HC Deb 04 April 1974 vol 871 cc1586-98

10.13 p.m.

Mrs. Gwyneth Dunwoody (Crewe)

One of the joys of being able to speak about the communications industry in this Adjournment debate is to have one of my own nationality in the Chair, Mr. Deputy Speaker. If any nation knows how to communicate, I believe that it is my own.

One of the problems we face in the film industry is that it seems impossible for the House to treat the entire industry seriously. We have one piece of evidence of that in the arrangements made in the recent Government changes for control of broadcasting, which is one of the most important of the communicating industries. We believe that in Whitehall there should be a small but powerful Department covering a wide group of industries—broadcasting, television, films and most certainly those of the media concerned with the newspapers and copyright. Although it is a great pleasure to me to have my hon. Friend the Secretary of State for Trade answering the debate, I am concerned that he has responsibility for only a small sector of an important industry.

I address myself tonight very firmly to an immediate and worrying situation. The film industry in this country has existed for a long time. We have had many talented people in it. We produce not only directors and actors but producers and craftsmen capable of turning out a high quality product.

My own previous Government produced an imaginative plan for a National Film School and allowed us to take part of its moneys from the levy to train people for the film industry There is hardly any point in attempting to create a pool of skilled workers, writers, actors and directors if we are not to be able to find them at least some employment in their own country. We realise as an industry, that we must look beyond our own borders for sales for our product, but there is no doubt that we are facing a great crisis.

It is difficult with the fluctuations of such a temperamental industry to quote specific figures, but I shall indicate some of the problems that we are facing. In 1968 50 films were commenced by members of my association with an estimated total investment of £22 million. The average budget per film at that time was about £450,000. In 1969 73 films were commenced. The estimated total investment was £23 million and the average budget per film was £320,000. In other words, the budgets were coming down and the industry was getting more efficient. Although we were making a greater number of films we were beginning to see a fall in overall investment. In 1972 we commenced 68 productions with a total investment of £21 million and the budget was £312,000 per film. In 1973 we commenced only 57 productions and the estimated total investment had fallen to £18,200,000. The average budget was £319,000.

We are seeing not just a fluctuating investment situation but a decline in overall investment. Perhaps that is not a 100 per cent. accurate guide, but we have only to see the changed employment situation to realise that many people who once were able to find work in the industry are now finding it increasingly difficult to do so. We have always said that the studio pattern in Great Britain was one of the reasons that enabled us to mantain con- stant production. Our studios, whether they be large or small, continue to run—so much so that they attract a number of films from other countries. However, in the year ending September 1968 the studios—I am now talking about the major studios—employed 3,790 people—I am including in that figure the old MGM studio which subsequently shut down—but by the end of July 1973 the figure had fallen to 1,679 people. That gives a clear indication that it is a contracting industry.

I am sure that my hon. Friend is aware that more and more people see films every night. The difference is that they do not pay to see them. The little box in the corner of most homes, which can be a great friend and educator, is transmitting more and more film material. It is possible to see about six feature films over a weekend. Most of those films have been bought for quite small amounts and most are several years old. Such films are now transmitted in colour and they attract large audiences.

The crisis from the industry's point of view is very real. The industry would like to see some strong measures taken to assist it. It does not suggest that it is the sort of industry that should be subsidised because it is a special case. It merely points out that it has been a great earner of overseas currency. It does a good job in terms of public relations. The Foreign and Commonwealth Office is increasingly finding that many countries abroad are asking for and specifying British films with not only British actors and directors but with films made in this country which show something of our way of life. We believe that therefore we have a continuing role to play.

We are so anxious that the industry itself has played a large part in promoting co-production treaties. The Department of Trade has been very active in concluding co-production treaties in the past. We are looking forward to the signing of an Anglo-German co-production treaty as soon as possible because we believe that Britain has a great deal to offer to European film makers. We can attract them here not just because of the use of the English language, which opens up worldwide market, but because of the efficiency and standards of our studios.

What, then, is to be done? My hon. Friend will be asked by many people on many occasions, representing as he does one of the most important Government Departments, to spend money he has not got on things he does not want and in ways he cannot defend. But I am asking for something much more important—for his influence, because there are ways in which the film industry could be assisted to continue in being in this country. That is the situation we are facing.

If we are to continue to project so many films on television, should it not be possible for a levy on the showing of each film to be paid to a production board, either the Eadie levy fund or some other form of production board set up under the aegis of the National Film Finance Corporation? This would be either a percentage of the levy which is at present being put by the Government on the television companies, or it could be an extra amount which would be capable of regenerating finance and encouraging people to make even more films.

There are other ways in which we would like my hon. Friend to take urgent action. A dangerous situation is developing in relation to the studios. The Shepperton studios are once more at considerable risk. We would like my hon. Friend to consider calling together the heads of all the studios complexes, asking them what their views are on rationalisation and seeking ways of making one of the major studios which could be fully employed really viable to be used for the whole of the industry.

It is time we stopped talking about television and films as being separate industries. The television studios are not capable of producing full-length films in the way it is essential for them to do if they are to capture and hold the audience they find every night. That is demonstrated plainly by the fact that the American industry is increasingly making films specially for television—films which can be readily seen on television here. This is a market we ourselves ought to be considering, and when one thinks that original material in Britain can cost about £300,000 for half an hour, one realises that it is not necessarily lack of money which is affecting the production programme. It is the feeling that television and films are two totally unrelated worlds.

Of the films commenced in 1973, a total of 63 per cent. were based in studios compared with 69 per cent. in 1972. There is a substantial under-use of studio space and facilities, however, and the continued maintenance of the three major studios is probably not viable. It does not follow, however, that if one of them closed this would reduce film production overall, because many people make their films on location and base them on studio facilities. Indeed, the studio facilities themselves attract a great deal of post-production work.

Film makers from abroad still continue to come here in order to use the facilities and the skills we provide. However, we cannot continue to have a properly-based film industry unless some of the problems we face are tackled right at the moment. We are having to decide on the future of the fourth television channel. We are faced with the problem of cassettes. Tape is being used increasingly and production facilities should be expanded, not contracted. This cannot be done without imaginative guidance from the Government. It should come from a Government like mine, who understand that communication is the art of talking to all the people all the time. It is not good enough to remember communications just before a General Election and then forget them firmly in the next five years.

We in the film industry ask for the Minister's help. He should encourage us by doing something about the levy on films, he should intervene on studios, but more than anything else now is the time for him to call together the heads of the studios, the unions and all of us concerned with the industry to decide how we are to continue in being. We believe that we have a part to play. I hope that he will help us to play it.

10.26 p.m.

Mr. Anthony Grant (Harrow, Central)

Of all the myriad industries for which I was responsible in the last Government, the film industry was one of the most fascinating. I reveal myself as being in an unholy alliance with the hon. Lady the Member for Crewe (Mrs. Dunwoody).

Shepperton and its future are a matter of great anxiety to the residents there and the workers and to those who have seen the remarkable work that has come out of the studio. I will not say more since negotiations are going on and I would not wish to rock the boat.

It was wise of my right hon. Friend the Leader of the Opposition when President of the Board of Trade to make the arrangements whereby the National Film Finance Corporation had a say in the future of the studio. I agree that in present circumstances, three major studios, with more and more work on location, are probably too many. There is overcapacity in the studios and gross overmanning in many of them.

I agree with the hon. Lady about finance. Britain produces some of the best films in the world. They are a form of flag which adds to our prestige and repute in many countries with which we trade. We must keep the industry going in our national interest, but there is a grave shortage of money. Merely to pump taxpayers' money into an industry which embodies the spirit of free enterprise is not the proper answer. But there is a solution on hand, and it lies in television. It is absurd that when we see a film in the cinema part of our ticket money goes back into film production but that when we watch the same film on television not a penny goes the same way. To remedy that would be the most practical solution to film production finance.

If the Minister wants further ideas he should consider the similar scheme which West Germany either has adopted or is about to adopt. Television companies should beware, if not killing of the goose that lays the golden eggs, of allowing it to die for want of finance.

10.29 p.m.

The Under-Secretary of State for Trade (Mr. Eric Deakins)

I am grateful to my hon. Friend the Member for Crewe (Mrs. Dunwoody) for providing the opportunity this early in the life of a new Parliament to discuss the problems and future prospects of the film industry. From her own experience she will know how concerned a Labour Government are about these matters.

I am also glad to see the hon. Member for Harrow, Central (Mr. Grant) present tonight and am grateful to him for his few remarks. Like my hon. Friend he acquired a very considerable knowledge of the problems of the industry in the period in which he exercised the responsibilities which I now hold in relation to the film industry.

I am pleased to be speaking on behalf of the Government tonight on a subject which is so close to my own heart. I happen to be one of the small band of people who still go to the cinema frequently, having been a member of the British Film Institute for the past 18 years. During that time there have been some radical changes in the size and structure of the industry. The number of cinemas has fallen by almost two-thirds from the 4,483 which there were in this country in 1955. By 1973 this number had dwindled to just under 1,600, which figure includes the growing numbers of premises where two, three or more small cinemas now exist where previously there was only one large one.

Despite the success of that policy of twinning and tripling cinemas, admissions over the same period fell by more than seven-eighths from 1,182 million to 142 million. At the same time, and despite the fall in the value of money, gross box office receipts fell from £106 million to no more than £62 million. The situation over the past four years shows no significant improvement. During this period admissions have fallen by more than one-third from 215 million, while gross box office receipts have remained fairly constant at around £60 million.

The drastic fall in receipts has coincided with a fall in production. The number of British feature films registered fell from 122 in 1955 to 89 in 1973. The forecast for 1974 indicates that the number is likely to be reduced very substantially. The number of big budget films has also fallen, with far-reaching consequences for employment in the production side of the industry. This means a falling investment situation as mentioned by my hon. Friend.

Significant cost reductions have been made possible by the revolution in production techniques. There was a time when films were made in studios even in countries where the sun always shines. The electronic age has altered all that. Cameras and lighting equipment weigh one-tenth of what they did, and although many films are still based on a studio much of the action is shot on location.

It is against that sombre background that one must view the difficulties of Lion International at Shepperton. There was a period in the late 1960s when the degree of American investment in this country was substantial and when it seemed likely that there would be sufficient work to sustain four large studios. The difficulties which overtook the United States industry, however, forced the companies concerned to retreat and this led first to the closure of Borehamwood in May 1970 and then to a 50 per cent. reduction of the workforce at Elstree.

It is no secret that Pinewood, Elstree and Shepperton have been making heavy losses and that as matters stand there is little prospect of all three returning to profitability in the foreseeable future. I know that for many people Shepperton has been the most treasured jewel in the crown of the British film industry, and I recognise the strength of feelings which have been aroused by Lion International's difficulties. This point was alluded to by the hon. Member for Harrow, Central.

As hon. Members will know, the NFFC has a preference share in British Lion giving it a right to veto certain actions except in defined circumstances. One defined circumstance was that the veto would be lifted if it could be shown to NFFC's satisfaction that the Shepperton Studios could be operated only at a critical loss and that there was no reasonable prospect of their being operated as studios for cinematograph film production on a profitable basis in the foreseeable future.

As my hon. Friend will know, however, discussions took place between the NFFC and British Lion in 1972 in response to the company's claim that this condition of critical loss and no reasonable prospect of future profitable operation had been met. Those discussions resulted in agreement to a revised studio complex occupying an area of about 20 acres, to which NFFC veto restrictions would continue to apply.

In the light of a further serious decline in the volume of production being handled by the major studios, NFFC has recognised that British Lion and Shepperton Studios will no longer be able to fulfil the conditions attached to the arrangements previously agreed and the NFFC therefore announced two days ago, on 2nd April, that the area of 40 acres referred to is now released from these veto restrictions unconditionally. I emphasise that the restriction will continue to apply, however, within the boundaries of the revised studio complex.

Various suggestions for economies which might help to keep the studios going have been considered, including their operation on a "four-walls" basis. The problem, however, is that the company has been making substantial losses over the past few months and this cannot continue.

There is an important secondary consideration to the question of spending money in keeping a studio going at a time when there is little or no output. British Lion Films Limited is in business to produce films and the company has told me that it would prefer to invest in film production, which might be profitable and which would provide employment in the industry, rather than commit the same money to unprofitable inactivity at the studios. The parent company has advanced a very considerable sum of money to Shepperton Studios during the past two years for very little return, and it feels that it cannot reasonably be expected to go on doing this for very much longer.

My hon. Friend suggests that to stem the losses incurred on studio operation, the number of fully-equipped and fully-manned studios should be rationalised and perhaps reduced from three to two, or even to one. I can see the attractions of such a course, provided the risks of a monopoly situation can be avoided, but I should like to reflect further on the suggestions which have been made before commenting further. I hope that the parties concerned, especially studio heads, will also reflect on the possibilities, because one thing I am already clear about is that such rationalisation, even if desirable, could not be secured unless the will to achieve it is there.

Mrs. Dunwoody

I do not mean to be discourteous to my hon. Friend, but reflection is the luxury of those who can pay the bills. I say firmly to my hon. Friend that, unless he takes action to call together the relevant interested parties, we shall be facing the difficulties of a monopoly situation. It is possible now to do something about the situation. Within the next year it may not be possible to do anything.

Mr. Deakins

I take my hon. Friend's point, but I am not yet convinced, in the four weeks I have been in this Department, that there is a danger that if one studio unhappily should close, one of the others will also close and there will be a monopoly situation. However, I take my hon. Friend's point about the need for urgent action.

I do not leave the subject of studio capacity if I turn now to the future of film production, because the developments at Shepperton are of course symptomatic of the many disappointments and difficulties with which the industry is struggling today. The case for rationalisation will rest not merely on what view is taken of how future production will be staged, but also on the future levels of film production, including production for television and cassettes as well as for the cinema.

Forecasts for 1974 suggest that the number of feature films likely to be produced will be very substantially less than in previous years, but even if this proves wrong it is uncertain whether the demand for studio space will return to what it was a few years ago. I am confident that the wealth of talent available in this country will not long remain idle, but the emphasis in future is more likely to be on the employment of specialist firms and freelance workers and so the demand for a fully-equipped and fully-manned studio could continue to fall.

The overriding need is to stimulate investment in the production of new films. This is a matter to which I shall give attention. Many people feel that more finance would be forthcoming if there were more good scripts. This is one of the problems which the Cinematograph Films Council has been examining in its review of the prospects of the film industry. It has today put forward certain recommendations to my right hon. Friend the Secretary of State for Trade.

The council has also recommended that money should be made available to help finance pre-production. This is an interesting idea which I should like to consider and on which I should like to consult the industry. There are problems involved though I am sure that the House would not wish me to go into them now. These schemes would be financed from the British Film Fund. There are a number of ideas and suggestions floating around for reallocating the money in the fund. I do not want to go into the details now because there is not sufficient time, but it is the view of most people in the industry that a radical change in the present system would not necessarily be in the interests of the industry at the present time.

An alternative is to look for a means of expanding the resources available. Here I come to my hon. Friend's point about a levy being imposed on cinematograph films shown on television similar in effect to that applied to cinema admissions.

In 1973 there were more than 900 showings of cinematograph films on television in Great Britain. A levy of £3,000 per showing in that year would have yielded approximately £2.7 million. Other countries have already recognised that cinematograph films play such a major part in television programmes that television should help the cinematograph film production industry rather than the other way round.

The advice of the Cinematograph Films Council is that the price paid for the right to show a film on television is usually but a fraction of the cost of producing an original programme covering the same playing time.

I know that the hon. Member for Harrow, Central was considering the question of the levy before the election, and I assume that he was aware of the difficulties, including the need for legislation. These are matters which I shall need to discuss with my colleagues and with the various interests concerned.

The Cinematograph Film Council is considering a number of other matters on which it expects to make recommendations shortly. Not all of these will involve the Government. One that does, however, involve the Government in the first instance is co-production agreements. I am pleased that the recent Anglo-German co-production agreement looks like being successfully launched.

What is above all required at the present time, in the film industry more than almost anywhere else, is for the industry to have more confidence in itself. The decline in cinema audiences has been arrested in the United States and in a number of countries in Europe. What is needed is enthusiasm properly directed, good management and a willingness to accept that costs have to be reduced to the minimum if the industry is to survive against competition from every side. The film industry still has a great part to play in our national life and in presenting a picture of this country overseas, but in the final analysis the industry's success must depend to a great extent on its own exertions.

I cannot end my reply without paying tribute to the Cinematograph Films Council, which has painstakingly advised successive Governments, over a period of more than 30 years, on many matters affecting this fascinating but complicated industry. Tonight's debate has shown that members of the present council, no less than their forebears, have given great attention to their task—

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

Adjourned at seventeen minutes to Eleven o'clock.