HC Deb 06 June 1980 vol 985 cc1848-63
Mr. Eyre

I beg to move amendment No. 12, in page 7, line 4, column 3, at end insert— In the Schedule, paragraph 8(2)(a).

Mr. Deputy Speaker (Mr. Richard Crawshaw)

With this it will be convenient to take Government amendment No. 13.

Mr. Eyre

The amendments are straightforward. They repeal parts of legislation that are overtaken by the Bill. Nothing is changed by them. They merely acknowledge the change of circumstances caused by the Bill. When the National Film Finance Corporation was a recipient of Government loans from the Department of Trade, there clearly had to be certain legislative provisions concerning those loans.

Clause 2 of the Bill, however, withdraws the ability of the corporation to borrow from the Government, so a few minor provisions become superfluous. These allowed the Department to waive interest charges on capital repayments in certain circumstances on the money it had loaned and obliged the Department to inform Parliament of these remittances. The two amendments repeal what have become irrelevant provisions of previous Acts. The amendments make a small contribution to the tidying up of the diffuse body of films legislation.

Amendment agreed to.

Amendment made: No. 13, in page 7, line 9, at end insert— 2 & 3 Eliz. 2, c. 15. The Cinematograph Film Production (Special Loans) Act 1954. Section 2(2) and (3).".—[Mr. Eyre.]

Motion made and Question proposed, That the Bill be now read the Third time.

10.36 am
Mr. Clinton Davis

I share the disappointment expressed by my hon. Friend the Member for Keighley (Mr. Cryer) that, on a politically uncontentious Bill, the Government saw fit to accept no amendments, apart from the minor amendments that they themseves have introduced. A convincing case has been put forward on a number of matters relating to the Eady levy and to the quota on which the Government could have shown some flexibility—a word which is favoured by Ministers of all Governments but which has disappeared in relation to the Films Bill. That is a great pity. This is a timid Bill. Using the parlance of the Prime Minister, it is a wet Bill introduced by a dry Minister, if that is the appropriate adjective.

I see no reason, now that we have reached Third Reading, to withdraw the criticisms that I made on Second Reading and in Committee. Offering some help to the industry is better than offering none. Our desire was that the Government should go further. It is no use the Government saying that the previous Labour Government did not seize the opportunity. When one looks back to the problems of the last 12 months of the previous Government, one can see how difficult it was for my hon. Friend the Member for Oldham, West (Mr. Meacher), who was in charge of the film industry for the Government, to have persuaded his colleagues that a radical Films Bill should be introduced. I know that it was his wish, as it was the wish of my right hon. Friend the Member for Lanarkshire, North (Mr. Smith), that this should have been done.

I believe that had we succeeded in the election we would have been more radical in our approach than this Government. In mitigation of the hon. Member for Chingford (Mr. Tebbit), I am bound to say that he, too, has had a difficult task in persuading his business managerial colleagues to go as far as they have. To that extent, my criticism is more muted than it would have been. We shall have to wait a long time before another Bill comes before the House that will offer a radical look at the film industry. At best, this Bill can be viewed only as a temporary palliative. One would have hoped, in the absence of legislative proposals, that Ministers, in their speeches, would have offered more confidence to the industry than has been the case. They have glossed over the real problems besetting the industry.

One simply has to ask " Do we want a British film industry at all? " in order to examine some of the principal arguments. Suffice it to say that the Government have deferred answering that question. They seem to be unsure whether they want a flourishing British film industry. If we are to embrace a more radical review, we shall clearly need more than this Bill to sustain the industry. My doubt is whether a British film industry, with all the problems and dilemmas confronting it, will survive until we reach the stage of the next Bill in 1983, 1984 or 1985 under the aegis of this Government or their successors.

It would be wrong not to recognise that the industry today is racked with doubts about its future. There is an inadequacy of investment available. There is almost a total reliance on extremely volatile foreign money. The industry is unquestionably going through a lean time. I do not believe that the proposals in the Eady levy will be sufficient to sustain the industry.

It is quite clear that the contribution from the television industry is wholly inadequate having regard to the benefits that the industry enjoys as a result of the film industry's activities. I refer to the talent that it is able to draw from people who are specifically trained to be engaged in the film industry. The contribution to compensate for siphoning off that talent to the television industry is wholly insufficient.

One of the questions to which the Government will have to address their mind is whether part of the Eady levy should be set aside as a fund for setting up or renovating cinemas under a system akin to that currently used in France with some success. We have to try to halt the large number of cinema closures and to improve the position of the smaller independent cinemas which find it extremely difficult to afford to spend the necessary money on new seating and equipment.

In talking about that, one is driven immediately to consider the position of the powerful duopoly, or perhaps it is an emerging triopoly, which has, to a large extent, the power of life and death over the distributive side of the industry. Its position was examined in 1966, but there is some doubt whether the recommendations of the Monopolies Commission at that time are being carried into effect by the people against whom the inquiry was brought. One of the points made in paragraph 261 of the commission's report was: we agree with the view of the Cinematograph Films Council … that ' the introduction of a larger measure of competition into film exhibition … would be advantageous to the industry '; we would add that it would also be advantageous to the public. That is demonstrably true.

The independent cinemas, in seeking lo compete with the large chains, are being denied, as a result of the increasing use of the barring system, some of the good new films being produced. Even if that system can be shown to be justified, its use should be far more limited. I think that it should be limited to a reasonable maximum distance of, say, five miles and a reasonable time limit of, say, four weeks. The burden of proving that the system is needed should fall clearly on those who claim that it is.

There is a need to sustain the smaller independent cinemas which limit themselves to smaller budget and high-quality films which are particularly aimed at British and Continental audiences. It is sad that some of these cinemas are faced with the threat of closure. One of them is the Arts cinema in Cambridge, which has performed a very important function for a number of years. I understand that it is faced with a demand for substantially increased rent which it is unlikely to be able to pay. These smaller cinemas have performed a very useful role. Since grants are made to the theatre and the opera, a case could clearly be made for sustaining this form of cinema, too.

The regulation of competition with television is an extremely important matter. It certainly needs considerable improvement. At present, the only restriction on the television showing of feature films is the rule that bans the television showing of British films less than five years old. In other countries there are far more restrictions, so that although in Britain over 900 films were shown on television in 1977, the number was 377 in Germany, 444 in France and 120 in Italy. Moreover, with three television networks in Britain compared with 13 in the United States, the competition leading to a bidding up of the price of films is much less. So the BBC acknowledged in 1978 that it spent an average of £4,000 per hour showing a feature film compared with £44,000 per hour for its own drama productions.

The result is that the film industry's receipts from television—I have no figures beyond 1976—were around £2.2 million, much less than the £33.5 million from cinemas, although the number of television viewers to cinemagoers was roughly in reverse proportion. This is widely regarded as an inequity.

It has been suggested that the number of cinema feature films shown on television should be substantially reduced. Other proposals are also made, including that a higher quota should be reserved for British films for television exhibition.

These are some of the matters that require close scrutiny and I hope that the Minister will agree to look carefully at them in the next year or so. I should like to see television compelled to pay into a central fund a levy on all films screened. It should be related to the saleability of the films in cinemas and should be higher in peak viewing times.

There is a significant omission from the Bill. The Government say that they have not yet made up their mind about the need for a British film authority. This case has been convincingly argued in a series of reports now before the House and which the Government have had ample opportunity to consider. Many arguments justify establishing such an authority. We tried to set them out in our new clause 1 in Committee. One of the most important features which I should have thought would find favour with the Government was the need to rationalise all the various agencies that currently advise the Government or play some part in the film industry.

The duties of the Cinematograph Films Council, the National Film Finance Corporation, the Minister's Department and the Department of Education and Science could all be merged and rationalised under such an authority. The point that I have been making about regulating arrangements between the film and television industries is a matter that a BFA could examine in a way which would to some extent be free of the diffuse arguments that are presented to the Minister as a result of the present set-up.

The need for better statistical information about the film industry could be satisfied by a BFA instead of our having to rely on the various bodies which now collate statistics. One of the important elements in favour of the establishment of a BFA would be the creation for it of a marketing arm for United Kingdom films.

Those are some of the matters which we believe, justify the establishment of a British film authority in the near future. The Government say that they have not made up their mind. Perhaps the Minister will give an indication of when he thinks that the Government's consideration of the matter will be concluded and what are the consultations upon which he is proposing to embark.

I say no more about these matters now. Suffice it to say that we find the present approach in this legislation disappointing and timid. We need a more radical review of the film industry now rather than in three or four years. That may be too late. However, we shall not vote against this proposal. We support it as far as it goes; but it could have gone much further.

10.51 am
Mr. Durant

I rise to speak in this short debate principally because I feel that the tenor of our discussions about the industry has been very gloomy. I believe that this is unjustified, bearing in mind the great amount of talent, skill and productive ability in the British film industry. I should not wish us to leave this Chamber saying that the atmosphere in the industry was all gloom and that there was little hope for the future.

The hon. Member for Hackney, Central (Mr. Davis) spoke of the lack of finance in the industry. That is a key factor. There is a great lack of risk capital in the industry. The more we are able to bring in the entrepreneurial skills to use money—which might perhaps come from the City—for the film industry, the more we shall be able to make a fundamental difference to the activities of the industry. We are far too dependent on overseas money.

I wish to make it clear that there is still great hope for the industry. It still possesses great talent, and if we can find the capital to enable us to implement some of the points made by the hon. Member for Hackney, Central—with which I agreed—particularly in relation to television, I think we shall once again have a viable and exciting film industry.

I believe that television has a responsibility, and if there is to be another channel we should recall that the available material is now running out. There is a great shortage of good material for screening on television. Anything that can be done to encourage provision of that material will be helpful. In the past, the television companies have done bad deals with the film industry. They have been able to buy movies at far too low a cost. I am happy to say that that trend is now changing and the companies are having to pay fees more closely related to the market value of the material. I believe that the Government should look at this issue in order to enable the production sector of the industry to provide the necessary material, not only for the cinemas but for television.

I hope that the atmosphere of gloom and despondency that has pervaded this debate will not spread outside the Chamber. I believe that there is hope for the industry. It has talent and imagination, and I am sure that if we can get the right capital behind it we shall have a viable and exciting industry.

10.53 am
Mr. Cryer

The hon. Member for Reading, North (Mr. Durant) is right. There is a great deal of talent available in the British film industry, but there are not many opportunities to use it.

When I suggested to the Under-Secretary in Committee that an additional technician might be appointed to the NFFC, since the Bill provides for an additional appointment, he said that that was all very well but that a technician might not be able to talk competently. The gist of the Minister's view was that someone who was good at doing things with his hands might not talk competently. That was the Minister's assessment of some of the people whom he repeatedly claimed—and both sides of the Committee agreed—were capable of fine work.

There has not, therefore, been any firm step by the Government in the direction of recognising that there are people of ability and talent in the film industry and that we should integrate them more closely into the governing apparatus of the tiny public sector and into the administration of the money for the industry through the Eady levy provided by the Bill.

The Bill is the latest in a long series of sticking plasters that have been stuck over the gaping wounds of the film industry since 1949. Some people take the view that the 1949 Act was imaginative and far-sighted. I do not think it was, and I wrote to The Manchester Guardian, as it was at that time, to say so. This Bill and the previous Act simply prop up the duopoly which has served the British film industry ill over the years.

If there are no opportunities to provide the talented and exciting film makers—I quote the words of the hon. Member for Reading, North—that is not the fault of the State. It is the fault of private enterprise exercising its duopoly through the ownership of the major studios and two cinema chains. They are the people who have witnessed the decline of the film industry and who have had props supplied to them by the State from time to time.

The Bill does not cover a number of issues and leaves a number of questions unanswered. I am not alone in saying that. I have here the April newsletter, No. 25, of the Association of Independent Producers. It reads: The Films Bill is presented in total disregard of the latest report of the Interim Action Committee: Statistics, Technological Development and Cable Television and in no way tackles problems such as the incentives for television companies to invest in feature films for primary cinema release, That is absolutely true. The newsletter refers to the imposition of a tax system on cable television for the rights to transmit feature films. It goes on to say: The NFFC can now borrow up to £5m. from the commercial market (previously £2m.)—but what is it to use as collateral? … The National Film Development Fund, now subsumed into the NFFC—Why? And how will the £200,000 annual Eady allocation for script development be treated in future?—also evidently to be ' submitted ' into the overall allocation from Eady for the NFFC. These are questions being asked not just by me but by people working in the industry who are expressing anxiety. That is an indication of the defects and the deficiencies of the Bill, and that is possibly why the comments in this debate have been gloomy. We fully recognise that there is talent and imagination for making good films in this country if the film makers are given the opportunity. That means that they must have money to spend in making films, but the money is not available.

The Bill says nothing about the need for the television industry to make a contribution to the National Film School. The independent television companies, in most cases, do not have a training scheme. Their training scheme is called the BBC. Once again, the private sector makes use of the State sector to get a supply of trained and competent technicians.

The National Film School, which by common consent is reasonably successful, provides an important grounding for people wishing to enter the film industry, but it receives a tiny proportion only of its funds from the commercial television industry, which benefits greatly from the production of graduates at the school. The Bill does nothing about remedying that position and compelling the television companies to make a better contribution to their source of talent in future.

In Committee the Under-Secretary claimed that the difficulty was not that the Bill was inadequate, as we claimed it was, but that the universal butter of tax incentives was being spread everywhere by the Government and that that was what was missing in the film industry. That meant that all the wonderful entrepreneurs would be making the decisions that would revitalise the British film industry.

I referred earlier to an article in The Guardian of Saturday 31 May about some of the people to whom the hon. Member for Reading, North referred—imaginative and talented directors. Michael Houldey, a British television director, said: The British feature film industry is nonexistent. Franc Roddam, who made "Quadro-phenia ", went to Hollywood. He said: I was offered 120 scripts when I walked in here … and I could have made any one of them by now. Ten that I rejected have been made, but I want to make a film on my terms, not theirs, and this means working with a writer right from scratch I didn't come here to make money. I came here to make films—and get away from Mrs. Thatcher "— and that is understandable, goodness knows. That refutes the claim by the Under-Secretary of State that all that is needed is a few tax concessions for the higher earners and everything will be all right because the incentives created by the Government will remedy the burden of tax imposed by Labour Governments.

Speaking of England, Mr. Roddam continued: I'd be back tomorrow if I could make a film there but that's a day dream. Any film made there is now imitation Hollywood, so I may as well stay here and pick and choose my subjects. That is the reality—the little patchwork quilt of Elastoplast and sticking plaster to try to keep the whole thing together. We want film makers to make films that represent this country rather than make imitation mid-Atlantic films.

Michael Tuchner, who made " Bar Mitzvah Boy " and the television production of " Phyllis Dixey ", is a detached student of success. If hon. Members smirk at the name of Phyllis Dixey, they should remember that it was a haunting and rather sad production of a sad woman. Michael Tuchner says that going to Hollywood was a career decision. It isn't money. In fact if you open me up you'll find ' BBC ' printed on my soul. But all I want to do is make feature films. And the only place is Hollywood. That is another indication that publication of the Bill, which was probably published before Michael Tuchner went to Hollywood, did not exactly lure him back to this country.

The Bill does nothing about the problem of the duopoly formed by EMI and Rank. I made a number of suggestions in Committee, but they were rejected by the Minister as being impracticable. He said that decisions must be taken by business men in executive office suites and that the public interest had no place in the scheme. Arbitrary decisions are taken not to show films for reasons which often are not clear. That goes back to 1949, when the legislation was first introduced. The trade unions daringly embarked on a production through a co-operative, and the duopoly saw that as a threat to its production system and simply banned the film from circuit distribution.

The duopoly banned " Salt of the Earth " in 1951 because that was supposed to be a terribly wicked film about strikers and women in America. Political discrimination was used against that film. A few years later the duopoly sought to discriminate against " Saturday Night and Sunday Morning " and " Kes ", both successful films.

Nobody can deny that " Kes " represented an aspect of living in Britain. It was an indigenous, triumphant production, and yet the distributors thought that they should not venture distributing it. After all, the people in it spoke with a Yorkshire accent and would not be understood south of Potters Bar. They said that the strange accent from Yorkshire, where people live in bungalows as they do in the South, would not be understood. However, the film was released in London and the critical support for it pressed it out on to the circuit. It was a struggle.

The same can be said of " The Europeans ". I can guarantee that that splendid film, financed by the National Film Finance Corporation, will not receive much of a circuit distribution from EMI or Rank. In my town it has been shown only in a special regional film theatre, not in an ordinary cinema.

The quota is now being exercised on a complex whilst the Eady levy is exercised on screens. That is a nice differentiation. The British quota could be fulfilled by shoving the British film on to the 100-seat cinema screen whilst the big screens are filled with the American blockbusters. I hope that the Miniser will keep a close eye on the arrangements in clause 6 which alter the quota position.

Another film to be released shortly is " Babylon ", which is financed by the NFFC. I have not seen it, but I understand that it is reasonably controversial. It is about an indigenous problem—race relations. What circuit release will that receive? I guess that it will be limited.

The Bill does not provide sufficient money for the NFFC to give sufficient financial support for such films. The rising costs of film production mean that a feature film cannot be made for much less than £350,000 The NFFC's participation is likely to be slim in future. I understand that the NFFC sometimes has difficulty in achieving even a show-case release for its films in the West End of London. Such a screening is important to set a film off with a good impact so that people know what is available. The Bill does not tackle that difficulty.

The Bill does not allow the managers of cinemas owned by the duopoly, often in key important central positions, to exercise an independent role. The notion is that if there were a State holding in a cinema chain the dead hand of the State would instruct cinema managers what films to show. As it is, the dead hand of the duopoly instructs managers. I am disappointed that one of my amendments to establish a charter for cinema managers to allow them to exercise independent judgment was not selected for discussion. That would have provided a code of practice, under which account would have had to be taken of local circumstances and needs and the showing of films of merit would have been emphasised.

In allowing the domination of Rank and EMI to continue, the Bill is a reflection of public squalor and private affluence. The public sector, as represented by the NFFC, is in a minority position with no real influence or scope, while the private sector is dominated by those two companies, which are investing not in this country but mainly abroad.

" Shoestring " was a recent television series that I found appealing, well made and attractive, with a characteristically British philosophy. It was very popular, since it struck a chord in people. I understand that the story has now been sold for a big feature film. The hero will be played by an American and the location will be shifted to America to meet the demands of the American market. That is a typical erosion of success on which we should have built. We should try to break into other markets through the success of our independent attitudes and aspirations.

If we really believe in using the ability and talent of imaginative film makers, there is no alternative to tighter control of the duopoly or a State film industry, at least in part, including a major studio and a cinema chain. Only then will we achieve meaningful public participation.

Without the Bill, the limping organisation that is the NFFC will wither away. We hope that it will have an expanding future, but that is unlikely under the Bill. Despite all its merits and abilities, the British film industry will continue to limp along, with the possibility looming on the horizon that it will wither away and be sucked into the hungry maw of the American industry.

11.13 am
Mr. Eyre

I do not think that it has ever been claimed, either by my hon. Friend the Member for Chingford (Mr. Tebbit) or myself, that the Bill provides a definitive answer to all the problems of the British film industry. The word " modest " has been used to describe it on several occasions. I would concur with that description.

But the Bill's acknowledged modesty should not be allowed to devalue its worth or understate its considerable importance to the British film industry. Without the Bill, the National Film Finance Corporation would be unable to continue investing in film production; the Eady levy would lapse—removing an incentive for film production in this country and the financial support of several worthy film industry institutions; and the quota also would lapse.

Labour Members have sought to make an inoifensive Bill more radical by the creation of a British film authority. We have resisted their demands, but not through any fundamental dislike of the concept. The complicated factors bearing upon the problems of the industry—the hon. Member for Hackney, Central (Mr. Davis) described many of them in an interesting way—deserve the most careful consideration, which they will receive. But because of all those problems our minds are genuinely not made up.

All hon. Members will agree that the creation of a BFA would require a major legislative initiative and the provision of substantial financial support. The Government do not wish to commit themselves to either without considerable deliberation. My hon. Friend assured the House that the concept of a BFA was " not deep frozen ". I hope that the House accepts that assurance.

The Bill safeguards the future of the NFFC—which should commend it to the Opposition. It has been suggested that the Bill does not give enough money to the corporation. I suspect that it would be impossible to hit on a percentage that was agreed by all to be just right. If we had raised the percentage grant to the corporation, we should have reduced the money available to the film producers who invest in this country, and we would have been criticised on that count. The important point to remember is that the corporation will now have a guaranteed income each year and is no longer encumbered by past debt. It will be enabled to make a distinctive contribution to film making in this country, The House should welcome that.

The Bill also extends the quota—a fact at times overlooked in the heated exchanges over clause 7, which would enable the Secretary of State to suspend its operation. Labour Members should remember that the power to impose quota would have expired at the end of this year, had the Bill not included a clause extending it. This is scarcely the act of a Government determined to see the end of quota as soon as possible.

The House has been reminded on several occasions—but a further repetition may be desired by the Opposition—that the Secretary of State is not obliged to suspend quota if Clause 7 is enacted. He will merely be able to review its operation—which has been increasingly criticised in recent years—with the possibility of a trial suspension. The Secretary of State will always be able to reimpose quota by order should its suspension—if it came about—be harming the industry. He cannot abolish quota without putting primary legislation before the House.

I assure the Opposition that there is no duplicity behind the introduction of clause 7. We are not out to remove quota if the industry needs its protection. We are prepared to evaluate its operation constructively.

Any Bill which renews powers rather than revising them can be called interim. However, this expression has no sinister import. It has at times been inferred that the present five-year extension to the levy and quota denotes their termination thereafter. My hon. Friend went out of his way to allay these doubts in Committee. There is no intention of withdrawing any legislative support from the industry—unless it is outdated or can be replaced by a better alternative. This does not mean that our present legislative framework will, in five years, be found entirely adequate to cope with all the developments in the industry which will have occurred by then.

The hon. Member for Keighley (Mr. Cryer) referred to a number of outstanding problems affecting the film industry, all of which will require serious attention. I certainly do not agree with some of his views about solutions, but I agree that these problems are of great consequence to the future of the industry.

Modifications may be needed, but that is entirely different from serving notice on the industry that after five years there will be no renewal of existing legislation. The Bill is needed by the film industry, which the Government certainly wish to have a successful future and to make full use of the talent and ability which are undeniably available in this country.

My hon. Friend the Member for Reading, North (Mr. Durant) mentioned some encouraging factors, including some powerful points that should give us optimism for the future if we can get the supporting arrangements right.

If the Bill does not receive Royal Assent by the Summer Recess, there will be no legislative provision for the Eady levy, a major feature of the post-war British film industry. The National Film Finance Corporation would face serious financial difficulties and its future would become uncertain. The continuation of quota would be at risk simply because it will lapse under present legislation before the end of 1980. I accept that the Opposition would like the Bill to include additional provisions. My hon. Friend and I hive explained that on such questions as a British films authority we must remain open-minded.

Differences of view and emphasis there may be, but of one thing I am certain. It would be quite wrong to subject the film industry to any more uncertainty by delaying the progress of the Bill and putting at risk its enactment before the Summer Recess.

As my hon. Friend said during Second Reading, the Bill helps to set the stage for the British film industry. On all sides of the House we wish the industry well for the future.

Question put and agreed to.

Bill accordingly read the Third time and passed.

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