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Orders Of The Day

Volume 496: debated on Thursday 28 February 1952

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Cinematograph Film Production (Special Loans) Bill

Order for Second Reading read.

4.24 p.m.

I beg to move, "That the Bill be now read a Second time."

The purpose of this Bill is to increase by £2 million the right of the National Film Finance Corporation to borrow money. If I may, I will explain shortly the reasons why we ask for that increase, and say something of the background to the situation. The Bill deals with the money which is involved in film making; but, of course, we all recognise that there is much more than money involved in the making of films: there is artistic merit; there is organising ability, and there is technical skill, and the industry with which we are now dealing has, in the number of very good films which it has produced, shown quite clearly that it possesses these qualities to a very great extent.

Very many industries, as hon. Members know, fall within the compass of the Board of Trade, but those in this House who have made a special study of this industry would, I think, agree with me that perhaps few industries would rival it in the complexity of its finances or in the complexity of the organisational set-up which is involved. It is not an unimportant industry, not unimportant to those who go to the cinema, for last year cinema admissions were at 1,350 million; not unimportant to the Chancellor, who draws £37 million in revenue from the Entertainments Duty—

The hon. Gentleman will not expect me to anticipate my right hon. Friend's Budget.

It is also not unimportant in a way that is sometimes not recognised, in that it brings in exports a sum of between £2 million to £3 million of overseas earnings to this country. By the Bill we are seeking authority for the National Film Finance Corporation to continue its rôle of providing capital for the industry. Therefore, it is perhaps right that I should say something about the history of that Corporation. To those who are very familiar with the history—and I know one or two are—I apologise for having to relate to them information with which they may be familiar, but I think it would be impossible to present this case without setting out shortly at any rate the background to the position.

Government finance for the industry started in September, 1948, with the National Film Finance Company. That Company was set up under the Borrowing (Control and Guarantees) Act, 1946, and the power which was then given was power to borrow £2½ million from its bankers on a Treasury guarantee. But in 1949 the existing Corporation replaced the Company and, as the House will remember, was given power to borrow from the Board of Trade to the extent of £5 million; that was increased in 1950 to the sum of £6 million, which is the situation as it exists about borrowing today.

The object of the National Film Finance Corporation was not to subsidise British film production. Its object was to provide the working capital, and the original intention was that the loan should be made to the distributors, for two reasons: first, because the distributors, by the very fact of their business, had experience of film financing; and second, because as they deal with quite a large number of films it would be possible for them to set off the losses of one film against the profits of another. In 1949, however, that system largely changed, and the Corporation started to make loans, in the main, not to the distributors but to the producers. It is that type of loan which is really the predominant part of the Corporation's business now.

Originally, the Board of Trade laid down certain conditions about the loans that could be made. It was necessary, of course, that a company should undertake to carry out a programme of film production. It was necessary that the Corporation should satisfy itself that the company was equipped with the necessary experience of the relevant type of production; and also that the amount of private investment ranking behind the money loaned by the Corporation or ranking pari passu with it was considered by the Corporation to be adequate.

But as the experience of the Corporation was manifestly growing in these matters these conditions were, quite rightly in my judgment, waived and a continually increasing responsibility for decisions in these matters was placed fairly and squarely upon the shoulders of the Corporation itself.

There is one other development to which the House would expect me to make a reference, a development of what is called the group system. This arrangement was arrived at between the previous Government and the Corporation under which groups of producers were established in order that within each group the profits and losses could be balanced. The first group was in association with the Rank Organisation for production at Pinewood. The second group was in association with Associated British Picture Corporation at Elstree. What was in some way, I thought, the most interesting group, was for young producers to make feature films at modest cost at Southall under the able supervision of Mr. John Grierson.

So much for the background and the type of work that has been so far carried on. Many very good films would not have been produced but for the support and intervention of the National Film Finance Corporation. Those on both sides of the House who have knowledge of its work would wish me to pay a tribute to the work of the staff engaged in it. I need not enlarge upon the matter, but anyone who studies it, or looks at the accounts, can see that this is an organisation which is run with remarkable administrative efficiency.

There is one matter of which I should like to speak, the effect of the National Film Finance Corporation upon costs. The Corporation has made considerable efforts to bring down or to encourage the reduction in the cost of British film making. It maintains direct contact with the producers to whom the loans are given, it scrutinises every budget put forward, it obtains a daily progress report during the time that the work is going on and it gets the weekly costs sheet.

I make no apology for mentioning these matters because when we are considering whether this Corporation should have power to borrow more money it is right to be able to demonstrate, as I think I can, that it has really made considerable efforts to see that money is spent wisely and well.

I should be very unwise to generalise about the question of the cost of film production. It varies so widely between one film and another. I remember reading a book many years ago with which some hon. Members may be familiar, entitled "Nobody ordered wolves," which gave a dramatic and rather highly coloured account—it was a novel, though some used to say that it was true, but it certainly gave a vivid description of some of the practices on all sides of the film industry.

One can say that since the operation of the Corporation a great deal of waste has been cut out. I do not want to recite the figures I am about to give as anything on which one could rely in detail, but the kind of film which previously cost about £250,000 to produce is often being produced for about £200,000 at present. In a world in which prices and costs are rising, that is quite a substantial contribution to the problem.

That brings me to what is the basic problem in the film industry, which is that the income of the film producer has not met the costs of production, and to balance the accounts various efforts have been made by the Corporation and producers in the reduction of costs. Also, of course, there is the interesting and important experiment of siphoning off some of the income of the exhibitors to the producers under what is known as the Eady scheme. I shall not go into detail about that except to say that the estimated receipts of this fund under the enlarged scheme now in operation will amount to about £3 million a year. That enlarged scheme has been in operation for only six months and it will, of course, take time for it to take effect.

The original idea goes back considerably further—

Perhaps we might get the point clear. The £3 million which the right hon. Gentleman mentions is the producers' share; it does not include the exhibitors.

I am much obliged to the right hon. Gentleman. I was restricting myself exclusively to the producers' side of the matter.

It will take time before money which is being siphoned off in that way is reflected in the accounts and balance sheets of the companies concerned. When it is, I think the right, hon. Gentleman will agree that it will make a substantial difference to the commercial standing of companies concerned.

Turning to the present position of the Corporation, it is indebted to the Board of Trade to the extent of £5,200,000 of the total of £6 million which it is allowed to borrow. That £5,200,000 takes account of £1 million—I speak in round figures—which has been repaid from previous loans and partly lent out again.

The Corporation has approved loans amounting to £5,959,000, and there is a balance of £800,000 which is actually available at the moment for borrowing. It is not easy, in an operation of this kind, to assess just how the balance will be struck between the commitments which are to be made on the one hand and the repayments on the other, but I think we should all agree that it is necessary that the Corporation should have a reasonable margin within which to operate if it is to do its job properly. It has to plan ahead, it has to enter into commitments ahead.

That fact was recognised by the previous Government. On 2nd August, 1951, my predecessor in this office made an announcement in the House, in answer to a Question, that with the agreement of the Chancellor of the Exchequer, it was intended to enable the Corporation to borrow a further £2 million. We are carrying out that same intention in this Bill. We have made provision here for the borrowing to take place from non-Governmental sources. I would hasten to say that there is no doctrinaire point in that in any way. I think the aim is generally agreed. The aim should be that, as soon as may be, we should try to get this industry back to a position where it can raise its capital in a normal way.

I do not say that we have arrived at that stage yet. I think it would probably be right for it to begin to make contact with non-Governmental sources in the borrowing of money, and at the same time let me hasten to say that I clearly do not rule out the possibilities of a Government guarantee. As to the precise terms on which the borrowing should take place, clearly one cannot lay down those in advance. They have to be approved both by the Board of Trade and the Treasury, and they will clearly depend upon when the borrowing takes place, upon how much money is borrowed at that time, and upon the financial position of the film industry at that moment.

I should like to say something about what would happen if we did not provide borrowing powers of this character. If the finances of the National Film Finance Corporation dried up, very serious consequences would follow. There would be a sharp decline in British film production, due not only to the fact that the Corporation would have no money but to the drying up of the confidence which has been built up by the operations of the Corporation and the working of the Eady scheme.

Clearly, if this money were not available the quota for British first feature films, which is now 30 per cent., would before long have to be reduced, and either there would be fewer cinema performances or more American films would have to be let in. It has been the policy of both parties in the House of Commons to give encouragement to the British film industry, not solely on economic grounds but also for the intangible benefits which arise from the fact of having British films not only in British cinemas but in cinemas overseas.

There is a special reason for fostering the British film industry at present. If we failed to foster it, not only would the Chancellor lose money but British film production would be prejudiced, and British film production is a dollar saver at this moment. It is for that reason, as well as for the others which I have urged in the course of my remarks, that we make no apology for making these proposals to the House and we invite the House to give the Bill a Second Reading.

4.44 p.m.

First of all, I should like to congratulate the right hon. Gentleman the President of the Board of Trade on being in such good form this afternoon after having been out of bed for the whole of last night. I could not help wishing that he had been as loquacious at the same hour this morning as he has been this afternoon at that Box.

As the House knows, we on this side raise no objection whatever to this Bill. We give it our general approval. But that does not mean that I shall not have to ask the right hon. Gentleman one or two questions before I conclude. As he very rightly said, this Bill stems from an original Act which was passed by the Labour Government in 1949, and was introduced by a previous occupant of the right hon. Gentleman's office, my right hon. Friend the Member for Huyton (Mr. H. Wilson). It is also true that the present Bill was foreshadowed by my right hon. and learned Friend who followed him at the Board of Trade, the Member for St. Helens (Sir H. Shawcross), I think last August.

It is, of course, correct that the original Measure, which was passed in 1949, was necessitated by the conditions which then existed in the British film industry. The industry then was greatly depressed. It was very difficult—indeed, almost impossible—to obtain working capital. Hollywood was in revolt over the 75 per cent. tax on films coming in, and altogether the industry was in the doldrums. I for one am very happy to realise that while the industry has quite a long way yet to go, the situation today has greatly improved. There is today a more hopeful outlook, and I think that the setting up of the National Film Finance Corporation has greatly helped this change, which is extremely gratifying.

As the right hon. Gentleman said with such felicity, this Corporation was set up to provide, not permanent but temporary, Government assistance primarily to independent producers, and they were to receive such assistance either direct from the Corporation or through some distributing company. The assistance was to be by loans on a self-liquidating basis, and the whole thing was, as I say, to be transitional until the industry has had a chance to rehabilitate itself and get back on to its feet.

Is it not a fact that very little of the money has gone to the independent producer, and that it has gone to the distributor, which leaves him still with the stranglehold on the industry that he has always had?

I do not hold that view myself. I was hoping, before I conclude, to mention that point.

It is true that in the early days—in the first year—or so it would appear, so far as its first Report goes, that very few independent producers as such were directly helped by the Corporation. We have yet to have the Report for this year. I think it is likely that the right hon. Gentleman has got figures to which I have not had access, but at any rate, in the second Report that we have, which was produced in the first half of last year and covered the full year to March, 1951, there was evidence that a growing number of independent producers were being directly helped. If my memory serves me, I think at least 29 independent producers are there mentioned as being directly helped. I think that shows that the Corporation is trying to fulfil the function for which it was set up and has been largely successful.

I am sorry to press the point, but were they helped directly or through a distributor? That is an important point, I think.

I am ready to be corrected, but my reading of the Report is that they were helped directly by the Corporation. Others were helped through a distributing company and, as far as that goes, if the distributing company has no stranglehold on the producer, in the sense in which I think the hon. Gentleman used that expression, then I see little harm in some producers getting help through a distributing company. At any rate, I think we can congratulate ourselves on the situation as it now exists.

The hope when the Act was passed was that the industry would expand considerably, that it should put itself on a paying basis and should also attract—and this was most important—its own financial backing. I think that from what the right hon. Gentleman has said these objects are in a fair way of being realised. The evidence, as he pointed out, goes to show that there is an increased number of independent producers now being financed and making, in some cases, extremely good films.

Costs generally have gone down, as it is most important they should. The United States is a country large enough to enable a fairly considerable sum to be spent on any one film. Here, we are smaller geographically, and the number of cinemas is relatively small. Therefore, it is quite impossible for a producer to spend up to £250,000 or £300,000 in the ordinary way and expect to see his money back. That being so, it is essential that costs should come down, and in so far as the Corporation has assisted in bringing costs down, I think we can reckon it to the good. Extravagance has, I think, to a large extent now been limited; heaven knows, there was room for a move in that direction.

It is gratifying to notice the number of loans which have already been repaid. These loans under the original Act can be made, I think, for a period up to five years. It is interesting to realise that this answers one of the criticisms made when we debated the Report of the first year's working of the Corporation. From the figures which the right hon. Gentleman gave us repayments are coming in, and are, at any rate for the moment, being used as new loans for the making of other films.

I think, too, that we should pay tribute to the type of films that have been made. I have been looking down the list, and I must admit that most of the titles there were new to me. What has happened to them I do not know. I suppose that they must have been shown in the provinces. At any rate, I think we can agree that many excellent films have been made as a result of the help that has been given by the Corporation. It assisted in the making of "The Third Man," "The Outcast of the Islands," "The Winslow Boy," "Tales of Hoffmann" and, this year, "Laughter in Paradise" and other films which are big box office draws and which, I understand, are making excellent profits.

Before I sit down, may I put one or two queries to the right hon. Gentleman or to the Parliamentary Secretary? I did not quite follow the right hon. Gentleman's reference to a Government guarantee. He certainly mentioned it, and I tried to take down his words. As I understood him, he said that he did not rule out the possibility of a Government guarantee, but I think he went on to say also that such Government guarantee would not cover the whole £2 million and would have to depend entirely on the circumstances surrounding each advance.

I do not think that that is good enough. If the Government were to back this and guarantee the whole £2 million, obviously the money can be borrowed much more easily and at a much cheaper rate in the City than it otherwise can. It may well be that, in spite of the Eady levy, people with fairly long memories in the City may still be a little shy of lending money to the film industry without such guarantee. Therefore, I think that from every point of view we should press the Government to be more explicit on this point and see that a Government guarantee is given, if only to ease things for those who are running the Corporation so successfully.

While I am on that point, perhaps I may draw attention to Clause 2 of the Bill. The right hon. Gentleman made no reference to this link-up between the £2 million envisaged in this Bill and paragraph 8 of the Schedule of the original Act of 1949. I have read paragraph 8 and Clause 2 of the Bill several times, but I must admit quite frankly to the House that I am still in the dark as to what the draftsmen had in mind when they inserted that Clause.

When the £2 million comes to be repaid, how will it rank? The right hon. Gentleman—and I listened very carefully to what he said—made no reference to that. Is it to rank before the £6 million which the Board of Trade has advanced, or is it, when we come to wind up the Corporation, to rank after it? I would, of course, like to feel that the Corporation is to be a permanent thing, although, for my part, not continued with Government money. But I do think it would be a good thing if in some shape or form the Corporation continued to exist.

The Act of 1949 empowers the Board of Trade to make loans for a period of five years. Therefore, the Act comes to an end in 1954, presumably about this time two years hence. That is not a very long period for the film industry to raise, use and repay this £2 million and I think that we must press the Government to give us more details as to what they have in mind about the future of the Corporation.

I repeat the question again to the Parliamentary Secretary for the sake of clarity: Is this £2 million which is to be borrowed from other sources to rank before the £6 million, rank equal with it, or is it to come after? Again, how is the Corporation to be allowed to raise this money? Will it issue debentures; will it have to raise the whole £2 million at once, or can it take advantage of any improvement in interest rates and raise the money as and when it may want it?

I think that it is a little unfair to the Corporation that we have as a House allowed its balance to run so low as it has. Obviously, in an industry of this kind, which is dealing in very large figures, the balance which the right hon. Gentleman indicated to us is not really sufficient working capital for a Corporation of this kind. Therefore, even if it borrowed the whole £2 million at once, that, in my view, would not be an excessive amount to hold if it is to help the industry to expand. So I would like, and I am sure my hon. Friends behind me would like, to have more information on that point.

I think that we are also entitled to ask a few questions on the working of what is known as the Eady levy. The right hon. Gentleman mentioned the sum of £3 million as the producers' share. He has greater access than I have to the figures, but my information is that the producers are now likely to get a good deal more than the £3 million he mentioned.

When this matter was discussed by the House, we were told that about £3 million would accrue yearly and that £1,500,000 of that would go to the exhibitors and £1,500,000 to the producers. I notice from figures that have come my way that in the first year the producers got about £1,250,000, but I am told—it may be that my informant has misled me; and, if not, I am delighted—that the amount now falling as the share of the producers is running much higher than £3 million. If that is so, we can pass the Bill with greater expectations that the money will not be lost, because in the Eady levy we have an additional fund to assist the industry in the months and years that lie ahead.

I have already mentioned that in the view of the Opposition, if the Act has only another two years to run in its present shape, we should begin to make plans for what is to follow it. The industry itself is entitled to know, and we ought not to delay the matter. It may well be that in two years' time or thereabouts we shall be in the throes of a General Election. It may even be that the General Election will have taken place before then, but in political life one never knows what the situation will be. I beg the right hon. Gentleman, therefore, to consider what is to follow the Act when its powers cease in two years' time.

At the risk of being slightly out of order I wish to refer to the Crown Film Unit. We all agree that this organisation has done splendid work for the film industry and for the British way of life. It is now proposed that this poor little child must die. Cannot we save it?

It is not so little and not so young. It has existed for many years.

I agree with my hon. Friend; it has had a very useful life and it has been allowed to live for a good many years. This adult, then, ought not to be allowed to die. I should like to feel that even at this eleventh hour, we can do something to save it.

I do not really want to make detailed suggestions about this, but I do appeal to the right hon. Gentleman to consider with his hon. Friends, before the Committee stage, if it is not possible to save the Crown Film Unit and associate it—it would only have to be associated for financial purposes—with the Corporation. It could remain a separate unit, receiving, through the Corporation, some of the money which we are now voting.

After all, we find a lot of money for the British Council, and, if we find money for that body to help it present the British way of life to the rest of the world, I cannot see why we should not find money —it is not a great sum—for the Crown Film Unit, for it is doing much the same kind of work as the British Council does.

I heartily agree with the right hon. Gentleman about the importance of this industry. The cinema enters into the life of millions of people. I suppose that in this country there are very few families who do not go to the cinema at least once a week. From the figures given us from time to time, we know that many of them go twice a week. In the nature of things, they must be tremendously influenced by what they see. I am delighted to think that on an occasion like this the House can turn aside from controversial issues and attempt to assist this great industry, which is so important a feature in our national life.

It is essential that the industry should be kept independent. It should be culturally independent; those who make films should have no interference from Government officials. The man who produces a film should also be allowed to decide for himself, within the law, his own treatment of his theme. It would be a bad day for the film industry and our national life if, when passing Bills of this kind and granting money to assist an industry of this sort, we tied up with it restrictions which prevented it from having complete independence on the cultural side.

I join in the expression of appreciation which the right hon. Gentleman has voiced to Mr. Lawrie and those associated with him on the Corporation. We ought not also to forget Sir Michael Balcon. He has not only done a very great deal for British films in his own studios, but he has also been a tower of strength to Mr. Lawrie, and his guidance and expert advice have been of the utmost assistance to the Corporation.

Finally, I want to say, once more, how much we welcome the Bill. We shall do our best to assist the right hon. Gentleman to put the Bill on the Statute Book with the least possible delay.

5.8 p.m.

I join the right hon. Gentleman the Member for Colne Valley (Mr. Glenvil Hall) in congratulating the President of the Board of Trade upon his youthful and fresh appearance after the long debate that we had last night. I knew him before be became President of the Board of Trade, and I can assure the House that his health is a result of the austere life which he led as a Private Member.

There is a sense of coalition in the air on this subject, but we ought not to be too pleased about everything that is going on. I should like first to support what the right hon. Gentleman the Member for Colne Valley said about the Crown Film Unit. There is a great necessity for intelligent and understandable propaganda abroad, and I believe that the film can do very much more than can be achieved by sending out groups of dancers to teach the Yugoslays to do English folk dances. Anyway, the Yugoslays dance much better than the English do.

Nor do I think we should send out to Jamaica, as the British Council has done, people to stop the Jamaicans singing calypsos and to teach them English folk songs. The British Council has been well-intentioned, but, like the village blacksmith, it has earned its night's repose. On the other hand, the Crown Film Unit always works with a minimum of cost and a maximum of intelligence, and I urge the Chancellor to reconsider this death sentence.

There are one or two things about the film industry which we should keep in mind. The industry is big enough now and it has gone through its period of wild extravagance, and, therefore, it should look forward very soon to handling its own affairs. I think the loans that have been made under this scheme were necessary in very difficult circumstances, but fundamentally it is wrong and it still puts the power in the hands of the distributors at the expense of the producers. In fact, the whole of the film industry in this country was planned in the wrong order. The first thing which the industry had in mind was the cinema houses, which, I agree, were necessary, the next thing the distributors, and the last to be thought of were the producers.

We do not want to try to persuade the industry to make cheap films. What we do want them to do is to use wise economy in making them. There have been pictures, which have cost a great deal of money, and which have got back their money, while in the matter of national propaganda abroad they have played a very big part. I am thinking of pictures like "Hamlet," in which Sir Laurence Olivier starred, and also "Henry V." Those pictures are still playing across the United States. I agree that in many cases they are shown in the smaller theatres, but they will be playing for years to come. In my own native Canada I was delighted to find when I was home at Christmas, the immense popularity of the British film, especially in cities like Toronto. I think that is very important.

There is a big enough public going to the cinema in this country for the industry to be able to make films that will pay their way. I was in the industry for a while, and it was the nearest thing to a nightmare that I have ever experienced. There was unbelievable extravagance, and the absurd feeling that if you paid £50,000 for something it was worth £50,000. Any director who made a film cheaply was never given another chance to make a film again, but one who displayed plenty of temper, tore his hair, walked off the set, did not come back for a week, took one "rush," as they call it, 17 times and then sat down and pretended to judge which was best—all these things stamped him as a genius, and he would be brought back to direct other films at any cost. I believe that that kind of thing has passed.

I have not a great deal more to add to this discussion. I ask my hon. Friend the Parliamentary Secretary to think carefully about the Crown Film Unit. I am sure it could be brought into this scheme and that it is something which should be retained. I would only add that I am certain that we shall not sit up until the early hours of tomorrow morning debating this Bill.

5.14 p.m.

I cannot help feeling that this is an appropriate debate to discuss wider issues than finance. I am not at all well acquainted with the particular relationship between the President of the Board of Trade and the Film Finance Corporation. I think probably there is some scope for ascertaining whether some guidance on the sort of films that are produced would not be desirable. My right hon. Friend the Member for Colne Valley (Mr. Glenvil Hall) said just now that it would not be a good thing if detailed guidance or any form of control were exercised, but I do not go the whole way with him on that.

It seems to me that the past history of this Corporation has shown up one weak- ness at the outset. It is that it tended to give too ready an ear to some rather earnest people who seemed to confuse education and entertainment. These earnest men and women then felt aggrieved when there was no tendency on the part of the Corporation to give them the ready capital with which to produce their films.

On the other side of the picture, I have always felt that in this country, the theatre—I think the term is the "legitimate theatre"—has never been comparable in any way as regards the presentation of national classics with the Continental theatre, more especially in Germany and France. That is why I should have thought there was scope for some tactful guidance of the Corporation.

There are classics of our literature and theatre which should be produced. It is true it would be very difficult to judge what sort of films should be produced, and what should be the yardstick as to whether they should lose or make money. Personally, I have always felt that many of the Shakespearean plays could well be filmed in addition to those mentioned by the hon. Member for Southgate (Mr. Baxter), "Henry V" and "Hamlet." On the other hand, hon. Members will recall that Mr. Orson Welles produced "Macbeth" which, in this country, was a gigantic failure and did not gain the prestige in his own country that the play itself justified.

There are other classics which might be good paying propositions. Perhaps I might carry the hon. Member with me if I suggested some of the more robust of Sir John Vanbrugh's plays, but that brings us to the question of censorship. There are classics which would appeal to the population, and there are classics which the population as a whole should have the opportunity of seeing. The opportunities to see plays on the legitimate stage in this country are very poor. We have no national or municipal theatres, as are found on the Continent. Therefore, some guidance could be given, I think, to the Film Finance Corporation.

I have talked for a few moments about some of the films which I personally think ought to be produced, and now I should like to make a passing reference to the sort of films we do not want, and go on to touch on censorship, which I appreciate is more the responsibility of the Home Office than the Board of Trade. My justification for introducing this matter is that in the post-war period there have been films produced, and more specifically scenes which have been put in films, which are quite deplorable, and which have a bad effect not only on children but on adults as well.

In the course of looking into these matters, I have consulted the British Board of Film Censors, and perhaps I may be permitted to say how much I appreciate the help I have received from that Board. In a publication which they distributed entitled "The British Board of Film Censors," the whole emphasis is on the censorship of films from the children's point of view and the children's interests. Any hon. Member of this House would be the last to say that the children's interest is not the most important. I know it is, but we cannot get away from the fact that there are certain types of scenes in films which have a bad effect on other elements of the population.

There are producers who pander to that sort of taste. There is a big film running in London now which seems to pander to the more nauseating tastes in society. I was very interested to find that, contrary to their established practice, and in conformity with the practice in other countries such as Sweden in this post-war period, the British Board of Film Censors have found it necessary to issue what is virtually a code to certain film producers. This code is entitled, "A Memorandum to Producers on Violence and Brutality in the Films" and it has been issued, the memorandum says, "to producers." My inquiry was: Why has it not been sent to those people who are responsible for film censorship at local authority level?

I would draw the attention of the House to the fact that the local licensing authority can be made up in two entirely different forms. There is the authority made up of a sub-committee of the local authority, for instance the watch committee, and that, in turn, is obviously made up of elected people. Alternatively, the local authority can delegate responsibility to justices of the peace, who are not elected. It is most important that this code should be issued to either the justices of the peace or to the sub-committee of the local authority. Speaking for myself, I think it is a pity that the justices of the peace come into the matter at all, and that it would be far better to have local censorship done by elected representatives, and that the electors should know what sort of code the local licensing authority are attempting to apply.

I am deliberately speaking of this memorandum now in order to draw the attention of the House and of the public at large to its provisions. It includes detailed guidance on such matters as shootings, killings, torture scenes, incidents involving brutality or sadism, scenes in which women are subjected to violence and, lastly, fight scenes and beatings-up. So that the House may get some idea of what this includes, I will, with the permission of hon. Members, read a short section dealing with fight scenes and beatings-up. The memorandum says:
"The Board objects to fight scenes and beatings up when these are prolonged, when these contain foul or particularly vicious blows, stomach blows, rabbit punches, kicks; when the effect of the blows is emphasised on the sound track; when an opponent or victim is struck when he is defenceless or overpowered. The Board objects to torture scenes or any incidents involving brutality or sadism."
The public at large should know what this code includes so that they may judge whether the films which are eventually given the authority of the screen conform with this code. I underline this point because I have been horrified, as I think many other hon. Members must have been, by some of the things that have slipped through. Who, in this House, has not been to a film show on some occasion and heard a frightened child? Who has not come across incidents in the lives of children who have demonstrated fear of scenes which they have seen on the films?

As the lay governor of an institution dealing with social psychiatric problems I know that many of the cases which come before us show that there has been some influence derived from films where unnecessary and violent scenes have been shown. There is a temptation to say that most of this comes from American films, but that is not by any means entirely true. There are some French films which include such scenes.

I want to emphasise the point that in my view this code should be publicized and sent to all members of local licensing authorities, and that the full meaning of the code should be understood by the electors at large.

5.25 p.m.

I am sure that everyone will sympathise with the objective which the hon. Member who has just spoken has in view, namely, to raise the general level of films produced and exhibited in this country, but I confess that I would feel a certain apprehension in pursuing that the very desirable objective by exerting pressure through a Government Department. The functions of censorship, especially any sort of censorship of taste, should be exercised by somebody not connected with a Government Department, as indeed it is at present.

May I point out that the sort of brutality I was mentioning could hardly be described as a matter of taste, and that the British Board of Film Censors is not a Government Department?

That was exactly my point. I think that is the way the thing should be run, by the British Board of Film Censors and not by the Corporation or by influence applied by the Board of Trade.

Some of these questions are difficult, especially the matter of frightening children. Cartoons designed for children which adults would think rather delightful very often frighten children in an unpredictable way. Most hon. Members who have spoken have mentioned the Crown Film Unit. I should like to mention it briefly. I would not go so far as my hon. Friend the Member for Southgate (Mr. Baxter) in his very lavish praise of the work of the Unit—it seemed to me rather lavish—but I hope it will be possible to maintain a nucleus in existence through the activities of the Film Finance Corporation under the Bill. That will be a very desirable thing to achieve.

I am glad to have an opportunity of intervening shortly in this debate because I have a considerable constituency interest. My constituency includes the Elstree Studio, while M.G.M., and one or two independent producers, are also operating there. I am fortunate in having the chance of catching your eye, Sir, remembering that yesterday we were discussing the public houses in my constituency. The interest taken in films by hon. Members is rather low, as is evidenced by the attendance in the Chamber now. People are beginning to feel that too much attention and assistance have been given to this industry, but it will be a great pity if they should feel that.

The film industry has special claims. It has an unemployment problem among the technicians, and that can be a very serious thing if it persists over a long period. This type of unemployment is particularly difficult, because the film technician gives many years of his life developing a specialised skill and he has great difficulty in finding employment elsewhere.

It is not generally realised how special is the form of competition which the British film industry has to face from the American film industry, based as this is, on the enormous American market. A manufacturer of tinned meat can sell his meat either in America or in Australia, but the manufacturer of a film can sell the same film as many times over as he wants to, which makes it much easier for him to compete in the British market.

The British film industry has been making considerable strides in recent months and bigger progress in economy and efficiency than is often realised by the outside public. There is no doubt that the National Film Finance Corporation has played a considerable part in promoting this advance. Anyone who is concerned for the welfare of the film industry and its employment will express gratitude to the Finance Corporation for their work. It is very desirable that the Government should take steps to enable the Corporation to borrow further money to finance further productions.

I am not altogether in agreement with the right hon. Member on the other side of the House who spoke about the way in which this money should be borrowed. I do not think that the Finance Corporation has any need of working capital and I should not have thought that the issuing of debentures would be a very suitable way of borrowing money for this Corporation.

If I may interrupt the hon. Gentleman, I did not intend to suggest that was the way in which to borrow the money; I merely inquired how it was visualised that it should be borrowed.

I appreciate that the right hon. Gentleman mentioned that as a possibility, but I should have thought that was a bad way of doing it because the important thing is to get the equity investor interested in film production. I have no doubt that some Treasury guarantee will have to be given to cover part of this additional £2 million if the capital is to be forthcoming from private investors who have been rather badly bitten once or twice in the past in this matter.

I do not think that a Treasury guaranteed loan raised privately by the City is, in normal conditions, a satisfactory arrangement. In that case the Treasury takes the risk but does not hold the equity. Now, however, when we are trying to move from a position where the Government is financing film production to a position where finance will come from normal private sources of capital which, it is agreed on all sides, should provide the risk capital for the industry, some form of Treasury guarantee would probably be satisfactory as a transitional stage.

By this Bill the Government are giving the film industry a further opportunity. I hope that the industry and all the people engaged in it will realise that this is further special assistance being given to the industry out of the public pocket, or at any rate by its assistance, and that they will concentrate as far as possible not on aggravating their internal differences, but in combining to solve the real problems still facing the industry. After all, there is no doubt that in current economic circumstances we shall have to reduce as far as possible the import of dollar films. The opportunities and duties which rest upon the British industry are growing greater and not smaller. It is being given a chance, by this Bill, to stand up in some measure to its duties, and we believe that with good will on all sides the industry shall be able to do that.

5.33 p.m.

We were most gratified on this side of the House to hear the comments of the President of the Board of Trade on the re- markable efficiency of the National Film Finance Corporation. Some of us remember the rather superior, supercilious criticisms that we heard of this organisation from the present Secretary of State for the Colonies when he used to speak from the Opposition Front Bench.

The hon. Member for Cheadle (Mr. Shepherd) shakes his head. I refreshed my own memory only this afternoon of the debate on this organisation which took place in the summer of 1950. If the hon. Gentleman would refresh his memory in the same way, he would realise that what I am saying is correct.

I am sure that we all support the object of this Bill because, as the hon. Member for Barnet (Mr. Maudling) has emphasised, the film industry has been through a difficult period. We are happy to see that there are signs of improvement. For example, in the last quota year the larger circuits showed a marked improvement in their performance over the preceding year. But we cannot be satisfied with the state of the film industry. Out of 14 film studios in this country at present, only four are fully employed, two are only partially occupied and eight are entirely idle. The level of employment in the industry stands at present in the neighbourhood of 3,400 workers, whereas some years ago it was nearly double that number. I do not pretend that the industry can sustain double that number, but the present number does not give us any great grounds for satisfaction.

We support the Bill in principle, but I wish we had received a little more detailed information from the President of the Board of Trade. I am sure that the Parliamentary Secretary will appreciate that we are in a rather difficult position. The last report on the work of the National Film Finance Corporation was for a period now almost 12 months' old. There are other uncertainties in the industry. We are glad to know that the Eady Plan is working out reasonably well, but we are still not quite sure what effect it will have on production. Of course, we do not know yet what will happen to the Wilson-Johnson agreement which comes up for reconsideration in some months' time.

So there are a number of uncertainties which make it a little difficult for us to discuss the matter as intelligently as we should like. I also wish that we had received some more information from the President on how the group system has been working. That is a most interesting development of the work of the Corporation, and since the House is being asked to approve this arrangement for additional finance, it would be more satisfactory if we were told how that interesting experiment has been working out.

Then we ought to hear something more about finances. For example, we are told that approximately £1 million of the funds of the Corporation have been repaid and have been lent out again. Could we be told, for instance, whether any of that sum represents a repayment from British Lion? The major portion of the original funds of the Corporation, namely, £3 million, went to one distributing organisation, British Lion. We want to know whether any of that money has been repaid or whether all the £1 million that has come back for further loan has come from the smaller organisations concerned.

I also hope that we may have some indication of the ideas in the mind of the present Government on the future of this organisation, as was suggested by my right hon. Friend the Member for Colne Valley (Mr. Glenvil Hall). It is true that it was first established largely as an emergency measure, and among the objects set out for the Corporation was that of temporary aid, as it was called by themselves in their first report, "until the confidence of private investors was restored." That is a most important function, towards which this present Bill is of some assistance. We are helping the private investor during an interim stage in his relationship with the film industry.

There were, however, concomitant objects of this organisation, including the maintenance of employment, the earning and saving of dollars, the training of technicians. All that is really included in the general improvement in film production. However, the Corporation went on to say in the first report:
"It was also felt that it might be possible to establish more economical standards and perhaps in general a higher code of commercial practice in the film industry."
From what I as a layman have been able to learn, it seems to me that they have been remarkably successful in improving standards of budgeting, cost control, and so on. The President of the Board of Trade has paid an eloquent tribute to the organisation, to Mr. Lawrie and his colleagues for the admirable work they have done.

Some of my friends and myself, however, are concerned to know how it is envisaged that this kind of function shall be continued. We feel that if the body which we are discussing this afternoon is simply allowed to die in 1954, there is no guarantee that the industry will not fall back into its rather extravagant ways and that much of the admirable work done in the last few years may be wasted. I am not suggesting that the finance should necessarily continue to come from public sources.

The Bill is a very good intermediate step, which might, perhaps, if it proves a successful experiment, be continued with the emphasis gradually being shifted away from direct Treasury money to money borrowed in this manner with, presumably, some type of Treasury guarantee. I should have thought that some Treasury guarantee was inherent in Clause 1 (2), because obviously, if the Treasury are to be responsible eventually for residual liabilities, there must be a Treasury guarantee.

I hope very much that before the matter comes up for final decision the Government will work on the line that this kind of organisation has considerable value in the industry and that they will endeavour to continue it and allow it to proceed with its useful work.

As we have been allowed to go a little wide in the debate, I should like to say a word about the Crown Film Unit. I am delighted to know that this is being regarded, as I very much hoped it would, as a matter of concern to Members on all sides who are interested in films. This organisation survived the economies of 1931—and they were pretty drastic. It would be shameful if in the present situation, needful as economies are, the death blow should be given to an organisation which has done more, probably, for the prestige of British films than any other single body.

I am not suggesting that there should not be a considerable investigation into, and economies in, the running of the Crown Film Unit—I think that there should be; but I hope it may be conveyed to the Chancellor of the Exchequer that the feeling of many of us who have had the opportunity of going into this matter has been that within that organisation over the past few years there have been constant attempts to obtain a reorganisation, but that a deaf ear has been turned to those who have been trying to make these suggestions. There has not been consultation with the staff who could have been consulted. They have been faced with this decision from on high, without being given an opportunity of helping themselves.

I hope very much that the plea which is being made on both sides of the House will be passed on to the proper quarter, so that we shall not have it held up against us that we have tamely agreed to killing this extremely interesting and valuable exponent of our way of life. I ask the Parliamentary Secretary to pass on these words with all the eloquence of which he is capable.

5.43 p.m.

I listened attentively to the hon. Lady the Member for Flint. East (Mrs. White), and I am sorry that she began on a rather critical note. I have the clearest recollections of the discussions we had on the establishment of the National Film Finance Corporation, and I am certainly not conscious of anything supercilious about the attitude of my right hon. Friend. My right hon. Friend is very jocular, and I have no doubt that, reading the reports at some distant date, the hon. Lady has mistaken jocularity for a supercilious approach. I will leave it at that, because I am sure that she did not intend to import a note of acrimony into the debate.

The hon. Lady regretted that the level of employment in the industry is not what it was. That is a point of view which is not put forward very strongly by those in the industry, nor particularly by the trade unions concerned. It is not an unnatural complaint, but we should not take that view at anything like the value at which it is presented.

It is quite wrong to look upon 1947 as being the norm of activity and employment in the industry. We have got to get the industry, as we now have it, on a healthy basis. We have to say that, having knowledge of the limitations of our creative capacity and the existence of skilled writers, producers and directors, we cannot healthily do much more than we are now doing. We must build upon a sound foundation. I hope we shall not have a repetition of looking wistfully to the 1947 level, which is by no means a norm for the film industry in Great Britain.

I share wholeheartedly the regard which is evidenced on both sides of the House for the work of the Crown Film Unit. I think it is true to say that the only substantial contribution to the art in recent times has come from this Unit. Therefore, we look upon it with a good deal of kindliness and enthusiasm. I do not, however, share the view of my hon. Friend the Member for Southgate (Mr. Baxter), who thinks that this Unit has always done its work with a good deal of economy. I do not think that the kindest person, looking at the activities of the Crown Film Unit, would take the view that its activities have been blessed with economy.

The House ought to have some regard to the changed circumstances of our times. The Crown Film Unit was most greatly needed in the last 12 years: that is to say, in times of great social change and impending social change, when it could reflect the turmoils of minds. We have passed through that phase. Whether hon. Members like it or not, we are in a phase of consolidation, and we are wondering whether we have done in all respects the right thing. In those circumstances, there is not quite the urgent social need for the organisation as before.

Would the hon. Member extend his sentiments to the social needs of the Colonies, for example? He may have seen "Daybreak at Udi," which was shown in Westminster Hall last night, and might agree that there is a social need in this direction.

I am not denying that a field exists, and I am coming to what is still to be done.

Undoubtedly, there is a social field, but when one considers the changes that have taken place in this country and the fact that the Crown Film Unit did so much, and expanded to such an extent, during the war, one realises that to some extent the urgent social needs which it once met are not today so large or urgent. I take the view that we cannot consider keeping on the Crown Film Unit in its present state.

Let us get this thing down to its barest minimum. I think we could agree, among those who take an interest in this question, that to take six key persons out of the Crown Film Unit and to establish them in some way, perhaps, under Group 3, would save the spirit of the Unit. We cannot save the body of the Crown Film Unit—that will disintegrate and will be duly buried; but we can save the spirit. Six key persons put into the right sort of organisation—perhaps, in Group 3—may well save the spirit and carry it on, and when conditions improve it may well be possible once more to branch out in a more extensive way.

I join in the general welcome to the Bill. I am quite satisfied that it is necessary to give the £2 million to the Film Corporation, and to do so well in advance, because continuity in production is the essence of economy. Some delay by the previous Administration in announcing their intentions caused a certain disorganisation in film production; and we must give the longest possible notice of our intentions to ensure continuity of programmes.

We have a specially urgent need for the Bill if, as my right hon. Friend the Chancellor of the Exchequer announced, we are to try to get a harder bargain with the Americans in September. It is no good, if we are seeking to reduce the American content or American admittances, to try to pinch our own hands; that would be a very foolish policy. I am particularly glad that we have endeavoured on this occasion to get away from the ambit of Government finance and into the ambit of private finance, albeit by Treasury guarantee.

There have been quite a number of speculations about the future of the National Film Finance Corporation. I visualise a permanent need for a film bank of some kind or other because finance in films is not like finance in any other product. One must have a highly specialised knowledge of it. I do not know what money exists or how many institutions or individuals are inclined to lend money to film companies. I should think they are precious few, and it needs to be done with a great deal of control not normally exercised by such institutions. I visualise the need for a permanent film bank, perhaps to take the place of the National Film Finance Corporation when the Corporation comes to an end, so that the industry will always have the backing of an institution able to meet its needs.

The losses of the National Film Finance Corporation have been very much lower than I thought they would be. The organisation has, on the whole, been more successful than anyone believed it would be. It has succeeded in clearing out of the business all, or nearly all, of the undesirable elements. It has put into operation a system of budgetary and employment control and has checked that day by day. I gather that it has not been entirely successful in the case of one organisation, and we await with interest the next report of the Corporation to see whether better behaviour has been indicated.

I think it is a good thing that the National Finance Corporation has been harsh in checking expenditure. Some people say that it has poked its nose in far too much and has not given to individuals the freedom which they desire. I always get suspicious when people making films start talking of freedom, because I think that in their minds freedom means freedom to spend any amount of money without regard to where it comes from or how it is to be paid back. I wholeheartedly support the detailed work of control which the National Film Finance Corporation has put into operation.

I believe that a more positive contribution towards the film industry has been made by the National Film Finance Corporation than has been credited to them in this House, or elsewhere. I am thinking of the effective establishment of the group system. My right hon. Friend said something about the group system, but he limited himself to saying that the group system was a means by which individual producers get together with the idea of safeguarding themselves mutually against loss. That, of course, is a factor in the group system, but to my mind it is perhaps the least important factor. This group system, for all the criticism it has had, is perhaps the most effective way ever devised of reconciling two opposing and conflicting elements in film production.

What are the two opposing elements? On the one hand, there is the desire of the fellow on the financial side to get a return for the money and, on the other hand, the desire of the artistic element to produce something along artistic lines. There is a constant clash in all film companies between the commercial side and the artistic production side. Reconciling that clash is very difficult indeed. If we look at American films, we see how it has been reconciled. In America they say that the fellow who attends to the cash is to have the say, and the result is that we get a whole system of stereotyped, uninteresting films. In individual companies it is extraordinarily difficult to get a balance because there is a dominant personality who may be on the production or the financial side.

In the group system we have done something which to my mind has solved this very difficult problem. If a producer has an idea for a film, he goes to the distribution company, shows them the script and mentions the stars, and gets a distribution guarantee. He goes to the National Film Finance Corporation and they give him the end money if they are fully satisfied. The producer is to some extent independent, but the financial control is safeguarded. There is not a fight inside a single company because the producer, the National Corporation and the distributing company know where they stand and neither is seeking unduly to influence the other.

I am satisfied that in this group system we have made a substantial contribution towards the structure of the industry. I know that my hon. Friend the Member for Southgate said that individual producers are not getting a fair deal and are not getting enough rope, but I am very pleased when I go round studios and producers under this scheme tell me that they have not enough liberty. I say that it is quite easy for them to earn their liberty. All they have to do is to make films for a short period of time consistently and they get all the money they want without restriction. In the present state of the industry, we cannot give producers their head and let them spend what they wish.

I am very pleased to welcome the Bill and to see the progress which the industry has made. I am satisfied that the industry is in a more healthy state today—here I speak about the production industry—than ever it has been. We have reduced costs from the 1947 level of about £250,000 to about £120,000 and we have no false ideas about what we can get. We know that we have to cut our coat according to our cloth, and we know there is not a vast heaven waiting in the United States of America. We know exactly the kind of films we can produce and we are producing them.

If we go on steadily expanding our production as we develop and create the right kind of artistic ability, which is the limiting factor of film production—if anyone can write scripts for films there is a job waiting for him at this moment —and if we go on encouraging and stimulating this talent and build economically on that basis, I am satisfied that in 10 or 20 years the British film industry will be another effective factor in world trade.

5.58 p.m.

On the whole, I think I agree with most of the suggestions of the hon. Member for Cheadle (Mr. Shepherd) except with his reference to the political differences. I think that is a matter of no importance in a debate of this kind. As the hon. Member for Southgate (Mr. Baxter) said, there is a sense of coalition on this question of British films. This House has always approached the problems confronting the British film industry in a bi-partisan way because we have always felt it is important from the national point of view that this great industry should be successful and that it should achieve objects which concern the nation as a whole as well as serve its own inherent purposes.

The industry as such not only serves the interest of entertainment but a much wider field which concerns the national interest. It would be a very bad day for this country if we were to lose the industry that has been established over years, with its peculiar characteristics and with its identification, as has been said on so many occasions, with the British way of life.

The only thing that worries me in connection with this Bill is that once again we are approaching the problem of financing this great industry in a piecemeal manner. The prospect, for instance, of the whole scheme terminating in 1954 is one which gives me great concern and I think it is important that we should have in mind the eventual establishment of what the hon. Member for Cheadle has described as a film bank.

I think we can take it for granted that for many years ahead special methods, or special means, must be employed for the financing of this industry which cannot normally enter into the field of competition as an ordinary industry is able to do. We have to make up our minds what are our objectives so far as this industry is concerned. At the moment—

Royal Assent

6.2 p.m.

Message to attend the Lords Commissioners.

The House went, and, having returned

Mr. SPEAKER reported the Royal Assent to:

  • 1. Income Tax Act, 1952.
  • 2. Northern Ireland (Foyle Fisheries) Act, 1952.
  • Cinematograph Film Production (Special Loans) Bill

    Question again proposed, "That the Bill be now read a Second time.

    6.12 p.m.

    As I was saying before the intermission, it is important that we should have in mind our objectives as far as this industry is concerned. I was drawing attention to the fact that it is not like an ordinary industry, and because it serves so many national purposes the country is vitally interested in its success.

    There is no doubt that, during the last few years—indeed, perhaps during the whole of its history—it has had a very chequered career, and that is on account of the very special conditions which prevail here. During the debate this afternoon, we have heard how different this industry is from the great American film industry. Because of our small population and the conditions prevailing in this island, we are not in a position to compete with our American film friends as effectively as we might otherwise be able to do, and therefore it is essential that the Government should consider themselves as partners in this industry. They should encourage it, help to finance it and see that standards are observed, and they should also see to it that, when a body of highly skilled people are gathered together, they have some measure of security.

    As a matter of fact, today there is no inducement whatever for a young man or a young woman to enter this industry. They do not know what kind of a career they may have. They know that, if circumstances are against them, their careers may be cut short right in middle life, when they may have entirely to re-orientate their lives and find another method of livelihood, as many people in the film industry have done during the last year or so.

    There is no doubt that, although we realise the special circumstances, we cannot sustain the conditions which prevailed in the peak year of 1947, but it ought to be possible for us to have a stable industry, which would give security to the technical people who are involved in the day-to-day operations of that industry.

    Today it is no exaggeration to say that there are thousands of highly qualified technicians languishing in idleness, and this country has to face that situation, because it is important that we should have our films on the screens of the world. We have all manner of foreign films shown on our screens, and it is only proper that the people in other countries should have opportunities of seeing the kind of films that we produce, which portray our way of life.

    This brings me to the closing down of the Crown Film Unit. I most sincerely believe that that proposal is a very grave mistake. I am sure that, in our efforts to make economies, we may make money savings at the expense of our national prestige and of the great, services which we have built up over the years. Once having disbanded this Unit, it would be almost impossible to recreate the conditions under which it grew.

    I well remember the conditions when this Unit was functioning under the auspices of the Empire Marketing Board. It did some first-class work in those years, and then, with the closing of that great experiment, the work was carried on by the Post Office Film Unit. Many well known films were produced, such as "Drifter," "Night Mail" and "North Sea," classical examples which are part and parcel of our educational system. It seems to me that it is a terrible thing that this Unit, having such a fine record behind it, should be closed summarily in this manner.

    I do not want to interrupt the hon. Gentleman if I can help it, but I do not think that the Crown Film Unit comes within the ambit of this Bill, which, as I read it, merely extends the scope of the financial assistance to other bodies engaged in the film business. I do not object to the hon. Gentleman making a reference to it, but that is not a matter which we can pursue very far here.

    I apologise, Mr. Speaker, but I really thought that I had the liberty to refer to this subject, particularly in view of the fact that almost every speaker —in fact, I think, every one—has already referred to it, almost extensively. I believe that the way in which hon. Members got over their difficulty was by saying that they were hoping that the National Film Finance Corporation would see to it that it incorporated either the work or the organisation of this Unit, which has had such a valuable record in the past.

    I will only say that I ask the hon. Member and other hon. Members who may speak to have a little regard for my susceptibilities.

    I bow to your Ruling, Mr. Speaker, and would not dream of trespassing on your good nature.

    Finally, there is one other point to which I should like to refer, and I am sure that this will be entirely in order. It concerns the question of financing the National Film Finance Corporation. According to the President of the Board of Trade, the National Film Finance Corporation has already made loans to the extent of £5,200,000, and it has received in repayments the sum of £1 million. It will be some years before a final balance-sheet can be made out.

    The money will be coming back all the time. No one knows exactly how the situation stands at the moment, but it seems to me that the addition of £2 million is very dubious in the sense that we are not certain as to the guarantees behind that sum. I think it would be a good thing if we were told how this sum is to be guaranteed. If it is to be raised in the ordinary way, there is no doubt that the banks will be very dubious about lending the money unless there are certain Government guarantees behind the loan. I should be glad if we could be told how these guarantees are to be arranged.\

    6.21 p.m.

    I am not in the least surprised, Mr. Speaker, that you were startled to find on your return to the Chair that one of the most significant facts about this debate had been that every single back bench Member on either side of the House had made a point of pressing for a reconsideration of the future of the Crown Film Unit. In deference to your Ruling, I shall cut out what I proposed to say on that subject, but I hope—indeed I am sure it will happen—the Parliamentary Secretary will bear in mind the feeling provoked in all parts of the House on that subject. The decision to abandon this Unit, and equally the decision to abandon the main organisation for the distribution of the kind of film the Crown Unit produces is generally regarded by people who know anything about it at all as a serious mistake.

    On the merits of this Bill practically everything has been said, and I will not repeat it. I wish only to emphasise one major point which has already been mentioned, the question about how this money is to be raised. I think we must have a firm Treasury guarantee. The hon. Member for Barnet (Mr. Maudling) expressed the hope that we should again attract investors to take the equity risk. Whether that is a good hope or not, I do not know, but I am absolutely certain that there is no prospect of getting private investors to take an equity risk at the present time.

    In spite of the great improvement which has taken place in the industry, largely owing to the work of the Film Corporation, I see no possibility of private investments coming back for many years to come. Therefore, I say, let us have a clear statement from the Government that the loans are to be backed by Treasury guarantee, because it is the Treasury which is going to stand the risk anyhow, as the money which will be borrowed under this Bill must rank before the money which has already been lent to the Corporation, as otherwise investors will take no part in it.

    Therefore, the Treasury, being the major creditor of the Film Finance Corporation, is already at risk, and it would be much better for them to continue to undertake the risk by giving a guarantee straightaway and so save a substantial amount of interest anyway. Subject to that qualification, I agree with everything that has been said about the Film Finance Corporation and about the necessity for its activities.

    Please do not let us think, however, that merely by supporting the Film Finance Corporation and by the sort of action we are taking this afternoon we are going to solve the problems which still lie ahead of this industry. The hon. Member for Barnet touched upon what to my mind is the most serious of all those problems, that of United States competition. The United States, with their huge home market, can look upon this country as being a place where they can get their profit. Their films can come to us at a rate which is almost invariably cheaper than the films produced here. They can be sold to the distributors and exhibitors at a much cheaper rate.

    In face of that fact, we shall find it extremely difficult, however much money we provide through the Film Finance Corporation, to get a healthy industry in this country. This may be outside the scope of the Bill, but it is related to it. I see no possibility of making this Bill worth while and getting a really healthy film industry unless we do something to restrict the imports of American films, and not only of American films, but of foreign films generally, as we must to avoid discrimination, by such means as a footage tax or in some other way. I ask the Parliamentary Secretary to consider that possibility and, indeed, to pass the suggestion to his right hon. Friend the Chancellor of the Exchequer. Such a footage tax, I think, is the best way in which we can give the British film industry a real chance to put itself on level terms. Subject to those two considerations, I give a very hearty welcome to this Bill.

    6.25 p.m.

    Reference has been made to your absence, Mr. Speaker, in the earlier part of the debate as a result of which many hon. Members ranged fairly extensively over the activities of the Crown Film Unit. I shall readily adopt a more rigorous standard of order by making what you said was permissible, a passing reference to it. All I will do is join in what has been said from both sides of the House about the Crown Film Unit and say that, in the light of what has been said, what was hitherto a shortsighted, petty meanness now becomes a flouting of the wishes of the House.

    I am very glad to find the President of the Board of Trade in his place as well as the sterner and less flexible-minded representatives of the Treasury, so that they may hear the views of the House on the subject. I hope the right hon. Gentleman will take note of the wise utterances of a non-party character which have been made from all parts of the House, and had there been a Liberal representative present, I am sure he would have joined in what has been said on this matter. My relations with the Liberal Party suggest something more than a geographical or topographical association. Of course, I have no authority to speak on behalf of that distinguished party, but, as I say, I am sure they would wish to be associated with the views which have been expressed.

    It is true, Mr. Speaker, that you would possibly have been shocked at the wide view which your predecessor in the Chair took of the Rules of Order on this matter; but you would have been more shocked to learn that until the present speaker rose there does not appear to have been one disagreeable or discordant word said in the debate. However, I intend to show that when public money is involved, something should be said.

    I understand that in 1950, I think it was— I will be perfectly fair to the present President of the Board of Trade—a similar Bill came before the House. On that occasion, I intended to come in and address a few inexpert words of criticism about the whole state of affairs in the film industry. But on that occasion, unfortunately just as I arrived, a couple of million pounds of public money was being nodded away without one voice being raised in protest. I say in all seriousness that something should be said on behalf of those back bench Members whose duty it is to watch that public money is not dispensed in this way.

    Something ought to be said to indicate that a good deal less than satisfaction is felt by us about the whole financial set-up of the film industry. We may not be interested enough in it to inquire into it in detail, but as an ordinary back bencher who knows very little about the film industry, I must say that a financial set-up which is kept in being by these repeated shots in the arm is not one that commends itself to me at all.

    I am not saying a word about the activities of the Film Finance Corporation itself. I have heard from all sides that this is an efficient and useful body which ought to be kept in being at the present time. I am not saying a word in criticism of or in dissent from the words uttered by the President of the Board of Trade in praise of the activities of the Corporation itself; but it must be wrong to have these repeated descents from the Board of Trade to the House asking for shots in the arm to the film industry—money to be distributed to private firms and entirely outside the control of this House.

    I had intended in 1950 to come to the House and warn the President of the Board of Trade that, if another Measure of this kind appeared, I would divide the House. Unfortunately, I was not able to give effect to that warning because the Bill was passed as I entered the Chamber. I should like to know from the Minister who is to reply how many more attempts we are to have at this sort of thing, and the handing over of a few million pounds of money, to the industry, over which we shall have no control. What is wanted is not these repeated shots in the arm, but a policy.

    What happens is that when the House votes these sums, it does so to perpetuate the present position and gives the Government of the day more time to think about a policy. We are buying time somewhat expensively by this method of providing a one-Clause Bill for a couple of million pounds. I object to it and I shall protest in far more serious terms —nd I am sure I shall receive the support of many of my colleagues—if any attempt is made to come back again, without any policy or pretence that there has been any policy, for more of these financial shots in the arm. It will be my duty to divide the House and to see that no miscalculation prevents me from exercising that duty.

    Part of the bad structure in the film industry at present arises from the fact that when film production started in this country it was often financed in a somewhat Bohemian way. Human artistic activity attracts people to the industry who have little notion of financial matters. What happened was that some wealthy person would put up the money to gain the artistic satisfaction so valuable to a man of culture. I understand that these gentlemen were described as "sugar daddies".

    My hon. Friend tells me that the word is "angels". I understand that "sugar daddy" is a term related to a different form of cultural activity. These "angels" were interested in the business not because they thought they would get a higher dividend from their money than if they had invested it, say, in the production of false teeth. They were interested, of course, in the indirect, aesthetic, emotional and cultural satisfaction that derives from close contact in an influential position in this industry.

    It seems to me that in the last few years, the supply of "angels" having dried up, a national "angel" has been set up with unlimited funds, and not only does the new "angel" not make a profit, but it cannot derive some of the emotional secondary satisfactions available to the original breed. That the Corporation should take on the rôle of being an "angel" without any stint in its resources seems to me deplorable and dangerous, and there ought to be control by the House.

    It is all very well to come here to talk about the necessity of sustaining the film industry and to say how useful it would be for British films to be seen all over the world. Everybody knows about that, as everybody knows about sin. It is not platitudes about films and the value of their being seen in Kenya and the Gold Coast that we want. What we want is to put the industry on its feet and not have a repetition of time-buying at the expense of the taxpayers of this country.

    It has become the habit of Ministers on this sort of occasion in connection with the film industry—and it would not be right to blame the present President of the Board of Trade more than his predecessor, for it is customary—to treat this matter with some levity, as I have indicated. They come here for permission to raise money and they do not tell us how the Corporation are going to raise it, and they do not guarantee the money. It would amount to a financial scandal if the Corporation raised this money un-guaranteed at a higher rate than if the Government guaranteed it.

    No one, of course, suggests that this Corporation is going to go bankrupt and default or that the Government would not pay up if such an event occurred. Then, of course, the market will be getting a far higher rate of interest than the security warrants. As my hon. Friend the Member for Huddersfield, East (Mr. J. P. W. Mallalieu), rightly said, the Government are at risk in any event, whether they formally agree to meet the obligations of the Corporation or not.

    I understand that one of my hon. Friends has expressed himself as rather anxious to encourage wider and more energetic exercise of the power of film censorship. I hope that will not be done except in the case of persons of tender age. I have never been able to see why public money should be spent on censoring films for adults, because it is not true that one can influence the adult mind by showing obscenities. By the hypothesis which warrants film censorship we should have to censor the film censors. If the theory on which they are brought into being is right, they must be the most depraved group of men in the land.

    Does my hon. Friend not accept the dogma that better the few should suffer than the many?

    If I were certain that the few in question really did arrive at the state of depravity which they ought to be in if their appointments are to be justified at all, I would agree with my hon. Friend, but of course the whole thing is based upon an hypothesis which is pure balderdash. The adults of this country do not need protecting from the grossest obscenities or acts of violence depicted on stage or screen. It is impossible to prove the theory that the adult mind can be depraved by hearing obscene words or seeing obscene images.

    Of course, children and impressionable people are totally different propositions. I am not suggesting for a moment that children whose minds are developing should be exposed to all sorts of adult films; but I object in principle to anyone using what is, to me, this deplorable action as an excuse for voicing the view that we should extend the activities of the Board of Film Censors. That may be a useful body, in that it provides a resting place on certain occasions—but I had better not continue in too detailed a manner because I might be unfairly criticising what I have no doubt is a useful body, provided its work is strictly limited. Apart from its being out of order, it surely must be indefensible to urge any extension of it.

    In conclusion, I beg the Minister to bear in mind that some of us are still old-fashioned enough to regard a couple of million pounds as a substantial sum —even when it is said quickly—and I do object to the House of Commons being treated in this way and being asked to give these sums from time to time to prop up a badly arranged structure—something which should have been put right years ago and which urgently needs a policy. I do urge that a policy be developed.

    Nothing that I have said is intended as a reflection upon the Film Corporation and the fine work it is doing. I hope its work will be perpetuated.

    Notice taken that 40 Members were not present:

    House counted, and 40 Members being present

    6.43 p.m.

    Of the various cuts we have been hearing about it has always seemed to me that the most serious were the cuts in capital expenditure. Since the war this country has faced a number of crises. Those crises arose inevitably out of the unbalance of world trade. We overcame them, each in turn, through an expanding economy, which was based upon a high level of capital expenditure—a level of capital expenditure which was more than double the pre-war expenditure.

    Now, for the first time, we are having a cut in capital expenditure. Capital which is required by our own industry if production is to increase is being exported. Another example of capital cuts is education. It is a process of selling the future in order to get out of an immediate difficulty—the sort of thing which happens when farmers sell their seed corn. It may save them for the day; it may save them for the morrow; but it means that a crack becomes utterly and completely inevitable.

    When we are having these capital cuts, is it justifiable to provide capital for this particular industry? When one is economising on capital in productive industry—the capital which is to produce a crop in terms of production—are we really justified in making additional capital available here? It does not really matter whether this capital is provided directly by the Government or by the City of London.

    As "The Times" observed this morning, one of the great discoveries the Conservative Party have made is that we are living in a planned economy—in a welfare state—and the Chancellor of the Exchequer has certainly made it very plain that he is conducting the finances of this country upon the basis of a planned capital expenditure. The money to be provided here comes out of the fund which is available for capital expenditure.

    Capital which is spent here is capital which cannot be spent somewhere else; it is capital which cannot be spent upon the machines which industry is lacking or on the development of marginal land —which can only be done at public expense and would increase our food production—or on the next generation, which is perhaps the most important of all our capital expenditure in terms of the future productivity of the country.

    The situation today is quite different from that envisaged when this Corporation first saw the light of day. It was created to deal with an emergency. In 1947 and 1948 there was a 75 per cent. tax on imported films, which resulted in a strike of the American film industry. Something had to be done if the whole industry was not to collapse, and £5 million was provided to meet that immediate emergency.

    In those circumstances I feel it was a very good investment. It certainly brought us some very fine films. Some of it was used directly on the production of films, and I think I am right in saying—the President of the Board of Trade will doubtless correct me if I am wrong—that it was responsible for those documentaries—the productions of the Crown Film Unit—which gave us a lead and won us the admiration of the whole world. That was a contribution, not in a financial sense, perhaps, but in an educational and artistic sense, which was possibly the best and most productive thing the film industry ever did.

    Apart from these ventures in which direct finance was involved, the investment was carried out largely through the British Lion Film Corporation and a series of really quite outstanding films were produced. We all remember "The Third Man." That was a result of this original expenditure, and I believe it won for the British film industry the highest awards in the world. The film was so outstanding that it even got the American awards.

    That was not the only film. We had "Tales of Hoffmann" which was, I think, the first effort made to use the medium of the film for the presentation of ballet. It was a great artistic success. Again, we have "The Outcast of the Islands," which is showing at present—a remarkable film from the Conrad story. There was "The Winslow Boy" and, light entertainment, "Maytime in Mayfair"—remarkable films and remarkably successful films. But, in spite of this series of winners, the money ran out; and we should be optimistic if we imagined that we could go on getting such a series of winners as that.

    With all these successes, still it was not sound in a financial sense. The money was running out, and in 1950 the Corporation had again to come to the House for additional assistance—another £1 million—and again for another £2 million. How long is this to continue? Perhaps the President, or whoever is to reply from the Board of Trade, will tell us this: do they consider that there is any prospect of this money coming back? We have written off £5 million, then another £1 million, and now another £2 million—all this money going in and in and in; and where is the return? And this at a time when capital expenditure is being cut everywhere!

    Lord Woolton asked us to cut capital expenditure in 1947. We refused to do so. We expanded capital expenditure, and the result was that we built and built and built production—and that building up of production enabled us to meet the crisis. That is the expansionist method of meeting crises. Now we have the Tory Party, with its traditional idea of meeting crises not by expanding but by cutting back. The previously mounting production figures are beginning to fall away, and they will fall away even more in the future because the Government are cutting back capital expenditure. Yet here, capital which is so urgently needed, and which everywhere else is being cut back, is being provided for a purpose which continuously seems to have been unproductive.

    We had the Eady scheme which, if hon. Members have forgotten, was a means of trying to provide the finance for producing films from the people who watch films. That is to say, it was a levy on the tickets bought by the film-going public, and the levy went back to the producer in order to obtain production. That seemed a reasonable, co-operative sort of way of solving the problem.

    Will the Minister tell us whether that scheme is working and why that sort of method is not followed, because it appears to be a method of getting money direct from what I think must be described as a luxury level of expenditure, even though it is the luxury of many poor people. It is, nevertheless, a collection of spending money for this capital purpose. What has happened to the Eady scheme? How is it getting on?

    I believe that the proposal we have before us tonight did not originate with the present occupant of the Board of Trade. It originated, I believe, with his predecessor. But that was in an atmosphere of expansion, when we had an expansionist Labour Government. How can hon. Gentlemen opposite regard this Bill as consistent with their policy? How do they relate this provision of money to the fact that in other, more vital matters expenditure appears to be cut back?

    It is a curious thing that, when we have a Conservative Government in power, there is no money for the people who need it. There is no money for the education of the poorest children. Expenditure on those things is to be cut back. But there is money for the rich; there is money for the film producers and for the brewers. Expenditure can be afforded in that direction, whereas what appear to us to be greater interests pass and are forgotten.

    Next, about the Treasury guarantee. Surely this is the greatest absurdity and the greatest hypocrisy. Everybody knows that the Government have to stand by this money because of the nature of the structure of the Corporation. The Government are, in practice and in fact, guarantors of the Bill, but if they hold back their formal guarantee there can be only one result—somebody will get more interest. Can we have an assurance on this point? We have these little side turns. First it is on public houses in the new towns, and now this Bill—all these little side bits going to the sort of people who produce the Woolton millions. How long are we to have that sort of thing? Surely this little interest game has gone far enough.

    Finally, as nobody has mentioned this before, I feel that something should be said in tribute to the work of Lord Reith on this Corporation. He did a remarkable job of public service. Indeed, he has done many remarkable jobs of public service and I feel we should express some gratitude to him for what he has done in this matter.

    6.58 p.m.

    We have heard an interesting debate in which, until the speech of the hon. and learned Member for Northampton (Mr. Paget), there had been uniform support for the Bill. I am sorry that the hon. and learned Member was not able to be present when the opening speech in the debate was made by my right hon. Friend, nor when the first speech was made from the Front Bench opposite. Had he heard' those two speeches, I think he would have heard the answer to some, at any rate, of the points which he raised. Nevertheless, the House will not wish me to repeat the matters into which my right hon. Friend went, but will rather expect me to attempt to answer some of the questions which have arisen in the course of the debate.

    I do not wish to weary the House, especially since there appears to be virtual unanimity in the desire to give the Bill a Second Reading. The right hon. Member for Colne Valley (Mr. Glenvil Hall) asked various questions about the Bill itself. I sympathise a good deal with one of his questions, because exactly the same question occurred to me when I first read the draft. What is the significance and importance of Clause 1 (2)? The necessity for that arises as a result of paragraph 8 of the Schedule to the Act of 1949. That provides for what is to happen if, at any time after the expiration of five years from 9th March, 1949, the Treasury decides to dissolve the Corporation. There is then provision for the transfer of assets and liabilities, and there would be a contingent liability to be accepted by the Crown.

    This is a legally necessary subsection to make it clear that the liabilities that would be dealt with under the provisions of that paragraph of that Schedule would include any sum outstanding of the moneys with which we are now concerned in this Bill. The right hon. Gentleman asked me whether such a sum would rank in front of or behind such sum as might be outstanding of the other £6 million. The answer is that the whole of the liability would rank pari passu.

    I would remind the House that what this Bill provides for is borrowing from persons other than the Board of Trade with the consent of the Board of Trade and the Treasury. It does not provide for raising any equity capital. It is loans with which the Bill deals; but it is loans from people other than the Board of Trade. It is not Government money that they are here encouraged or entitled to borrow; but, as my right hon. Friend pointed out, that does not exclude the possibility of a Government guarantee. There is no mention of a guarantee in the terms of the Bill itself, because that is fully provided for, as the right hon. Gentleman will know from his days at the Treasury, under section 2 of the Borrowing (Control and Guarantees) Act, 1946.

    I think that the right hon. Gentleman and other hon. Members have raised the question whether this money could be raised from other sources without a Government guarantee, or whether a Government guarantee was necessary or desirable. In the view of the Government, it would quite clearly be preferable to raise it without a Government guarantee if that could be done, because it is the desire of this Government—and here, I think, we agree with what was the desire of the preceding Government—that this industry should not permanently rely on moneys from this Corporation but should eventually become self-supporting. Therefore, if it proved practicable to raise money without a Government guarantee, in the view of the Government that would be preferable.

    A point arises out of what the hon. and learned Gentleman has just said that alarms me a great deal. Will he, if he is now authorising the borrowing of money from private sources without a guarantee, make it plain to the lenders that the Government are not in fact going to pay this money if default is made?—because that would be making the worst of both worlds. If that position were taken up, I suggest to him that then they would not get a farthing from private sources—unless the Government were behind the loan.

    People who lend money are quite capable of ascertaining for themselves the legal position. They can examine and will, no doubt, examine these Measures passed by Parliament. But if the hon. Gentleman is asking me whether the Government have the same liability on a loan, whether or not they give a guarantee, the answer, as he well knows, because he belongs to the legal profession, is "No."

    The right hon. Gentleman opposite and many others have raised a point about the life of this Corporation. If the right hon. Gentleman will refer to the paragraph of the Schedule which I have already mentioned, he will see that there is, of course, nothing compulsory about the winding-up of the Corporation at the expiration of that period. The loans have to be made within the stated period, but whether or not the Corporation is dissolved is, under the Act passed by the Government of which the right hon. Gentleman was a distinguished member, a matter to be decided by the Treasury.

    I am sorry to interrupt, and I am grateful to the hon. and learned Gentleman for giving way. I should like to make this point. The whole purpose of the Act is to lend money over a period of five years. Once the five years have elapsed, namely, at 9th March, 1954, the Act, in a sense, becomes useless. Its only purpose and usefulness thereafter is to collect moneys that may be outstanding. Well, that is a very useful function for any corporation to perform, but the real function of the Corporation, and its right to exist, is centred in the fact that it carries on business either as a bank or as a company or as an organisation advancing money for the making of films.

    I am afraid I am speaking at greater length than I expected in this intervention, but the point we are trying to make on this side of the House is that we all want this to go on; and we were urging the Government to come to some decision well before March, 1954, in order that the Corporation and the industry and everyone concerned should know where they are.

    I am obliged to the right hon. Gentleman, who made a useful speech, and certainly need not apologise for any intervention to clarify any matter. I agree with him about looking ahead. Looking ahead is very much needed in this industry. There is, however, no need now to provide for any amendment to this paragraph in the principal Act or to go beyond what we are now doing in this Bill. But in so far as the right hon. Gentleman is making a plea for looking ahead, I agree.

    The right hon. Gentleman asked whether all this money need be raised at once. Certainly not. There is no need for that at all. This sum is a permitted maximum. What will actually be required, and when it will be required, will depend on many factors—among other things, on how the revised Eady scheme works out. It may be that things will work out in such a way that the whole of this sum will not need to be borrowed at all, but it is because we want to enable the Corporation to plan ahead that we have come to the conclusion—which is the same conclusion as that reached by our predecessors in that matter—that permission to borrow this additional sum—the ability to borrow it —is advisable and necessary.

    The right hon. Gentleman was the first of many to mention the Crown Film Unit. It was when you, Mr. Speaker, were not in the Chair. You have already pointed out, as it would have been pointed out in any event if a Minister had gone outside the scope of the Bill, that that is really quite outside this Bill. Nor, indeed, as the right hon. Gentleman with his Ministerial experience knows, is that particular matter one for the Board of Trade at all. It is both outside the Bill and outside the function of my Department.

    My hon. Friend the Member for Southgate (Mr. Baxter), who welcomed the Bill and welcomed the great progress that has been made in this industry from the days of wild extravagance, made, as he always does, an entertaining speech. When my right hon. Friend mentioned the book "Nobody Ordered Wolves," I heard a whisper from the right hon. Member for Colne Valley (Mr. Glenvil Hall) that there was a lot of truth in it. I am bound to say that I received the same advice many years ago from a professional friend who had been engaged for some days in some film litigation, and who told me that, if I wanted to understand the industry as it then was, the quickest way to learn was to read "Nobody Ordered Wolves."

    I welcomed what was said by hon. Members in all quarters about the Corporation, which we are empowering to borrow a further £2 million by this Bill, having done a great deal in reducing waste and remedying those extravagant ideas. Since competition with other countries has been mentioned, I would say, although I am not very expert or a frequent filmgoer, that I think that the best British films are as good as any that I have had the good fortune to see; and the best are not necessarily the most lavish.

    The hon. Member for Lichfield and Tamworth (Mr. Snow) wanted us to give guidance to the Corporation on the sort of film that they should encourage. I am sure that we ought not to do that. Nor do I think that the Corporation should do very much in guiding the producers in that way. Producers should have a very great measure of liberty, though I think that the Corporation has been able and will continue to be able to improve business methods and finance. I do not believe that either the Board of Trade or this Corporation would be the proper guide to say what sort of film should be produced to satisfy the public taste.

    I was a little astonished when the hon. Member for Lichfield and Tamworth dealt with the subject of censorship, and I must say I thought he was lucky that his hon. Friend the Member for Devon-port (Mr. Foot) was not in the House. He would certainly have quoted "Areopagitica"—as, indeed, I am tempted to quote it now. I think perhaps, on second thoughts, I had better not deal with that subject at all, because it is wholly outside the present Measure.

    Perhaps I am a little out of order in saying this, but I did get a whisper that the Minister took that view of my remarks. In case I did not make myself clear, I should like to do so now. All I was asking was that the code issued by the British Board of Film Censors should be publicised and should be issued, not only to producers, but to local licensing authorities, so that the electors could judge whether the code, which is a very good code, was being properly enforced.

    I note what the hon. Gentleman has said. I always listen to him with interest because we share a passion for Georgian architecture—which may perhaps not be very relevant at this moment. It is about as relevant as censorship to the work of the Board of Trade and to this Bill.

    My hon. Friend the Member for Barnet (Mr. Maudling) had something to say in favour of the chief change in the method of raising money in this Measure as contrasted with previous Measures, namely, seeking to get private finance interested. He was, however, in error if he thought that there is anything to do with equity capital in this Bill.

    A question about how the Eady plan was working was put to me by the right hon. Member for Colne Valley and others, including the hon. and learned Member for Northampton (Mr. Paget). The revised Eady plan has only been in operation since 5th August of last year, and it is perhaps a little early to be very definite. The best estimate we can make today is that we believe it will bring in for the producers between £3 million and £3½ million in a full year.

    The hon. Lady the Member for Flint, East (Mrs. White) asked me to say a word or two about the group system. The description of the group system is available in a public document, namely, in Appendix C to the Report of the Corporation for the year ending 31st March. 1951, but I can give a few figures of the number of films in each group that have so far been helped by the Corporation: nine films in Group 1, four films in Group 2 and five films in Group 3. This group system has not, I think, been in operation for a sufficient time to make any final assessment on how beneficial it is, but no doubt the House will read with interest the next Report of the Corporation when it comes out.

    The hon. Lady also asked me about the loan to British Lion. The Corporation started off with this commitment of £3 million, half of the hitherto authorised total of loans, in respect of British Lion. That debt of £3 million has not been repaid; nor has it been added to. The indebtedness of British Lion stands today at £3 million.

    Discussions are proceeding between the Corporation and British Lion to see what is the best method of securing such repayment as may be possible. Those discussions are now proceeding. My hon. Friend the Member for Cheadle (Mr. Shepherd) rightly drew attention, as indeed did the right hon. Gentleman and others, to the great importance of continuity and ability to plan ahead. That was the case for the principal Act, for the amending Act and for this Bill. That is the object of these measures. I think that I have dealt incidentally with the point raised by the hon. Member for Greenwich (Mr. Reeves), who spoke about borrowing equity capital. I have pointed out that this Bill deals only with loans.

    The hon. Member for Huddersfield, East (Mr. J. P. W. Mallalieu) also asked a question about finance, and he raised some of the points on borrowing with or without a Treasury guarantee. I think that I have answered him incidentally in dealing with the point raised by the right hon. Member for Colne Valley.

    The hon. and learned Gentleman certainly referred to it, but I am not clear that he has answered it. It seems to me that it will be quite impossible to borrow this money without a Treasury guarantee. It really will not work.

    I should like the hon. Member to consider whether we are not right in thinking that, if this Corporation could raise the money without a guarantee, that would be better in the permanent interests of the industry. I am sure the hon. Member will not expect me to express a view which I do not hold, namely, that it will necessarily be impossible for this Corporation to borrow money without a Treasury guarantee. My right hon. Friend and I have pointed out that it will be possible for the Treasury to give a guarantee, if it is thought right, under the powers of the 1946 Statute, and my right hon. Friend does not exclude that possibility. But it is my conviction that we should not be serving the interests which we all wish to serve in this matter if we assumed, in advance, that borrowing would be impossible without a guarantee.

    I should have thought that that was a fair assumption in the next few years. For the rest, I can understand the hon. and learned Gentleman's argument if it is suggested that the industry itself was going to borrow the money, but it is not the industry which is going to borrow it. It is what amounts to a Treasury Corporation. The Treasury is behind it. Let us say flatly that it is behind it.

    I agree that there is an interesting argument on this point, though, perhaps, it is not entirely a Second Reading point. The view which Her Majesty's Government hold is that it is in the interests of the industry that we should start what has already been in contemplation by every Government which has done anything for this industry, namely, progress to the state where the industry can be self-supporting and does not have to seek Government help. I believe, therefore, that this difference between this Measure and the previous Acts is one for which an argument can be put up, though I appreciate that there can be differences of opinion on the point.

    The hon. Member for Cheetham (Mr. N. H. Lever) showed a rather refreshing concern for public money. He was not quite right in saying that this Bill provided for the expenditure of £2 million of public money. Nevertheless, I was so delighted with his concern for public money, which we do not always find in the party opposite, that I welcome that attitude, and the Government note that, if it is ever necessary, in the opinion of the Government, again to introduce such a Bill, he has given notice that he will divide the House against it.

    The hon. and learned Member for Northampton, who alone spoke in opposition to the Bill, asked one question. Incidentally, he credited this Corporation with the high quality films which he said were produced by the Crown Film Unit. This Corporation has never dealt with the films of the Crown Film Unit at all. He then asked whether the Government expect to get back the moneys dealt with in this Bill and in the previous Acts. The answer is that we certainly expect to get some of it back—indeed, a large part of it—though I certainly shall not commit myself to the view that we shall get it all back. I am quite certain that our chances of getting it back will be much greater if this Measure is passed, than if this Measure had not been introduced.

    Whatever might have been done had we started afresh without any previous legislation, I believe, having regard to the previous history, that this Measure is right now even on grounds of Government finance. That is our belief. I think I have dealt with the questions raised by various hon. Members, with the exception of those which were clearly beyond the scope of this Bill and in respect of which, if I were to reply to them, I should be out of order. I ask the House to give this Bill a unanimous Second Reading.

    7.26 p.m.

    I apologise to the President of the Board of Trade for being unable to be present this afternoon when he opened this debate owing to duties elsewhere. However, I have just read a considerable Teport on the tape machine in another part of the House referring to the Crown Film Unit and I felt that it was perhaps my duty to come into the Chamber to see how that subject was faring.

    I have already ruled that the Crown Film Unit does not come within the scope of this Bill. The purpose of this Bill is to provide finance for a corporation which does not control the Crown Film Unit, and I have already checked hon. Members from making more than a passing reference to the Crown Film Unit.

    That is why I was rather mystified, when I heard your Ruling earlier as I sat listening to this debate, Mr. Speaker, for I was drawn to the Chamber when I read extracts from Members' speeches on the tape machine referring to the Crown Film Unit, and I must say that I am in somewhat of a predicament in finding that your Ruling conflicts with history which is recorded on the tape machine elsewhere. But I have no intention of doing other than making a passing reference to the Crown Film Unit and perhaps using it as an illustration of one or two points which I will make later in my speech.

    Before I attempt to trespass in any way upon your generosity, Mr. Speaker, I want first of all to deal with the question of finance to which this Bill relates. It is well known that the original Measure was introduced by the Labour Government to deal with a problem in the film industry, and I wish to reinforce what has been said by some of my hon. Friends about the method of finance adopted in this new Measure.

    Why is it that Her Majesty's Government are departing from the precedent laid down in the Measure of the previous Government? Having listened to the film industry's case, and having appreciated that in the present situation they needed help, we thought it right to make that help available to them as cheaply as possible through the Treasury. Nothing that the Parliamentary Secretary has said has done anything to convince me other than that was the right method to pursue. I should like an assurance from him, and it ought to be made clear during the Committee stage, that if the Government are going to depart from what I regard as the best principle, namely making this money available through the Treasury, then at least the Government ought to give a guarantee on this £2 million overdraft in order that the money can be obtained as cheaply as possible.

    Why is it that the President of the Board of Trade refuses to give the assurance that there will be a Government guarantee, because he knows, as well as I and all other hon. Members know, that that will make a considerable difference to the terms upon which this money can be borrowed? Perhaps the Parliamentary Secretary will say now whether or not he agrees with my contention that without some form of Government guarantee this £2 million will be borrowed at a higher rate of interest than it could be borrowed if it had that guarantee. Since he does not care to make any intervention in response to my invitation, I can only conclude that he has not followed my argument.

    I did not get up to reply to this debate until no one got up on the opposite side of the House. I then endeavoured to deal, I hope with courtesy, with such questions as had then been asked. I have now exhausted my right to speak, and so has my right hon. Friend, and neither of us intends to ask the House to give him leave to speak again.

    In response to that, I can only say that I was in the House well before the hon. Gentleman got up to reply to this debate. It was as a result of a conversation with a right hon. Friend on the Front Bench, who told me that it might be appropriate for the Parliamentary Secretary to get up to deal with some of the points made in the debate and there was no reason at all, as I well understand, why I should not continue the debate if I was not altogether satisfied with the reply we had received, that I am dealing with the point upon what I think all my hon. Friends on this side of the House are not at all satisfied.

    Why is it—and I do not mind whether the hon. Gentleman replies now or whether his right hon. Friend seeks the indulgence of the House to reply, because these matters go down on the record and the public can judge for themselves—the present Government have departed from the principle laid down by the previous Government that this money should be made available to the film industry as cheaply as possible through the Treasury? Why is it that one of their first acts on coming into power is to throw back to private enterprise the opportunities for such capital investments as this?

    I say, yet again, that the Parliamentary Secretary knows, as well as I do, that if he is throwing it back to private enterprise without any Government assistance or guarantee, the £2 million will cost more to borrow than it would have done had it been made available through the same channels as were operated by the previous Government, so I hope that they will change their mind. But, I must admit, when looking at the faces of hon. Members opposite, there is not the slightest prospect of their altering their minds on this issue, because they are committed to allowing private enterprise to find this money at a high rate of interest, just as they were committed yesterday to handing back their public houses to private enterprise, and, at the Election, to handing housing back to private enterprise.

    Nevertheless, I think that we on this side of the House have a duty to keep reiterating our demand, even if it is not appreciated by hon. Members opposite, that when we see a necessary operation, as we all agree this is, which should be carried out, then it should be carried out properly and cheaply through Government funds being nude available. We hope against hope that during the Committee stage the Government may be won over to making a somewhat clearer pronouncement of their attitude in regard to how this £2 million is to be raised.

    I am aware that it would be out of order to deal in any detail with the position of the Crown Film Unit, but I think I may be allowed to express in passing my astonishment at the fact that the Government are prepared to allow £2 million to be raised for the Film Corporation to be used generally by the film industry and yet are not prepared to find £250,000 a year to keep the Crown Film Unit going, because I feel—and I think that my feeling is shared by most hon. Members in this House and certainly by the public at large—that £250,000 a year invested in the Crown Film Unit produces a far bigger return to the country than £2 million made available for general dispersal throughout the private him industry as a whole.

    I think that the Government are making a colossal mistake in trying to disband the arrangement made for the films of the Crown Film Unit to be shown to specialised audiences throughout the country Only the other day I had a letter from a business man who is a friend of mine—and in case hon. Members opposite think that he is a Socialist I will, without giving his name, mention that he stood as Liberal candidate at the two previous Elections— who expressed his very real regret that it would no longer be possible to receive films on time and motion study and matters of that sort which the workers at his factory had certainly enjoyed, and from which they had benefited by the Crown Film Units taking these films to his factory.

    It is deplorable that even at this difficult time in the affairs of the nation, the Government should be willing to allow all the good work of the Crown Film Unit and the Central Office of Information to be swept away for the sake of £250,000 a year, when they are bringing this Bill forward and asking for another £2 million to be made available to the private film industry. Although I realise that it is absolutely hopeless, I go out of my way at this early hour to plead with the Financial Secretary, who is sitting opposite and looking very jovial, to reconsider this matter. How can he look so happy when one of the first acts in which he has participated has been to destroy this very valuable Crown Film Unit, and when he must, by virtue of his office, know some of the dark secrets to be given to this House on 11th March. It is significant of his joviality that, having carried out or prepared these dark deeds, he should have the affrontery to come down to this House and still look happy about them.

    I make one final plea to the Government. We all agree with the necessity for this Measure, but we think that the £2 million ought to be provided through the same channels as were made available for the funds which were previously provided; and, above all, I ask the President of the Board of Trade to speak with his colleagues in the Cabinet and to stress upon them, as has been done by so many hon. Members here today, that this is a bad move for the country as a whole. It is hitting at the information and instruction services that can be given to specialised and to general audiences in the country if they allow the Crown Film Unit to pass away merely for the sake of £250,000. I would like to ask him, on some other occasion, how much capital equipment is being discarded.

    The hon. Member's references to this matter do not justify the use of the adjective "passing."

    I accept your rebuke, Mr. Speaker. I started off with a few passing references, but this subject is so near to my heart and, in my view, so important that I perhaps got carried away and delved more deeply into it than I should have done. I hope as a result of my remarks, together with those of my hon. Friends, we have succeeded in penetrating the jovial exteriors of the President of the Board of Trade and the Financial Secretary, so that they will think deeply about this matter and pass on their observations to their more important Cabinet colleagues, so that we may hope that before the Budget passes through its final stages the country will have the great joy of learning that the Crown Film Unit has been saved from the spoilations of the new Government.

    7.40 p.m.

    I just want to answer the speech of the hon. Member for Wandsworth, Central (Mr. Adams). I have heard many speeches from hon. Members opposite but I have seldom heard anything which has so little relation to the facts.

    There has been no return whatsoever upon the £6 million spent by the late Government. The Government were charged with the duty of seeing that the money spent out of the £6 million was returnable on every single firm venture which was embarked upon. However, they failed to obtain any return whatsoever, and the whole of the £6 million has gone. What we are trying to do in the Bill is to remedy the situation left to us in which a great deal of public money has been wasted. There is no hope of the return of that money. Now we want to put the film industry on a proper commercial basis by ensuring that when it wants to borrow money it shall do so at proper terms from people who will expect a return.

    The trouble is that during the last six years hon. Members opposite wasted public money and left nothing to show for it. No hon. Member opposite, particularly if he reads the Reports of the Public Accounts Committee, can say that there have been any returns on the £6 million or any chance whatsoever of a return. Now we have the sensible situation that such money shall be borrowed and shall be repaid. We have at last got away from the sort of thing that happened so often during the lifetime of the Socialist Government, when money was borrowed on some pretext or another and was never repaid.

    I hope the House will give the Bill a most warm Second Reading, because it at last shows an element of honesty in what has heretofore been merely a matter of borrowing money without there being any intention that it should be repaid.

    Question put, and agreed to.

    Bill accordingly read a Second time.

    Committed to a Committee of the whole House.—[ Mr. Oakshott.]

    Committee Tomorrow.

    Cinematograph Film Production (Special Loans) Money

    Considered in Committee of the whole House under Standing Order No. 84 (Money Committees).—[ Queen's Recommendation signified.]

    [Colonel Sir CHARLES MACANDREW in the Chair]


    That, for the purposes of any Act of the present Session to empower the National Film Finance Corporation to borrow otherwise than from the Board of Trade, it is expedient to authorise the payment out of moneys provided by Parliament of any increase attributable to the said Act in the sums which, under paragraph 8 of the Schedule to the Cinematograph Film Producton (Special Loans) Act, 1949, are payable out of moneys so provided.—[Mr. P. Thorneycroft.]

    Resolution to be reported Tomorrow.

    Industrial And Provident Societies (No 1) Bill

    As amended ( in the Standing Committee) considered; reported, without Amendment; read the Third time, and passed.

    Diplomatic Immunities (Commonwealth Countries And Republic Of Ireland) Bill

    Considered in Committee.

    [Colonel Sir CHARLES MACANDREW in the Chair]

    Clause 1—(Immunities Of Representatives Of Commonwealth Countries And Republic Of Ireland And Certain Other Persons)

    7.45 p.m.

    I beg to move, in page two, line 13, to leave out from "envoy" to the end of line 17.

    The Bill deals with the conferring of certain immunities upon certain representatives in the United Kingdom of Commonwealth countries and the Republic of Ireland. Clause 1 extends these immunities to certain members of staffs in addition to high commissioners and agents-general.

    The reason for the Amendment is partly because of some remarks made by the hon. Member for Enfield, East (Mr. Ernest Davies), during the Second Reading debate. He was the Under-Secretary of State for Foreign Affairs in the last Socialist Government, and can therefore be expected to know something about this subject. I wish to quote what he said about the domestic staffs aspect of the matter. He made this statement
    "…there has been a regrettable increase in the number classed as on the domestic staffs of the heads of missions. Figures were given to me in reply to a Question today to the effect that between 1945 and the present time the numbers of those classified by foreign missions in London as being domestics have risen from 537 to 861. I sometimes have a slight suspicion that some of these people might be wrongly classified with the purpose of obtaining that diplomatic immunity."—[OFFICIAL REPORT, 5th December, 1951; Vol 494, c. 2462.]
    I also spoke on Second Reading and referred to the same point.

    It seems to be that this is of some importance because some of the figures quoted by the hon. Member referred to foreign missions, not to High Commissioners and representatives of our Dominions. If under this Clause we are to grant additional immunities, it seems to be extending diplomatic immunities far more than is reasonable. I am glad to have the support ab initio of the hon. Member by reason of his statement on Second Reading.

    We have had the Report on Diplomatic Immunity—Command Paper No. 8460—from an Inter-Departmental Committee under the chairmanship of Lord Justice Somervell who, in my previous experience in the House, was a very popular Attorney-General. The Report contains several references to the domestic servant. There are three main points. The first is the question of extending diplomatic immunities to such a large number of domestic servants. The second is the question of giving diplomatic immunities to the local nationals who are in the service of the heads of missions, whether they be foreign or Dominion. On that, the summary of conclusions in the Report says:
    "…the Foreign Secretary should in future refuse to accept any local national as holding any position in a foreign embassy in this country.…"
    I am sorry to say that for that purpose Dominion countries are classed as foreign—
    "including the position of a 'domestic servant,' except on the condition such person shall not enjoy a personal diplomatic immunity."
    The third point is the question of reciprocity. If the Committee will read this Report, they will find that in paragraph 10 on page 6 it is clearly shown that in some cases there is no reciprocity with some countries. If I may read one sentence:
    "The immunity was recognised as applying and under our laws applies to Ambassadors and their servants, including domestic servants. There are a certain number of States, including the U.S.S.R. which do not recognise the immunity of servants of any nationality."
    It seems to me, therefor, that we ought to do something in the Bill on the lines of only giving diplomatic immunity in those cases where it is given to our people.

    This is a very complicated matter both, legally and technically, and the Report does refer to how Britain came to give diplomatic immunity to the domestic servants of the heads of missions. The incident which gave rise to it occurred in the early 18th century when the Czar of Russia was visiting Queen Anne, and his carriage was upset by the mob, so I understand.

    I think it was the Czar's ambassador and not the Czar in person.

    I agree. The Czar's ambassador was in his carriage and the carriage was upset by the mob. Both the Czar and the ambassador were furious. The result was that under the Diplomatic Privileges Act, 1708, for the first time Britain gave certain diplomatic immunity to servants of representatives of foreign countries.

    On the merits of the case, diplomatic immunity is not the same as diplomatic privilege, but I said on Second Reading that diplomatic immunity for domestic servants conferred immunity in two main ways. I was not contradicted and I hope I was right. The Acts are there to be studied. Incidentally, I should like to make a plea for some form of consolidation so that we might be able to understand these Acts more clearly.

    There is freedom from taxes. I am not talking now about Customs and Excise, but internal taxes. Domestic servants who may come within our tax ranges are covered under this subsection, and it seems to me very unfair to the overburdened British taxpayer that such a large number of people should be granted exemption from taxes simply because they happen to be the domestic servants of a High Commissioner, ambassador or agent-general.

    Then there is the question of freedom from legal suing. I mentioned on Second Reading a supposed case where the chauffeur of a High Commissioner had an accident:
    "Supposing the chauffeur of one of these consuls or high commissioners—it does not matter whether he is on duty or not—knocks down somebody. He need not have a driving licence; he need not have passed a driving test, because being free from legal suit, he cannot be sued for not having a driving licence nor can he be sued for having driven without having passed a driving test, and he cannot be sued for the consequences of any damage he does to a British citizen in the streets."—[OFFICIAL REPORT, 5th December, 1951; Vol. 494, c. 2473.]
    The Somervell Committee to a certain extent deals with this point. It says that by some agreement which has been made with the various foreign missions in London, all drivers of cars now have to have, in effect, insurance against third parties. But that is not good enough, because although third party risk itself covers a part of the element of risk to a British citizen, it does not cover all, and it seems to me that the British citizen ought to be covered entirely against risk as with any British driver of any British vehicle on any British street.

    I know there is in normal practice an arrangement by which diplomatic immunity is waived, and I am thankful to see from the Report that that normally is done, but I should like to see it in much more legal form than that. Arrangements should be quite clearly made whereby people should not be allowed to claim diplomatic immunity if an accident is caused to British citizens. There have been cases where diplomatic immunity has not been waived. I need not recite them, but the Tass Agency was one. This is one of those things where we are making such vast extension to the immunities and privileges of people from abroad who are in this country, that we should be very chary of extending it without proper safeguards.

    I hope, therefore, that my hon. Friend will not only do his best to meet the point that I have made, but will give me some indication of what he intends to do about the recommendations in this respect of the Inter-Departmental Committee presided over by Lord Justice Somervell.

    8.0 p.m.

    The hon. and gallant Member for Angus, South (Captain Duncan), has referred to some remarks I made in my Second Reading speech. He mentioned that I drew attention to the large increase in the domestic staff of the foreign missions in London, and to the fact that I expressed the view that I had suspicions that this large increase might not be fully warranted.

    It was because I had in mind the very committee which has since reported, that while I was at the Foreign Office I came to the conclusion that it would be advisable if some action could be taken as regards the domestic staff. In the Bill now before us some action is proposed, and it carries out, in fact, a recommendation made in the Somervell Report. Because that recommendation is being implemented here, it would be unfortunate if the Amendment were accepted by the Under-Secretary of State who is handling this Bill.

    It would be most unfortunate if the domestic staffs were not included and if, being included in the Bill as they are, it were proposed that they should only receive immunity for their official acts, and therefore strictly limited immunity. It would be unfortunate if they were not included because it would put Commonwealth missions in a worse position than foreign missions, and that is something which the Bill itself aims to remedy.

    This Amendment would cover that point. The principle of the Amendment, if accepted, would put foreign missions on a level with the English missions.

    I am not certain that it would be the case. If this Amendment were accepted it would mean that the domestic staff of a Commonwealth mission would not be granted any immunity whatsoever, not even for their official acts. As it happens, it seems certain, as the Somervell Report points out, that such immunity for the domestic staffs is required by international law, and as the report indicates in paragraph 9, in the passage which the hon. and gallant Gentleman quoted, it is made clear that under the Act it is required that this immunity should be given to domestics or domestic servants.

    I want to know from the Under-Secretary whether it is intended that this Report should be carried out as regards foreign missions, and if action is to be taken in the near future; because that seems desirable, when we are dealing with a Bill aimed at bringing the Commonwealth missions into line with the foreign missions. In this case we are going a little further, inasmuch as the immunity of the domestic staffs is being restricted as regards local nationals, and it would be most unfortunate if the foreign domestic staffs of the chiefs of missions were not brought into line in this particular as soon as possible.

    So I hope the Under-Secretary will indicate that it is proposed to proceed with that legislation, if legislation is required, which I rather doubt. But, if it is proposed to take the necessary action I hope the hon. Gentleman will indicate that there will be similarity in the immunity which is granted to the two missions.

    One other reason I would put forward for rejecting this Amendment is because of the effect it would have on our embassies abroad if reciprocity were entered into by Commonwealth countries in this case or by foreign countries in the case of foreign missions. After all, we employ a large number of domestics, including foreign local nationals overseas in our foreign missions, and it would be highly undesirable if they did not receive immunity at least in all cases for their official acts. It would put us in a difficult position and it is necessary that immunity should be given to all our staffs, including the local nationals whom we employ.

    So, although I referred to this matter in my Second Reading speech, it was with a view to having this limitation put on and certainly not with a view to having that immunity taken away completely from the domestic staffs.

    The Amendment put forward by my hon. and gallant Friend is founded, as he says, on two main points, and I hope to be able to satisfy him on both.

    The first was regarding the position of the servants of the local nationality under the report on diplomatic immunity which was made by an Inter-departmental Committee under the Chairmanship of Lord Justice Somervell. If my hon. and gallant Friend looks at page 7 of that report, he will see that the Committee at para. 12 says that—
    "Apart from local nationals employed as domestic servants our general conclusion is that the immunities granted here do not exceed those required or probably required by International Law."
    Then if he looks at the Bill he will see that the proviso restricts the diplomatic immunity in the case of the domestic staff to nationals who are not citizens of the United Kingdom except where they are dual nationals, when they get the diplomatic immunity. The reason why local nationality servants who are also dual nationals were included in the scheme of diplomatic immunity is that in the case of the Commonwealth countries it is very likely that, say. Australia or New Zealand citizens would also have a dual citizenship because their father might have been born in the United Kingdom. Therefore it was felt that it was desirable to include within the scope of diplomatic immunity those domestic servants who had the local citizenship in addition to that of the Commonwealth countries.

    I hope my hon. and gallant Friend will be satisfied that the report of the committee with regard to the persons covered in the category of domestic servants has been carried out by this Bill, and that local citizens have been included in the scope of diplomatic immunity.

    Then my hon. and gallant Friend raised a point with regard to paragraph 10 of the report of the Inter-Departmental Committee. He pointed out that a certain number of States do not recognise the immunity of servants of any nationality. If he will look at the Bill, I hope he will be satisfied with the provision in Clause 2 (2), which allows Her Majesty by Order in Council to modify or remove any immunity where the corresponding country does not accord a like immunity.

    Of course it does not mean that if one of the Commonwealth countries did not accord immunity to the servants of the United Kingdom High Commissioner in that country we would necessarily go through the motions of bringing that Order in Council. That would be a matter for decision at the time. It might be that, as a result of representations, the Commonwealth country would change its mind. But we have the power, and the hon. and gallant Member will appreciate that this provision about the Order in Council is covered by Clause 2 (2) and is subject to the affirmative procedure under Clause 3 (2).

    May I ask one question on that? Is it the intention of Her Majesty's Government to apply that principle to foreign diplomatic missions as well?

    My hon. and gallant Friend will appreciate that it is not within the province of the Department of my noble Friend. All I can say is that the matter is under consideration. That is a time-honoured phrase used by Governments and sometimes it is active or earnest or immediate consideration. However, the report is being studied and a decision will be taken about that. At any rate, on this point the recommendation of the Committee on Diplomatic Immunity has been carried out with the immunity which is sought to be given by the Bill to the representatives of Commonwealth countries.

    My hon. and gallant Friend, quoting from the speech of the hon. Member for Enfield, East (Mr. Ernest Davies), expressed apprehension about the growing number of servants and his doubt as to whether all the servants of the foreign countries were carrying out domestic tasks on behalf of their missions. All I can say is that the situation is always carefully watched by the Foreign Office and that the fact that there might be abuse would not be a reason for refusing diplomatic immunity to servants. The best way to deal with this is by ensuring that no claims which are made by any foreign mission—I have no reason to suppose that this is the case—for putting servants on what is called the diplomatic list are improperly based.

    Both points, therefore, are covered by the Bill. First, with regard to the position of servants, the local citizens, where they are not dual citizens, are excluded; and second, the Bill gives power to the Government to modify the immunity, or to remove it entirely, where reciprocity is not accorded. I hope, therefore, that my hon. and gallant Friend will be disposed to withdraw his Amendment.

    The last point raised by my hon. and gallant Friend—that of tax privileges—is outside the scope of the Bill. In so far as I may speak on a matter which is outside my Department, I believe that domestic servants do not have tax privileges. This is a Bill dealing, not with privileges, but with immunity, and tax privileges do not follow from immunity—they are two entirely different subjects.

    I see that the hon. Member for Enfield, East, believes I am right. For all these reasons, therefore, I hope that my hon. and gallant Friend will see his way to withdraw the Amendment.

    The successes with which my hon. and learned Friend has shown that the anxieties of my hon. and gallant Friend the Member for Angus, South (Captain Duncan) in regard to domestic servants are covered in this Bill so far as Commonwealth countries go, has thrown into relief the unsatisfactory position regarding foreign countries.

    By the Bill, as has been shown, where a Commonwealth country denies reciprocity, diplomatic immunity in this country can be withdrawn. But we are unable to protect ourselves similarly against foreign countries, which are much more likely to deny reciprocity. It is ironical to reflect that the country which at present most conspicuously denies reciprocity, Russia, is the country on account of which this immunity was first written on to our Statute Book; for although my hon. and gallant Friend was not quite accurate in saying that immunity did not exist before 1708, it was not statutory before that year. Accordingly, as the hon. Member for Enfield, East (Mr. Ernest Davies) has said, there are the words "domestick or domestick servant" in Section 3 of the Act of 1708.

    The difficulty, of course, is that in order to remove the anomaly which the Bill creates, we should require new legislation in regard to foreign powers. Several hon. Members have drawn attention to the unsatisfactory and unconsolidated condition of the law on the subject of diplomatic immunity. Thus it is not unreasonable to suggest to my hon. and learned Friend that he should ask his right hon. Friend the Foreign Secretary to take this matter into consideration.

    Perhaps the whole conception of immunity for a domestic, as embodied in the law of diplomatic privilege, is something of an anachronism. At the time of the Reign of Queen Anne, and, of course, much earlier, it was normal to accord to servants the same privileges as were enjoyed by their masters. For example, all the immunities outside the Palace of Westminster which were enjoyed by Peers of the Realm were equally enjoyed by their domestic servants. At a time when such privileges existed widely, it was natural that they should be conferred upon the servants of foreign ambassadors.

    The unsatisfactory position to which the hon. Member for Enfield, East, and others have drawn attention, justifies us not only extending the provisions of this Bill to foreign countries, but also examining more jealously whether there should not be a narrower definition, for the purposes of diplomatic immunity, of the conception of a domestic servant.

    8.15 p.m.

    I will certainly bring to the notice of my right hon. Friend the Foreign Secretary the observations of my hon. Friend the Member for Wolverhampton, South-West (Mr. Powell). It is important to realise that in practice diplomatic immunity does not result in the escape from either a suit or prosecution in the courts of a person who may have committed an offence.

    It is, however, necessary as a practical matter to have this immunity, because at the time an accident takes place—take a motor car accident as a typical case—it might lead to a very awkward result if, say, the chauffeur of an ambassador or a High Commissioner were to knock somebody down whilst he was driving dangerously and the police were to arrest him immediately and create, perhaps, an international incident.

    The chauffeur would be prosecuted and sued for the accident; he would have his third party liability. The British subject who may have been run over would get his damages, and the law of the land would be enforced. If, however, diplomatic immunity did not exist, the incident might lead to very undesirable consequences at the time the accident or crime is committed. It is for that reason that in civilised nations it is thought very necessary and valuable to have this diplomatic immunity.

    There is often a misconception that the criminal or the person involved is enabled to get away unscathed. I know that my hon. and gallant Friend does not share that illusion, but it is important to mention that in relation to the Amendment because he very helpfully drew the attention of the Committee to the situation when a motor car accident occurred and to the statements in the Report on Diplomatic Immunity, where the Committee point out that in practice the immunity is waived. The provisions about waiver are contained in Clause 1 (5) of the Bill.

    The discussion has been worth while and I was justified in putting down the Amendment. I am grateful to my hon. and learned Friend for saying that, broadly speaking, the points I have raised are covered in the Bill. At the same time, I hope we shall have impressed on the Foreign Office that the existing law is not satisfactory. I am glad that my hon. and learned Friend said in reply to my hon. Friend the Member for Wolverhampton, South-West (Mr. Powell) that this whole matter is under further consideration, so that we can get reciprocity and equality with foreign missions and nations. In the circumstances, I beg to ask leave to withdraw the Amendment.

    Amendment, by leave, withdrawn.

    I beg to move, in page 2, line 30, after "such," to insert "offices or.

    I think it would be for the convenience of the Committee if we also took the remaining Amendments to this Clause, as they are purely consequential and all rest on a small drafting point.

    The position is that it was found that it might be inconvenient to restrict the words only to classes of offices as sometimes there might be only one example and it might be necessary by Order in Council to confer consular immunity on an office and not on classes of office because there was only one office in a particular case. I hope the Committee will think it is not an important enough Amendment to divide upon it.

    Amendment agreed to.

    Further Amendments made: In page 2, line 31, after "being," insert "offices or."

    In line 42, after "such," insert "offices or."

    In line 43, after "being," insert "offices or."—[ Mr. J. Foster.]

    Motion made, and Question proposed, "That the Clause, as amended, stand part of the Bill."

    Before we add the Clause to the Bill I should like to draw the attention of my hon. and learned Friend to two points on which he may give some clarification. The first relates to the proviso to subsection (1), which is found in line 18 of page 2 of the Bill. This is the proviso, already referred to in this debate, which lifts the immunity from persons who are citizens of the United Kingdom and Colonies but not also citizens of the country concerned.

    It does not however lift that immunity from all classes of persons on whom Clause 1 confers it. Clause 1 deals with the chief representative of a Commonwealth country and his family as it also deals with his official and domestic staffs. If we look at the terms of the proviso, we see that the immunity is only lifted from a member of the official or domestic staff, or members of such a person's family. In other words, the chief representative and the members of his family retain these immunities even when they are citizens of the United Kingdom and Colonies only. That appears to me to be an anomaly which can hardly have been intended.

    It may be a very improbable case that the chief representative himself would not be a citizen of the country which he represented; but I can very easily conceive that his wife or other members of his family residing with him might at the material time only be citizens of the United Kingdom and Colonies. We would therefore have the absurd situation that the United Kingdom wife of a counsellor or other subordinate is not immune, whereas the wife of the chief representative himself would be immune. I cannot see that it was intended to create that anomalous situation and I hope my hon. and learned Friend will refer to the matter.

    My second point relates to subsection (5), also referred to previously in this debate, which enables the immunities to be waived for the purpose of securing suit or punishment. It does so under two headings. Paragraph (a) deals with waiver in the case of what is described as
    "a person in the service of the Government of the country."
    Paragraph (b) refers to waiver in the case of a State representative or a member of a State representative's staff.

    It seems evident that these two paragraphs are intended to correspond with paragraph (a) and paragraphs (b) and (c) respectively in subsection (2). That is to say, the person
    "in the service of the Government of the country"
    is a person such as is referred to in subsection (2, a) and a State representative or a member of his staff is a person such as is referred to in paragraphs (b) or (c) of subsection (2). May it not easily happen that the State representative or a member of his staff is also in the service of the Government of the country which the chief representative represents? If that could happen, and I cannot see how it could fail to happen, we would have the position in which two separate individuals, who might be personally antagonistic to one another, would equally have the right to waive the immunity of the same individual.

    Suppose, for example, that a process was intended against a member of the staff of the State representative for Western Australia. That State representative himself, or the member of his staff, might also be a servant of the Government of the Commonwealth of Australia. The position would arise that both the Commonwealth High Commissioner and the Agent General for Western Australia would be entitled to make the waiver. Knowing the sensibility of States within a federation as to their privileges and rights, one can well imagine that such a collision, which there is no necessity to create, could cause difficulty. I hope that if there is a real collision, or duplication, in this subsection it may be removed.

    I am grateful to my hon. Friend for raising these two interesting points. With regard to the first, which was that the chief representative or his family, if they were solely United Kingdom citizens, would not be exempted from diplomatic immunity under the proviso, I can only say that it really is a matter of opinion as to whether it is right or wrong. It certainly was intended. My hon. Friend said it could not have been intended, but it certainly was. The argument for that view is that if we have a chief representative who is solely a United Kingdom citizen it was thought desirable that he should have immunity and that also the members of his family, even if they were only United Kingdom citizens, should have that same immunity.

    I agree that it would point a distinction between the wife of the counsellor my hon. Friend instanced who might be a United Kingdom citizen only and would not have that immunity because she was excluded under the proviso. But I can quite understand as a practical matter that it would be desirable for the chief representative and his family to have diplomatic immunity in the very rare case where the chief representative was solely a United Kingdom citizen and perhaps in the less rare case where a member of his family might be solely a United Kingdom citizen. I do not think it is a point capable of any further bargument. It is a matter of opinion. We think on the whole that it would be right to include these persons who are solely United Kingdom citizens within the diplomatic immunity and, therefore, the proviso was purposely drafted in that way.

    8.30 p.m.

    With regard to the second point, the view of those who drafted this Measure, and the view of my noble Friend, is that the two subsections are not overlapping. I would be grateful to my hon. Friend if he would say if he really thinks that the Agent General is in the employ, in the service, of the Federal Government. I should have thought he was not, and that although a State might be an emanation of the Central Government, there is a difference between the Agent General and the chief representative.

    I would not suggest that he was in the Commonwealth employ in his capacity as Agent General, but that he and the members of his staff might well also be in the service of the Government of the Federation in some other capacity.

    I do not know if my hon. Friend means that he had some other service in Australia, but probably he would have given that up to be Agent General. I think it unlikely that we should get a person who doubled the roles of being both in the service of the Federal Government and also in the service of the State Government. In that very unlikely case there would, of course, be the possibility that both classes would have the right to waive immunity. But I should have thought that was so unlikely to happen that it would not be worth introducing any complicated provision to avoid the situation.

    Besides the unlikelihood of its happening we would have to have the position where the chief representative and the State representative, either himself or the person under him, in the double employment, do not get on together. There we have two very far-fetched hypotheses.

    But as my hon. Friend has raised these points we will look at them again to make sure our view is right.

    Question put, and agreed to.

    Clause, as amended, ordered to stand part of the Bill.

    Clause 2—(Power To Extend Section One To Other Commonwealth Countries, And To Exclude Countries Refusing Reciprocal Treatment)

    Motion made, and Question proposed, "That the Clause stand part of the Bill."

    I do not see the need for this Clause or, for that matter, the next Clause, because the two are related. I am wondering what other country could be added. I presume that the idea behind it is that there may be some new Dominions in the future. If one begins to think of the possibility of new Dominions, first of all there is the Caribbean which may come into a sort of federation in the West Indies.

    The next possibility is a Central African Federation. Both of these are not countries, because Clause 2 (1) says:
    "being a country within the Commonwealth."
    I am wondering whether "country" is meant to include "Federation." Otherwise I cannot see that there is very much point in including this Clause at all, and I should like to know what is the point.

    The comments I would offer on this Clause relate to the same words as those referred to by my hon. and gallant Friend the Member for Angus, South (Captain Duncan), but from a different point of view, namely the words,

    "being a country within the Commonwealth."
    I have no intention of attempting to indulge in a political discussion on the implications of the term "Commonwealth." Purely in the narrow drafting sense this expression "Commonwealth" has a peculiar history in our Statute Law. The first occurrence of the word "Commonwealth" in the Statutes of the Realm was by a kind of side-wind in subsection (2) of Section 36 of, of all places, the Finance Act, 1950.

    Until the issue of the Finance Bill of 1950 the word "Commonwealth" or "British Commonwealth" had not occurred in the text of any Statute of the Realm. When the Finance Bill was first presented, it included no definition of the term "Commonwealth territories," which is the term there used. That was added at a later stage, as the result of an Amendment which I put down. Even so, Section 36 (9) of the Finance Act, 1950 only defines the expression "Commonwealth territories," and it does so only for the purpose of that Act and the Schedule to the Act.

    So we are really faced here with what is a substantial innovation in the phraseology of a statute. This is actually the first time where the expression "Commonwealth" occurs at all. "Commonwealth territories," as I have explained, has once occurred. Here the term is used without any definition or reference to any other statute where the expression is defined.

    That seems to me to be an unsatisfactory state of affairs. It is one which I believe—and here I think I should be relieving the difficulty of my hon. and gallant Friend—could easily be removed. I submit there is no need at all for those words,
    "being a country within the Commonwealth."
    In fact they do more harm than good.

    Let us suppose that a new State arises within the Commonwealth, whether it be part of Her Majesty's Dominions or not—as is the case at present with the Union of India. Then that country, or whatever one is pleased to call it—that State—could be specified in the Order in Council. There is no danger by omitting these words that a foreign State, one outside the Commonwealth, could be included; for the object of the whole Bill is to place persons who are not representatives of Foreign Powers in the same position as if they were. So no State which is a Foreign Power could in any case by an Order in Council under this Bill be brought within the scope of it.

    So far from importing any necessary limitation, the expression
    "being a country within the Commonwealth"
    is an innovation in our legal phraseology without necessity; and innovations without necessity are always undesirable. I hope therefore that in deference to both my hon. and gallant Friend and myself my hon. and learned Friend will look at this Clause again and see whether it would be better without those words.

    Naturally, I will look at the Clause again in view of the remarks put forward, but I would like to indicate the way I view these points. My hon. and gallant Friend the Member for Angus, South (Captain Duncan), made the point that perhaps the word "country" might include a federation.

    I see the point which my hon. Friend makes, but I would point out to him that, in the second line of Clause 2, the word "countries" occurs in the plural. It refers to countries which are specified in Clause 1 (6), some of which are federations, for instance, Canada and Australia. Therefore I should have thought that that reference to countries specified in Clause 1 (6), which include federations, indicates that there should be very little doubt that the words "country within the Commonwealth" would also include a federation. It is unwise, however, to hazard legal opinions on these complicated matters without further examination, and I will certainly look into this point.

    With regard to the point raised by my hon. Friend the Member for Wolverhampton South-West (Mr. Powell), I see exactly what he means, and I appreciate that if the words were left out there would still be a sufficient safeguard, because we should not need to inquire of foreign countries as they would have diplomatic immunity already. It would be possible to have a foreign country which might not be independent and would not possess diplomatic immunity, and, therefore, would not be included without being a member of the Commonwealth. That is one point that occurs to me.

    I think the addition of the words is useful as indicating what is contemplated, because not every word in an Act is actually necessary for its working. So often, many of the words drafted into an Act are there in order to make the object of the particular section clearer, and the word Commonwealth is one which would fall to the interpretation of the court, either to be decided by the judge on political documents and actions as to whether a particular country has been admitted into the Commonwealth, or be decided by the court on the principle of applying to the Executive for a certificate, as in the case of the question whether a foreign country was an independent sovereign country or not.

    I would submit for my hon. Friend's consideration that the words "being a country within the Commonwealth" are words which are apt to indicate what the scope of the Order in Council is. Of course, Parliament has complete control over this by reason of the affirmative Resolution procedure mentioned in Clause 3. However, both these points will certainly be looked into, as they are interesting and raise rather difficult legal problems.

    Question put, and agreed to.

    Clause ordered to stand part of the Bill.

    Clause 3—(Orders In Council)

    I beg to move, in page 4, line 8, after "by," to insert "the foregoing provisions of."

    This is a very simple Amendment which is necessitated by the Amendment which immediately follows and stands on the Order Paper in my name in relation to Clause 5. There, it is proposed to add words which would allow the date to be fixed by Order in Council, and, therefore, this Amendment is consequential on the Amendment to Clause 5 which follows.

    It is obvious that the provisions of Clause 3 (3), which provides that any power exercised by Order in Council shall be construed as including a power to revoke or vary the Order in Council, shall apply only to those Orders in Council made under Clause 2 and should not apply to the Order in Council fixing the date. We may have an Order in Council fixing the date having in itself the implied power of revoking that Order. For these technical reasons, the object of the Amendment is to restrict the power to revoke or vary Orders in Council to all Orders in Council made under this Bill other than the one that fixes the date.

    Amendment agreed to.

    Clause, as amended, ordered to stand part of the Bill.

    Clause 4 ordered to stand part of the Bill.

    Clause 5—(Short Title, Commencement And Extent)

    I beg to move in page 4, line 17, to leave out from "on," to the end of line 18, and to insert

    "such date as Her Majesty may by Order in Council appoint."
    The purpose of this Amendment I have already adumbrated in what I said on the previous Amendment. It is necessary in order that the date can be fixed by an Order in Council. This is more convenient than fixing a particular date, because sometimes legislation does not go through the House as quickly or as smoothly as we expect, and, although I do not expect that this Bill will be subject to any of these delays, it may be behind other Bills in the queue, and if we inserted any particular date, we might then find that Her Majesty's loyal Opposition had, by their actions, delayed other Bills so that this Bill had passed beyond the date provided, thus giving rise to the necessity for another Amendment.

    8.45 p.m.

    I would explain to the Under-Secretary that it is no blame on the part of the Opposition that he did not get his Bill by 1st March. We should have been quite happy to stay here during part of the Christmas Recess in order to facilitate the passage of this most important Bill. I would also add that it appears that they have learned their lesson by the incompetent handling of their business programme and by the muddling of their legislation in the House, because they cannot now even fix a date when this Bill will be through the other place. Apparently their business there is equally muddled. In saying this, I take the blame which was implied off the shoulders of the Opposition.

    I do not think that is really fair. The Government abandoned their programme deliberately. They had a long Recess at Christmas in order to give the Ministers an opportunity to become conversant with their Departments. The Government planned this Bill to be law by 1st March, but, unfortunately, King George VI died. I think that is the real reason why we have to have this Amendment tonight. I do not think it is fair to blame the Government for muddling their programme. The delay is due to something completely outside their control.

    Amendment agreed to.

    Clause, as amended, ordered to stand part of the Bill.

    Bill reported, with Amendments; as amended, considered; read the Third time, and passed.

    Town Development Money

    Resolution reported,

    That, for the purposes of any Act of the present Session to encourage town development in county districts for the relief of congestion or over-population elsewhere, it is expedient to authorise payment out of moneys provided by Parliament—
  • (a) of contributions towards expenses incurred by local authorities in relation to de-development in county districts undertaken primarily for the purpose of providing accommodation to relieve congestion or over-population elsewhere and carried out after the thirty-first day of July, nineteen hundred and fifty-one;
  • (b) of any increase attributable to the provisions of the said Act in moneys so payable under any other Act.
  • Resolution agreed to.

    School Building Programme

    Motion made, and Question proposed, "That this House do now adjourn."—[ Mr. Redmayne.]

    8.48 p.m.

    I am naturally very happy to have an Adjournment Motion at this time of night, particularly in view of the importance of the subject I wish to raise, and I hope it will enable quite a number of hon. Members to participate in discussing educational problems. The opportunities for discussing education are, in the normal way, comparatively few and far between in this House, and, therefore I intend to be fairly brief so that as many hon. Members as possible will be able to participate.

    It is a matter for regret that the Minister herself is either unable or unwilling to be present. Whatever respect is due to the Parliamentary Secretary, I say that this is a matter of very great importance. Since this Government came to power it has become clear, as is very natural, that education has been picked on as the first and chief victim of the Government's "cold war" on the Welfare State. First of all, the Minister of Education herself is excluded from the Cabinet. Then the Chancellor of the Exchequer postpones the starting dates of new school buildings for a period of three months. Then we have the Minister asking for a 5 per cent. cut in the education budgets, and, finally, we are confronted with Circular 245 which, in my opinion, reduces the school building programme this year to a shadow of what it ought to be.

    To hear some people talk, one might imagine that the school building programme had been developed merely for the purpose of catering for the bulge in the birth rate. I do not under-estimate for one moment the great problem presented by the rise in the birth rate and in the school population. We have to bear in mind in this debate that the school population will not reach its peak of 6,500,000 until 1958 and that continuously for the seven years from 1954 onwards the secondary school population will rise rapidly by numbers amounting to 750,000.

    We must bear in mind that the principal reasons for the school building programme are to carry out the promises of the 1944 Act. First, the programme is intended to enable a reduction to be made in the size of classes, and secondly, to provide generally a better school environment for the children of the future than was provided in the past. Thirdly, and not least, important, it is to make a reality of the promise of secondary school education for all.

    I ought to remind the House of what was said in the 1950 debate on education, both by my right hon. Friend the former Minister of Education, the Member for Farnworth (Mr. Tomlinson), and by the right hon. Gentleman the present Chancellor of the Exchequer whose name has been associated with the 1944 Act. It was made clear by my right hon. Friend the Member for Farnworth in the education debate on 4th May, 1950, after the devaluation crisis, that 1,450,000 new school places were required between the end of the war and the end of 1953 if we were to have a progressive implementation of the Act of 1944.

    In that debate my right hon. Friend gave an assurance that there would be no reduction in the 1951 school building programme. He also said it was vitally necessary to maintain the momentum which the school building programme had so slowly and laboriously gathered. I am not going into the reasons why the school building programme did develop so slowly and laboriously from 1945. As my right hon. Friend emphasised, once this programme had developed, as it had really started to develop in 1949, it was essential to maintain its momentum if we were to achieve our purposes by the end of 1953.

    I want to quote from what the present Chancellor of the Exchequer said in that same debate, There was at that time talk of cuts and crises, as there is now. He said:
    "… I calculate that no fewer than 1,450,000 new places will be wanted by 1953… I consider the Minister is right up against a very serious problem if … he is going to make it possible for teachers to retain that vital principle of all in education—some personal relationship between the teacher and the taught by a reasonable size of classes in our schools."—[OFFICIAL REPORT. 4th May, 1950; Vol. 474, c. 1912.]
    He referred on that occasion to the fact that in his opinion many teachers in our schools were compelled to be circus masters—as he put it—rather than teachers, because of the swollen size of the classes they had to take.

    What have the Government done? In the first place, what the Chancellor of the Exchequer has done—last November —has been to nip in the bud 75 per cent. of the programme that had been planned and approved for the financial year 1951–52. I propose to illustrate that in relation to my own county when I come to that in a moment. Seventy-five per cent. of the planned and approved programme was nipped in the bud by the standstill order of the Chancellor of the Exchequer in November, 1951.

    Secondly, the 1952 programme has been cut to a size that, in my opinion, is disastrously inadequate. All work for the purpose of relieving over-crowding in the schools is forbidden. All work for the purpose of replacing black-listed schools is forbidden. Therefore, any possibility of making a reality of the promise of secondary education for all is indefinitely postponed.

    Besides that, the Minister has even gone so far as to impose a restriction at this time on the development of facilities for technical education. On 4th February of this year, the Chancellor of the Exchequer, addressing the London University Institute of Education, described the programme of this Government as "marking time." I say it is a headlong retreat from the promises made by the right hon. Gentleman when he presented the 1944 Measure.

    Let me refer to the way in which this affects the county of Stafford, a part of which I have the honour to represent and whose needs are particularly great for the development of education. The original programme of school building for the county of Stafford which had been approved for the financial year 1951–52 was worth £650,000—in round figures—of school buildings, and in the course of the year my right hon. Friend had increased that to the sum of £736,000 because he regarded the needs of Staffordshire as being particularly great, and was able to include some additional projects.

    The effect of the Chancellor's stop in November, 1951, was to kill £568,000 worth of the £736,000 that had been agreed to and approved by my right hon. Friend. That was stopped in November. 1951. In September last year, the former Minister of Education had approved for Staffordshire a school building programme for 1952–53 worth the sum of £387,000. What the Minister of Education now suggests to the County of Stafford is that its programme for 1952 should be of a value of £472,000.

    What is the total effect of that? If that proposal is carried out, the effect will be that at the end of March, 1953, the County of Stafford will have lost £483,000 worth of school building, which means 1,500 primary school places and more than 900 secondary school places that were to be provided under the original programme.

    My right hon. Friend, the former Minister of Education has recently issued this statement to the Press. He said,
    "The programme fixed by the Labour Government left no margin, and we knew it would have to be faithfully followed if we were to keep faith with mothers and children."
    Bear in mind, too, that these are the children of the people who are digging the coal and producing the pottery. We know from the background of educational development in Staffordshire that, unless that programme is fulfilled, the chances of making a reality of the promises of 1944 are the same as the chances in the 1920's of making a reality of the promises held out by the Fisher Act of 1918.

    Between 200,000 and 300,000 children will be affected by this cut in the school building programme. Who are these children? These are the children of the men who came back from the war with the promises of 1944 ringing in their ears —because they are the men whose children enter school in this period when the school population is rising so rapidly. The Parliamentary Secretary need not take it from me; he can take it from what I think is politically a quite impartial source. Let him read and digest the editorial in "The Times Educational Supplement" of 22nd February, which said:
    "Circular 245 means at best the continuance in many places of conditons already intolerable and at worse such a deterioration in them as will make even the pretence of teaching impossible."
    Why does it say that? It is because Circular 245 means the continuance in use of nearly 600 schools which were blacklisted in 1925. There are nearly 600 schools in use today which were condemned for educational purposes in 1925, and Circular 245, which forbids building work for the purpose of relieving overcrowding and replacing these blacklisted schools, means the continuance of these schools in use. It means the continuance of 34,000 classes in each of which there are more than 40 pupils and the continuance of probably more than 1,000 classes in our schools, each of which has more than 50 pupils. These are the classes to which the Chancellor of the Exchequer referred on 4th May, 1950, he said the teachers can be no more than circus masters; and in which "The Times Educational Supplement" says, "The pretence of teaching is impossible."

    What is the reason for this policy? Simply to save money? The Chancellor of the Exchequer can find another £200 million for arms, but not one tithe of that, apparently, for the increase of the school programme. Is it, as has been reported, to save 30,000 tons of steel? What is 30,000 tons of steel? It is less than one-quarter of 1 per cent. of the national output of steel. Are we to condemn these children to possible exclusion from school for the sake of less than one-quarter of 1 per cent. of the national output of steel?

    There is a very strong suspicion that the Government are creating an ability for cutting the school age in 1953 and that the Government, which refused before the Christmas Recess to deny or confirm that they were considering cutting the school age, have now taken a step which they know will have the effect of preventing the provision of accommodation for between 200,000 and 300,000 children in 1953 and 1954, and therefore are providing themselves with an excuse and an alibi for reducing, at one end or the other, the school age at that time.

    We do not blame the Minister of Education for this. The Minister of Education has been excluded from the Cabinet, and it is not fair for the Opposition to cast all the blame upon her. She has received her instructions in this matter from a Cabinet the majority of whose Members are determined to bury the 1944 Act, in the same way as the Fisher Act of 1918 was buried, who believe in one education for the rich and another for the poor.

    I say that a very heavy responsibility will lie upon those who take their instructions and orders from this Cabinet, who held out such great promises in 1944, to which they paid such great lip-service, during the period the Labour Government were in power, in all the education debates since 1945, but who, since they came to power in October, 1951, have picked upon the educational system to carry out the same old economy drive, producing the same old cynicism about the promises that have been given.

    I demand that this educational programme, in particular for the area which I represent, which has been so neglected in the past in provision for education, be reconsidered; that we attempt—what has been made very difficult by what the Chancellor has done—to regain the momentum to which the school building programme had gathered in 1951. If we carried on with that and were prepared to make the sacrifices to provide the materials, labour, and money, we could create for these children the reality of secondary education, a reduction in the size of classes, and the progressive replacement of these "black" schools. If we do not do that, I say that we shall postpone indefinitely the fulfilment of the great educational promises made at the end of the war.

    9.7 p.m.

    I am sure that we can congratulate the hon. Member for Newcastle-under-Lyme (Mr. Swingler) on his good fortune, both in obtaining the Adjournment Debate and in its happening to fall to him on an evening when we can have a more extended debate than is usually the case upon Adjournment Motions. At the same time, while we feel that this is an extraordinarily difficult and important question which it would be well to approach, as much as we can, in the spirit of a Council of State, in which we so often do conduct our education debates, I cannot feel that the hon. Gentleman has approached this problem in anything like that spirit.

    I will come to the Government later. Let us take them one at a time.

    The hon. Gentleman accused the Government of making education the chief victim of a "cold war" on the Welfare State, and any person who was unacquainted with the facts and who listened to his speech would think that the result of this Government's programme was that education was being almost abolished in this country. What is the fact? The fact, of course, is that this Government is proposing to spend more money on education than was ever spent by the Socialist Government or by any other Government in the history of this country. [HON. MEMBERS: "Oh!"] Well, doubtless hon. Gentlemen opposite saw the Education Estimates this morning; they are greater than ever they were before.

    The hon. Gentleman also accused the Government of wishing to create an alibi for lowering the school-leaving age. Why the Conservative Party, which had a majority at that time, should have put itself to the inordinate trouble of passing the Butler Act if it wished to abolish it later on, I cannot conceive. As we know, that Act was carried through by the present Chancellor of the Exchequer, a leading member of the Conservative Party, at a time when there was a Conservative majority, and a work of supererogation more ridiculous than going to the enormous trouble of carrying through this complicated Act if we did not believe in it and did not wish to have it would be difficult to imagine.

    The hon. Member talked about an alibi for cutting the school age. I do not think that the Government need an alibi on this particular topic. We know what happened. The Government came into power, and the only person who had even discussed the question of whether it would be necessary to cut the school age up to that time was the late Chancellor of the Exchequer, the right hon. Member for Leeds, South (Mr. Gaitskell). He said that the previous Government had considered it and had rejected it.

    In the first few days this Government were in power, the responsible Ministers, especially at such a time as this, could not be expected to say precisely what they would do and what they would not do before they had even had time to look at the books; and before the opportunity had come to the Goverment to decide upon their policy, friends of hon. Members opposite went about spreading the rumour that the school age was to be cut down—[HON. MEMBERS: "No."] Then there went on the most time-honoured of political dodges. First they said that the Government were going to do it and when the Government did not do it, they said, "Of course it would have been done but for our agitation against it." I do not think that hon. Members opposite really expect such arguments to be taken with very great gravity.

    Then the hon. Member for Newcastle-under-Lyme indulged in a lot of rhetoric about the cruelty of bringing financial considerations to bear upon educational policy. But I do not think that he can take that very seriously, and certainly his Government did not take it very seriously when they were in power. Whether we dislike this or that in detail that they did, yet they were not so foolish as to imagine that we do not have to pay some attention to practical conditions when we draw up an educational programme, and, therefore, when they found that times were not so easy as they had anticipated, they did not hesitate for a moment to economise on education. Whether they were right or wrong in detail, I do not propose to argue, but there has never been a Government in history that carried through so many education cuts as were carried through by the last Government.

    In 1947 they put an almost complete embargo on the building of nursery schools. In 1949—the time of the gathering momentum of this programme, as the hon. Gentleman said—they stopped all new building for school meal services at existing schools. In the same year, they reduced the facilities for free transport, and in 1950 they increased the price of school meals from 5d. to 6d. and in 1951 to 7d. The whole educational programme of the late Government in that great year of momentum involved a reduction in proposed capital expenditure of about 10 per cent.—about twice as much as the present Government have dared to suggest.

    I think that the hon. Gentleman is challenging what I said about the building programme gathering momentum at that time. Will he give the figures of the value of the school building programme in 1949 and 1950 and how they compare with the years 1948 and 1947? I think that they will bear out my argument that the school building programme was built up over that period and reached very considerable strength in the years 1949 to 1950.

    I have not the exact figures, but, of course we built no schools at all during the war.

    I have not the figures, but my argument is that there was this economy—no doubt a very justifiable economy—in school buildings. The Government reached the conclusion, very wisely, no doubt-I think that it was wise—that it was necessary to have some economical standards. All I am arguing is that there was a degree of comparative sanity in the educational policy of the late Government. The hon. Member may wish to challenge that, but all I was concerned about was that his Government behaved in a reasonable fashion.

    Is it not a fact that twice as much school building occurred between 1946 and 1951 as in any previous five years in the history of the country?

    So far I have been expressing an opinion defending the policy of the late Government. In our education debates there was very little party division. We used to congratulate one another because there was no party division. We went forward on this in general agreement and we were all very anxious that there should be as much building as possible. When building was possible we applauded it, and when the Government thought it necessary to have economies, on the whole they received support from both sides of the House. It is not part of my argument to say that nothing sensible was done by the last Government.

    When the late Minister of Education embarked on his standstill policy for building, did he not say that full provision would be made by the end of 1953 for the extra children coming into the schools?

    All I have been dealing with is the fact that it is not reasonable for an hon. Member to talk as if economy was a thing to which one could be completely indifferent in drawing up an educational programme. We are all very anxious to do what can be done within the limits of what is possible in this extremely difficult time. My hon. Friend the Parliamentary Secretary will be telling us more exactly what this Government is doing and is proposing to do at present.

    The hon. Member for Newcastle-under-Lyme gave the impression that there were to be extraordinary and drastic cuts in accommodation, and he said that 75 per cent. of building activity in Staffordshire was to be nipped in the bud. I am not quite clear what happens to a building when it is nipped in the bud.

    The problem which the Government inherited was that in school building, as in many other things, a great deal of work was under construction and would take a very long time to finish. Educational projects to a value of about £120 million were under construction. The Government and the Minister decided that, instead of starting up new projects so that an enormous amount of building would be going on and very little would be finished, it would be better first to concentrate on finishing what could be finished. The Government therefore closed down the 1951–52 building programme, but compiled a revised programme so that by the end of 1953 they would include as much as possible of the balance of the 1951 and the 1952–53 programmes.

    Hon. Members talk about "drastic cuts," but what are the figures? The new programme is differently distributed—the Minister is rightly concentrating on the most pressing needs—but the sum total is almost exactly the same as the previous total. New building has already provided 636,000 places, it is anticipated that the completion of existing building will provide another 400,000 places, and the revised building programme for next year will provide a further 114,000 places. It is far from true that the provision of places is a problem that has been neglected, even under these present and serious circumstances.

    Does that mean that the hon. Gentleman disagrees with his right hon. Friend the Chancellor of the Exchequer who, in 1950, agreed with the then Minister of Education that 1,450,000 new places were required by 1953 to make up this programme? I agree with the figures which my hon. Friend gave of a deficiency between 200,000 and 300,000, and that is a gap to which I am objecting today.

    I have spoken so far about the provision of places. Then there is the phenomenon that the bulge is moving up the age limit, and, therefore, it is not unreasonable that we should, at a time when new building is extremely difficult, allow ourselves to make flexible the age of transfer from one sort of school to another. No one says it is a desirable thing in itself. It creates its incidental problems. But it cannot be seriously pretended that such problems as that which we heard at Question time, of bigger children wanting bigger furniture, are beyond solution.

    Take a town like Coventry. It has a secondary school population of 17,000, but by 1956 it will have a school population of 19,000. What is the use of talking about a flexible age of transfer when 50 per cent. more places will be required? That is the dilemma we have to face. We have to find these new places without doing any building at this moment.

    No one says we should not do any building at the present time. The hon. Gentleman talks of Coventry as a place with a rapidly growing population, and if his facts are right special consideration should be given to such a place. But my argument is that this talk by hon. Members opposite of building is a travesty of the facts, as when they suggest that as much as possible in the way of building would not be done.

    Hon. Members opposite must agree that we live in a time of desperate economic disturbance and desperately serious shortages, in particular of raw materials that are required for school building and for other purposes at the same time. There is also a desperate housing shortage. Let us do all we can for school building at such a time as this, but in the last resort the people have got to face this issue—do they prefer to have houses or do they prefer to have schools? One can make speeches in which both are demanded, but in this world of limited materials that is the issue we have to face.

    The hon. Gentleman for Newcastle-under-Lyme may oppose our present rearmament programme, which was put before the country by his own leaders. That is the subject with which we can hardly deal in a limited debate like this, but it is the contention alike of the Government and the late Government that the armament programme is desperately necessary for the country's survival. And indeed, if we did not have the armament programme we would have plenty of problems with raw materials. In the last analysis, in so far as we have to choose between houses and schools, houses are more important than schools, not only for other large humanitarian reasons but even from the purely narrow education point of view.

    The late Government, as hon. Members Know, produced an interesting little booklet called "Reading Ability" in which they showed the alarming fact that in spite of the momentous building programme, in spite of the amount of money spent and in spite of the devoted work being done, there had been a substantial decline in literacy during the war and there had been no arrest of that decline in the years since the war. They inquired into the reasons for that, and one of the most important reasons was the bad housing conditions from which so many of the children came.

    So I would say, even from the purely educational point of view, that to some extent we have to choose between houses and putting up with some of these blacklisted schools for a little longer. That is undesirable in itself, but if I were a child and were asked if I would prefer to have a nice house and go to a black-listed school or live in the gutter and go to a new school, I would prefer a nice house and to go to a black-listed school, and I believe that I would even be better educated if I made that choice.

    9.26 p.m.

    hope the day will arrive when education will be a non-party subject in this House and in the country. However, the events of the last three months, and even the speech of the hon. Member for Devizes (Mr. Hollis), expressing willingness to sacrifice the children of everybody except those who sit on the opposite benches, shows that it is still a party matter.

    If I want to underline the seriousness of what we are discussing tonight, it is revealed in the fact that Labour Members of Parliament are doing their best at the moment to prevent trade unionists up and down the country who feel so indignant about what has taken place during these last few months from withholding their labour as a protest.

    I expressed the hope on the first day of this Parliament that this Conservative Minister of Education would depart from the historic practice of recent Conservative Ministers of Education and not make cuts in our educational programme. We asked the Prime Minister from these benches at the end of last year to assure us that he did not intend to break the law of the land during the recess by depriving children of their right under the 1944 Education Act to education between the ages of five and 15. We could not get that assurance.

    Hon. Members opposite are deeply interested in what they imagine to be divergencies of opinion on this side of the House. I suggest that between the closing of Parliament at the end of last year and the opening of Parliament this year there were conflicts in the party opposite. One serious thing happened. It was that the Trades Union Congress went on record in bitter opposition to any tampering with the school-leaving age. Conservative education authorities up and down the country, including the education committee of Southampton, went on record in protest against any tampering with the school-leaving age. It is not too much to imagine that the effect of the one contribution which the Chancellor of the Exchequer in this Government made out of loyalty to his own Education Act was to resist those in the Tory Cabinet who would have deprived children at one end of the scale or the other of full education.

    What we are saying, and what the country is saying ever-increasingly and ever more powerfully, is that if we carry on with this programme of retrenchment in school buildings, then physically we shall do what legislatively the Cabinet has declared that it will not do: we shall deprive either an age group at the bottom of the scale or an age group at the top of the scale from room in the schools in the months and years ahead.

    Those of us who protested at our own Minister's educational retrenchment—and there was educational retrenchment—want to emphasise just how desperate is the need and how true is the fact that we have gone as near to the bone as we dare do.

    If the hon. Member is explaining the action and the protest made by the Socialist Party, perhaps he will explain why, when their Circular 210 was placed before the country, there was no letter from the N.U.T. to Members of Parliament or to local authorities, there was no Motion on the Order Paper by hon. Members opposite, no Adjournment Motion or Question was raised by them, and there was not a chicken's cheep from any of them? How can he pretend that what he is doing is non-party?

    If the hon. Member accuses me of pretending to be non-party, he does not understand what I have said. I am not responsible for the behaviour of the National Union of Teachers. As for the views which I have expressed, I refer the hon. Member to the debates on education in which I have taken part.

    I want to give the House a picture from my area of just how serious the position is. The county of Hampshire has some 400 schools. Under the development plan of the Hampshire County Council, 100 of them are due to be pulled down because they do not conform to the minimum standards laid down in the Act. Another 100 need substantial alterations.

    Grammar school places in the county are provided for less than 14 per cent. of its children. We in Southampton have experienced this terribly unjust disparity between the provision of grammar school education as between town and county as our own children have over-spilled from the town and no longer have one chance in four, or about that figure, of finding their way to a grammar school, but by moving over the border had one chance in seven.

    In South Hampshire, a grammar school which was built for 600 pupils now houses 900, and the headmaster on speech night pointed out that he could not conceive how he was going to conduct his school certificate examination in the summer term of this year. As far as modern secondary education is concerned, the children of Lymington—which once, by the way, sent two Members to Parliament—receive their modern secondary education by travelling five miles in a bus to Brockenhurst to occupy the old grammar school—

    Secondary modern. It is certainly not modern. Children in New Milton receive their primary education in an Army hut, which was erected in 1918 and was first protested against four years later and is still housing children.

    Let me make my argument. The Fawley oil refinery, with a great new population around it, with people demanding for their children—as people all over the country are demanding—the education they did not manage to get for themselves, is in the middle of an area where there are one or two excellent new schools and some of the oldest and poorest schools in the county.

    My own town of Southampton, with a quarter of its schools damaged in the blitz, has in the playground of every school Army huts—and rather poor Army huts—to house the infants and the extra classes of children.

    On the edge of the town, in these last weeks, the first infants are being refused admission in an overspill area. Yet we in Hampshire are having our school building programme seriously cut. At Southampton Education Committee on Monday this week its director of education was pointing out the inevitability of lack of accommodation for children if the original programme was not carried out. What is true of Hampshire is, I am certain, true of the whole country. One million of our children, or 950,000, are still being educated in all-age schools, the older children in these schools being deprived of anything like secondary education because of physical conditions.

    I pay tribute, and have done from the other side of the House, to the late Minister of Education for an excellent school building programme. It is true, as my hon. Friend the Member for Itchen (Mr. Morley) has said, that we have built more schools under Labour Governments than under any previous Government in the history of this country. Even so, the provisions of the late Minister of Education provided the accommodation for all this vastly expanding population to which my hon. Friend the Member for Newcastle-under-Lyme (Mr. Swingler) referred in opening the debate, only on the assumption that all the children happened to be born in the right places where the new schools were. We were physically providing a programme with a place somewhere in the country for every child, but I pointed out in this House that even with that programme we would have infants being refused admission to schools, even if the whole programme was carried out.

    The moratorium in school building and the cuts in the programme mean that in the next 12 months in every corner of the country we shall not only have large classes but infant headmistresses will be compelled to refuse admission to young children. We have the junior Minister here tonight and, as an old university man, I urge him to use every influence he can to stop this policy of retrenchment in education. We went too far back in the education building programme under the last Labour Government, and if we proceed at this rate it will indeed be a tragedy.

    9.39 p.m.

    I am one of the members of the National Union of Teachers, one of the few on this side of the House, and I was horrified to find —I hope the hon. Members for the Southampton Divisions of Test (Dr. King) and lichen (Mr. Morley) will support my horror—when I found that my union card was a month out of date. I am sure I have paid my dues, but that is the situation.

    I therefore want to be a bridge, as I hope, between rival views and to do what I can to re-establish a non-party attitude to this educational problem because we are, surely, in this House really convinced that the solution to all problems is an educational one and that education is the foundation of it. We are all here in this House agreed that one of the most important things in progress at any time is that there should be a free and vigorous presentation of the case from both sides of the House and that truth and justice is really obtained in the balance.

    I maintain that at the present moment we are losing our sense of balance about what are the facts. It seems it is an issue of facts and of opinions based on those facts. If we leave out of account for the moment the absolute equality of marking time, the two rival views are whether educationally we are going forward or back. I hope we can establish undoubtedly as a fact that we are going forward educationally and that what we are really talking about is the degree of speed at which we are going forward.

    We can all say that we cannot go forward educationally fast enough, but do not let us, in misinterpreting the facts give the impression that we are going back when we are making considerable forward progress. That is what my hon. Friend the Member for Devizes (Mr. Hollis) was saying, that during the period of the Labour Government the building of school places was going forward at a very decent pace. But nevertheless there were cuts and the brake was put on by the Labour Government.

    How can the hon. Member argue that there were cuts in the school building programme under a Labour Government? What the Minister of Education under a Labour Government did was to see that the schools were built more economically, at a less cost per place. There was no cut at all in the provision of school places. As many schools were built and the programme continued uninterrupted so far as the total number of schools built were concerned. All that happened was that they were built at less cost, by more economical standards. It was not a cut.

    I was coming to that point. I think it is most important to establish the point of the pipe-line. What in fact the Minister is now doing is reducing the number of places being incomplete in the pipe-line and accelerating completion. So she is getting this very substantial figure of 1,150,000 new places within the year which is within striking distance, not only of the target set by the former Minister but is, I suspect—and I hope we shall be enlightened on this—actually what would have been realised by the former Minister. It is a question of concentrating on that which is within the pipe-line and bringing it to completion.

    We all know we cannot progress, much as we would like to, as fast as we would wish in education. Otherwise there would not be the 600 black-list schools which both parties wish to abolish, but which after six years of Labour Government are still there. It clearly indicates that in education, as in everything else, there is a list of priorities and we can do only a certain amount at a time or else we wreck the whole programme.

    What the former Minister of Education did was to take the facilities which he had and divide them in priority with those things which he thought most important, and that is precisely what the present Minister is doing. I would not accept the view advanced from hon. Members on the other side of the House that they have a knowledge of what is going on in the Cabinet and that they nave only to say that it was intended to cut the school leaving age. I never for a moment accepted that the school leaving age would be lowered.

    I regard it as a great challenge to teachers in this country to show that they really can make the best of that extra year of school work for the people who are not at secondary grammar schools but at secondary modern schools; and that was why I interposed when I thought the hon. Member used the term "modern secondary" which has a different significance. It is a great challenge to the nation and to the teaching profession. I strongly support the Minister, because I feel that, in keeping the school leaving age at that level, we are really accepting a challenge and trying to get somewhere.

    I say that, in terms of the school building programme, to have not only 1,150,000 additional places built during the year but additional money provided within the Estimates for the operation of education within those places, shows very clearly that we are moving forward. Let us join in wishing the Minister well, so that she may accelerate her speed as conditions improve in the country, but let us remember that the solution of our difficulties does not lie in dividing this House on a party attitude to education, but in solving the economic problems which have made the temporary slowing down of an otherwise forward progress essential.

    9.47 p.m.

    I do not wish to draw this subject of education into the cockpit of party politics. On the other hand, as a former district education officer, I cannot help remembering the severe cut which followed the return to power of the National Government in 1931.

    Let us get the facts right when these things are said. The May Committee was set up by a Socialist Government and made the recommendation of a 20 per cent. cut. The Socialist Government negotiated with the teachers on the basis of 15 per cent., and a maximum of 10 per cent. was introduced by the Government.

    I am not going to enter into a detailed argument. I am not talking about the teachers' salaries which were cut. I say to the hon. Member that the disgraceful thing which was done by the National Tory Government of 1931 was the wiping away of the free scholarships which hitherto had been awarded for children in the grammar schools. In 1931, for the first time since 1907, there were no free places guaranteed to a child from a primary school in the county grammar schools of this country. Before that, there was originally the provision that 25 per cent. of the number of admissions into a grammar school in a year had to be free places—really free places.

    In many areas before 1931 the percentage had increased to 40 per cent., and after that in many cases schools had made all their places free, though I am not sure on that point. After 1931, the parents of every child who won a place in a grammar school had to submit to a means test to determine whether the child should go into the school or not. As a district education officer, I had the painful experience, time after time, of parents coming to me and saying that they could not afford to allow the child to take up the scholarship.

    As a matter of fact, the hon. Gentleman is inaccurate on that point as well. He says that 25 per cent. of the places were absolutely free before 1931. The fact is that 50 per cent. of the places were free only to children coming from public elementary schools.

    I said primary schools, and in the generally accepted sense of the term primary schools refers to local education authority schools, formerly known as elementary schools.

    Referring to Cornwall, which is my county, I quote the following to the House:
    "A total of £71,830 for loan charges, compared with £41,465 in 1951–52, was reduced by £5,710 because it will not be possible to complete the capital expenditure programme by the end of the year. The sum of £60,000 which was to have been spent on the second stage of the Cornwall Technical College was cut by half; £50,000 for the first part of a new county secondary modern school at Falmouth was reduced by £30,000; and £123,000 of a similar school at Newquay was cut £85,000."
    Apart from that, I draw attention to Circular 242 and to what it has to say about capital expenditure out of revenue. The circular says:
    "Authorities are, therefore, asked to restrict the charging of capital expenditure to revenue within the specified limits to the utmost possible extent so as thereby to lighten the charge upon the Exchequer."
    One hon. Member opposite referred just now to the year 1949–50 and implied that in that year the Labour Government stopped school building. Let us take this one item of capital expenditure out of revenue and the figures for Cornwall. In 1949–50, £10,173 was spent on capital expenditure out of revenue to improve old school buildings. In 1950–51 the figure was £67,700, in 1951–52 it was £12,400, and for the next year,1952–53, the estimate is £4,900.

    That has a very great bearing on what is said so often in this House, and what was said at Question time this afternoon by hon. Members opposite, that we must not close any village school. I said in this House over 18 months ago that some of our village schools were disgraceful slum buildings, and I think that what applies to Cornwall applies all over the country. I am not asking that village schools should be closed, but I do beg the Minister to see that every year a proper sum is set aside to help bring these old school buildings up to a reasonable standard, particularly so far as water supplies, drainage, lighting, windows and that kind of thing is concerned.

    Circular 242 will have the disastrous effect that once again the improvement of these old school buildings will be postponed to the dim and distant future. Reference has been made to black-listed schools. In the area in which I live there is a building now being used as a secondary modern school which was on the black list in 1919, and very little has since been done to improve it. Even after six years of Labour Government we were unable to redress the previous 30 years of neglect by the Tory Party.

    I said that some of us were inclined to lose heart at times. I can assure the Minister that throughout the local government service those officers engaged in education administration feel very cynical when time after time these platitudes are spoken and promises made that are not fulfilled. In 1918 we had the Fisher Act, but what did the party opposite do to try and redeem the promise made in that Act? In 1926 the Hadow Report was published, and in 1928 Lord Eustace Percy issued a special pamphlet telling local authorities how they should proceed to get the new modern schools, as they are now known. In 1936 the Tory Government issued circulars to local authorities about plans for modern technical schools. How many were provided?

    There was a blank for the period of the war and now a brake is to be applied to the provision of schools. In Cornwall, as in other areas, a greater number of places in secondary schools are being secured by simply altering the name of the building which, from being a primary school building, becomes a secondary modern school building.

    I can assure the Minister that some of those buildings are hopelessly and dreadfully overcrowded. They are a disgrace to the educational system of this country, and I hope that something will be done to rectify these conditions. The Cornwall Education Committee are talking of altering a number of premises from primary schools to secondary schools, but I could take the Minister to junior schools in Cornwall where the authorities simply do not know where to accommodate the next child that comes along.

    The effect of Circular 242 is also to postpone still further the provision of new primary school places. My hon. Friend the Member for Southampton, Test (Dr. King), referred to school huts. Within 50 yards of where I live there is an old wooden Army hut of the 1914–18 war which still does duty for grammar school accommodation. There are many such huts still in use in Cornwall and the Minister will know, if he looks at his file, that most of the secondary grammar schools in Cornwall are as overcrowded as, and even more overcrowded than, the primary schools.

    An hon. Member opposite referred to the need for more houses. We all agree. He said, "Houses before schools." But surely there should be a balanced building programme. What is the use of putting up large new housing estates if we do not provide school accommodation for the children who go to live there? One of the greatest problems facing education authorities today is this problem of the great new housing estates which intensify the difficulties of providing education.

    I appeal to the Minister to withdraw Circular 242 and to hasten the time when we can spend much more money on building improvements to existing schools and on the new schools which are so badly needed.

    9.59 p.m.

    I did not expect to have an opportunity to take part in this debate tonight as I thought there would be the usual short Adjournment. I promise the Parliamentary Secretary that I will not be more than two or three minutes.

    It being Ten o'Clock, the Motion for the Adjournment of the House lapsed, without Question put.

    Motion made, and Question proposed, "That this House do now adjourn."—[ Mr. R. Thompson.]

    I am very surprised that the party opposite have drawn all these red herrings across the trail of education. Since the 1944 Act we have been almost unanimous in the House in regard to its implementation in almost every possible way and we honestly did not anticipate the increasing difficulties that have been created year by year since the Act was first put on the Statute Book.

    With regard to the buildings, which is the topic with which we are supposed to be intimately concerned tonight, I have not the fears which have been expressed by the Socialists opposite. I think I have had as much to do with building programmes since the 1944 Act as anybody in the House. I did feel that at times we were going a little too fast and that in many ways the Minister was not leading us the right way, because in the 1949 specifications we were led to build rather expensive schools and we did build some very very nice ones. I can assure hon. Members that I was very proud to think we were able to build such schools; but we did not foresee the stringencies which were coming and were about to be imposed upon us.

    It was natural that when we came into power last October and discovered the revenue and capital expenditure which had been going on so glibly last year we should cut it very considerably at once. It was obviously essential that one Ministry or Ministerial Department alone should not bear the cut; it had to be spread in every department of every Ministry, and obviously the Ministry of Education could not be the one which would be left out entirely. I do not think it at all unreasonable that education should make its contribution towards the forced economies which we have to endure at least for the next year.

    En spite of the fact that the Minister has had to call a halt to the building programme, I do not think that in actual fact it has done any harm whatsoever because without any doubt it has enabled us to make up a little leeway in the programme of school building which have taken two years and ought to have been completed in one year. It has enabled us to complete those schools—

    I have very great respect for the hon. Member's past educational administration, but can he tell us how the halting of building for three months is enabling us to make up the leeway?

    I have already said it did not. In most places there were schools still in building and these schools had no chance of being completed because we could not get the materials to finish them. We were held up for cement and we were held up for steel for months and months. We have one estate at Merstham where we are held up because we have empty ground and no foundations laid.

    We cannot make any progress, but the three months we have waited have been very helpful. As regards the application of economies in education I do not fear them too much. We were going rather fast in the ancillary side of education itself. The Minister told us that the cuts which had to be made must not interfere with the basic fabric of education. I do not think any of the cuts made by the Ministry will do that. I hope that every county authority under the direction of the Ministry will take the greatest possible care in making their economy cuts, and only make those cuts which they feel will not interfere with the progress and the fabric of education itself.

    With regard to the number of places, we shall be behind the number we require for years. We cannot help it. We are behind in every possible way in the building of anything at all in this country.

    I believe that by careful management the county authorities will be able to provide the places which it is expected they will need. I appreciate that we have the 1953 bulge to deal with, but I believe we can cope even with that by careful handling and by the provision of huts, some of which are very good today—far superior to what they were three or four years ago. We shall be able to lessen to a great extent the fears which have been expressed by hon. Members opposite about the reduction in the school building programme. It is not nearly so fearful as hon. Members opposite suggest. They have certainly put a great deal of fear into people's minds by their ill-considered and ill-founded statements.

    The hon. Member is well known for his work in education administration, and I want to ask him a straight question. Is it not a fact that it is not only hon. Members on this side who have fears, but also responsible and long-experienced men connected full-time with education, and administrative workers in local government? Does not he himself feel that there will be many places unavailable by 1956?

    We know the situation and we shall make adequate provision. I was dealing with some of the infamous statements made by hon. Members opposite before the Recess. I think that conduct did them much harm. They said certain things would happen, and they said it with authority—although I do not know from where they derived the authority. As a result, they made people nervous and afraid that their schools would be closed, that the school leaving age would be lowered or the entry age raised.

    This was a false assumption by the Party opposite, and they made the most of it. Even tonight, when we are supposed to be debating only the slowness of school building, these fears are introduced. The slowness of building is not entirely due to this Government; they have been left the arrears of the late Government. I believe that if we had been a little more careful and a little more prescient in the last three or four years we could have provided many more places in our schools. I say that, despite my great appreciation of what has been done by the Minister and by this House in implementing the 1944 Act.

    The 1918 Act is constantly quoted and has been continually thrown in the teeth of the Government tonight. I am not sure that hon. Members opposite do not hope that the 1944 Act will meet the same fate from this Government as the 1918 Act met. I do not think it will. Unlike some hon. Members opposite, we think we must keep education as a nonparty matter. Tonight the Opposition have put it into the political arena, for which I am very sorry. It is a pity that they have done so, because they have cast doubts on the bona fides of the educationists on this side of the House who are just as anxious for education in this country as are hon. Members opposite.

    I feel quite sure that the Minister will take great care during the year to see that the cuts which we have to make will be made good in the shortest possible time and as soon as the economy measures, which we are bound to introduce, can be relieved so as to give us an opportunity of spending more money.

    The hon. Gentleman adopted a very strong attitude about conduct from this side of the House, which he called infamous. Does he not welcome Parliamentary pressure upon any Government in power to make certain that the education of our children is not sacrificed to so-called economies?

    My point was that I think the party opposite howled before they were bitten.

    10.10 p.m.

    I very seldom have that consciousness of fitness for function which is, I believe, a very great strength to most progressives and philanthropists, but on this occasion, after all the appeals to get away from party on this side of the House, I have almost face enough to feel a certain adequacy, because I am sure at least of this, that my own party has never thought me sound upon this subject. That will perhaps endear, if not me, at least my hon. Friends to hon. Gentlemen opposite.

    I really hope that we shall not go on having what I beg hon. Members opposite to think is an unnecessary form of bitterness—this stuff about people who wish to see the rich educated and stop the poor being educated. At any rate, again I may say this personally, if that reproach were thrown at me I should certainly have remained illiterate, if that had been the view. It really is not worth saying that.

    Nor, if I may say it to a learned Gentleman opposite, does it very well suit his learning to throw across the Floor the taunt that the Tories thrive upon illiteracy.

    One second. If the hon. Gentleman would like to see educational tests as hurdles before the exercise of the franchise, I would suggest that he should introduce a Private Member's Bill to that effect.

    As the hon. Gentleman has addressed the question to me, perhaps I might point out that my intervention came, as he will remember, at a point when hon. Gentlemen opposite were saying that houses came before schools; and at a point when my hon. Friend was pointing out that new housing estates without schools would be inadequate to communities in the kind of world we want. It was the jeer which greeted that observation that led me to make the remark that the Tories thrive upon illiteracy. That is, in fact, part of their record and their approach to this problem.

    That does not meet the point I put. Let the hon. Gentleman then introduce a Private Member's Bill to have illiteracy tests before the exercise of the franchise, if that is really what he believes. Secondly, it is really no use saying that he was annoyed because somebody said that houses came before schools. Fingers came before forks; and I could tell the hon. Gentleman of certain professions that came before lawyers. But that is no proof of comparative indispensability, or of what limited resources are likely to come—

    I am now going to answer other comments made by hon. Members opposite. I apologise if in this part of my speech I seem to be slightly disjointed, but I will come afterwards to a more consecutive part of the argument.

    I am very sorry that the hon. Gentleman did not get into the debate. That was not my fault. I waited until the point at which if I had waited another minute I should have been obnoxious to and reproached by the hon. Gentleman's colleagues for trying to avoid the ordeal of speaking. I am genuinely sorry; I do not wish to hurt the hon. Gentleman's feelings.

    Now I want to make one or two rather disjointed remarks in the order in which my notes happen to catch my eye. About education always being the first and chief victim when the Tories come in, I say that really will not do. We have yet to see who will be the chief victim. I have no doubt that very soon hon. Gentlemen opposite will be telling some other supporters that they are the chief victims. Education has not really been the first victim. It is perfectly plain that the way in which education is managed, all the indirection between local education authorities, and so on, meant that notice had to be taken particularly early in the case of education.

    We were told by the hon. Member for Newcastle-under-Lyme (Mr. Swingler) that the real objection to the circular which is the nominal subject of the debate was the very strong suspicion that it was an alibi, an excuse, to be used later when the Government fulfilled their continual intention of shortening the school life. No man knows what the school life will be, whatever Government are in power, next year or the year after that. We are talking as if the crisis which we heard of recently had now been surmounted. It has not. Neither the financial crisis nor the strategic crisis has been surmounted yet. None of us knows where we shall be in two years' time. I hope and pray that we shall all be very much better off than we are at present.

    I ask hon. Gentlemen opposite, with no controversial intention at all, to think that it does not help public or private discussion of this subject to impute motives of that kind. I will let them into a secret. My hon. Friends and even my right hon. Friends are not clever enough to do anything so complicated of far-seeing as that.

    There was a point about the Coventry population going up, I think from 1,300 to 1,900—

    No, from 13,000 to 19,000 in 1956. At the moment the effective grammar school population is under 6,000.

    I think that 13,000 to 19,000 is the increase about which he is worried. We all understand the difficulty at this particular time about the secondary school population. My information is that in the 1952–53 programme the amount of money spent in trying to meet that increase will be about £550,000, of which £400,000 will be for secondary education. I do not suggest that will put all Coventry's problems right quickly or even at the end of two years, but I think it is sufficient to indicate that something is being tried.

    Similarly, I do not complain of the comparison given by the hon. Member for Newcastle-under-Lyme about the amount of money to be spent. Staffordshire now finds that it is under the moratorium and under the circular, and I ask the hon. Member to look at the figures and if he has not got them to be kind enough to write to me at the Ministry and I will let him have them. If he will look at the figure of school places, because there the comparison is much less frightening from the point of view of Staffordshire than if we look at the comparison of the pounds being spent, I am told that, as far as secondary school places go, it will be 910 twice—what it was going to be before the moratorium—and so far as the primary schools go, 1,720 instead of 2,320, which was the amount left over from the 1951–52 programme.

    I have an awful lot to say. I would give way but I have left it as late as I could and I think it would be better if I were left to go straight ahead with my continuous remarks.

    Our belief is that, whatever Government had been in power, the 1952–53 programme would by now have had to be revised. I am sorry to restate obvious truths, but how much school building there can be in a given period must depend on the materials—in our case, steel—and the labour available. The shortage of steel had become a limiting factor before the General Election. The late Government had already decided to introduce the control of steel, and that by itself would have meant that the 1951–52 programmes could not have been started at the due dates. Therefore, the fact that they now have not been so started, and could not be so started, is not to be attributed to this Government.

    Then the moratorium on new starts imposed in November was, as my hon. Friend said, not an attempt to stop the amount of building which will be done by the end of the next two years, but an attempt at relieving the immediate overloading without slackening the building projects at the end of two years. Again, on grounds of labour alone—particularly in the Midlands—even if it were not a matter of the shortage of steel, it would be impossible to start in 1952–53 both the residue of the 1951–52 programme and what had been the 1952–53 programme. That is ruled out by the steel situation if steel only were to be considered, and it is also ruled out by building labour distribution if that were the only thing to be considered.

    Incidentally, about overcrowding, I have the deepest sympathy with people who regret over-large classes. I should like very much some day to have a complete debate on that subject by itself, because I think that the most important things about it have even yet not been said. But this moratorium on building, or this substitution of the existing programme for the old 1952–53 programme, plus the residue of the 1951–52 programme, will not add to the size of classes. If classes continue big or get bigger, it will be for the shortage of teachers and not for any holding up in building. That is the belief of those whose advice I can take and who are in the best position to know.

    I shall not give way again. It may prove to be mistaken, and for all I know, it is mistaken in regard to Cornwall and in regard to the year 1931, for which I am not now answering.

    That is the general point from which this thing has to be established. My hon. Friend the Member for Devizes (Mr. Hollis) spoke clearly and very convincingly about the fact that the principle has been accepted by all Governments. No Government, including the Government which has just been replaced, has ever felt it possible to say that never, never, never must there be economies in education. I make bold to say that if the same men were in office who were in office six months ago, there would now be economies in education.

    As to how it would be done, that was the question, and the Government reached a decision. I am not saying it is right; I think it is right, but it is not by any means one of those certain given truths that people are apt to assume. However, I think both parties at least do assume that the most important thing to hang on to is the 10 years' school life. I do not think there is any real burning doubt about that. I am not dead certain that it is always in all circumstances absolutely right. I think that matter is too easily assumed. At any rate, for our purposes tonight, we may say fairly certainly—because there is no one here who wants to assert the odds—that, even if that were to be done, some way would have to be found of economising. I use the word "economising" in its strict sense.

    I use the word in its strict sense which I will explain to the hon. Gentleman afterwards if he does not think I am doing it fairly. I have no time now. Nobody has suggested that it was possible to try to make any substantial economies, even by holding down education costs to the point which they had reached, if nothing whatever was to be said or done about building. And that, therefore, was the origin of this circular.

    Now, what is the effect of it? The Government decided not to shorten the 10-year school life. It has, therefore, somehow, without doing that, to provide for a 1.7 million increase in the school roll between 1947 and 1957 and, at the same time, to provide for nobody knows how many, but some scores of thousands, presumably, of families who perhaps would have had school places if they had stayed where they were but have had to move because of the blitz or industrial shifts, or what. So that is the size of the problem—1.7 million children plus those additional children who are additional in the places where they now find themselves.

    How, in that situation, was it to be done? First of all, it had to be admitted —and hon. Gentlemen opposite talk as though this is now being admitted for the first time, but it has been admitted and asserted in the course of every single year during which their friends were in office; it had to be admitted that no building can be done for improvement purposes but only for providing new accommodation. That had to be admitted, as it has been admitted in every year since 1946 onwards. So that was not any particular Tory wickedness. It also meant that we cannot build new schools on housing estates where, with anything like reasonable transport, old schools can be kept going.

    With those oddments we think it is just possible to make these two ends meet; partly with new schools, and even some not so new which may be made to accommodate more children, not by making classes larger, but—we admit with some inconvenience, especially to teachers—by making the number of classes in the school larger.

    It would not be really awfully economic even in easier times perhaps to build very rapidly all the places you want for the primary school population now which would become redundant places when those children have gone off to the secon- dary schools. So it is hoped that sometimes an old primary school building can be converted to a secondary school house; that sometimes some primary school accommodation can be converted into an annexe to a secondary school so that the children will be on the roll of the secondary school, managed by the secondary school but geographically in the primary. And, thirdly, that sometimes it may be necessary to defer the transfer of children from a primary school to a secondary school, but with the local authority and the teachers very conscious that they have to do everything possible to see that the child's education becomes for that additional year secondary in effect.

    Those are the ways in which we hope that the thing can, in the main, be done. We see that all of them involve some inconvenience. We all see that in times when there were ample teachers, ample building operatives, ample steel, this is not what would be done. It is indeed true that houses come before schools, and it is indeed true that defence must come before welfare—horrible as it is when one is brought up against it. We believe that those things are true, as we do not believe—

    The Question having been proposed at Ten o'Clock, and the debate having continued for half an hour, Mr. SPEAKER adjourned the House without Question put, pursuant to the Standing Order.

    Adjourned at Half-past Ten o'Clock.