that there is far from being any kind of consensus of views on the subject. Some people like the noble Earl believe that there should be much stronger measures brought in; others, like the noble Lord, Lord Beaumont of Whitley, would like to see censorship abolished altogether. If I may give my own view, I think that violence is much more harmful. I am at one with all noble Lords in deploring the misuse of this marvellous medium—which has been aptly described in this debate as probably the most marvellous invention of the 20th century—for this kind of purpose, and for making these really disgusting near-pornographic films.

My noble friend Lord Longford asked about the law. As he said, this is very complicated. Few people would describe the present law as ideal. Nevertheless, in an area where there is little agreement the censorship system has worked to an extent, and the chief responsibility for licensing films for public exhibition devolves on the local democratically elected representatives as well as the British Board of Film Censors, a body which, although with no legal standing, has considerable authority in this field. The system of pre-censorship is the prime control on the content of films, but the criminal law still has a role to play. The law is complex and obscure, and even though films are generally exempted from the Obscene Publications Act, the Common Law offences of keeping a disorderly house and of conspiracy to corrupt public morals have been used in respect of licensed films shown in cinema clubs. There is at the moment a trial currently pending. This part of the Common Law is being reviewed by the Law Commission, and I think that we should leave it to the Commission in the first instance to look into these problems.

I was asked about the Theatre Museum. Certainly, this is being considered. On the question of the National Theatre, which has been raised by several noble Lords, decisions on the opening of the new National Theatre and on its running costs lie respectively with the South Bank Theatre Board, the National Theatre Board and the Arts Council. I am not in a position to say more than that at present, but I may say that my honourable friend the Minister for the Arts is hoping to make a Statement in another place as soon as possible.

In conclusion, therefore, it must be our hope that both the Arts and the cinema will be able to sustain themselves through the difficult times which we are experiencing and which may still lie ahead. The Government are anxious to help all they can but their funds, as noble Lords will realise, are not unlimited, and it would be wrong for those who desire the regular injection of greater sums of money to continue to look to the Government as the sole source in this respect. Imagination and resource on the part of all those who care about the performing Arts and cinema are called for, if anything, even more urgently than before.

Lord WILLIS

My Lords, I only have time to thank all the speakers in this debate, and especially the noble Lord, Lord Gibson, and to thank the Government for the reply, including some of the dusty answers. I beg leave to withdraw my Motion for Papers.

Motion for Papers, by leave, withdrawn.