§ If, upon any application for the registration of a film under Part III of this Act, being an application in connection with which it is material to ascertain—
- (a) the labour costs of the film, or
- (b) the proportion of those costs which represents payments in respect of the labour or services of persons of any particular class,
§ Brought up, and read the First time.
§ The Parliamentary Secretary to the Board of Trade (Captain Euan Wallace)
I beg to move, "That the Clause be read a Second time."
The House will, perhaps, have observed with some surprise that the Parliamentary Secretary is standing at this Box instead of the President of the Board of Trade to introduce the first new Clause. My right hon. Friend has asked me to convey his apology to hon. Members in all quarters of the House for his unavoidable absence due to illness. He has been unwell and under doctor's orders for several days, and to-day has been forbidden to attend the House. He very much regrets that he cannot be present in person when a Bill which has had such careful and meticulous examination comes before the House. Although I am fortified by the support of a Cabinet Minister and of a Law Officer, I ask the House in these circumstances to give me the most generous treatment.
§ This new Clause is designed to give effect to a promise made in the Standing Committee at an early stage. I think the promise was made to the hon. Lady who sits for Jarrow (Miss Wilkinson). The promise was that during the subsequent stages of the Bill we would attempt to 388 tighten up the definition of "labour costs" in order to meet as far as possible any loophole for evasion. The hon. Lady asked my right hon. Friend in Committee whether he was aware that it was possible by bookkeeping transactions, by the employment of highly-paid technicians or artists, to swell the labour costs in the production of a film, and she asked that the provision as to labour costs should be strengthened. It has been suggested in the Press and elsewhere that this provision in regard to total costs might be evaded by large sums being paid by the maker of the films to members of his own family who constitute the artists and technicians employed in the making of the film. Another suggestion has been that the producer or technician might form a company to produce a film and cause the company to pay him a high salary for his services but return to the company the greater portion of the amount that he received. A film, made under such bookkeeping conditions, might well show a total labour cost of over £7,500 and therefore qualify for quota, while it really would not have cost anything like that at all, and might well be sold at a profit for £5,000 or £6,000, becoming in effect another "quota quickie"—the one thing, as hon. Members will remember, that this Bill is intended to destroy.
§ The Clause gives the Board of Trade power, in cases where they are not satisfied that the payments made for labour are in fact bonâ fide payments to a person for the services which he performs in respect of that particular film, to disallow the whole or part of the amount from the total labour costs of the film, and, therefore, to disqualify it for quota. The same power of disallowance of payments which are considered not to have been made in good faith will also be given by the Clause in cases where the prescribed percentage of labour costs is required to be paid to British subjects—as for a British film—or to persons ordinarily resident in the United Kingdom in the case of a film qualifying for renters' quota. We believe that this Clause will serve to avoid evasion of the cost test, and I hope the House will accept it with acclamation.
§ 4.18 p.m.
§ Mr. T. Williams
May I, first of all, echo the sentiment expressed by the right hon. and gallant Gentleman concerning 389 the absence of the President of the Board of Trade We all very much regret it, not only because of the illness from which he is suffering, but also because of the profound knowledge of this Measure which he has acquired during the past few months, and we should have welcomed his presence here to-day.
With regard to the new Clause, we are in entire agreement with the sentiment and the spirit of it. We want to see this question of labour costs tightened up. Is it the intention of the appropriate body, when any producer seeks registration of a film, to ask to see the books and documents to ascertain whether the labour provisions have been fully observed, or do they only intend to make this investigation in an occasional case— perhaps one film in five or ten? The Clause looks very well indeed on the paper, but I should like to know exactly how they intend to carry it out. Once the application for registration is made, the Board of Trade will have to be satisfied that the cost section has been fully complied with, and my question, therefore, is a very simple one: Will they ascertain that in every case all the conditions have been fulfilled, or will they only make this particular inquiry in respect to a film here and there? We ought to know that, because unless we do, we shall not know exactly who is to be responsible for ascertaining the rights or wrongs of the actions of producers and whether or not a film will be registered before the sanction has been obtained. What is to happen if some film has been registered and subsequently, after it has been shown round the country, it is found that the conditions have not been fulfilled? The primary question, however, is, When will they make their inquiries with regard to the labour costs, as to whether or not all the conditions have been fulfilled?
§ 4.21 p.m.
§ Mr. Mander
I too am very sorry that the President is not able to be here today, and I hope it may be possible for him to come to-morrow. I hope also that his absence does not mean that we shall be placed at any disadvantage and that my right hon. and gallant Friend will not be just as free to grant any concessions that may appear to us to be reasonable and necessary as if the President himself were in his place. I feel 390 sure, supported as he is by such high talent on both sides of him, that we can look for reasonable and favourable treatment. I think this is a very sound Clause, because undoubtedly every effort will be made by the interests concerned— American renters and others—to evade the Act if they can, and it is desirable that provisions should be contained in the Bill to prevent such evasion. Is it the intention of the Board of Trade—it says, "If it appears to the Board of Trade"—to make use of the machinery of the Films Council? Upon what evidence are they going? It seems to me that it would be far better as a matter of practice to refer all these questions to those who will be devoting their minds continuously to all the details of the problem and I hope the Minister will be able to say that it is the intention to use the machinery of the Films Council to obtain this information.
§ 4.24 p.m.
§ Captain Wallace
I should first like to thank the two hon. Members who have spoken for what they have said about my right hon. Friend the President of the Board of Trade, and to say that I am fully seized of his views on this Bill, and that I am afraid I shall be able to be neither more pliable nor more adamant than if he were present. The examination of these labour costs will be made by the Board of Trade, and, of course, it will be a Board of Trade responsibility to see that the cost conditions have been complied with. If it subsequently transpires that those conditions have not been complied with, I think the position would arise, that if that had occurred through any misstatement of the person who applied for registration, there is provision in another part of the Bill for dealing with such a case. I think hon. Members may take it that the Board of Trade are determined to see that these provisions, which are an essential feature of the Bill, are complied with in a proper manner.
As regards what the hon. Member for East Wolverhampton (Mr. Mander) said, it seems to me that this is not a matter in which really the Films Council should be involved. The question of whether a certain sum of money has been spent on the labour costs of a film or whether a certain proportion of that sum has been paid either to British subjects or to people ordinarily resident in the United Kingdom, 391 is a matter of fact and not a matter of opinion, and I think it might well be dealt with in the Department.
§ 4.26 p.m.
§ Mr. Lawson
This Clause is an instance of the reasons for the new Clause that will be moved later on by my hon. Friend. We have always been seized with the need for closely watching the administration of this Measure when it becomes an Act. The right hon. and gallant Gentleman knows that there is no question about it—and facts came out during the proceedings in Committee—that there are practices in reference to labelling as labour costs certain people, and there are certain methods which were agreed during the Committee stage to be highly discreditable methods. The Board of Trade is going to watch this matter, but there is to be a Films Council set up, the chairman of which will be a full-time man. Is it only to be at the discretion of the Board of Trade, when it thinks there is something wrong in reference to labour costs, that the matter will be raised? According to this new Clause that is so, and while the Clause is an improvement upon what has previously been the practice, the right hon. and gallant Gentleman knows very well that those who are employed in this industry have very grave disquietude about the methods of arriving at labour costs.
Will the Films Council be empowered to deal with this matter as well as with the items that they are set up to deal with? It will need very close examination. It is not a question of offhand investigation or of investigation being made merely from time to time at the discretion of the Board of Trade. The right hon. and gallant Gentleman knows, as every Member who sat in the Committee knows, that there are very serious reasons for close examination of the facts concerning the labour costs of every film, and I hope he will tell us that it is the intention of the Board of Trade, not merely to rely upon some report that comes to it haphazard, but to use the machinery of the Films Council for very close investigation of the matter.
§ 4.28 p.m.
§ Mr. Day
Will the Minister also give the House an assurance as to when the labour costs are to be investigated? Will it be previous to the application for 392 registration being sent in, or between that time and the time when the film is registered? It is very important, not only for the House but for the trade itself, to know this.
§ 4.29 p.m.
§ Mr. Hall-Caine
Is not this new Clause only an extension of powers already possessed by the Board of Trade in regard to whether a film has complied with a certain Section of the Act under which 75 per cent. of the labour employed must be British and 25 per cent. of the cost thereof may be foreign? During the whole 10 years of the operation of the Act I think only one or two mistakes of that character have arisen and only one or two films have been wrongly registered. Therefore it shows, I think, that the officials of the Board of Trade have been exceedingly careful in examining the figures presented to them by the film producers before they have registered films. I do not think the House need have any doubt that the officials of the Board of Trade will carry out the duties given to them under this Clause in an exact manner and satisfactory to those concerned.
§ Question, "That the Clause be read a Second time," put, and agreed to. Clause added to the Bill.