Commons Sitting of 19 November 1984

Preamble
The House met at half-past Two o'clock
PRAYERS
[MR. SPEAKER in the Chair]

TRADE
Resolved,
That an humble Address be presented to Her Majesty, That she will be graciously pleased to give directions that there be laid before this House a Return of Statistics relating to Overseas Trade of the United Kingdom for the year 1985 and for each month during 1985.—[Mr. Durant.]

Oral Answers to Questions
  WALES

    Elderly Population Migration
    Mr. Wigleyasked the Secretary of State for Wales if he will take steps to ensure that there is adequate recognition in deciding on the allocation of finance to area health authorities in Wales of sparsity of population, the impact of tourism and costs associated with elderly population migration.
    The Parliamentary Under-Secretary of State for Wales (Mr. Wyn Roberts): My right hon. Friend already takes these factors into account.
    Mr. Wigley: Does the Minister appreciate that the Gwynedd area health authority does not accept that sufficient account is taken of these factors? The sparsity of clinics leads to high travelling costs and a high-cost ambulance service, for example, especially at a time when
    2
    there is emphasis on bringing services into the community. No account is taken of the additional tourist population that moves into Gwynedd during the summer months. A consequence of the Government's policy is that the elderly are moving into old-age homes in Gwynedd. Private homes are being established as a result of Government policy, but no additional funds are being given to the health authority or local authorities to deal with the extra costs. Will the Minister think again?
    Mr. Roberts: I do not know what Gwynedd has to complain about. Gwynedd has seen more financial growth than any other Welsh authority since 1974. During the period 1974 to 1983 the Gwynedd health authority's recurrent revenue allocation has grown by 32·8 per cent. after making allowances for pay and price changes. This year it has already had further growth of 5·5 per cent. and another 2·6 per cent. is available. I have already told the hon. Gentleman that the revenue formula is weighted to take account of the age and sex structure of the populations served and of the relative costs of providing an ambulance service in rural areas. There is a special allowance for tourism.
    Mr. Douglas Hogg: Does my hon. Friend appreciate that the special problems—[Interruption.]
    Mr. Speaker: Order. Members representing English constituencies have a right to ask questions when the House is dealing with Welsh questions, provided that they do not relate to Grantham.
    Mr. Hogg: Will my hon. Friend note that the special problems that arise in widely and sparsely populated areas are not confined to Welsh area health authorities? Similar problems arise in English counties, and those who represent English counties, such as Lincolnshire, would like to see the rate support grant take account of that fact.
    Mr. Speaker: The Secretary of State for Wales cannot answer for English counties.

    National Museum of Wales (Purchasing Policy)
    Mrs. Clwydasked the Secretary of State for Wales whether he is satisfied that the procedures adopted by the National Museum of Wales for purchasing major works of art, such as the Rubens' cartoons, are satisfactory.
    The Secretary of State for Wales (Mr. Nicholas Edwards): Decisions regarding the acquisition of works of art or any other purchases are matters entirely for the museum authorities.
    Mrs. Clwyd: Is the Secretary of State satisfied that £1·2 million of public money should be spent on the say-so of one expert? There are several questions which the right hon. Gentleman should answer. First, where were the cartoons for over 400 years? Secondly, why were they offered to the National Museum of Wales when the strength of the museum is in post-impressionist and impressionist painters? Thirdly, how can the right hon. Gentleman not urge that their authenticity be established one way or the other when he knows that there has been doubt about them for five years?
    Mr. Edwards: I cannot help the hon. Lady on the 400-year issue, as I think that the cartoons were probably painted just over 350 years ago. The strength of the collections of the National Museum of Wales is with impressionist painters, and that is why the museum has sought to strengthen its collections in other areas. The art committee and the museum authorities take considerable care and much advice over the difficult decisions involved in art purchasing. I am satisfied that under the royal charter it is for the museum authorities, not Ministers, to take those decisions.

    Mid-Wales Development
    Mr. Alex Carlileasked the Secretary of State for Wales whether he has any proposals for increasing the funds available to mid-Wales development for the purpose of industrial development in mid-Wales; and if he will make a statement.
    The Minister of State, Welsh Office (Mr. John Stradling Thomas): No decisions have yet been made on the board's financial allocation for 1985–86.
    Mr. Carlile: When is the Development Board for Rural Wales to know the funds that it is to have? Does the Minister recognise that, with the decline in dairy farming in mid-Wales, the board's role in providing the wherewithal for jobs in the future is needed more than ever?
    Mr. Stradling Thomas: I cannot give a firm date for when that decision will be made. As the hon. and learned Gentleman is aware, the board's basic role has been to develop the industrial infrastructure of its area, for precisely the reasons that he stated.
    Mr. Hooson: Does my hon. Friend believe that the opening up of the mid-Wales development factories for service industries, which I welcomed when the change was made, is having a beneficial effect on the utilisation of those factories?
    Mr. Stradling Thomas: My answer is brief: yes, it is an advantage.
    Mr. D. E. Thomas: I am sure that the Minister and the whole House will not think it appropriate for me to ask a
    4
    question about mid-Wales without referring to my late predecessor, Lord Maelor, and putting on record the appreciation of his constituents for his long and devoted service to Merioneth.
    When does the Minister expect to make a firm statement about the board's allocation? Does he accept that it is essential to the board's long-term planning that it has a regular allocation, which is increased in terms of the needs of mid-Wales?
    Mr. Stradling Thomas: I am sorry that I cannot go much further than I did a few moments ago, but we hope to be able to announce a decision soon. I appreciate the hon. Gentleman's last point. Conservative Members would like to add their tribute to those paid to the former Member for Merioneth.
    Mr. Harvey: Is my hon. Friend aware of the extreme worry felt in Glen Dhu at the possibility of its losing intermediate area status? Will he guarantee that its status will not change?
    Mr. Stradling Thomas: No, I cannot anticipate any decision that will be taken on this matter. I am aware that people are looking forward to the decision in the not-toodistant future.
    Mr. Barry Jones: Why did the Government deschedule the new town area several years ago?
    Mr. Stradling Thomas: I have noted that point, but, as the House knows, other arrangements have been of great benefit to mid-Wales.

    British Steel Corporation
    Mr. Roy Hughesasked the Secretary of State for Wales if he has had any recent discussions with the chairman of the British Steel Corporation about the corporation's activities in Wales.
    Mr. Nicholas Edwards: I met the chairman of the British Steel Corporation last week. We had a wide-ranging discussion about the corporation's operations.
    Mr. Hughes: Should not the Secretary of State be discussing with the chairman of BSC the 5,000 new jobs that were to be created following the slimline operation? Bearing in mind that 8,000 jobs overall have been lost in Newport alone, is it any wonder that the Newport borough council has lost all confidence in the Secretary of State? Why will the right hon. Gentleman not allocate the resources to provide those new jobs, which he promised originally?
    Mr. Edwards: The fact is that Llanwern has been doing spectacularly well and showing itself to be a competitive steelworks. I am sorry that the current coal dispute is holding up decisions about future investment there. If the hon. Gentleman is worried about new jobs, may I ask whether he supports the action of the Newport, East Labour party which passed a resolution urging Gwent county council that lorries supplying Llanwern should be blacked after the strike? Is such action helpful in providing jobs?
    Sir Raymond Gower: Is not one of the most inspiring things that has happened in the Principality the splendid effort of the management and employees at all levels to increase the efficiency and effectiveness of steel production at Llanwern and Port Talbot? Will my right

    5
    hon. Friend emphasise that aspect to the British Steel Corporation and his colleagues in the Cabinet at all times when the future of the United Kingdom's steel industry is considered?
    Mr. Edwards: I assure my hon. Friend that that point does not have to be emphasised to the British Steel Corporation, which is very much aware of it. I discussed those matters last week with the chairman. He shares my pleasure that Llanwern has put up such a magnificent performance despite the grave difficulties of the coal miners' dispute. I think that the fact that Llanwern can remain competitive in such conditions provides the best guarantee for its future.
    Mr. Coleman: In view of what my hon. Friend the Member for Newport, East (Mr. Hughes) said about employment losses in the industry, and what the Secretary of State has said about the profitability of the industry, can the right hon. Gentleman assure the House that the British Steel Corporation in Wales will not be saddled with the costs of the coal miners' strike?
    Mr. Edwards: The hon. Gentleman will be aware that one of the major costs of the steel industry is energy, which is one of the central issues in the coal miners' strike. I remind the hon. Gentleman that the Government are making a massive capital investment at Port Talbot at present and that there has been a substantial investment at Shotton, which is now the largest strip steel coating centre in Britain.
    Decisions about future investment at Llanwern cannot be taken while uncertainties about the coal strike continue.
    Mr. Gwilym Jones: As coal is vital to Llanwern, I imagine that my right hon. Friend will welcome the sight of coal trains running again in south Wales. Does he agree that we must all look forward to a return to coal production in south Wales as the miners continue to vote with their feet?
    Mr. Edwards: I entirely agree with my hon. Friend. The numbers returning to the coal industry this week continue to rise. Therefore, we must hope that a full return to work will not be long delayed.

    Labour Statistics
    Mr. Barry Jonesasked the Secretary of State for Wales how many unemployed people there are in Wales compared with 1979 as a total and as a percentage of the total; and how many are long-term unemployed.
    Mr. Ray Powellasked the Secretary of State for Wales how many people are unemployed in Wales at present compared with the 1979 figures; and how many of these are long-term unemployed.
    Mr. Nicholas Edwards: On 11 October 1984 unemployment claimants totalled 178,561, compared with 78,739 in October 1979, an increase of 99,822 or 126·8 per cent. Of the October 1984 total, 71,902 had been unemployed for over a year. Comparable figures for 1979 are not available.
    Mr. Jones: Following that set of figures, the autumn statement was a crushing disappointment to the unemployed in Wales. Will the Secretary of State take an urgent initiative and chair an all-Wales conference aimed, at creating new jobs by means of a programme of
    6
    additional public works? Will he invite, for example, the Wales TUC, the CBI, county and district authorities and Members of the Houses of Parliament to such a conference? May I remind the right hon. Gentleman that, under his regime, since 1979 Wales has lost 100,000 manufacturing jobs and suffered more than 145,000 redundancies? The people of Wales need hope and a change of policy.
    Mr. Edwards: I do not believe that hope and a change of policy would necessarily be the results of the kind of talking shop which the hon. Gentleman wishes to establish. I am glad to say that the numbers in employment have begun to rise and that this year, in the period from January to October, there were 11,000 new jobs associated with projects for which selective financial assistance applications had been accepted, compared with 8,800 in the whole of 1983. That is one of the many signs that substantial investment in new projects is taking place in Wales, and that, of course, offers the best hope for new jobs.
    Mr. Powell: Why did the Secretary of State want to juggle the unemployment figures once again? Was it for the primary purpose of trying to allow constituency Members of Parliament to have accurate figures of the unemployment position? If so, I should like to draw his attention to the fact that for a number of months I have complained about 8,000 people being out of work in Ogmore and there being only 100 jobs at the jobcentre. I have analysed the new figures that have been presented, and I should like to know why there are now 4,907 people out of work in the Ogmore constituency and only eight jobs at the jobcentre. Surely that alone shows that the information continually being given at Welsh Question Time is misleading or completely misrepresenting the facts that are presented to us week after week and month after month.
    Mr. Edwards: I have given the facts for which the hon. Gentleman asked. I am aware that Bridgend is one of the areas that have been most successful in attracting new projects. I am glad to say that that continues to be the position and that it is providing a substantial number of additional jobs.
    Mr. Best: In the interests of jobs in Wales, will my right hon. Friend continue to urge south Wales miners to follow their colleagues in Yorkshire and elsewhere rather than the headstrong, self-willed and political ambition of one man who clearly has no interest in the future of the coal industry in south Wales?
    Mr. Edwards: I agree. I understand that the lion. Member for Alyn and Deeside (Mr. Jones) attended the disgraceful conference at Aberavon, during which the general secretary of the TUC was shouted clown. Furthermore, I understand that the hon. Gentleman spoke during the conference. I hope that he, like the general secretary, condemned the violence and urged that a ballot be held, particularly as in his part of Wales many miners have voted with their feet and returned to work.
    Sir Anthony Meyer: Can my right hon. Friend estimate the number of jobs in Wales that have been lost permanently, not temporarily, as a result of the loss of markets caused by Mr. Scargill's politically motivated strike?
    Mr. Edwards: Undoubtedly, that must be one of the most worrying features. The losers will be principally the miners and the mining industry, because it is more difficult to recover lost markets than to hold on to existing markets. I am afraid that the strike will cause great long-term damage.
    Mr. Foot: With regard to the appalling figures which the Secretary of State has announced, when the new regional policy is announced, will the areas in Wales most hard hit by mass unemployment have an increase in assistance and regional aid in real terms?
    With regard to the strike, my right hon. Friends the Members for Salford, East (Mr. Orme) and for Islwyn (Mr. Kinnock), have been seeking throughout to get an honourable, decent negotiated settlement. Has the right hon. Gentleman done anything from the beginning of the strike to try to secure such a result?
    Mr. Edwards: I am glad to hear that Opposition Members are trying to end the dispute. I hope that they will speak out loud and clear for a ballot and condemn the violence, and the disgraceful scenes that we saw at Aberavon, as clearly as the general secretary of the TUC has done.
    Mr. Abse: Will the Secretary of State explain his continuing disinterest in the whole of the coal industry in Wales, which has been exemplified by his failure even to attend pit premises during the whole period that he has been Secretary of State? Does he not think it right that, when we have this anguished situation, instead of corroborating the confrontist and provocative attitude of our turbulent Prime Minister, he should pay a tribute to the sense of community, solidarity and loyalty that are among our values in south Wales? Irrespective of the judgment that one makes, as was said by a former Conservative Prime Minister in the House, such values need to be sustained, not condemned, by a Secretary of State if this nation is to survive.
    Mr. Edwards: If we are to talk about moral stands, I agree with Mr. Alan Watkins, who wrote in The Observer that
    "the scenes at Aberavon last week were a disgrace to the Labour movement."
    If Mr. Watkins expresses surprise that those scenes were not condemned by the right hon. and learned Member for Aberavon (Mr. Morris) and the right hon. Member for Llanelli (Mr. Davies), I must express equal surprise that they were not condemned by the hon. Gentleman.

    Public Transport Development
    Mr. Rogersasked the Secretary of State for Wales what discussions he has had with local authorities regarding public transport developments.
    Mr. John Stradling Thomas: My right hon. Friend and I have agreed to meet the standing conference on regional policy in south Wales to discuss its response to our consultation paper "Local Choice in Public Transport".
    Mr. Rogers: As the Welsh Counties Committee, the Association of District Councils and everybody else in Wales, except a few potential cowboy operators, oppose the deregulation of buses, will the Minister examine the possibility of a franchise system instead?
    Mr. Stradling Thomas: I cannot speak for cowboy operators. Perhaps the hon. Gentleman can. The Welsh Office document is a genuine consultation paper. We shall consider all aspects of the matter in a genuine spirit of consultation, but I hold out no hope for the semi-monopoly franchise system proposed by some Labour Members.
    Mr. Raffan: Will my hon. Friend assure the House that after deregulation safety standards will not just be maintained, as the consultation paper promises, but will be considerably tightened? Is he aware that even private operators realise that the existing total of 42 examiners to monitor 10,000 public service vehicles in the northwestern traffic area is grossly inadequate?
    Mr. Stradling Thomas: The Government have absolutely no intention of allowing safety standards to be eroded in any way.
    Mr. Alex Carlile: Does the Minister agree that the effect of the Government's proposals so far will be to denude much of rural Wales of bus services, unless public money is put into public transport in those areas? Will he ensure that there is no reduction whatever in the provision of bus services in Powys as a result of Government policy?
    Mr. Stradling Thomas: The difficulty about the hon. and learned Gentleman's question is that all the complaints are to the effect that the services have already declined, whereas he makes it sound as though flourishing services were about to disappear. Our proposals will provide an opportunity for more flexible systems to be developed for the benefit of rural users.
    Mr. Gwilym Jones: In view of the welcome given to the consultative document by the Welsh Consumer Council, when my hon. Friend meets the local authorities will he urge them to start thinking positively about the opportunities presented there for cheaper bus fares, and even for new railway services?
    Mr. Stradling Thomas: There will be discussion on both those points. We genuinely believe that competition will not only improve matters generally but will achieve better value for money and cheaper fares.
    Mr. D. E. Thomas: What is the Minister's response to the view of the Transport Users Consultative Committee for Wales, which clearly stated that there would be a net loss of public transport throughout Wales as a result of the proposals in the consultative document?
    Mr. Stradling Thomas: That is assertion and speculation without any backing whatever.
    Mr. Barry Jones: Even at this late stage, will the Minister take steps to exclude Wales from the privatisation measures, which we believe will involve job losses, a decline in road safety and in reliability of services and the prospect of higher fares? Does he not realise that the likely result of these measures will be the denudation of rural Wales in terms of public transport services?
    Mr. Stradling Thomas: No, Sir.

    Textbooks (Expenditure)
    Mr. Gareth Wardellasked the Secretary of State for Wales what was the expenditure on books per pupil in (a) primary and (b) secondary schools in West Glamorgan, Mid-Glamorgan and South Glamorgan in 1983–84; and what is the proposed expenditure for 1984–85.
    Mr. Stradling Thomas: As the answer is a long one I shall, with permission, circulate the details in the Official Report.
    Mr. Wardell: As the figures supplied to me by the Welsh counties show that two of the three for which I requested figures will spend less on books per primary school pupil this year than last year, and as two of the Welsh counties are at the bottom of the spending league in this respect out of all 47 non-metropolitan counties, will the Minister set a level of expenditure on books so that education standards can be guaranteed for the children of Wales in the future? Will the Minister give that undertaking today rather than the usual pat answer that it is for the local authority to decide, thus making scapegoats of the Welsh counties yet again?
    Mr. Stradling Thomas: The hon. Gentleman has indeed answered his own question, because, as he well knows, with his considerable experience in education, expenditure on school books is determined by the local education authorities. However, when allowance has been made for the effects of pay and price increases, the local authorities' current expenditure on education has remained at a virtually constant level for a number of years, while the number of pupils in schools has declined markedly. Those facts are not consistent with allegations of heavy cuts.
    Mr. Hubbard-Miles: Does my hon. Friend agree that while books are an important element in the education of children, the standard and quality of teaching is even more important? In the three Glamorgan authorities, have not standards of teaching been irrepairably damaged by the notorious system of appointments and promotions in which a teacher's qualities are far less important than his relationship to the local Labour party?
    Mr. Stradling Thomas: I should like to reinforce the point that the number of pupils—[Interruption.] I am answering my hon. Friend's question, which relates to expenditure by LEAs, including expenditure on books. The number of pupils has dropped by nearly 12 per cent., but the number of teachers by only about 3 per cent. That being so, it is for the local education authorities to re-examine carefully their management and expenditure policies.
    Following are the details:

    Expenditure figures for 1983–84 which are available are calculated in terms of books and equipment taken together

    Primary Schools

    Secondary Schools

    £

    £

    West Glamorgan

    23·3

    42·6

    Mid-Glamorgan

    19·6

    33·9

    South Glamorgan*

    18·8

    33·6

    * Provisional outturn figures.

    The education authorities' estimated figures for 1984–85 for books and equipment have been published by the Chartered Institute of Public Finance and Accountancy as follows:

    Primary Schools

    Secondary Schools

    £

    £

    West Glamorgan

    22·0

    35·0

    Mid-Glamorgan

    17·0

    31·0

    South Glamorgan

    19·0

    37·0

    Mid-Glamorgan (Employment and Training)
    Mr. Ron Daviesasked the Secretary of State for Wales what is the number of people covered by the Government's special employment and training measures in Mid-Glamorgan.
    Mr. John Stradling Thomas: The total for the county is 7,112, excluding the enterprise allowance scheme, for which there is no separate figure for Mid-Glamorgan.
    Mr. Davies: Is the Minister aware that officials of the Manpower Services Commission are now directly involving themselves in the administration of the youth training scheme in Mid-Glamorgan? Does he approve of the practice increasingly adopted by those officials of giving the Mid-Glamorgan county council directions about which schemes to reduce, which mode B places to remove and which members of staff to sack? Can the Minister say whether this practice is based on a statement of policy or whether the MSC officials in Wales are conducting their affairs as they see fit?
    Mr. Stradling Thomas: I would hope that the Mid-Glamorgan authority and the MSC officials would act in close co-operation to achieve the best results obtainable.
    Mr. Rowlands: Given the increasing importance of the MSC, should not responsibility for both the programme and the budget of the MSC in Wales be given to the Secretary of State for Wales, so that if there were underspends or differences of emphasis he could adjust the budget and the programme to suit the needs of Wales? At the moment it appears to be the Department of Employment, on a national level, which is in control.
    Mr. Stradling Thomas: We work in the closest co-operation with the Department of Employment. We have our own MSC committee for Wales with direct access, through Ministers, to the Department of Employment and to the MSC in Sheffield.

    Stage Carriage Bus Services
    Dr. Marekasked the Secretary of State for Wales what assessment he has made of the quality of stage carriage bus services in Wales if Her Majesty's Government's plans for deregulation are implemented.
    Mr. John Stradling Thomas: My hon. Friend the Parliamentary Under-Secretary of State for Transport has already explained to the hon. Member and to the House that the recent White Paper on buses sets out the Government's reasons for removing the present system of road service licensing and their assessment of the beneficial effects of the proposals. Reference to the Government's proposals for the bus industry is made in paragraphs 14 and 15 of the consultation paper "Local Choice in Public Transport", a copy of which was sent to the hon. Gentleman.
    Dr. Marek: Can the Minister give us a guarantee that, if the proposals are implemented, stage carriage bus services will not further decline?
    Mr. Stradling Thomas: I do not think that anyone could give such a guarantee. We want greater flexibility and more local choice. I should have thought that that would be welcome, especially in the context of what I said earlier about genuine consultation on these matters.
    Mr. Gwilym Jones: What assessment has been made of the concept of cross-subsidy, when it usually comes from passengers who are resident in the least well-off areas and benefits areas with a high car-owning population?
    Mr. Stradling Thomas: That illustrates why we want to get the maximum flexibility to achieve the fairest and most efficient transport provision in rural and urban areas.
    Mr. Anderson: Is the Minister aware that British Leyland assumes that there will be a substantial reduction in purchases of its vehicles if deregulation comes about? Is the Minister making way for cowboys in clapped-out vehicles, or will there be more inspection of vehicles?
    Mr. Stradling Thomas: Far from there being cowboys in clapped-out vehicles, current experience is of safety standards being increased because more modern vehicles are being used. Moreover, British Leyland, like the rest of British industry, must learn to adapt to the needs of the new system.
    Sir Raymond Gower: Is it possible for there to be greater consultation between bus operators, potential bus operators and those who control other services such as the distribution of mail, foods and other commodities, as obtains in some parts of France?
    Mr. Stradling Thomas: That would be very welcome. The greater flexibility that has been suggested in the consultation document could well lead to such a happy result.
    Mr. Wigley: Bearing in mind the fact that the Government plan to introduce private companies, which will come in only to take profits out of money available for buses, will the hon. Gentleman guarantee that local authorities will have that much more money to maintain services in rural areas which would otherwise be disadvantaged by the loss of cross-subsidy?
    Mr. Stradling Thomas: The financial provisions are broadly neutral with regard to local authorities. I find it surprising that a company that runs a profitable route should be criticised. We want profitable services, which will provide an efficient service, rather than loss-making services that can never succeed and will ultimately be withdrawn. We have already seen that pattern of decline.
    Mr. Roy Hughes: Will the Minister take into consideration the fact that the transport committee of the Association of District Councils does not accept that radical changes are necessary for the road passenger transport industry? Indeed, it has expressed doubts about the knowledge of the people who have drawn up the proposals. In view of the general disquiet about the proposals, does the Minister agree that it would be wise for the Government to turn the White Paper into a Green Paper?
    Mr. Stradling Thomas: I see. I note what the hon. Gentleman says, but there are two separate papers for Wales and there is obvious confusion about them. The Green Paper issued by the Welsh Office is a Green Paper— [Interruption.] It is clear from much of what has been said that even hon. Members have completely confused the Green Paper and the White Paper. It is also clear from what has been said upstairs in Committee that the two have been confused. It is therefore right that the matter should be clarified.

    Health Authorities (Laundry and Catering Services)
    Mr. Gristasked the Secretary of State for Wales in which health authorities in Wales laundry and catering services have been put out to open tender.
    Mr. Wyn Roberts: As yet no authority has invited tenders for catering services, but the Pembrokeshire health authority has done so with regard to laundry services and has placed a contract. Decisions after tender on domestic services have also been reached by the Pembrokeshire and Powys health authorities and by the Welsh Health Technical Services Organisation.
    Mr. Grist: What steps has my hon. Friend taken to encourage and, if necessary, force authorities to open their markets to the private sector?
    Mr. Roberts: Privatisation is its own reward. Total savings in excess of £250,000 annually are likely to accrue to the National Health Service as a result of the four tendering exercises so far conducted in Wales. I am generally satisfied with progress, but the Department is about to write to authorities commenting on the programmes which they submitted to me earlier this year.

    New Factory Units
    Mr. Knoxasked the Secretary of State for Wales how many new factory units and how many square feet of factory space have been built by the Welsh Development Agency since its inception.
    Mr. Nicholas Edwards: Between January 1976 and October 1984 inclusive, the Welsh Development Agency completed 1,201 advance factory units, 14 bespoke factory units and 82 factory extensions, totalling just over 9 million sq ft.
    Mr. Knox: Will my right hon. Friend say what proportion of the factory units are unoccupied, and whether any have been unoccupied for as long as five years?
    Mr. Edwards: About 13·5 per cent. of the Welsh Development Agency total factory stock is now vacant and available for letting. The letting rate this year is extremely good. About 1·6 million sq ft of Government factory space has been let, which is an increase on last year's record figure.

    Home Improvement Grants
    Mr. Bestasked the Secretary of State for Wales if he will give the amount in constant prices spent on home improvement grants during (a) the last year for which figures are available and (b) 1978–79.
    Mr. Wyn Roberts: Spending by district councils in Wales on all forms of house renovation grant in 1978–79 amounted to £18·1 million. The provisional total for 1983–84 is £114·5 million. Both sums have been revalued to 1984–85 prices.
    Mr. Best: Does my hon. Friend agree that the best way to deal with the poor housing stock in Wales is through improvement grants, so long as those grants are given to those most in need? Does he accept that the almost tenfold increase in expenditure by the Government over that of the Labour Government in their last year of office

    13
    demonstrates the Government's commitment to doing precisely that, and that any criticism from the Labour party is pure humbug?
    Mr. Roberts: I agree with my hon. Friend's last remark, and with the fact that the Government have spent considerably more than the Labour Government did on the improvement of houses in Wales. There is no doubt that our housing stock must be improved. We are likely to spend about £81 million on grants this year.
    Mr. Coleman: Does the Minister not understand that although the suggestion of his hon. Friend the Member for Ynys Môn (Mr. Best) will improve the quality of housing, it will do nothing for those who do not have homes? What about investment in new housing?
    Mr. Roberts: The proportion of the total money allocated to be spent on improvement grants, new build and improving their own houses is entirely a matter for the local authorities. As well as the £81 million spent on grants, the local authorities in Wales will this year spend £34 million on new building and £44 million on improving their own council houses.

  THE CHURCH COMMISSIONERS

    Beneficed Clergy
    Mr. Greenwayasked the hon. Member for Wokingham, as representing the Church Commissioners, what is the value of current pay and emoluments of beneficed clergy in the Church of England.
    The Second Church Estates Commissioner, Representing Church Commissioners (Sir William van Straubenzee): For the year from 1 April 1984 the Church Commissioners, as Central Stipends Authority, have recommended a national minimum stipend for incumbents of £6,500 per annum. In addition to the stipend, an incumbent is provided with a house, free of rent, rates, repairs and insurance.
    Mr. Greenway: I congratulate my hon. Friend on the improvement that those figures represent. Do the clergy work within spiritual and political guidelines and, if so, what are they?
    Sir William van Straubenzee: No guidelines of either kind are laid down by those whom I represent this afternoon.
    Mr. Ryman: Cannot the hon. Gentleman recommend to the Church Commissioners a realistic increase in the stipend of the clergy because, in addition to their arduous duties, they must now endure the intellectually sterile and sanctimonious utterances of a mediocre nonentity— namely, the chairman of the Tory party?
    Sir William van Straubenzee: I remind the hon. Gentleman, who follows these matters carefully, that the average stipend in the current year represents an increase over the previous one of 6·8 per cent. during a period when inflation was 4·5 per cent. Both clergy and laity are greatly stimulated by all the utterances of my hon. Friend the Member for Suffolk, Coastal (Mr. Gummer).

    Redundant Churches
    Dr. Mawhinneyasked the hon. Member for Wokingham, as representing the Church Commissioners, how many redundant churches there are in the diocese of Durham.
    Sir William van Straubenzee: Nineteen churches in Durham diocese have been declared redundant since the Pastoral Measure 1968 came into operation.
    Dr. Mawhinney: Does my hon. Friend accept that the number of redundant churches there is likely to rise if the clergy reflect their bishop's view of the resurrection and talk about a conjuring trick with bones? That phrase is grossly offensive to millions of bible-believing Christians. Does my hon. Friend also accept that the bishop's view about society, the economy and allegedly shoeless families are as eccentric and ill-founded as his theological views?
    Sir William van Straubenzee: I should incur your wrath, Mr. Speaker, if I attempted to answer matters for which I am not answerable. I hope that my hon. Friend read the text of what was said—I expect that he has. I take the point about the actual formulation used. The Lord Bishop of Durham is now well able to answer for himself in another place, which is a great relief to me.
    Mr. Mark Hughes: May I record that it is a great relief to the diocese of Durham that its bishop can answer ln the other place, rather than have the hon. Gentleman answering for him? Does the hon. Gentleman accept that many people in the diocese of Durham welcome the bishop's forthright views on the pressures invoked on families consequent upon the current strike?
    Sir William van Straubenzee: I hope that the hon. Gentleman recognises that, not only today but previously, I have attempted to understand both sides. Perhaps he and I—he is much more qualified than I am in this matter—understand the difference between a quip or a phrase used round an academic table and instruction or guidance given by the bishop of a diocese.
    Mr. St. John-Stevas: As my hon. Friend is the nearest thing, with the possible exception of myself, to an English pope, will he tell us how many redundant bishops there are in the diocese of Durham?
    Sir William van Straubenzee: None, yet, Sir.
    Mr. Madden: Does the hon. Gentleman agree that churches in Durham and in many other places would be fuller, and the views of priests listened to with more respect, if more clergymen spoke with the clarity, conviction, courage and facts with which the Bishop of Durham recently addressed the nation?
    Sir William van Straubenzee: Many members of the clergy attempt to do that faithfully in all the Christian churches.
    Mr. Cormack: Will my hon. Friend ensure that in future redundant churches are vested in the fund so that they can remain quiet places where orthodox believers can contemplate the fate of heretics?
    Sir William van Straubenzee: My hon. Friend generally approves of the Church Commissioners' policy, which is, wherever possible, to find alternative living uses for those buildings.
    Mr. Campbell-Savours: Will not the social and enlightened message of the Bishop of Durham serve only to swell congregations throughout that county and, indeed, the entire northern region, where there is high unemployment? Will the hon. Gentleman have a word with the chairman of the Conservative party and tell him to stop bullying the bishops? They do not like it.
    Sir William van Straubenzee: One could say many things about the 43 diocesan bishops of the Church of England, but one cannot say that they are capable of being bullied by my hon. Friend or by anyone else.
    Mr. Peter Bruinvelsasked the hon. Member for Wokingham, as representing the Church Commissioners, how many redundant churches there are in the diocese of Leicester.
    Sir William van Straubenzee: Nine churches in Leicester diocese have been declared redundant since the Pastoral Measure 1968 came into operation.
    Mr. Bruinvels: While thanking my hon. Friend for that answer, may I say that there may be many more redundant churches if women are admitted to the priesthood? Will he encourage the Church Commissioners to ensure that no churches are demolished after they are declared redundant, but are instead used for other purposes such as for the ethnic communities?
    Sir William van Straubenzee: I have studied carefully the list of churches in Leicester. My hon. Friend will know of the great care that has been taken to find alternative living uses where that is possible. As to the first part of his question, I do not believe that this afternoon, after what has happened, I should touch women.

  THE ARTS

    English National Opera
    Mr. Tony Banksasked the Parliamentary Under-Secretary of State answering in respect of the Arts how many times the Minister for the Arts met the chairman of the English National Opera prior to the commencement of the company's North American tour to discuss financial arrangements; what indications were given of likely financial support for the tour from the Government; and if he is considering providing additional funds to assist the English National Opera to meet the £700,000 tour deficit.
    The Parliamentary Under-Secretary of State for the Environment (Mr. William Waldegrave): My right hon. and noble Friend met the chairman of the ENO informally on four occasions before the tour; no indication of Government financial support was given. The deficit on the tour is a matter for the Arts Council and the company.
    Mr. Banks: Is the Minister aware that according to the minutes of the ENO board the Minister for the Arts
    "emphasised the Government's desire for the tour to go ahead"
    and that the Minister also gave a heavy hint of additional Government financing for the tour? The tour then proceeded. In view of those two statements, should not the Minister for the Arts now come forward with the money for the ENO, or resign?
    Mr. Waldegrave: The first part of the hon. Gentleman's remarks is correct. The Minister hoped that the tour would take place. Indeed, it was a triumphant
    16
    success. The records show that the Minister did not offer Government support in advance of the tour. When the money-raising went wrong, and as on other occasions and with other companies, he offered his good offices to raise private money to help, but that is a very different matter.
    Mr. St. John-Stevas: Does my hon. Friend agree that the hon. Member for Newham, North-West (Mr. Banks) has rendered a service to the Minister for the Arts by leaking those minutes to the press, because after reading them no reasonable person could conclude that any pledge of Government finance had been given? Having said that, in view of the phenomenal success of the ENO tour in the United States, and given that the company was let down by certain Amercian sponsors, will my hon. Friend ask his right hon. and noble Friend to launch an appeal, publicly and privately funded, to meet this deficit and to save this company, which has made such great contributions to our cultural life?
    Mr. Waldegrave: My right hon. Friend's initial remarks are entirely right. I again confirm that the tour was a tremendous success. My right hon. and noble Friend has already taken some steps to help find private money, and I shall report to him the idea that my right hon. Friend has put forward.
    Mr. Buchan: It is not good enough for the Minister to give the answer that he has. Like others, I have seen the minutes, and there is no doubt whatever that the tour went ahead with the encouragement of the Minister. Therefore, as a matter of honour, the Minister for the Arts has a moral duty to help the company. It would not have undertaken the tour without his prior imprimatur. The Minister's honour is now at stake. It is insufficient to leave this to private funds. The Government must come clean and meet the deficit.
    Mr. Waldegrave: That is not fair. My right hon. Friend the Member for Chelmsford (Mr. St. John-Stevas) more accurately described what happened. The ENO knew perfectly well that Arts Council funds cannot be used for foreign touring. My right hon. and noble Friend wanted the tour to go ahead, as we all did. Now that the ENO has been let down by some of the American backers who promised it money, my right hon. and noble Friend and a number of others are seeing what can be done to help.

    Museums and Galleries (Entrance Charges)
    Mr. Nicholas Bakerasked the Parliamentary Under-Secretary of State answering in respect of the Arts if he will encourage individual museums and galleries which wish to make entrance charges.
    Mr. Waldegrave: The Government's policy is to leave to the trustees' discretion whether to introduce general admission charges for the main collections at the national museums and galleries. My right hon. and noble Friend will encourage suitable programmes of self-help, which could include admission charges, if the trustees wish to propose these.
    Mr. Baker: Does my hon. Friend agree that charging can enable museums and galleries to become more exciting places to visit, particularly for families? If charging can enable museums and galleries to maintain their treasures and to replenish their store by buying

    17
    others, is there any good reason why those in work who are prepared to pay, and tourists, should not pay entrance charges to museums?
    Mr. Waldegrave: There have been charges for many of the most successful special exhibitions in recent years, but it is the Government's policy to leave the initiative in such matters to the museum trustees.
    Mr. Faulds: Is the hon. Gentleman aware that last time round, even before charges were introduced, attendances at the National Gallery fell markedly, simply on the supposition that they had been introduced? Does he accept that I know many people who will not be able to afford to pay for entry to museums and art galleries? Does he not know such people too?
    Mr. Waldegrave: The position is different for different types of museums. For example, the National Maritime museum seems to be making a great success of its scheme. It is right to leave the matter to the trustees of individual museums.
    Mr. David Atkinson: Does my hon. Friend agree that those museums in Britain which do not charge are put at a disadvantage compared with those museums in Europe, the Soviet Union and the United States which do charge and which can, as a result, enhance their collections, particularly when, knowing that, visitors are quite prepared to pay for admission?
    Mr. Waldegrave: That is the sort of consideration that may carry weight with some of the trustees concerned.
    Mr. Buchan: Is not the only disadvantage to which museums and galleries in Britain are put compared with those in other countries that Governments of other countries are a great deal more generous to their museums than are this Government? Is it not the case that, far from the Minister leaving it to the trustees to decide, he has used every possible occasion, including the recent opening of the library at Ealing, to encourage them to charge? He says that people appreciate what they pay for, but is that not the philosophy of the harlot?
    Mr. Waldegrave: I did not say that, but I am sure that the hon. Gentleman thought up his joke before he listened to me. Some foreign countries can be more generous because they are now richer than Britain, and that is largely the result of the economic policies followed by the Labour party over a number of years.

    Arts Council (Funding)
    Mr. Bestasked the Parliamentary Under-Secretary of State answering in respect of the Arts if he will give the level of funding for the Arts Council in Wales for each of the last six years.
    Mr. Waldegrave: I will, with permission Mr. Speaker, make the complete list of figures available in the Official Report. The funding has risen from £3·94 million in 1978–79 to £6·54 million in 1983–84.
    Mr. Best: Will my hon. Friend acknowledge the importance of the arts in Wales, particularly for those visitors to the Principality who suffer the deprivation of not being able to enjoy the arts in Wales every day of their lives? Will he comment on my perception of those figures, which is that broadly, in real terms, the level of funding has remained about the same, even though that has been at a time of supposed financial restraint?
    Mr. Waldegrave: I confirm the importance which the Government attach to the arts in Wales. My hon. Friend is right to say that on the latest figures, up to 1984–85, spending on the arts in Wales has been just about within 1 per cent. protected against inflation.
    Following are the figures:

    Arts Council's grant-in-aid to the Welsh Arts Council

    Year

    £ million

    1978–79

    3·94

    1979–80

    4·58

    1980–81

    5·06

    1981–82

    5·61

    1982–83

    6·70

    1983–84

    6·54

    Source: WAC annual Income and Expenditure Accounts.
    The Arts Council's allocation to the WAC in the current year is £6·92 million.

    Hayward Gallery
    Mr. Jesselasked the Parliamentary Under-Secretary of State answering in respect of the Arts if, following legislation on local government in Greater London, the Government still intend that the Hayward gallery shall be managed under the auspices of the Arts Council.
    Mr. Waldegrave: Yes, Sir.
    Mr. Jessel: Does my hon. Friend agree that the GLC's attempt to expel the Arts Council of Great Britain— which has to prepare important art exhibitions two or three years ahead— from the Hayward gallery at a few months' notice is an act of uncivilised vandalism, which shows that the GLC is wholly unfit to run any serious art gallery, or anything else?
    Mr. Waldegrave: The GLC group concerned has made rather a fool of itself over this issue. The matter is subject to litigation. The Arts Council may be serving writs the other way. Such reputation as the GLC has in this area has been severely damaged by its behaviour over the Hayward gallery.
    Mr. Tony Banks: Is the Minister aware that some 18 months ago the Arts Council, in the form of its chair, said that it wanted to get out of both the Hayward and the Serpentine galleries? Is he also aware that the GLC has said that all contractual obligations to the Arts Council will be honoured? I do not see how that fits in with the question.
    Mr. Waldegrave: I am aware that the GLC's lawyers have now told the GLC something about the law of contract, which has influenced its position somewhat. I think that the position of the Arts Council is related to the proposals put forward by the GLC and is not an abstract one.

    Private Sponsorship
    Mr. Murphyasked the Parliamentary Under-Secretary of State answering in respect of the Arts what is the current level of private sponsorship of the arts; and if he will make a statement.
    Mr. Waldegrave: The Association for Business Sponsorship of the Arts estimated sponsorship at £13·5 million in 1983, excluding charitable donations by

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    companies and private individuals. No later figures are currently available, but the new incentive scheme of my right hon. and noble Friend has given sponsorship a new impetus. He will be announcing the initial 12 award winners tomorrow.
    Mr. Murphy: I welcome the results of private sponsorship of the arts. Are the Government to give extra publicity to that?
    Mr. Waldegrave: I shall certainly take up that matter with my right hon. and noble Friend and write to my hon. Friend on that point.

Confectionery (Poisoning)
3.30 pm
Mr. Peter Bruinvels(by private notice) asked the Secretary of State for the Home Department if he will make a statement on the poisoning of confectionery by members of the Animal Liberation Front.
The Parliamentary Under-Secretary of State for the Home Department (Mr. David Mellor): I have been asked to reply.
I have today received the following information from the Commissioner of Police of the Metropolis. At 3.10 pm on Saturday, 17 November, the press bureau at New Scotland Yard received a telephone call from the deputy news editor of the Sunday Mirror informing the police that he had just received a telephone call from the Animal Liberation Front stating that Mars bars throughout the country had been injected with rat poison. That telephone call was followed by the receipt at the Sunday Mirror of a Mars bar and a letter from the ALF, in which the ALF claimed to have adulterated Mars bars in London, Leeds, York, Southampton and Coventry. The Mars bar and letter were handed to the Metropolitan police.
At about 3.45 pm the same day the BBC offices at Portland place were handed a Mars bar which was claimed to have come from the ALF and to be contaminated, as were others throughout the country.
The Mars bars that were handed to the Sunday Mirror and the BBC have been submitted to the Metropolitan police laboratory for examination, and a result of the analysis is expected tomorrow. In the light of recent ALF activities, the police and the manufacturers have, very properly, taken these claims seriously.
I understand that a number of other police forces have been handed Mars bars which are either marked with a large cross or contain a copy of the ALF letter. Tests to determine whether or not they have been contaminated continue, but thus far I am glad to say that there is no evidence that any member of the public has purchased or eaten a contaminated product.
Police inquiries are continuing.
I am sure that the whole House will join me in deploring the Animal Liberation Front's outrageous and irresponsible behaviour.
Mr. Bruinvels: I thank my hon. Friend for that helpful answer. Is this not yet another example of an irresponsible campaign that is corrupted by violence and terror tactics? Are not defenceless children very much in danger, and is there not a risk that they could be very ill indeed from eating contaminated Mars bars? I think that my hon. Friend will agree that the ALF appears to care more about animals than humans, which is a disgrace.
Will my hon. Friend let us know whether any warnings were given? What steps is the Home Office taking to monitor the ALF's activities? Is my hon. Friend aware that the RSPCA has condemned outright the ALF's action as being totally irresponsible and very corrupt? Is he further aware that these animals—
Mr. Speaker: Order. I think that the hon. Gentleman has asked at least three questions and, in fairness to other hon. Members, that is enough.
Mr. Mellor: I agree with my hon. Friend's concern. It comes a little hard to be lectured about animal rights by
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a group that is plainly contemptuous of human rights. The problem with the incident that has been reported is that it is just one of a series of incidents which has been escalating in seriousness in recent months. Those incidents have involved personal violence against people involved in research work in laboratories. Three weeks ago. three people were put into hospital. Dangerous wild animals have also been let loose.
The problem facing civilised people in this country is that such behaviour threatens us all. It is utterly irresponsible, and we must all stand firm against it by assisting the police to resolve the matter as speedily as possible.
Mr. Robert Maclennan: Is the Minister aware that people such as the spokesman for the RSPCA—who yesterday on television described such monstrous criminal behaviour as understandable—are doing the cause of those concerned about animal welfare no good at all? What steps are being taken by the police to trace the perpetrators of these offences?
Mr. Mellor: In reply to the hon. Gentleman's helpful question, I can tell him that every effort is being made by the police to trace those responsible, and inquiries are continuing.
Many of us are concerned about animal welfare, which is why Britain has the most rigorous animal welfare laws in the world. It is why the Government are currently negotiating with a wide range of interested groups to reform the 1876 Act and to introduce controls that will be even more rigorous.
We appreciate that some animal experiments—indeed, quite a large number—will be absolutely crucial for the foreseeable future if we are to have product safety and if we are to conquer diseases for which currently there is no cure. That is something that the extremists find it impossible to understand.
None of us can have any truck with such conduct, which must be stamped out in the interests of us all.
Mr. Charles Morrison: Is my hon. Friend aware that the vast majority of people are becoming increasingly fed up with the arrogant and irresponsible antics of the members of the Animal Liberation Front masquerading as do-gooders and presuming to know better than the law or this House about what the law does or should allow?
Does my hon. Friend agree that the Mars affair is only the latest in a series of episodes in which the freedom of people in Britain to go about their lawful business has been interfered with? When I say people, I mean butchers, pet food shopkeepers and many other traders.
Mr. Mellor: It is the appallingly wide range of activities condemned by the extremists that make them so frightening. For example, when a football manager is a fisherman, that is a licence for the extremists to damage the ground and pitch of a team that the manager's team is playing against. Because they are against angling, apparently youths must be free to throw stones at anglers. Because they do not agree with people eating hamburgers, at least a dozen McDonald's restaurants have been damaged in recent months. Because they do not agree with mink farming, some of my hon. Friend's constituents have had mink released into the countryside. That is an act of grotesque irresponsibility for both mink and other wildlife in the countryside. They even released a wolf last week.

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These things are going too far. The community as a whole must repudiate such action if we are to have the civilised debate about animal welfare that we all want.
Mr. Stuart Bell: Will the Minister confirm that, by legitimate and orthodox means over the years, the RSPCA has had signal successes with the Home Office to prevent cruelty to animals? Do not such incidents as what occurred during the weekend, even if they turn out to be a hoax, add nothing to the cause of animal lovers throughout Britain who sympathise with the movement against cruelty to animals?
Mr. Mellor: Not for the first time, the hon. Gentleman is absolutely right. At the end of the last Parliament, an Act was passed, supported by the RSPCA, to prevent the sale of pets from open street markets. That dealt with the scandal of Club row. I was happy to support that on behalf of the Government.
A dialogue is continuing with a whole range of groups concerned with animal welfare, including the Fund for the Replacement of Animals in Medical Experiments—which I know many hon. Members support—to update our laws on animal experiments.
We do not need the activities of extremists to persuade us that our animal welfare laws need to be the best possible. They only hinder the process of reform; they do not advance it.
Mr. Roger Gale: Will my hon. Friend accept the assurances of hon. Members on both sides of the House who belong to the all-party parliamentary group for the Fund for the Replacement of Animals in Medical Experiments—which I have the privilege to chair—that we are wholly opposed to the practices carried out by people such as this, who claim to believe in animal welfare?
Will my hon. Friend accept our assurance that we believe that the only proper way forward is to fund research into alternatives, so that animals are no longer required for experiments?
We would welcome a statement from the Minister in the near future on our submissions on the White Paper.
Mr. Mellor: My hon. Friend knows that the Government, for the first time, have made available a substantial sum for research into alternatives. He knows that the number of animal experiments has fallen from about 5·6 million in 1976 to about 3·6 million last year. He is aware that, while we must strive to bring into play as many alternatives as possible, for the foreseeable future many animal experiments will be needed if we are to have any chance of conquering those diseases that still remain without a remedy.
The House will know that several surgical procedures that are now commonplace, such as coronary bypasses, were introduced 20 years ago only after the most rigorous experimentation on animals, without which such life-saving operations would not have been possible.
Mr. Tam Dalyell: Does the Minister recollect that, following my active participation in the Committee stage of the Protection of Animals (Scientific Purposes) Bill, introduced in 1979 by the hon. Member for Wellingborough (Mr. Fry), there were suggestions that Governments of the day should make it clear that to accept
24
the demands of animal liberation supporters would lead naturally to infringements of the various Medicines Acts? In those circumstances, would it not be useful for Governments to indulge in the making of some tear-jerking statements—many of which would have a basis of fact—about precisely what would happen if the aims of the ALF were to be achieved? If they were, all sorts of work relating to human disasters would be gravely affected.
Has anything been learnt from the recent Japanese experience in regard to the poisoning of foods?
Mr. Mellor: The hon. Gentleman has made some valuable points, and it is up to all of us in public life to stress them. I have done my best to do so, and as a consequence I have suffered somewhat at the hands of the extremists. It needs to be clearly understood that the vaccines that save children's lives all have to be tested on animals. Unless every batch is tested, there will be more vaccine-damaged children, and we cannot countenance that.
We must not think that it is only animal experiments—or so-called unnecessary animal experiments—that the extremists are against. They are against commonplace pursuits such as fishing, they are against the eating of animals, and I have seen letters from the Animal Liberation Front denouncing the keeping of pets. There is no way in which any civilised Government can bow to their demands.
Mr. Michael Latham: Can my hon. Friend assure the House that the tests on the allegedly poisoned Mars bars will be carried out as quickly as possible? On today's 1 o'clock radio news a man purporting to speak for the Animal Liberation Front said that none of the Mars bars had been poisoned. Those of us who know the Mars corporation know it to be an exceptionally responsible and worthwhile company.
Mr. Mellor: I agree with my hon. Friend that it is important that the results of the analysis should be known as quickly as possible. The reason why the analysis is taking a good deal of time is that everything, including the wrappers, is being subjected to minute examination, not merely to determine whether Mars bars have been contaminated but to get evidence as to who might have been responsible. Whether or not the bars have been contaminated, criminal offences have been committed. The incident is deplorable, whether or not Mars bars containing rat poison have been put on shelves.
It is most unfair that Mars should be pilloried and held in contempt for supporting important medical research at one of the most significant medical establishments. If that is a matter for which people are to be held in contempt, things have come to a pretty pass.
Mr. Alex Carlile: In rightly and forthrightly condemning the interference with Mars bars, is the Minister aware that many responsible campaigners felt a great deal of frustration that there was no legislation on animal welfare proposed in the Queen's Speech? Will the Minister take steps to ensure that firm proposals are made public as soon as possible to minimise the damage done by wild and irresponsible groups such as the ALF?
Mr. Mellor: The trouble is that we are breeding a large number of single-interest groups which become extremely frustrated when people who have to deal with many other

25
matters are not prepared to give total priority to their point of view. They seem to think that they can resort to any kind of law breaking to bring about their aims. We must all, regardless of our party political position, condemn that sort of activity. I know that the hon. and learned Gentleman would not want his words to be interpreted as condoning that frustration. We are the first Government for a long time to take the matter seriously enough to introduce a carefully considered proposal to reform the 1876 Act.
Further deliberations are taking place in the light of detailed submissions received from animal welfare groups and others. It is in the best interests of the legislation that it remains under consideration. The Government are committed to take action, and action will be taken. However, that will not satisfy the extremists. They are opposed to all experiments and "all experiments" would not be stopped by a responsible Government.
Mr. Derek Spencer: Does my hon. Friend agree that the activities of the Animal Liberation Front go much further than irresponsibility? Its members claim deliberately to promote their activities by serious crime. They have claimed responsibility for acts of criminal damage involving between £70,000 and £80,000. They inflict terror upon those who work in laboratories and their activities are to be condemned by everyone who supports the cause of animal welfare.
Mr. Mellor: Several recent incidents have involved attacks by several dozen people armed with slegehammers and crowbars. In a recent incident, three people were put into hospital. During the year the claims that have been made by the group and the threats that it has uttered have become ever more ferocious, including breaking into the homes of scientists and smashing their hands to pulp in front of their families. Last week ALF representatives threatened to use firearms. My worry is that these people are feeding their own psychotic tendencies to such a degree that we can no longer assume that they do not mean what they say, and that sooner or later, as is evidenced by the fact that violence is already escalating, they will not do something truly dreadful. That is why I say that the community must disclose any information that it has about these groups so that members of them can be stopped, as much in their own interests as in those of the rest of us.
Several Hon. Members rose—
Mr. Speaker: Order. In view of the importance of this subject, I shall call those hon. Members who have been rising in their places. However, this is a private notice question and we must move on when those hon. Members have been called.
Mr. D. N. Campbell-Savours: The Minister says that he wishes to stamp out this irresponsibility. Perhaps one way of doing so would be for the Minister to show a little more flexibility. He has developed over these last years a reputation among those people who take an interest in these matters as not being flexible. [HON. MEMBERS: "No."] That is the reputation that this Minister has acquired for himself. It may well not be grounded on fact, but it happens to be the truth. If that is the case, then surely it is for the Minister himself to ensure that a campaign is organised to make the Government's position quite clear to those interest groups. That is the way to defuse the difficulty that we have today.
Mr. Mellor: The hon. Gentleman is an instant expert on everything that comes before the House, and I suppose that I must take his strictures as stolidly as those of my colleagues who have them visited upon them regularly. The proposals in the White Paper have been considered by groups such as both the veterinary bodies, the Fund for the Replacement of Animals in Medical Experiments, and other reputable bodies such as the Royal Society, and have been found to be entirely in keeping with the best traditions of British concern for animals. If the hon. Gentleman means by flexibility that in the interests of pandering to extremists I should stop medical research, cancer tests, research into safe vaccine for children and protection for those who deal with hazardous chemicals, let him have the backbone to say so rather than using coded expressions that suggest that we should pander to extremism, which is something that he is good at doing.
Mr. Tim Brinton: Is my hon. Friend aware that, apart from radio interviews, Independent Television News showed on our screens at lunchtime a gentleman who proudly admitted that the exercise had been a hoax? If it be a lunatic hoax, should not the Government be thinking fairly carefully whether those who may be associated with crimes should be allowed such platforms?
Mr. Mellor: As I have said, I am not in a position to say whether it has been a hoax. Irrespective of whether it is a hoax, it is profoundly irresponsible. I shall not comment on what the gentleman said on ITN, as I gather that the police are interested in the observations he made.
Mr. Albert McQuarriie: My hon. Friend will be aware that millions of Mars bars have been withdrawn from the shelves of shops and that the production of the bars has been stopped. This will create unemployment in a factory and town where we are looking for employment. Members of the ALF should take that into consideration before they set out on their dangerous expeditions.
Mr. Mellor: I agree with my hon. Friend.
Mr. Richard Hickmet: Does my hon. Friend accept the fact that many hon. Members on both sides of the House are well aware of the pressure and attacks on him and entirely reject the ludicrous statements by the hon. Member for Workington (Mr. Campbell-Savours)?
Mr. Campbell-Savours: Did you listen to what I said? If not, read it tomorrow.
Mr. Hickmet: Will my hon. Friend help the House by saying what assistance he and the police have received from the Mars company? Is my hon. Friend satisfied with that assistance in tracing the so-called poisoned bars?
Mr. Mellor: I am happy to say that the Mars company has behaved with the utmost responsibility in all this. I stress that there is no reason why people should lack any confidence in Mars products or why Mars should feel that it has been anything other than the victim of an outrageous, unnecessary and unjustified attack. In supporting research, the Mars company has acted inestimably. Companies such as Mars would be criticised not if they supported such research but if they did not do so.
Mr. Douglas Hogg: Does my hon. Friend agree that Mars bars contaminated with rat poison would

27
cause death or serious injury? Does my hon. Friend agree that charges that reflect those consequences should follow? If, however, this is a hoax, does my hon. Friend agree that the Mars company and the retailers should be able to pursue an action for damages?
Mr. Dennis Skinner: He will represent either side.
Mr. Mellor: It would be dangerous for me to seek to advise either the Mars company or the police on what charges should follow. I remain of the view, as I have said, that this is a serious incident, whether or not rat poison was put into those Mars bars. It is worth bearing in mind that, the last time these people threatened to contaminate products, they put bleach into shampoo, which could have blinded people. No one should treat this as a joke; the hon. Member for Bolsover (Mr. Skinner) seems to treat most things as a joke.
Mr. Skinner: It is not a joke: he will take the brief.
Mr. Mellor: This is one of a series of incidents in recent months that will trouble every responsible hon. Member.
Mr. Alfred Dubs: Is the hon. Gentleman aware that many people who are seriously worried about the welfare of animals will be appalled that a small minority are using threats to the well-being and health of children as a way of getting publicity? They will be even more worried because that publicity prevents and obscures the serious public debate that is taking place and should take place on how we in Britain treat animals? Will the Under-Secretary of State comment on the obvious vulnerability of food manufacturers to such threats? Is the Japanese experience helpful in this respect?
Mr. Mellor: These are worldwide phenomena. The experience in Japan and America will be studied.
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Producers of goods that are widely distributed and sold all over the country are especially vulnerable to this threat. That is why the only answer to the problem is to stamp out those extremists. It is important that we should have a debate about animal welfare and that our animal laws should be the best possible legislation. It is important also that we should have an environment in which there is not only good animal welfare but a good climate for scientists to do important work of fundamental research. Striking the balance between the two is something that all responsible people want to do.

Confectionery (Poisoning)

  STATUTORY INSTRUMENTS, &c.
  Mr. Speaker: With the leave of the House, I shall put together the Questions on the eight motions relating to statutory instruments.
  Ordered,
  That the Food Labelling Regulations 1984 (S.I., 1984, No. 1305) be referred to a Standing Committee on Statutory Instruments, &c.
  That the Agricultural Holdings (Forms of Notice to Pay Rent or to Remedy) Regulations 1984 (S.I., 1984, No. 1308) be referred to a Standing Committee on Statutory Instruments, &c.
  That the Agriculture (Miscellaneous Provisions) Act 1976 (Units of Production) Order 1984 (S.I., 1984, No. 1309) be referred to a Standing Committee on Statutory Instruments, &c.
  That the Agricultural Land Tribunals (Succession to Agricultural Tenancies) Order 1984 (S.I., 1984, No. 1301) be referred to a Standing Committee on Statutory Instruments, &c.
  That the Registered Homes Tribunals Rules 1984 (S.I., 1984, No. 1346) be referred to a Standing Committee on Statutory Instruments, &c.
  That the Residential Care Homes Regulations 1984 (S.I., 1984, No. 1345) be referred to a Standing Committee on Statutory Instruments, &c.
  That the Social Security (Severe Disablement Allowance) Regulations 1984 (S.I., 1984, No. 1303) be referred to a Standing Committee on Statutory Instruments, &c.
  That the Social Security (General Benefit) Amendment Regulations 1984 (S.I., 1984, No. 1259) be referred to a Standing Committee on Statutory Instruments, &c.—[Mr. Durant.]

Films Bill
Order for Second Reading read.
3.53 pm
The Minister of State, Department of Trade and Industry (Mr. Norman Lamont): I beg to move, That the Bill be now read a Second time.
It is now four months to the day since my right hon. Friend the Member for Mole Valley (Mr. Baker) appeared at the Dispatch Box to announce the Government's review of the film industry. The review's conclusions were set out in the White Paper on film policy published on that day. The Bill before the House is essentially concerned with providing the legislative framework to implement the decisions that were announced then.
It is important to remember the impressive strength of the British film industry. I have noticed that there has been a campaign to suggest otherwise by certain groups interested in obtaining tax concessions and more money. However, in the past few years the industry has seen a surge of activity. Production has increased. Studios are full. We have been able to attract some internationally mobile productions. That is largely because of the wealth of talents and skills that are found in this country.
In addition, we have also become a centre of expertise in certain technical areas and that has led to highly successful major international productions such as the "Star Wars" films and, more recently, "Indiana Jones and the Temple of Doom". More technicians are in work now than for many years and last year 34 full-length British feature films were made here, and there were some notable successes—"Local Hero", "Educating Rita" and "The Dresser". [AN HON. MEMBER: "Have you seen them?"] I have seen them. If that list is not impressive enough by itself I know that some people have sought to argue that the number of films does not necessarily show a great deal—the budget for the film and television activity here in 1983 was some £210 million, of which one third was funded from United Kingdom sources. That £210 million compares with £160 million in the previous year. There are two encouraging things about that—first, the United Kingdom percentage has been growing and, secondly, the growth has been not just among the major pictures but at all budget levels.
We have also seen some notable examples of fundraising by companies for investment in films. Thorn EMI, one of our major production companies, is investing up to £25 million in new films this year. Goldcrest has recently been able to raise more than £20 million for investment in films. There are newcomers also. Virgin Records, diversifying into films as well as air travel, has produced some exciting new films. There was the impressive production of Orwell's "1984", although I have not yet had the benefit of seeing it.
The growth of the independent television sector, substantially stimulated by the work for Channel 4, has also given a boost to low-budget feature films. Channel 4 alone has invested some £8 million this year in independently made feature films. Estimates put the additional jobs in the London area alone at 4,000. Again, there is growing public interest in the British film industry because of the industry's own efforts to launch British Film Year next year, to which the Government are subscribing £250,000.
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I know that people have been anxious about the tax changes that have been made, but I believe that there is evidence of a high level of activity. There have been some notable successes and with the market opening up there are increasing opportunities.
It would be wrong not to mention other sections of the industry. The number of commercial advertising films, for example, is about 3,000 a year, and an entirely new segment of the industry—pop videos—has shown strong growth and was worth about £10 million last year.
Another feature that has been much commented upon is the high quality of British films. Many commentators remarked on the outstanding quality of British films at Cannes this year, which enhanced our reputation in world markets. Other European countries may make more films, and although many of their films are doubtless of great merit, they have not all had the same international appeal or been on the same scale.
Overall, in our view, the industry is in a healthy enough state to take advantage of the increased opportunities that are becoming available through video, cable and DBS. These are massive changes, and they are not all so far away. DBS is due to start in 1987. These changes, which will open up the market for films, pose the problem as to whether we can create enough films, and cause me to refuse to believe that the future is bleak.
I believe that there are tremendous new opportunities. I do not think that with these growing sectors it is an appropriate response to say, "Levy everywhere. Take a growing and successful sector and impose a levy on it, to recycle money to an industry which will face growing markets and growing opportunities for its products."
For that reason, we started with the presumption that the time had come to sweep away the archaic legislative framework of the industry, under which my Department still registers every film for public exhibition and licences every distributor and every exhibitor showing registered films at a cinema. In my view, the modern industry will be better off without those tiresome bureaucratic restraints.
Another major consideration—I think that it is recognised by both sides of the House—has been the state of the cinema industry itself. In contrast to the general buoyancy of the production sector, cinemas have been in decline. For 30 years, there has been an almost unbroken decline in cinema admissions as social habits have changed and different forms of visual entertainment have entered the market—first television, then the video. In that period, annual admissions to cinemas have fallen from over 1·25 billion to about 66 million, and I regret that the figures for the first four months of 1984 show that admissions are down by 25 per cent. on the same period last year.
These are undoubtedly hard times for cinema proprietors, and cinemas continue to close at the rate of three or four a month. I think that it is widely accepted that that is a reason why we must take action to help the cinema industry. It is still important to the film industry. It is often in cinemas that a film makes its reputation. I very much hope that cinema is an industry that can thrive and survive, because the decline of cinema in this country has been very much greater than in other countries. Seeing films on the large screen is different from seeing them on the small screen. One wants that experience to continue. One motive for wanting to get rid of the levy is to help the cinema industry itself.

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The levy has declined in importance as cinema has declined. Therefore, one should not exaggerate the importance of the levy to film producers. I am afraid to say, extrapolating forward from where we are, with cinema attendances where they are now and the further decline that is likely, that the significance of the levy to producers is not all that great.
It was against that background that we came to the conclusions announced in the White Paper. Our first and most important decision was that the Eady levy on cinema receipts must be ended. Introduced in the heyday of cinema, it was designed as a means of recycling money from a prosperous sector into the weaker British film production industry. Now the position has reversed: the levy has become a penalty for cinema owners. For too many of them, it represents the difference between survival and extinction. So the levy must go. It has always had an uncertain future. It has always been subject to renewal every five years. Now, in our view, it should go entirely.
As a consequence of getting rid of the levy, it is necessary to consider the future of the various bodies that depend to a greater or lesser extent on the proceeds of the levy. I am sure that Opposition Members will ask why we should interfere with institutions such as the National Film Finance Corporation. Once we had taken the step of deciding to get rid of the levy, the first body that we had to consider was the NFFC, because it has been dependent on the levy, which has been becoming dramatically less valuable. As the White Paper explained, we were impressed by those who argued that the work of the NFFC should be allowed to continue. I believe and genuinely hope that the arrangements now being discussed with the private sector will make that possible. I shall return to that point.
The other bodies that receive a share of the Eady levy are the National Film and Television School and the British Film Institute production board. The school is a highly respected institution that produces a steady stream of talented young people, well trained and skilled to fill professional places straight away, whether as technicians, directors or producers. The Government have negotiated agreements for the school to receive £600,000 a year for five years from a mixture of sources within both the film and television industries. This will be the first time that the British Broadcasting Corporation and the independent television companies have made a major contribution to that body, from which they receive such significant benefit. The new funding is limited to five years, but I hope that in due course further arrangements can be made.
Mr. Mark Fisher: Having secured a temporary financial future for the National Film and Television School, has the Minister also been able to secure the school's educational policy independence? Will he give the House an assurance that it will not become a television school in which the needs of the funding bodies predominate over the educational needs of the industry?
Mr. Lamont: I hope that that is so.
Mr. Fisher: Really?
Mr. Lamont: I shall address that point further. The hon. Gentleman and the House will understand if I say
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frankly that I have been looking after the industry for a mere six weeks, during which time, with my right hon. Friend the Secretary of State being away, I have had many problems to occupy my mind. The film industry has been a significant problem.
The issue raised by the hon. Gentleman is important. It is the same as the issue raised by some people in relation to the NFFC, with its private shareholders. I think that we have found a way of getting the assurances that the hon. Gentleman wants, but I shall consider the matter and see whether there are ways in which we can tighten the arrangements to secure that independence.
Sir Geoffrey Johnson Smith: My hon. Friend mentioned the NFFC and the arrangements that are being made to help finance the new organisation that is to take its place. In the White Paper a sum is mentioned, but there is no mention of any sum in the Bill. Will my hon. Friend give an assurance that we can expect the new private organisation that is to be formed to be funded at least to the tune of £1·5 million?
Mr. Lamont: I shall deal with that point in some detail.
I should like to revert to the subject mentioned by the hon. Member for Stoke-on-Trent, Central (Mr. Fisher). I said that we had secured the funding for five years, which is a relatively long time. As I observed, in the past the Eady levy was limited to a lifetime of only five years at a time. I am glad to be able to tell the House that the Government intend to contribute up to £250,000 next year to improve the facilities of the school—that is, over and above the other sums of money that I mentioned.
Mr. Tim Smith: With regard to the National Film and Television School, I welcome the agreement that the Government have been able to secure, as the school is in my constituency. It recognises the value of the work done at the school. However, I wonder whether there should be some reference to the agreement in the Bill. Will the future of the school be secure just on the basis of the White Paper, with no reference in the Bill?
Mr. Lamont: The agreement does not need to be covered by the Bill. The school has been the beneficiary of the proceeds of the levy but I think that I am right in saying that it is not specifically mentioned. However, I do not think that my hon. Friend needs to have any fears that the arrangements are other than secure—I believe that they are.
Mr. Bryan Gould: I was interested in what the Minister said about the film school. As he rightly says, other institutions are in the same position. Did I understand him to say that the Bill would be amended to take account of their position?
Mr. Lamont: No, I did not say that.
Mr. Gould: Is the school being closed down?
Mr. Lamont: The school is not being closed down; it is being secured with large sums of money, as the hon. Gentleman will know. I shall return to those points in a moment.
Mrs. Gwyneth Dunwoody: I am grateful to the Minister for giving way, as he has been interrupted a great deal, but this is a vital point. He is doing away with the only guaranteed form of support for production in this country and is making no effort to

33
provide any alternative guarantee for exhibitors or producers, or indeed for the National Film and Television School. Where does the Bill state that funds will continue to be provided for those institutions?
Mr. Lamont: I have made it perfectly clear that the Bill does not provide any such guarantee.
The British Film Institute production board has also benefited from a small payment out of the Eady levy. We intend to make a normal grant of £125,000 to it from the Eady levy in the levy year 1984–85 and a special final supplement of £250,000.
The termination of the Eady levy will pave the way for the winding up of the public body which distributes the proceeds of the levy—the British Film Fund Agency. In addition, the way becomes clear to abolish the statutory advisory body—the Cinematograph Films Council—whose function in recent years has largely been to advise on regulatory matters.
Mrs. Dunwoody: What is to replace it?
Mr. Lamont: As the hon. Lady will recall, another body is to be set up, based on the interim action committee but on a wider basis. I was not party to the consultations, but I understand that there was a feeling that the Cinematograph Films Council was too circumscribed by statutory obligations and that a different more broadly based body was needed. We are in the process of considering that new body and I shall, of course, pay close attention to representations made by Members, by the industry and by other interested parties as to what its basis should be.
I wish to set out the main provisions of the Bill before dealing with the question raised by my hon. Friend the Member for Wealden (Sir G. Johnson Smith).
Clause 1 repeals the Films Acts 1960 to 1980—six statutes in all. The first effect of this is the abolition of the quota system, which required cinemas to show a certain minimum proportion of British films. This protectionist measure was a feature of the original films legislation of 1927 and, like most measures of that kind, was never, in our view, a satisfactory means of ensuring the long-term health of the domestic industry. Because the system was both ineffective and irrelevant, the quota was suspended from January 1983.
Secondly, the repeal of the Films Acts brings to an end the requirement to register films for public exhibition and to have a licence for the distribution or exhibition of films. These provisions were originally designed to underpin the quota and to make it possible to police the scheme. I hasten to add that they had and have nothing to do with the moral or artistic values of the films in question. Since the 1950s, the registration system has also provided the basis for distributing the Eady levy to British film makers. More recently, it has also provided a means of identifying those films which qualify for tax purposes.
The third effect of repealing the Films Acts is to remove the restrictions on blind and advance booking. These were a prominent feature of the original Cinematograph Films Act 1927 and were designed to protect exhibitors from distributors who might otherwise oblige them to contract to take a film more than six months in advance or to take a film that had not been trade shown. Today these provisions seem paternalistic and outmoded in a world of international film festivals and trade fairs where cinema exhibitors are vying with the new video and cable markets
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to acquire saleable products. We have received virtually no representations for the retention of those restrictions, although I shall, of course, be interested to hear the views of the House and of other interested parties.
Mr. Gerald Bermingham: Does the Minister agree that this is very much a re-run of the argument that we heard on the Cable and Broadcasting Bill? In taking away all protection from the British cinema industry in terms of distribution one opens the way for the American industry, with its vast resources, to flood and dominate the British distribution industry, to the great detriment of the British film industry.
Mr. Lamont: I recognise the hon. Gentleman's point, but I believe that the whole structure of the industry is changing. The duopoly of the market is changing and there are now new opportunities. I shall, of course, listen to what people have to say about this, but I have told the House what my views now are and what we have heard from the industry. One would have expected the film production industry to make that point if it felt that there was a serious threat, but I believe that it too feels that the market is changing.
Clause 2 is concerned with the Eady levy. Under the existing law the levy is due to terminate on 12 October next year. This clause makes it possible to terminate the levy earlier, but at the same time it provides a mechanism for ensuring that the National Film Finance Corporation is properly funded for the remainder of its existence and is thus able to continue its work. Power to dissolve the British Film Fund Agency already exists in the Film Levy Finance Act 1981 and it is our intention to do that as soon as the agency has completed its work.
Clause 3 deals with the NFFC. First, it enables the Secretary of State, with the approval of the Treasury, to dissolve the NFFC at any time after the Eady levy is terminated. Secondly, it provides that upon dissolution any of the corporation's property or rights may be vested in the Secretary of State, who may deal with them in such manner as he thinks fit for any purpose connected with the British film industry. I shall go on to describe more precisely the arrangements that we have in mind for the disposal of those assets, as that is an important aspect.
Mr. Clement Freud: Is it any part of the Government's plan to persuade cinema owners to lower the price of seats once they no longer have to pay the Eady levy?
Mr. Lamont: That is clearly a matter for the cinema owners, and I should not anticipate what they are likely to do. The economics of their business is pretty difficult already and many cinemas, need refurbishment and further investment. It is not for me to say, but I certainly do not predict that abolition of the levy will lead to a fall in seat prices. If the levy were not abolished, however, I believe that more cinemas would disappear even more quickly in view of the current difficult situation.
With regard to NFFC assets, the White Paper makes it clear that one of the assets—the NFFC's portfolio of rights and interests in films—will be made available to the son of NFFC, the successor body, but on the important condition that the company uses its best endeavours to encourage the production of British films.
Finally, clause 3 empowers the Secretary of State by order to repeal the National Film Finance Corporation Act 1981 when the NFFC has been dissolved.

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Clause 4 is particularly important. It contains the Secretary of State's new powers to give the industry direct financial assistance. This will take two forms. First, there is the provision of £1·5 million per year to the private successor to the NFFC for the purposes of co-financing film production. Secondly, as my right hon. Friend the Secretary of State has said before, £500,000 per year will be set aside for project development work.
As the White Paper shows, we have been given assurances by three leading companies in the industry that they are prepared to contribute jointly £850,000 a year for three years to finance feature film production. The organisations concerned are Channel 4, Rank and Thorn-EMI. In addition, several member companies in the video sector, represented by the British Videogram Association, have shown interest in the new venture. The association expects that £250,000, possibly more, will be raised from an aggregate of smaller individual investments for at least three years and possibly for longer.
What is envisaged is that the three companies and the association's participating members will jointly invest in a new company. Details have yet to be settled, but I can say that neither those four organisations nor the Government wish the new company to be a closed shop. We all hope that other companies will be prepared to join in, and swell the volume of investment in British films.
I have heard concern expressed in some quarters that the new company will be dominated excessively by the interests of its principal shareholders, to the detriment, it is alleged, of the NFFC's traditional role. I take that anxiety seriously, and in Committee I will seriously consider whatever is said on that point.
Mr. John Gorst: To those of us whose memories of the activities of the British film industry stretch back 20 years to the problems of British Lion, the scale of three years, to which my hon. Friend has referred, is a very short one in the history of the film industry. Is it not possible that assurances which appear to be binding may be of very little value if they are to last for only three years? Does my hon. Friend intend to introduce another films Bill in three years' time, perhaps, or his successor in six or seven years' time, as that appears to be the average length of time between Bills?
Mr. Lamont: The company will be a Companies Act company, and the three companies which are to invest in it will be shareholders in it. Having talked to those companies, I believe that they are serious about their long-term intentions. I believe that they want to continue the traditions of the National Film Finance Corporation and the work that it has done.
Mrs. Dunwoody: It is not clear why major companies should allow their money to be used to support independent productions, or offer seed money for new productions as the NFFC used to do. Surely they will have a vested interest in making sure that their own cash goes towards their own productions? Does the Minister intend to defend the position of the independent producers?
Mr. Lamont: I fear that I am giving way too often. I mentioned that I knew that the point was causing anxiety, but, before I could answer it, I courteously gave way. I take seriously the point about the independence of the
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NFFC. One thing that the companies will wish to do is to foster talent. It is in their interests to help people and to encourage young producers. They recognise that the NFFC has done a good job, and they want that tradition to be continued.
As concern has been expressed about whether the organisation will be over-commercial, I shall outline the arrangements to be made.
It is envisaged that the company will be run by a chief executive, who will be responsible for making investment decisions within broad guidelines laid down by the board. It is expected that the person to be appointed to the post of managing director of the NFFC will become the chief executive of the new company so that there will be some continuity and a smooth transition when the NFFC is dissolved. The Government have also made it clear that we wish to approve the appointment of the new company's chairman, and to appoint a Government nominee to the board.
None of these safeguards appears in the Bill, but the key provision is in clauses 3 and 4. It enables the Secretary of State to attach conditions both to the grant of money and to the loan of the NFFC's portfolio. The proposal to grant £7·5 million over five years is the Government's response to the industry's representations that the NFFC performs an essential role in encouraging new and relatively untried talent. Neither the Government nor the four private organisations wish to undermine that role. However, we think that by being rooted in the private sector the new company will bring a commercial edge to its operations.
Mr. Andrew Faulds: Will the hon. Gentleman give way?
Mr. Lamont: How could I refuse?
Mr. Faulds: Would the matter not be enormously simplified if the Government had had the sense to listen to representations made in all parts of the House that supervision of the film industry should be taken away from the Minister's Department, where it is a nuisance to everyone concerned, and given to a new cultural ministry? That suggestion was made by the Select Committee and by a number of other bodies, including myself. The film industry could be more responsibly run under a body analogous to the Arts Council. It could be dealt with at arm's length and given proper funding, and the appalling commercial risks involved in the hon. Gentleman's suggestions would not arise.
Mr. Lamont: With great respect, I do not agree with the hon. Gentleman. We are not talking about the art house sector of the industry. The appropriate part of the industry is already under the guidance of the Minister for the Arts. If the other part of the industry is to be successful, it must appeal to the market. There must be a commercial organisation, and that is nothing to be ashamed of. We want the industry to be commercially successful. That has been the aim of the Department of Trade and Industry for a long time.
There has also been criticism that, despite the Government's contribution, the funds available to the new company are inadequate to carry out its role of investing in low and medium-budget feature films—the riskiest end of a risky business. We hope that in due course the company will attract other sources of finance and that participants may extend their own commitment.
Mrs. Dunwoody rose—
Mr. Lamont: I have been generous in giving way. If the hon. Lady will listen, she may learn something that will enlighten her.
Mrs. Dunwoody: I am waiting.
Mr. Lamont: The hon. Lady must wait a little longer. She is not always easy to please, but what I have to say may please her.
We also propose to transfer to the new company the NFFC's portfolio of rights and interests in about 800 films made since the late 1940s. In the White Paper the portfolio of film rights was stated to have an income-generating capacity of upwards of £200,000 a year. That represents net profits. However, we have now decided that, in addition, repayments of principal and interest should also be made to the new company. These are estimated to bring the total value of the portfolio—at least for the crucial first two or three years—to some £600,000 a year. That will bring the total amount initially available to the new company for investment in film production to nearly £3·25 million a year. That is over twice the amount of money that used to be available.
However, that is not all. Leaving aside the portfolio, the NFFC's principal asset is a bank balance currently standing at about £5 million. Of that sum, only about £3·3 million is presently committed to future film production, and in due course film producers will claim against these forward commitments. Our intention is that when the NFFC's assets become vested in the Secretary of State after dissolution of the NFFC, we will transfer to the private company the liability to meet the NFFC's outstanding commitments, together with a sufficient sum to cover them.
The uncommitted remainder of the NFFC's assets is the industry's money, and by and large it will represent the unspent income from the annual Eady levy subventions.
I believe—I am sure that the House will agree—that the logical disposal of that sum is back to the British Film Fund Agency for distribution to British film-makers. That is likely to be a substantial boost to the final distribution.
The White Paper stated that we received many representations that the work of the national film development fund should be allowed to continue. Our response has been a new project development scheme of £500,000 a year for five years. The scheme will be operated as a specialised type of industry support scheme by my Department—with the assistance taking the form of loans repayable in certain circumstances. We intend to sub-contract the operation of the scheme as far as possible on an agency basis. This may be an activity that the successor to the NFFC will want to take on, or there might be other candidates.
I do not think that I need detain the House for long on the remaining provisions of the Bill. Clause 5 and schedule 1—
Mr. Jack Dormand: Will the Minister give way on a point concerning clause 4?
Mr. Lamont: I have dealt with clause 4. Clause 5 and schedule 1 are consequential upon the repeal of the existing films legislation. The schedule contains a mass of detail but it is largely a consolidation of existing provisions. However, it provides a definition of British films, which I know is a matter to which the industry attaches importance.
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Clauses 6 and 7 deal with repeals, transitional provisions, and the short title, commencement and extent. The Bill is drafted to have immediate effect in respect of the power to end the Eady levy, and in respect of the regulatory provisions for licensing and registration. I know that the Bill falls short of the demands of some groups in the industry who advocate a return to the tax regimes of the past, or even direct subsidies, but we are concerned here with a commercial industry. We are not dealing with a sector that is deliberately targeted on minority interests. Like other branches of the arts, art films will no doubt continue to require special support, but the commercial film industry, like any other industry, is in the business of making products that will succeed or not according to whether there is a market for them.
I recognise that this is a high risk industry. Conventional wisdom is that of every 10 films made, seven make a loss, two break even and one makes a profit, but other industries involve high levels of risk and in films the rewards of success can be remarkable. If, as we believe, the British film industry is on the threshold of a strong commercial future, then—as The Times expressed it last week—the industry
"should certainly be thinking in terms of moving with the grain of the Government's policies to encourage enterprise and stimulate small businesses, instead of subconsciously pigeonholing itself as an art that needs support from the public purse"
In the long run, the film industry will be healthy and prosperous only if it is able to attract private investment on its own merits and if it is prepared to subject itself, like other industries, to the pressures of the market place.
I recognise that anxieties have been aroused by the changes and by the loss of capital allowances. I know that we shall hear about that from the Opposition today. However, I should take their attitude more seriously if they had permitted the Inland Revenue to allow the industry capital allowances when they were in office. I recognise the anxieties but, in the light of the concessions that the Treasury has made, I believe that they are unfounded. Opportunities are opening up and there are new and vastly growing demands for films. The problem will be whether we can generate enough films for the massive and numerous new markets.
Despite what we might hear from the Opposition, the Bill is not a tax Bill. It concerns arrangements for the levy and for the NFFC. Before the Opposition rush in to condemn it, I invite them to consider three things. First, the levy has been killing the cinema. We need to do something about that. Secondly, because the levy has fallen, cinema attendances have fallen. That has not done a great deal for film producers. Thirdly, with the levy gone, we have had to consider the future and status of the NFFC. I believe that the arrangements that we have come up with give twice as much money as before. That should be welcomed, as it will mean that there is more money to help with new films, new producers and smaller budget films.
We have recognised the special position of the NFFC. We have negotiated a means of continuing its work and are injecting Government money alongside private capital to get it off to a good start. If we include the film project development scheme, the new company will have nearly £3·75 million a year—far more than twice the income of the NFFC. In addition we are giving £250,000 to the National Film and Television School for new equipment. We are giving some money towards the industry's own

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initiative—British Film Year—and there are possibilities of further funding for that project's overseas dimension. The Bill is sweeping away, without delay, outdated restrictions, removing the burden of the Eady levy, and letting the film industry get on with its business. I therefore commend the Bill to the House.
4.35 pm
Mr. Bryan Gould: It is unusual, even for this Government, to introduce a measure that has received such a hostile reception from those whose interests it is meant to advance. Many of the most famous names in British cinema, including some of those whose achievements the Government seem most anxious to share vicariously, are mounting a campaign against the Bill because they are convinced that the very survival of their industry is at stake.
It is a sad commentary on the Government's reputation of intransigence that there is little realistic hope of Ministers listening to the virtually unanimous view of the industry. It is not so much that there is opposition to the Bill, although there is plenty to oppose in it. Rather there is anger, disappointment and frustration at what is not in it and at what is widely regarded as a missed opportunity.
In their White Paper, the Government began promisingly enough. They recounted the industry's achievements, the employment it provides and its overseas earnings. They also recognised that it has an important influence in our national life and internationally which is out of all proportion to its size. There is nothing wrong with the rhetoric, although it is somewhat muted. There is not the recognition of the cultural significance of film such as might be found in a French Government publication on the same subject, but it is the Minister's analysis, which he repeated today, rather than the rhetoric, that is defective.
The Government claim, and take as their starting point, the assertion that the industry is in good shape and that there are grounds for considerable optimism. That is not how it seems from within the industry. The number of British films made last year, which the Minister cited as evidence of recovery and strength, was slightly above the disastrous and record low of 27 in 1982. However, at only 34, it is still less than half the post-war average. It remains an indication of weakness rather than strength.
As the Minister conceded, cinema attendances have resumed their sharp decline this year. Moreover, the British market, including the much-touted opportunities in cable, video and direct broadcasting by satellite remain largely at the mercy of the American industry. All of this is blithely ignored by the Government who, as is so often the case, show a remarkable and insensitive talent for ignoring and disclaiming responsibility for bad news while trying to claim credit for the stray bits of good news. There are a couple of British Oscar-winning films and the Minister seizes on them as evidence that all is well but, faced with the reality of an industry whose lifeblood is slipping away, the Government turn a blind eye. At best, the only remedy they suggest is further blood-letting.
A more sober assessment of the state of the industry and therefore of the extent to which the Government must act to put things right must begin with the succession of blows that the industry has had to endure in the past year. First in importance was the loss of capital allowances as
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announced in this year's Budget. I think that the Minister recognises that. The loss was imposed despite a clear ministerial assurance that the allowances would be maintained for another five years. That is a breach of faith that will not incline the industry to place much value on ministerial assurances in future. The loss of those capital allowances leaves the British film industry, virtually uniquely in the western world, without any form of tax incentive for investment in it. Some people object to that form of incentive because it leads to films being made for tax avoidance reasons rather than for artistic reasons. That is true, but it is true of any fiscal regime designed to encourage any form of economic activity. Even the Opposition would prefer to see some form of investment incentive to ensure that money is forthcoming and that the film industry prospers rather than that the British film industry should wither away.
The loss of that powerful aid is hardly compensated for by the niggardly provision of public money, about which the Minister seems so proud. The Government propose to contribute only £10 million over five years. That is a pitiful sum, compared with that available to other art forms, such as the theatre, ballet, music and opera, and with what other countries feel able to provide. The Bill does not mention the Government's commitment on that point. Although the White Paper and the Minister's statement are welcome so far as they go, there will unfortunately be cynicism and scepticism because of what happened to past ministerial assurances. The House should remember that the £1·5 million which the Government propose to make available to the National Film Finance Corporation is enough to finance only one low-budget film a year.
The industry has finally lost the protection of the quota system, which at least guaranteed to the British industry a proportion of the British market and some protection against the flood of American imports. There is to be no limit on imports. It is true that the Bill still provides, faithfully enough, a definition of a British film. I do not know why anyone should believe that that matters because, with the abolition of the Eady levy and the loss of capital allowances, there is little point even in attempting to define a British film.
The Bill delivers yet another blow. It arises not from the abolition of the Eady levy—all hon. Members accept that that is inevitable—but from the failure to provide an effective mechanism with which to replace it. A mechanism to redistribute the resources produced by the film industry as a whole, so that a proportion of its enormous earnings is fed back to the film-makers, remains of desperate urgency and need.
Mr. Norman Lamont: The hon. Gentleman will not wish to exaggerate his case. A definition of a British film is necessary for tax purposes because there are concessions on British films.
Mr. Gould: Unfortunately, by the time British investors take advantage of those alleged incentives, they will be of little interest or use to them. No one in the industry believes that what remains will be of any value.
No one disputes that the principle of a redistribution of resources remains of great importance. During its declining days the Eady levy was inadequate to fulfil that purpose, but the principle of redistribution remains valid and is recognised in the practices of many foreign

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countries, especially those in western Europe. True to form, the Government have thrown out the redistribution baby with the levy bath water.
If cinema audiences are no longer large enough to provide the necessary revenue, it becomes of cardinal importance that some recourse should be had to the modern equivalent of those once vast cinema audiences. We must now look to those billions of occasions when people watch films on a small screen—on television or on a video recorder.
The Select Committee and the industry recommended that an attempt to tap that huge audience was the remedy. Yet the Government do not mention it. They appear to reject it out of hand. The Opposition, however, believe that there is much to be said for some such mechanism. We do not commit ourselves to the technical or mechanical detail of a precise proposal—for example, the charge made on television companies or the levy on blank cassettes or pre-recorded videos— but there are possibilities worth considering. We believe that some means can and should be found to require television companies and video firms, who depend heavily on the output of the film industry and who pay such a small price for what they obtain, to pay a real return to the filmmakers. The industry as a whole will be profoundly disappointed by the Government's cavalier dismissal of those ideas.
Mr. Roger Gale: Will the hon. Gentleman consider the possibility that if the craft unions in the television industry were to lift their restrictive practices and control their in-house production, the greatest possible stimulus to independent production would be for the big television companies and the British Broadcasting Corporation to invest in small independent productions?
Mr. Gould: The hon. Gentleman will undoubtedly develop that argument when he speaks to the House later, as I hope he will. We are considering the responsibilities of the Government, who claim to guarantee the future of the film industry through the Bill. However, in failing to provide a buoyant recycled form of revenue to the industry, they are condemning it to penury and to withering away.
I now follow the point made by the hon. Member for Cambridgeshire, North-East (Mr. Freud). It is to be hoped—I am sorry that the Minister did not mention this—that cinema proprietors will not be permitted simply to swallow the advantage that they gain from the abolition of the Eady levy, and that the money saved will be spent on improving cinemas. An enormous amount can be done in that area. The beneficial consequences for the industry are equally large, as the French experience graphically shows.
The final blow to the industry, which must be added to the loss of capital allowances, the loss of the protection offered by the quota system, the inadequacy of public money being provided and the failure to provide replacement for the Eady levy, is the abolition of the National Film Finance Corporation. That, in the view of the industry and the Opposition, is final evidence that the Government are prepared to wash their hands of the industry. The Government recognise that the NFFC has done valuable work. But in their anxiety to share in the glory of Oscars for "Chariots of Fire" and "Gandhi", Ministers overlooked both David Puttnam's and Richard
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Attenborough's publicly expressed debt of gratitude to the NFFC and their statements that they could not have made progress without its help. The Government's verbal tributes to it in the White Paper are not enough.
Despite the NFFC's handicap of admittedly inadequate resources, it has met over the years met a particular need in providing seedcorn finance for low to middle-budget films. In sweeping it away, the Government have left a gaping hole in the ability of the British industry to raise finance crucially needed if the industry is to survive. The Minister may say that the Government have made all kinds of complex arrangements to take care of that, but what the Minister described today falls short of being adequate.
It is astonishing that the Government will donate the NFFC's assets to a private company. Those assets were financed by the Eady levy, and belong to the industry, yet the income from them is to be handed over to a private company. The recipient of that munificence by the Government, the private company, will be committed only to its own short-term commercial and financial involvement. Most worrying, it will operate commercially and serve its own immediate interests. It will be suspected, unless the independence of its decision-making is guaranteed by statute or in some other way, that its decisions will reflect its own commercial interests. If, after three years, those interests should suggest a termination of its involvement in film finance, even the reudimentary and unsatisfactory mechanism provided by the Government will, one assumes, disappear.
Mr. Gorst: Perhaps the hon. Gentleman would allow me to underline his point by reminding the House that when, 20 years ago, the Government withdrew, from British Lion, a special share was created to protect the Government's investment. However, when the company fell on hard times and was sold through the market, the special shareholding, or special condition, was withdrawn because the Government of the day regarded it as impractical to implement. That experience must endorse the hon. Gentleman's point that one cannot have much faith in what happened previously not happening again.
Mr. Gould: The hon. Gentleman has reinforced my point with the benefit of his experience of such matters. He also reinforces the urgent need for hon. Members on both sides of the House to scrutinise carefully the provisions proposed by the Government. In Committee, we shall certainly examine the Bill with great interest to see what mechanisms the Government will introduce to deal with the problem the hon. Gentleman mentioned.
The sorry picture of the withdrawal of Government interest, support and commitment from a major industry—perhaps not so much major in the economic sense, but certainly in the wider cultural sense—is in sharp contrast to the experience of many other countries. No one who studies the range of Government aids made available in many countries, not just those with film industries but those which aspire to have film industries, can fail to be impressed by their efforts and the importance which they attach to their film industries. It makes a sorry contrast with the parsimony of our Government.
To take just a handful of examples—one could cite dozens—in Australia, apart from the tax incentives that are found in almost every film-making country but that are signally lacking here, the federal Government contribute by way of grants and loans the equivalent of £50 million

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a year. The Brazilian Government— one does not automatically think of Brazil as a film-making country—provide much protection to their film industry through import quotas and restrictions. France, following a pattern established throughout western Europe, manages through incentives, grants, subsidies and levies to give about £35 million worth of help to its film industry. From Pakistan to the Philippines, and from New Zealand to Norway, Governments are involved in promoting their film industries. Even in private enterprise America, the federal Government make available a generous tax incentive scheme and the state Governments provide equally generous incentives.
The industry and the Opposition are forced to ask whether it is possible that all those countries have got it wrong. Or is Britain alone in believing that it is desirable and practicable to expect a film industry to flourish with almost no Government help?
Mr. Faulds: My hon. Friend has cited, rightly, the fact that many other countries more sensibly and properly fund their film industries. But do not all of the examples that he mentioned have the additional defence that they do not share a language with the United States of America?
Mr. Gould: My hon. Friend is right. That is the usually unstated but fundamental factor that makes our position more precarious and difficult than that of almost any filmmaking country.
Mr. Norman Lamont: The hon. Gentleman must recognise that that factor gives us great opportunities and advantages. There is demand for 150 English language films a year, so we have more outlets and more opportunities. Many British films have been internationally successful because they are in English. It is extraordinary that, at a time when the media are opening up, when Channel 4 provides £8·8 million a year for new films, with DBS to arrive in 1987, and with the liberalisation of the American market—with the result that many British films have been successful there—the hon. Gentleman's instinctive solution is to levy films and transfer the money back. Why cannot British film-makers produce films for that market, as they have done successfully in many instances?
Mr. Gould: I am glad to offer the hon. Gentleman the opportunity to remedy the deficiencies in his opening speech. The fact remains that when we ask whether we are right and everyone else is wrong—that is the issue when we compare our practice with that of our foreign competitors—I have no hesitation in answering that the Government have got it wrong. They got it wrong for a familiar reason: as with so many other issues, they have succumbed to their own propaganda. They believe that by privatising the industry they will release market forces that will enable it to prosper. That is the real answer to the Minister's point. The problem with his naive view is that nothing even remotely resembling a free market exists for the British film industry. That was the overwhelming conclusion of the Monopolies and Mergers Commission when it examined the industry. The commission discovered that three distributor companies dominated film distribution; that two major concerns enjoyed almost a duopoly of outlets; and that there was almost a duopoly in television.
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The overwhelming consensus of those who know, understand and fear for the future of the British film industry is that, under the influence of those monopolistic pressures, and despite the optimistic and facile noises made by the Minister, the market is rigged in such a way as to be almost impossible to resist. It is rigged in favour of the major American film-makers, who alone have the resources, distribution and exhibition arrangements, and consequently the guaranteed market opportunities, to be able to survive in what everyone accepts is a highly speculative industry. I warn the Minister that to leave matters to the market, as he and the Government intend, is simply to abandon the British film industry and to surrender the British film market to the American industry.
Despite their protestations, the Government know this to be true in their heart of hearts. If they truly believed—
Mr. Bermingham: Does my hon. Friend agree that the proof of the pudding is already in the eating in that, in 1983, Britain made 34 major feature films, the Germans made 131 and the French made about 70? If the Government remove their support, what chance is there for competition in the future?
Mr. Gould: My hon. Friend is right. I accept that quantity is not everything and that quality counts, but it helps a little if an industry can make 70 or 100 films a year rather than about 10 films a year on a declining trend.
The Government know that, in the end, market forces will not save the British film industry. If they believed that, why are they still legislating for the industry? They know that if they said, "No more Government involvement, no more help, no recycling—let those who wish to make films commercially do so," that would be the end of the British film industry. We are left with a damaging compromise between the Government's commitment to an ideological position and what at heart they are compelled to accept is needed in practice.
The Government and the industry must make a determined and concerted effort if the industry is to have a future. It cannot survive on the strength of the odd oneoff success. It needs a proper fiscal climate, a long-term guarantee of public funding and a buoyant source of recirculating revenue if investors are to take the risk of trying to match their commercial judgment to artistic imaginations and to popular fashions.
The Bill comes from a Government who manifestly know little of the film industry and who care even less. It is understandable and only to be expected that those who claim to be a business man's Government should undervalue creative achievement and misjudge the importance of the film industry to our cultural life and to the image of Britain abroad. It is also understandable that a Government who have seen so much of British industry decimated should apparently be content to envisage a future for the British film industry as a sort of minor provider of services to a dominant American industry. Even that future depends on the continuing strength of the dollar.
It is understandable that a business man's Government urge us to reconcile ourselves to a cultural and commercial surrender to the Americans, but it is less to be expected that as business men Ministers should so hopelessly have misjudged the commercial conditions needed to guarantee survival, let alone success.

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These failures of commercial judgment and cultural awareness, which vitiate the Bill, demand that we, in common with most people in the industry, will oppose the measure this evening.
5 pm
Sir Geoffrey Johnson Smith: As we would expect, the hon. Member for Dagenham (Mr. Gould) made a powerful speech which reflected the criticisms of those who live and work in the industry, but in my judgment he exaggerated— no doubt for his own purposes— the Government's position. His criticism would be substantiated if one were able to say, "The Government are handing over completely the future of the British film industry to the forces of the market place dominated by the United States." From what he said, one would not gather that the financial support forthcoming from public funds in the next few years is considerably larger than that of the past few years, when from rock bottom the industry seems to have improved its fortunes at almost every level.
The problems of the film industry must be looked at in two contexts—that of our tax structure and that of the change in the structure of the market place for films. I shall not weary the House by regurgitating the Chancellor's arguments for believing that the phasing out of capital allowances and reducing corporation tax is favourable for all British industry. I believe that his strategy is absolutely right, and we run into tremendous dangers if we accept that somehow the film industry is so unusual that it must be given a totally privileged position.
That is particularly so in view of the track record of this industry, whereby tax allowances of different kinds have been exploited by overseas interests, principally from the United States. In no way will there be stability if the British film industry is subjected to the whims of American finance because we have provided a tax structure which makes it possible for people to come in and out of the industry who have not the slightest interest in British or any other form of film making.
Mr. Freud: If the hon. Gentleman feels that the abolition of capital allowances is absolutely right, will he condemn the Financial Secretary for announcing an extension of capital allowances for the film industry and then going back on his word?
Sir Geoffrey Johnson Smith: I do not condemn that. We all know the history of this matter and are aware that the phasing out will take place in 1986 rather than 1987. The Minister has suggested that other things should replace capital allowances, but I do not want to go into the detail of those. The hon. Gentleman may consider that these are inadequate, but they are an attempt to meet the concerns of the industry. Included in these new arrangements is the business expansion scheme, which will be opened up to the small and medium sized filmmakers who feel particularly aggrieved. Incidentally, no one in the movie industry had anything to do with the business expansion scheme, because the industry was not included. I wonder how many producers and directors know how the scheme works. Have they tried it? However, both the Bill and the Treasury ask them to consider a new climate.
Mr. Gorst: My hon. Friend was somewhat scathing about American-financed British films, but the second
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paragraph of the White Paper on which the Bill is based pays enormous tribute to the success of "Gandhi" and "Chariots of Fire". "Chariots of Fire" was financed from the United States and "Gandhi" received a third of its finance from Indian sources and a third from American sources. However, all the kudos was taken by the Government.
Sir Geoffrey Johnson Smith: I am grateful to my hon. Friend for his intervention. I do not wish to denigrate those who have helped to provide finance, be it from the United States, India or elsewhere. I accept that in terms of talent as well as money, various people in the United States have made a tremendous contribution to what we sometimes regard as the British film industry. I do not always accept that anything made here is wholly British, because an increasing number of people believe that film production can reflect a national culture without the necessity of a film being made only by people of that particular nationality. My hon. Friend will recognise that the opportunity to exploit tax shelters as a result of previous legislation was taken by people from the United States. That was rightly stopped.
Mrs. Dunwoody: Will the hon. Gentleman give way?
Sir Geoffrey Johnson Smith: I do not want to do so because many other hon. Members wish to speak, and no doubt the hon. Lady will catch the eye of the Chair. I am making the obvious point that the tax structure regime had to be changed.
That is not to say that the Bill is perfect. We must ensure that money invested in British industry is used satisfactorily. As some of the money for the new company which is to replace the NFFC will continue to be financed from the Eady levy, it is not unreasonable that those who help to create the revenue should have some say in how it should be spent.
There is a suspicion that the organisations concerned with the successor to the NFFC will not act impartially but will have regard to their own interests rather than the interests of the small or medium sized producer. The British Film and Television Producers Association has suggested that it should be consulted from time to time on how the money should be spent. That would be courteous, if nothing else.
The Minister must be aware of the concern expressed about future moneys for the industry. We recognise that the Government have agreed to make subventions which are an improvement on the past. I welcome that. There is, however, an anxiety about what happens after the commitment runs out. Will the British film industry survive? Can it survive when we know that in one way or another other countries have some form of public funding? If the lessons of the past are to be learnt, both here and elsewhere, in the not too distant future the Government will have to make it clear that they are willing to have a discussion on funding to replace the loss of funds from the Eady levy.
It may be that revenue could come from a levy on blank video or audio tapes. I do not want to nail my flag to the mast by saying that that is the only way it can be done. That idea has plenty of advocates and some critics. I should declare an interest as a non-executive director of London Weekend Television, but I shall not advocate that the excessive burden should be borne by television

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companies. They already have problems of increased competition and the prospect of deciding whether to form part of the development of direct broadcasting by satellite.
The Government expect such things to be financed privately, but direct broadcasting by satellite requires substantial investment and it will be many years before a return is seen on that money. Any television company that is asked to consider direct broadcasting by satellite and at the same time to finance generously the British film industry will have to reflect carefully. It is not for me to suggest that they would be ungenerous if they were cautious.
There is a problem about future finance once Government commitments begin to run out. It is completely unfair that so many other interests which benefit from the British film industry should not be asked to consider some way of financing it. That is one of the main points that have been made so far.
I recognise that we are dealing with the commercial market today. It is right to help restructure the industry in the way that has been advocated by the Government. It is also right to take a much more robust approach. But I recognise that there are those in the production of films who are not in the business just for art but who straddle the borderline between minority interests and art. They can, if given a fair wind, and good judgment, make a profit, but they may not. It is in that area that so often we find the film reflecting some of the more cultural aspects of the film-making world.
I want to make a small suggestion, but one which could be of value. Nothing is more difficult for someone in the film industry, who is inexperienced about how such things are managed despite being good at film making, than to set up a project. Nothing is more valuable than that the national film development fund should be better secured. I may be speaking on behalf of a vested interest as a governor of the British Film Institute and therefore my advice cannot be regarded as being as impartial as it should be. The British film industry believes that the future of the film development fund might be better secured if it were attached to a body that is already engaged in project evaluation and development—the British Film Institute's production board. That was the source of such notable achievements and cheap budget films as "The Draughtsman's Contract" and the recent Berlin prizewinner "Ascendancy". The board is not in the film business to make films that will be seen by a few without caring whether any money is made. It hopes that costs will be covered and that the films will find a commercial audience.
My hon. Friend the Minister will be aware that the film development fund has just the sort of activities which recognise the problem to which I have drawn his attention this afternoon. It is to provide finance for the earliest stages in the creation of a film—the preparation of the screenplay, the assembly of the nucleus of a production team, and other such detailed matters. Rather than create another quango, why not pass that responsibility over to an organisation which is highly respected on all sides of the film industry?
I agree with my hon. Friend the Minister on the prospects for the British film industry. One of the problems that beset those who work in the industry—or some of them—is that they like the crutches, however
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meagre, that they have had. They fear that they are going to lose them altogether, rather than, as I have said, that in the short term they will receive greater support.
However, there is natural anxiety about the longer term. I suspect that the industry is wanting more help than is desirable for its own health and independence.
Films are still made in a remarkably old-fashioned way. Why does not the industry look more to its own house and see how far it can reflect the changes that I have mentioned? For example, too many productions are still treated as new projects. Individuals get together, form a company, get the talent and make a film. That company is then dissolved or put on a back burner. Then along comes another idea and a new company is formed. There is no continuity.
Mr. Tim Brinton rose—
Sir Geoffrey Johnson-Smith: I would rather not give way if my hon. Friend does not mind.
The market has changed. The gap between television and film production has narrowed enormously. For those who want to get into film production, there is a market not just in the prestige cinemas or the small cinemas in the country and the smaller towns; there is also the video tape market and the terrestrial television market, followed soon by the DBS and cable markets. With those multiple outlets, not just because of Channel 4, there has surely never been a better opportunity for the small budget film. Surely the blockbuster film also provides a great opportunity, assuming that it provides value for money and is not just wasteful because of restrictive practices or the overblown ideas of some egocentric movie mogul.
If the industry will consider such opportunities and put its house in order, providing the Government respond in the longer term and give the assurance that something will replace the Eady levy, I am sure that the film industry will thrive.
5.17 pm
Mr. Clement Freud: I begin by complimenting the Minister on presenting what is a pretty unreasonable Bill in a reasonable manner. We all appreciate the stress under which his Department has been placed with the absence through illness of the Secretary of State. I think I speak for all hon. Members when I say that we wish the right hon. Gentleman well and we hope for his early return.
If one were pushed to find the most blatant illogicality in the Minister's argument it was when he said that the Eady money was of little consequence to the film industry and then prided himself on basing his aid on the Eady contribution. Essentially, my argument is that the Government are introducing a half-baked measure which fails to pursue the logic of their argument and thus contains potentially fatal misunderstandings of the structure of the film industry in both organisational and financial terms.
The prediction of health is based on one or two signs announcing the all-clear and the prosperity of the film industry. They are the success of "Gandhi" and the use of British expertise and studios by American film-makers. That is a completely incorrect diagnosis. Both the phenomena are specific to one point in time. It is generally acknowledged that "Gandhi"—we take it as epitomising the Goldcrest phenomenon—was the product of a short period of capital allowances that came to an end with the

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1984 Budget. On the other hand, the presence of the United States is largely, if not wholly, a product of the exchange rate now prevailing.
An analogy can be drawn with the deregulation of buses. The Government are using the experience of the coach service following its privatisation to make a claim about the advantages of deregulation per se. As in the case of the bus industry, the experiences are specific. It is wrong to base a whole policy—if "policy" is the right word for what the Government are doing— on that model. Many film people now attest to the fact that Goldcrest will be all right under the new system but accept that it would have found starting out difficult, if not impossible, and that other film-makers do not have its track record and thus will be unable to attract the same financial backing. The Government are trying to create a summer out of one miserable, underfed swallow.
The film industry has also suffered from financial uncertainty. As I have said, the capital allowances were extended only to film stocks in 1979. The industry thought that they would remain until 1987. It should not be forgotten that half the money for "Chariots of Fire" came from City investors. Between 25 and 33 per cent. of the total Goldcrest money came from tax advantages that no longer exist. To speak of the prosperity of the film industry when the Government have taken away the infrastructure is plumb wrong. The Chancellor of the Exchequer has removed the source of finance. The British Film and Television Producers Association says:
"The Association was deeply shocked by the 1984 budget proposals for the abolition of Capital Allowances in the face of pledges made for their continuation."
The White Paper claims great generosity in the Finance Act 1984, which allows for expenditure to be written off on a "cost recovery" basis, yet according to BFTPA that is really only the status quo ante.
There are also problems with relying on the business expansion scheme. We welcome that scheme, but I understand that it is for continuing trade and not for oneoff investments. Under the previous allowance scheme, it was much easier to find one company to put up a substantial sum of money than it is to find money under the business expansion scheme, which has a ceiling of £40,000. The National Film Finance Corporation Act dates only from 1981 and the Film Levy Finance Act also dates from that year. Under those two Acts, which ended Government funding to the NFFC, the first subvention on the Eady money was a constant £1·5 million.
It could he argued that the Bill will only stave off the next bout of uncertainty, since its condition for contributing to the reconstituted NFFC is a five-year commitment. There is one additional point to be made about uncertainty. It has been suggested that tax allowances should be held back until the Budget. However, that is another example of taking things in isolation, to which I shall refer later.
The new body will receive funds from private and public sources, which will amount to about £3 million, or twice the amount currently available to it. That means that the Government are funding at twice the pathetic level while at the same time claiming a great future. But doubling an inadequate sum does not make it adequate. It is widely known that the Eady levy has fallen to less and less. Can it really herald the new dawn of the film industry if we wait until the amount is totally inadequate, double it and then say that we have solved the problem?
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In 1984, the cost of one low-budget film is about £1·5 million. The Association of Independent Producers wants the new body to be able to produce 10 to 12 features and six short films per year. Yesterday, I returned from a Commonwealth Parliamentary Association visit to Australia specifically so that I could speak in this debate. The Australian Film Commission has certified 28 films to start production during 1984 and 19 of them will be completed by next May.
The hon. Member for Dagenham (Mr. Gould) gave us a world tour of film production. However, he did not mention Ecuador. Even there, about 12 producers can make short films each year 'with state help. In the debate on the White Paper, I described the new body as a pigmy that had been established to replace a dwarf. I do not take that back. With the abolition of capital allowances in the 1984 Budget, Britain has become the only major country not to give tax concessions to those who invest in the domestic film industry. Even countries such as Ecuador have a finance system for short films. Cinemas pay a 27 per cent. municipal tax but claim back 22 per cent. of it as a rebate. Even that would be better than the Minister's inadequate suggestions. The money paid goes to either the House of Culture or the Association of Journalists. Other countries not only provide the cash but do so with a range of imagination that should be an object lesson to the Department of Trade and Industry.
In France, total Government support was worth £21·43 million in 1983, which represented 3·8 per cent. of the cultural budget and 0·03 per cent. of the total budget. Short films are eligible for a "quality" label and features that are shown with such shorts receive an extra 8 per cent. entitlement to an interest-free advance. Thus there is cross-fertilisation between support policies. Those quality shorts can compete for the title "quality premium", which means that the director then receives 10 per cent. of the prize money.
In Canada, the Canadian Broadcasting Corporation is pledged to ensure that over a five-year period 50 per cent. of its network programmes, excluding sport, news and current affairs, comes from independent producers. Indeed, 80 per cent. of peak-hour national network material is Canadian in content. In Italy, the film industry has some problems, but an "umbrella" Bill has just been introduced by the umbrella Minister for entertainment. This year there will be a 180 billion lire contribution. I realise I am speaking in multi-telephone numbers, so I should point out that that is $95 million. Again, that is a very substantial contribution.
It used to be said that the difference between Australia and yogurt was that one contained a living culture. But that joke is no longer true. Australia has, perhaps, the most comprehensive and effective system of tax incentives. The Australian Film Commission was created out of earlier bodies in 1975. Its remit was to establish a viable film and television industry. In my view, the two are indivisible. In 1983–84, a budget of $14 million could be given to "qualifying Australian films"—films in which most of the action is by Australians in the form of cash, loans or investment and could constitute up to 50 per cent. of the film's budget. In addition, taxpayers can claim up to 133 per cent. of the sum invested as a concession on their personal incomes.
We should like to see something like that in Britain. There is no doubt that capital allowances or tax concessions encourage film production. As the Minister

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said, Richard Branson has gone from the record business into the aircraft business and now into the film industry, and he said that the abolition of capital allowances would probably drive him to make his films with foreign associates in countries with depreciation allowances. That is what the Bill is likely to do to the industry.
The new British film industry, as outlined by the Minister, will not be competing on equal terms. All the Government talk of the value of competition appears ironic when they effectively penalise our runners and give their competitors a start in the race. To sum up the financial brunt of my argument, we need new sources of finance and a concessionary tax structure.
The Government are wrong to view film production in virtual isolation as regards administration and organisation. Effectively, they are saying that they do not understand the structure of the media or the shape of the leisure industry. There is a lack of integration. They have a muddled view of the subject for legislation—in which context they are unlikely in theory, as the Bill shows in practice, to get things right. Cinema films must be seen as a corporate entity with television, cable, video and DBS as part of the same structure.
The reason for that is that the place where people see films has changed. It used to be in the cinema, but it is now in the home. The market for films has not disappeared, although that is why the Eady levy has been decimated. According to the British Videogram Association, by the end of 1983 26 per cent. of all homes had a video recorder—that is more than 5 million machines. By the end of 1984, the figure will be almost 6 million. A total of 70 per cent. of the material recorded from television are feature films. There is an appetite which is being satisfied at home.
Film viewing has dominated much of television, so there is a market for film production. The next step is to connect the production to the exhibition.
The White Paper acknowledges that, in the past, British films and televison have tended to operate in isolation, especially compared with the United States. That is now changing. The report by Christopher Price states:
"In comparing our film and television industries with experience elsewhere in the world, it is noticeable how the two arms of the moving image business have not directly collaborated in providing domestic television services in this country…There are signs that the gap between film and television is being closed…it may well be that this interface of films and television is where the key to much of the film production industry's future is to be found."
I do not believe that the Bill operates within that framework.
Film, as we saw, provides the most popular material on video. Its supply will falter once the big films take a larger proportion of a smaller ammount of production money. It has been suggested that the abolition of capital allowances will hit the medium budget films hardest—films like "Another Country" and "Cal". Big epics will still receive backing; it is the small and experimental films, for which we are so renowned and which we have produced with such success, that will fall.
The secondary market of the TV screen could be the stimulus to a flourishing and indigenous film industry—as, indeed, it could be said largely to explain the demise of the cinema industry in the 1950s and 1960s. Showing a new film in a smart cinema could be the promotion for
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the sale of that film for television and video. David Puttnam drew an analogy with the rock music business where it was the pattern to subsidise live performances to stimulate sales of the album. I believe that the cinema will promote the film and the costs will be recouped in other ways.
As we saw in other countries, there is scope for imaginative integration. The hon. Member for Dagenham was quite right to ask the Minister why, if all those other countries subsidise their film industries, we cannot do so when we have such expertise.
We must remember that British television is so much better than United States television. Therefore, it does not seem wholly impossible that we should have the sort of linkage that I have described. The Government recognise the relationship. They will tell us that Channel 4 is putting up £8 million to commission films and that the television companies have contributed about half of the money for the new NFFC. But their logic stops there, and they do not appear to understand the implications.
We need an organisation with one ministerial responsibility, a levy on video tapes and, perhaps, some new form of film authority or corporation to oversee the finance of film making. The proposed replacement for the NFFC is, in this context, only half of what is needed.
I wish to elaborate on those three suggestions. We must have one ministerial authority. Currently, responsibility is split between the Department of Education and Science, the Department of Industry, the Treasury, the Home Office and the Minister responsible for the Arts. Liberal party policy, and the recommendation of the Select Committee dealing with the public and private funding of the arts is that there should be an umbrella ministry that could co-ordinate activity and push the arts into political prominence. The Liberal party suggested that it should be called the Ministry of Culture. It is not an attractive name, but the concept is absolutely right. In the present circumstances, it is hardly surprising that film policy and film-makers seem confused and appear to receive contradictory signals from different sources.
There should be a levy on video tapes, either blank or both blank and pre-recorded. I was deeply opposed to that suggestion for a long time. Having looked at the Performing Right Society, I realised what an astonishingly large sum of money was spent in administration and policing. A tax on blank video tapes of 40p a tape, which would go straight to the new authority, would raise about £14 million or £15 million, and is an appropriate way to proceed. The alternative is that a tax should be paid by those who watch films on television. I am not sure that we could find a reasonable way to implement that. The Committee's recommendation was based on how much is lost to the industry as a result of home taping and on considerations of money. I am sure that we shall discuss that at great length in Committee.
A new film authority was envisaged not by the Select Committee but by the interim acting committee chaired by Lord Wilson. The Association of Independent Producers, among others, wants that. It would have much clearer powers than the proposed new NFFC and, with a levy, would have real financial clout. Indeed, it would be rather similar to the Arts Council.
It is unusual for such a Bill to have no support from anyone remotely connected with the film industry. I hope that the Minister will bear in mind that the industry is almost wholly united against the Bill, with the exception

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of one executive from EMI who said that he had not read it properly but did not think that there was much wrong with it.
I want to quote from Mr. James G. Lee, speaking to the Education, Science and Arts Committee. He said:
"The British are actually rather good at making good films and good television. Furthermore the country has a natural competitive advantage. It is an unfortunate fact of life that few other sectors of the economy have such natural resources and natural advantages. It is a tragedy that the potential of this industry has not been fully recognised by those in a position to promote the changes that are required."
5.40 pm
Mr. John Gorst: As I have shown in one or two interventions, I have been following the fortunes—if that is the way to describe it—of the film industry for a good many years. However, having attended many funerals of the British film industry, this is the first occasion on which I have attended its re-birth. At least, that would be my interpretation of the optimistic picture that was painted by my hon. Friend the Minister of State in his opening speech.
As I listened to the speeches of the Opposition spokesman, the hon. Member for Dagenham (Mr. Gould), my hon. Friend the Member for Wealden (Sir G. Johnson Smith) and the hon. Member for Ely (Mr. Freud), it seemed to me that, if we exclude the Government, we are almost conducting an all-party debate. I cannot speak for all my hon. Friends because they have not declared their position, but it seems that there is an enormous measure of agreement in all parts of the House.
I would include my hon. Friend the Minister when I say that I think we are all completely at one about the ends that we want to achieve. I think that we are all in agreement about the diagnosis of what is necessary, but we are less close in prescribing from the diagnosis and deciding what needs to be done.
Before offering my suggestions, I should like to make one general observation about the important difference between industry in general and what is called "the film industry" in particular. Industry develops a product with research and development. It makes pre-production models. It does market research. Perhaps, as a result of that, it modifies the product. Then it does trial runs. Finally, it manufactures, advertises and sells the product. That is what we understand as manufacturing.
The film industry is quite different. It has an idea. Then it lavishes waves of creative talent on that idea. It embellishes it with the reputations of countless other talents— some celebrated and others perhaps entirely unknown. After a process combining cajolery, flattery, persuasion and exhortation, it raises funds of a size and enormity that would make Chancellors of the Exchequer and Secretaries of State blanch.
A product is ultimately launched upon an astonished, delighted and— if the industry is lucky— spendthrift public. For a few halcyon weeks or months, the film makers are in business and then, like Shakespeare's "poor player", they are heard no more. That is not the typical process that we understand as industry. In short, the film industry creates and sells a prototype—a one-off. Every production— even when there are imitations of successful films—is one-off; it is unique.
The film industry—if I can call it an industry—not only defies the norms of orthodox accountancy; it defies the nostrums of orthodox monetarism. I should like the
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Minister to take particular note of that. We are not dealing with an industry in the typical and generally accepted sense of that word. It is necessary to establish those essential differences between industry and the film industry before we even attempt to extrapolate the largely irrelevant lessons of monetarism, political dogma, or the latest received wisdom of economic theory. The achievement of the ends that Governments, film industry and film audiences all desire lies outside that narrow thinking and interpretation of the film industry's needs.
Before considering the correct solution, I think it is sensible to consider for a moment— as other hon. Members have done—what happens in other countries. Do other countries perceive their film industries to be different in kind from other industrial activities?
I have a list—other hon. Members may well have received it— of over 30 film-making countries. It excludes the United States and all the iron curtain countries. All the countries on that list, from Venezuela to Jamaica, from France to India, from Malaysia to Mexico, support the making of large or short films from Government-financed sources. All those countries understand that "the film" explains, promotes and enhances their culture and their way of life. Therefore, it also improves their economic prospects in a world that is inexorably becoming more and more uniform. That is why they put Government money into the film industry.
Mr. Tony Banks: Wilt the hon. Member agree that one of the reasons for the strange discrepancy between our film industry and those abroad is that we still seem to regard the film industry as essentially producing entertainment, making no great cultural contribution?
Mr. Gorst: I concede that that is a factor and I am grateful to the hon. Gentleman for pointing it out.
I have also noticed from the list to which I referred that, apart from Israel, which has merely discontinued the awarding of a small annual prize, every other country except the United Kingdom is maintaining, although perhaps modifying, the support that it gives to its film industry. In the words of the White Paper of last July,
"The British commercial film industry … has an importance and influence … out of all proportion to its size ".
The world, the Government and I are therefore in step. We agree with one another; we agree that films matter. They can make money, they can influence people and they can entertain them. So where is the snag? Where is the difference between the world, the Government and myself on the one hand, and the Government Front Bench on the other?
The position, alas, is that a clever doctor can make an accurate diagnosis, just as a clever White Paper author can marshal facts into a coherent picture of today's British film industry. But those clever men are only as good and as valuable as the prescriptions they offer—the one to save the life of his patient and the other to save the life of the British film industry. Alas, again, we have better results from our doctors than we have from the authors of the White Paper. The White Paper is strong on analysis but weak in many of its prescriptions. I should like to be more precise about that weakness.
There is an abundance of talent in Britain. We have producers, directors, writers, cameramen, technicians and actors who are as good as or better than any to be found anywhere else in the world. We have hungry, gawping

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audiences who will spend not hours but weeks of their lives watching the products of the film industry. There is an annual audience of about 4 billion for films on television and 66 million for films on cinema screens. The Government want films to be made and so do ITV stations. BBC moguls want to buy films and worldwide audiences want to watch films. The snag, as every contributor to the debate has said, is finance. Where is the finance to come from? The Government will not pay the price of even one full-length feature film of any notability. What is the point—I change the analogy—of deciding that we want an army but deciding at the same time that although tanks are needed we shall have only one? We cannot run an army on one tank and we cannot have a film industry with only one film, and that a pretty cheap one.
BBC and ITV companies say that they want films and their audiencies want films but they cannot pay a proper price even for the old ones. I believe that audiences would and could pay for films but even they, the public, are wayward and fickle in choosing where to watch their films. Film finance is a difficult, chancy and wayward business, because viewing fashions are changing constantly.
I believe that there is a solution. A levy on the viewing of films shown on television, which according to the estimates I have seen is not, as is stated in the White Paper, an uneconomic proposition because of the effect that it would have on licensing, would be at the rate of about 25p per viewer, which is equal to a 30p increase in the cost of the licence fee. To recycle some of the funds collected and absorbed by the greatest exhibitors of the British film industry's products, ITV and BBC, would seem to be the most sensible option open to us. It is, of course, the one that will raise the greatest contribution to film making. The Government reject this view, in my opinion rather unconvincingly.
It is necessary that we return to this matter again and again. In equity and in practice, a levy on the viewing of films shown on television would seem to be the solution in financing full-length British commercial films. For acceptance of this proposition it is necessary to disabuse our minds of the specious arguments about licence fees increasing by leaps and bounds. It is necessary also to ignore the siren voices of the copper-bottomed television moguls and magnates. It is equally necessary for the Government to get away from the idea that we can apply the rules, theories and dogmas of monetarism and free markets to an industry which is one in name but not in reality.
It is suggested in the White Paper that there is a glorious future opening up with the advent of cable television and direct broadcasting by satellite. It is said in Aesop's fable of the fox and the cat that one safe way is better than 100 on which we cannot reckon. We cannot reckon on the unknown effects of these new forms of distribution. Therefore, we should go to the one upon which we can reckon, which is a levy on those who watch films on television.
5.54 Pm
Mr. Jack Dormand: I count myself as one of those persons who has no specialist knowledge of the film industry nor any connection with it. I understand that some Conservative Members have such connections and
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perhaps we shall hear from them during the debate. I am proud of the contribution that the British film industry has made to the cinema. There is a British ingredient, and that has been evident in recent years when British films have been among the best in the world. I pay tribute to filmmakers who could have lived abroad and earned considerable sums but who have chosen to spend a large part, of all, or their working lives in the United Kingdom.
Despite the decline in the number of cinema-goers, there will always be a demand for cinemas. Next year will be British Film Year and its slogan will be "Cinema: the best place to see a film." There is a fundamental difference between watching a film in a cinema, with everything that that means, and watching the same film on a small screen. British Film Year has chosen an excellent catch-phrase and it happens to be true. I have no doubt that the wheel will turn full circle and that it may not be too long before we have the crammed cinemas that some of us used to see in our youth not too long ago. We must remember that the cinema is especially important to what might loosely be called working-class people.
Theatres have never been so readily available as cinemas to ordinary people in the United Kingdom and I pay tribute to the efforts of my hon. Friend the Member for Newham, North-West (Mr. Banks) to increase their availability. Working people in the north-east do not have so many opportunities of going to the theatre but my hon. Friend and his colleagues in London have made cinemas and theatres much more available to working-class people. Tribute must be paid to the work that they have done, and are continuing to do. However, there is not that opportunity in most parts of Britain and so it is important that we have well constructed modern cinemas in which to show quality films. Ideally, good plays and good movies should be equally available, but unfortunately that has not been the position in most areas.
The Government are once again demonstrating in the Bill their theory that market forces are the most effective way of producing what is best for the people. We see it time and time again from the Government. That is their theme and theory and it will be presented to us later this week in some of the proposed legislation that will come before us. It is said that public money will still be involved but I have some doubts, which I shall express later. It does not need a film enthusiast to recognise the fundamental difference between what is being proposed and the work that is being done by the National Film Finance Corporation, which has established an international reputation for itself. On most occasions it has secured what my right hon. and hon. Friends see as a balance between good entertainment—there is nothing wrong if a film has entertainment value— and quality film-making. I pay tribute to the dedicated work that has been undertaken by the director of the corporation, Mr. Mamoun Hassan. I doubt whether anyone in Britain knows more about the problems and merits of the film industry than Mr. Hassan. If people like him are to be lost to the British film industry because of this measure it would be little short of a scandal.
Before the Bill was introduced, and since, we have not heard one valid reason for the abolition of the corporation. Having heard the Minister's so-called case, I am sure that I can say on behalf of my right hon. and hon. Friends that we have even greater doubts about the proposals set out in the Bill. I repeat: the legislation is all part of the doctrinaire attitude that governs virtually everything that

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the Government touch. My hon. Friend the Member for Dagenham (Mr. Gould) said that there is grave doubt and distrust in all parts of the film industry about the alternative proposed in the Bill. People who share the Government's political philosophy and doctrinaire beliefs feel that such a change is not only unnecessary but a retrograde step.
We are entitled to ask for more details about the long-term effects of such important financial changes on the Children's Film Foundation and the National Film and Television School. The Children's Film Foundation is unique. It does a first-class job, and, without any question, its films are the best of their kind. The dedication and enthusiasm of the foundation can be seen also in the National Film and Television School. The school has made a tremendous contribution to the quality of British films. I refer to the whole range of technicians, budding directors and producers—everyone concerned with the school.
The information that we received from the Minister about the financing of the Children's Film Foundation and the television school made me suspicious. The amount is insufficient. It is simply not good enough to say that £250,000 will be spent on replenishing the place. It will take more than £250,000 to bring the National Film and Television School, which I have had the pleasure of visiting twice, up to the standard that we would like. Even more importantly, we must find out for how long the £600,000 contribution will last. When the Minister was questioned further about that amount, we did not receive a satisfactory answer, and that matter must be pursued.
In studying the Bill, had one main thought in mind: will its provisions enhance the structure of the indigenous British film industry— an industry fit to make films reflecting our way of life, our thinking, difficulties, strengths and weaknesses? I am certain that the Bill does not provide such opportunities. The bias towards the market place—I keep returning to this point, because it is the fundamental issue in this measure—inherent in the Bill inhibits our achievement of that objective. I hope that I am not being doctrinaire. I admit that I have no doubt that some excellent movies will result from the structure on the financing that is presented to us in this legislation. That will happen simply because we have available the full range of talent to make excellent pictures, as the hon. Member for Hendon, North (Mr. Gorst) said. My argument is that there will not be sufficient finances, having regard to our resources of talent.
The British film industry may simply become, as my hon. Friend the Member for Dagenham said, increasingly part of the United States film industry. The Americans will, as they do now to some extent, hire our studios, technical people and other experts, make more "Star Wars" and "Superman" pictures and hie the films back to the States, making a lot of money in the process. Is that the kind of arrangement that we want? Do we want something that will make no contribution to British film culture? I am afraid that, under this Bill, that is what will happen, in spite of our David Puttnams, Bill Forsyths and Richard Attenboroughs.
Finance is crucial in avoiding those pitfalls. Equally important is the need to have some type of British film authority. My party's policy is to have such an authority. We make no detailed recommendations, but we believe that there should be such a body with expertise available from all sections of the industry. That means experts and laymen who can intervene at appropriate levels— in
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training, co-operating with television and, not least, working with the unions. My party believes that the unions would have representatives on the authority. In this Bill, as always, there is not even a hint of this type of body.
All these matters add up to one point: how seriously do the Government take the British film industry? That question must be asked, and the answer is clear in the Bill and in the Minister's speech: not very seriously. My hon. Friend the Member for Dagenham properly compared the British film industry with the film industry in other countries. I shall compare our industry with those of two of our partners in the European Economic Community. Recently, I read an article by Anthony Smith who, I think we all agree, is the distinguished director of the British Film Institute. He said:
"Re-deploying the Eady fund and supplementing it with television and video money would be an enormous boost and would cost the government nothing. But it would have to be administered not under the 'automatic' formulae of trade officials but in the light of deliberate artistic choices. That is what is done in Germany which has re-built its film industry into one of the most admired in the world during the past 10 years."
I think we would all concur with that view of Germany's film industry.
The French set up a high-powered commission which produced the Bredin report, the most important commentary in 50 years on any country's film industry. Some of that report's recommendations were expensive—in contrast to what we heard from the Government—but they have been implemented and, I understand, are already paying for themselves both financially and in artistic merit.
The Government do not even begin to think in such terms. In spite of having such an array of talent. we may be thought of only as a country that produces the "Carry On" films—
Mr. Tony Banks: Very good.
Mr. Dormand: I agree. They are enjoyed by some people. I hope that the Minister agrees that our reputation should not depend on those films. It is a startling fact that a country's reputation depends, to some extent— I would not exaggerate it— on films. Those of us interested in films applaud that fact. This country, with its well-known films—I shall not repeat them—made in the past four or five years, demonstrates that. The National Film Finance Corporation has assisted in the production of more than just the usual films that are well known. The House must be reminded that an array of magnificent films—"Babylon" and "The Europeans" come to mind—has been made, and such films would not have seen the light of day had it not been for the NFFC's support.
The British Film and Television Producers Association appears to be enthusiastic about the Bill; I hope that I am not misrepresenting it. But even it says that the new body, which it calls the new FFC—that may be a Freudian slip, for we are, are we not, talking about a company—must be paid to retain independence so that it is not dominated entirely by the commercial interests involved. I could hardly expect it from this of all Governments, but I believe that, having regard to the nature of the British film industry, provision should have been made in this Bill for a nationalised sector of the industry. If the Government accept—they can hardly deny it—that publicly financed films have had some outstanding successes, they could demonstrate their faith by making finance and other resources available for a nationalised sector.

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The Government profess to believe in competition—we hear that every day in the House—but I suspect that they are afraid of the talent that would jump at the chance to work in a publicly financed film sector. I am not talking about a vast sum of money. I am talking about a few million pounds. I believe that we have been given incorrect figures. One of my hon. Friends spoke of £1·5 million, but that is for a second-level film, if I can still describe it that way. I am pleased to see two Conservative Members nodding in agreement, but that is the measure of financial assistance that we request.
With the increasing tendency—I am talking about the public sector—towards cartels, monopolies, semi-cartels and duopolies in the economic terms that have been described today, some of us believe strongly that to have an independent nationalised sector is more important than ever. I hope that even this Government will not dismiss that suggestion completely.
When talking about independence, I genuinely seek some information. I was surprised that the Minister refused to give way on this point. The point involves clause 4(3) which states:
"The Secretary of State may appoint a person to make recommendations and provide other services in connection with the discharge by the Secretary of State of his functions under subsection (1)(b)."
Why does it refer only to subsection (1)(b)? If the Secretary of State is to appoint a person to make recommendations and provide other services, which is what the subsection provides, why does it not also apply to subsection (1)(a), or have I misunderstood something? Under the Bill financial assistance will be granted to any British company or person, but if I understand clause 4(3) correctly the person who may be appointed will deal only with subsection (1)(b). I find that puzzling, and if the Minister could deal with the point when he replies I should be grateful.
Whatever failings the present financing and structure of the British film industry has, it cannot be denied that there have been some outstanding successes. In my view, and that of my hon. Friends, that success could be extended by an increase in public financing and public accountability. By "success" I mean producing films of artistic merit which can also pay for themselves. I sometimes believe that Conservative Members think that the Opposition regard profit as a dirty word. We do not. We believe in a mixed economy. There is no reason why films should not make money. If that does nothing else, it provides investment for better films in the future. We have had proof of that in the past two or three years. The fact that artistic films can also make money has been proved many times in recent years.
We should, as a nation, be proud of the British talent for film making. We are second to none. Indeed, our people in the industry are presently setting the pace internationally. That talent needs to be nurtured and encouraged. Instead of that, today we are being presented with a Bill that is unimaginative, negative and lacking in justifiable pride. If it becomes law in its present form, I fear for the future of what should be a great industry.
6.14 pm
Mr. Tim Brinton: I have listened carefully to the hon. Member for Easington (Mr.
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Dormand). I sympathise with much of his diagnosis, although the cures that he offered would not be my cures. A few minutes ago I held my breath for a moment when he referred to the "Carry On" films, remembering that I once made a fleeting appearance in a film called "Carry on Emmanuelle"—with my clothes on, I hasten to add—but he did not refer to it.
Sir Geoffrey Johnson Smith: What part were you playing?
Mr. Brinton: I was playing the part of a newscaster behind the television screen, so I was protected.
It is an interesting debate. Hon. Members have spoken seriously and given their diagnosis and potential cures. I wonder whether I might be allowed to approach the subject from a slightly different dimension. Before I do that, I should perhaps declare my interest in these matters as a consultant to the British Videogram Association and as a director of Airtime Publicity (Newsflash) Ltd., neither of which has, in fact, consulted me about the Bill, so I am free to speak entirely on my own and give my own views. I have, however, had a little experience generally within the industry and in television and radio.
I feel that we have arrived at the point that we have reached today because unfortunately many, many years ago the British film had to become involved, and have some sort of relationship, with Government. Since the time of the buccaneer who founded the nickelodeon at the turn of the century, and since those lovely 1930s-style Odeons were built and were making a great deal of money, the British industry has been in a state of almost permanent financial crisis.
The various interests involved—be they the massive, gaudy musicals and entertainments, through to the cultural and artistic low-budget side of the industry and the main feature which is not the huge expensive Hollywood extravaganza—have all looked for help wherever they could find it.
It is not unnatural that we are receiving in our post today communications from interested parties who see, as their first line of support, Government—taxpayers'—money. They seem to be saying that if that does not work, "Let us make the viewer pay. After all, he paid the Eady levy through the cinema, and that was no bad idea." The man or woman who went to the cinema and enjoyed seeing films contributed to the making of future films, thus perpetuating the art, but there were snags. As the matter developed, the Eady money did not go into the new production. It did not end up in the right pocket so to do. The audience therefore deserted the cinema. Now most of them, sadly in many people's opinion, sit at home and watch the feature film on television.
There is a justification for making the viewer pay. It is not a tax. It would be a contribution, albeit not entirely voluntary, by the film fan or buff to the future production of British films, if it could be organised in such a way. Do we want to give support through the taxpayer's money or the film buff's money to that sort of venture? Why should it not be purely commercial? Why should not commercial firms do what the hon. Member for Easington said so optimistically and idealistically, and make films which can pay for themselves and which have artistic merit? I hope that I quote him almost exactly.
The tragedy is that only a limited number of films can pay for themselves. One hon. Member spoke of one film

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in 10 making a profit. To be sure, the odd film that makes money makes a great deal of money, but most of the people to whom I talk suggest that the figure is more like one film in 20. A feature film, which is what we are talking about, is special. It is not to be confused with a television feature film. Any commercial undertaking in the business of making a feature film is probably looking to invest in each film that it makes a modest £1 million to £2 million; if it is to make the 20 to make the one that makes money, a vast sum is required. The company will then need much more than that.
When I was on the Select Committee which last Session investigated private and public funding of the arts, we looked deeply into this subject, as the Under-Secretary will remember. I remember a frisson going down my spine when I had a pleasant conversation one afternoon with the gentleman in Paris who is in charge of giving money to French productions. The thing that he said that produced that frisson was that every film that needed any support had to achieve his sanction. That is why I do not want a British films authority. That is why the Select Committee, in its report, looked at the present state of film quangos and other bodies in this country, regarded it as a muddle and suggested that it should be considerably simplified. The main thrust of its suggestion was that there should be a revamped NFFC.
We went further, as some hon. Members have said. We said that in 1984 one cannot consider the feature film made for the cinema—or television, but it is really made for the cinema in that special way—unless one also takes into account what is happening in television—in broadcasting, satellite and cable. That is why some of us are still pressing that some form of unified ministerial control over the arts and communications should eventually come. I do not want a "Ministry of Culture" because that is most frightening. However, we are asking the Minister and the Secretary of State almost to achieve the impossible in the Bill because their responsibility is for film, and they do not—and presumably cannot—take much regard of what is happening in television. I believe that one cannot begin to fund the industry properly until one does that.
I think that I have pointed the way to what I feel needs support in British film production—the medium-budget film. Some of us are old enough to remember the Ealing films such as "Whisky Galore" made about 30 years ago. Such British pictures reflect our society, good or bad, and do something for us abroad. However, they need serious funding. Because the Government have not got their act together on a film and television policy unifying the two, of necessity I come down to the practical. I sincerely hope that in Committee more thought will be given to exacting a contribution like the Eady levy from the television viewer of feature films, to support such pictures. It may be too late; it may be impossible, but I believe that the impossible is sometimes possible.
Presumably we shall discuss the details of the Bill for many weeks to come, but at the moment it reminds me of a piece of sticking plaster over a wound—there is a wound in the British film-producing industry—and unfortunately the wound needs more than sticking plaster. It needs a touch of antibiotics or something else. Those antibiotics can come either from funding from a source such as I have described or from tax relief—from restoration of capital allowances or some other tax relief. I am not often given to special financial pleading because
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it is not my nature, but in this case the high risks involved in making and producing good feature films for any investor are such as to warrant more attention from the Chancellor.
6.25 pm
Mr. Tom Pendry: Like my hon. Friend the Member for Easington (Mr. Dormand), I have no experience of the film industry. I suppose that I must be classified as a punter. My enthusiasm began on Saturday mornings at the Odeon, which shows my age. However, I am a grateful punter, especially of late, because of the achievements of the British film industry. I shall make a short contribution to the debate because the main points of opposition have been made already, especially in the eloquent speech by my hon. Friend the Member for Dagenham (Mr. Gould) and in speeches by other hon. Members on both sides of the House. Such a debate enhances the House's reputation. I hope that the Minister's response will match the contributions that have been made.
Some of my hon. Friends think that I am a bit of a softy on such occasions, but I should like to absolve the Minister of State from any blame that one attaches to the Bill. The Bill is a slap in the face to the British film industry, but that is not due to the Minister, nor to the Parliamentary Under-Secretary. The reason is that the Bill has the imprint of one of the Minister's predecessors, a certain Mr. lain Sproat. The good people of Aberdeen may well have displaced him at the general election, but his narrow and doctrinaire approach to the British film industry lives on in the White Paper and the Bill. I hope that that will help the Treasury Bench to get off the hook in Committee.
The Minister of State listed his favourite films. We are pleased that he saw the films of which he spoke. Other Ministers have also said great things about the film industry. When introducing the White Paper, one spoke of a film renaissance, and in doing so he listed his favourite films. As on so many other occasions, today we heard about "Gandhi", "Chariots of Fire", "Cal" and 'Another Country". We also heard about David Puttnam, Bill Forsyth and Sir Richard Attenborough. Those names come easily off the tongue, but it is strange that the Government have not recognised what those people are saying. If they listened to what is said about the Bill by the very people who produced those films and whose expertise they are so ready to acclaim, they would scrap it now. Therefore, we must consider it in a new light in Committee. The Bill can be seen only as a backward step by the people I mentioned and others in the industry.
The removal of the Eady levy and the abolition of the NFFC will not revitalise the industry. Anyone who knows anything about the industry knows that only too well. The Minister of State said that he has been in his job for only a few weeks, and it is clear that he has not spoken to the people I mentioned, so perhaps he has not yet grasped the point.
We accept that the Eady levy may be outmoded and oudated, but the Government have not put anything in its place. The body to replace the NFFC could be a good idea. We are not doctrinaire, but surely the measure is inadequate and biased in favour of EMI and Rank, which already have too much influence on the industry. The £1·5 million put in by the Government and £1 million put in by those two bodies are not enough. That is small fry when one considers the needs of the industry. As my hon. Friend

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the Member for Dagenham said, the Government, who take pride in that paltry financial assistance, must recognise that it represents the cost of only one low-budget film. The industry believes that six to 10 main feature films and up to six short films should be produced annually, so the sum is clearly inadequate.
I should like to make one point that has not been mentioned so far. One may say that it is not in the Bill as such, but it is clearly associated with it. If the Minister is as worried as he says about declining cinema audiences, scrapping the Eady levy will not solve the problem. I spoke to several small cinema owners by telephone today and they are adamant that abolition of the levy will not be reflected in lower prices to the punter. If the Minister wishes the industry to pick up, especially in the suburbs of our cities and towns, he must act on the recommendation of the Monopolies and Mergers Commission report, Cmnd. 8858. We hear a great deal about free competition from the Conservatives, but the commission found that there was less than free competition in the film distribution industry, that Rank and EMI dominated the market and that many smaller enterprises were unsure what films they would be showing the next week. Four cinemas in Manchester today cannot tell the public what film they will be showing next Friday, despite many phone calls to the two major distributors. That is a disgrace and it leads to a decline in the number of people, mostly working-class people, who wish to go to the cinema. The Under-Secretary of State, the hon. Member for Rossendale and Darwen (Mr. Trippier), should take this on board, as many of the punters involved are his constituents too.
Greater Manchester has more independent cinemas than any other city outside London, but their prospects for survival are bleak. The vast population of Manchester itself has just two major cinemas with a maximum capacity of 3,600. One is Rank; the other is EMI. The Under-Secretary of State with responsibility for small industries knows that many of the independent cinema owners are strong supporters of his party. They are well intentioned in other respects but misguided in terms of political allegiance. Those Conservative supporters are being held up due to these monopolistic practices.
My hon. Friend the Member for Easington spoke of monopoly and duopoly. He missed out oligopoly, but it is rife in this industry and the small cinema owner is losing out. I take the north-west as an example. In Oldham there is no cinema at all any more. In Bolton, one is still open, but the Rank cinema has closed. Rank also intends to close its cinema in Blackpool, of all places, and in Bury and Sale they have already closed. If Rank and EMI are closing their cinemas but at the same time depriving the independent cinemas of the films that Rank and EMI show in the plusher areas, there is a great deal to be said for implementing the Monopolies and Mergers Commission recommendation straight away. The Palace cinema in Stalybridge is the plushest, most comfortable cinema that I have ever visited. The proprietor has done a great deal, against enormous odds, to make the cinema attractive, but he cannot get the films to bring in the crowds.
If the Minister is really passionate about putting bums on seats, he should not sit on his own bottom too long. The Government have been sitting on the Monopolies and Mergers Commission report for 18 months. It is time that
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they pronounced. I hope that that will be done when the Minister winds up today's debate. As I have said, I do not believe that the Minister who will take the Bill into Committee is as prejudiced as his predecessors. I hope, therefore, that, with the help of Conservative Members who have spoken so well in today's debate, the Bill will be amended and will emerge a far better Bill. If the Minister achieves that, he will deserve congratulations, and they will certainly be forthcoming from the film industry.
6.34 pm
Mr. Robert Key: I begin by declaring an interest. Hope springs eternal and I remain a shareholder of Salisbury Cablevision. The cable industry will undoubtedly flourish in the future, but it would help if Members of Parliament were more to the forefront in encouraging it and if the Treasury were rather more co-operative.
I should also declare another interest. No doubt hon. Members saw Peter Shaffer's play "Amadeus" in London. I was delighted to hear that it was to become a major film, although unfortunately a United States film. Nevertheless, wishing to turn to the United Kingdom for the greatest talent, the Americans chose to record much of the music of Mozart and Salieri in Britain, including me and my choir, the Academy of St. Martin in the Fields. I am thus perhaps the only Member with such a direct interest, apart from the role of my hon. Friend the Member for Gravesham (Mr. Brinton) in "Carry on Emmanuelle".
Having listened to the views of the British Film and Television Producers Association and the Association of Independent Producers, I have learnt a great deal. I was surprised not to receive any information from the unions involved and I regret that. Another view that has been lacking in today's debate, with a few honourable exceptions, has been the consumer view of the Bill. As the Minister said, we are losing an average of one cinema per week due to closures. The hon. Member for Easington (Mr. Dormand) referred to the importance of entertainment in the cinema, and I entirely agree. I enjoy entertainment and drama in the cinema perhaps more than the intellectual or the avant garde, although that, too, has its place. My hon. Friend the Member for Gravesham said that people had deserted the cinemas for the comfort of their home and, regrettably, that is all too true. The hon. Member for Stalybridge and Hyde (Mr. Pendry) said that cinemas had become few and far between. Even in the sun belt of the south of England it is now a very long way from one cinema to the next.
When Lord Gowrie opened the 28th London film festival last week he said:
"For film makers in Britain and those who watch their work, this period is a remarkable time of revival—of new kinds of film-making and artistic exploration, and of the discovery of a vast reservoir of new talent.
An enormous range of film work is going on in this country or is being undertaken by British film directors…In fact, the revival of British film-making must be one of the most important cultural projects in the world today. In the current year no fewer than 75 new British feature films will be completed. Furthermore, this great upsurge of work is going on alongside the steady flow of American films being made in British studios and by British technicians."
We welcome that development. He also drew attention to British Film Year, a joint project to begin in March next year involving the Government and a large number of

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institutions, and suggested that that project could recreate the cinema experience for large numbers of people. I only hope that that is true.
The proposals in the White Paper were based on the assumption that the industry was booming. It said that in 1983
"The signs of a renaissance were clear".
I believe that that is misleading and wrong. The White Paper also said that
"production levels were being sustained"
and noted an increase in production of seven films between 1982 and 1983, with a total of 34, but that still means that production is close to its lowest level ever. The White Paper continued:
"Domestically … the cinema checked its previously steady downward trend"
but admissions dropped by a further 30 to 35 per cent. in the first part of 1984. The White Paper also said:
"in the all-important North-American market there was a much greater acceptance of British films".
In my view, however, two Oscar-winning films do not demonstrate a significantly higher penetration of the United States market. British films have won Oscars before, but very few British films have achieved national distribution in the United States. However, there has been a tremendous growth in sales of pop videos in the United States. I pay tribute to the pop industry, and to the pop video industry in particular, for its contribution to our export earnings. There is tremendous potential in the production and direction of such videos, in which we are taking the initiative. They are very popular throughout the English-speaking world, and notably in the United States.
In the United Kingdom, video has achieved 30 per cent. penetration in households with colour televisions, but that has not helped the British production industry. The lion's share of that market continues to go to American studios and to the video pirates. Video piracy costs our industry about £100 million a year. Like several other hon. Members who have spoken today, I feel that there is a strong case for a blank video tape levy of as much as £1 per tape. That would raise some £25 million a year which would be returned into the right pockets in the industry.
The White Paper succintly listed the reasons for significant market distortions in the industry. It pointed out that most overseas films already receive substantial Government support and that that means that a British film is handicapped from the outset. For instance, investment allowances in Australia have enabled the Australian film industry to make inroads into world markets on a scale of which we can only dream. The White Paper also pointed out that the cinema distribution system in the United Kingdom is dominated by the major American studios. That does not help us at all.
My hon. Friends mentioned the duopoly of United Kingdom broadcast television, the existence of which means that the prices paid for feature films shown on television do not reflect the enormous size of the audiences. The White Paper points out that the switch from the cinema to the home as the principal place for watching films means that, with the theft of copyright which naturally flows from that switch, there is no significant financial return for the producers. We are also told that home video, cable and direct broadcasting by satellite will provide a number of exciting new opportunities.
I am sure that that is true. However, the video business is levelling out at the moment, with little sign of an upward
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trend, and some distributors and retailers are currently facing bankruptcy. The development of cable and DBS is also passing through a very difficult phase. The reduction of capital allowances only months after the Government had agreed that the cost of the installation of the cable should be eligible for initial allowances has, in the absence of any alternative support, cast considerable doubt over the development of cable systems as an additional source of revenue for the film industry.
None of those markets, either alone or together, will be able for the foreseeable future to generate revenues sufficiently large to justify the production of feature films for those markets alone. There are now so many independent producers setting up in this country that they are finding it increasingly difficult to raise the necessary money. We must start making blockbuster films in this country, and we must be able to afford to make such films. I wish that the City would recognise the fact that our film industry contains unbeatable talent and would also recognise the comparative lack of risk. Putting money into films is not a great gamble. The risks are largely calculable. The industry undoubtedly feels that the Bill pulls the Eady rug from under its feet and that the floorboards underneath are rotten.
Mr. Brinton: My hon. Friend believes that we should make blockbuster films, by which I presume him to mean high-budget extravaganzas. Would he not agree with me, on reflection, that such films receive international distribution right away, and do not require Government or Eady support?
Mr. Key: They may not need such support in the first place, but what I am criticising is the fact that the City is unwilling to provide money and that the City, as well as the Government, has been deterred from supporting the film industry. That attitude needs to be changed. The industry feels that the investment allowances are vital, and it now feels very depressed.
Our film industry possesses unbeatable resources and assets, from unrivalled acting talent to unbeatable technology. The difference between the large screen and the television set remains enormous. I have already referred to the forthcoming film "Amadeus". I have been lucky enough to see a preview of the film. The technology, the acting and the music are stunning, and the film must be seen on a large screen to be appreciated.
Many American films such as "Star Wars", "Indiana Jones and the Temple of Doom", the James Bond films and "Superman" were all made in Britain. Most people do not realise that. I have referred to the fact that video penetration in this country has been rapid and deep. However, it is now slowing down. Films have an enormous export potential, whether they are destined for television showing or the big screen, and that potential is currently under-valued. I believe that it is shared by our provincial repertory companies and theatres. Some of our provincial theatres are as good as the theatres in any capital city on the Continent.
We should not forget that there are some good American productions. During Committee stage of the Cable and Broadcasting Bill there was much discussion of the possibility of the import of cheap American rubbish, and attempts were made to define what we meant by rubbish. We should remember that there is an enormous demand for high quality British films and videos in America, and that our export potential is enormous.

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There is a big market for films in this country, but the market has shifted from the cinema to the home. Artistically, the home is not the best place to watch a film. When people watch films on television instead of in the cinema, comfort, convenience and cost have won over the technological impact of the big screen and the demands of the art form. That is regrettable.
The Minister tells us that a cinema closes nearly every week. In any year, therefore, many constituencies must be affected. The work done by the Cinema Theatre Association and by such campaigners as Mr. Alan Richardson should not go unnoticed. They are drawing public attention to the decline in the number of cinemas.
Those who campaign for the retention of cinemas need to decide whether it is the historic buildings that they want to save, or cinema as a form of art and entertainment. If they wish to save the buildings, they must concentrate their efforts on the planners and the elected district councillors. To save the cinema as an art form is a more complicated business, because they must persuade young people, families and tourists to make more use of our cinemas.
Other hon. Members have shared with us their reminiscences. I remember the day when my father took me to see "Twenty Thousand Leagues under the Sea". The impact of that film on a child of eight was enormous. However, in the past year alone there has been a considerable drop in cinema attendances. This afternoon I spoke to Rank Leisure Services. I was told that although Rank is supporting the £850,000 a year scheme to finance new film production, it has faced a considerable drop in attendances this year. Rank does not want to close cinemas. Indeed, it is building new ones. I believe that there is one in Bristol. It also has a responsibility to its shareholders. It could do better in terms of financing and financial returns in commercial activities other than the provision of cinemas. Rank may plan to spend the proceeds of the sale of the Salisbury Odeon to finance its new initiative. It would be no comfort to my constituents to lose their cinema.
It has also been suggested that cinemas which are under threat should be taken over by district councils. I do not recommend that. It is not the role of a council to run a cinema, and others can do it better. In my constituency, the district council has already taken over one of Rank's cinemas and turned it into a city hall. Frequently there are arts societies and centres, such as the St. Edmunds arts centre in Salisbury, which has projection facilities, but also suffers from under-financing.
Mr. Bermingham: Does the hon. Gentleman agree that a tragic result of the closure of cinemas is that in rural areas the only provision of cinema-type entertainment is by the district council, which either sets up and funds a local cinema group or puts on local shows and shows of historic interest?
Mr. Key: I agree with the hon. Gentleman. The district council in my constituency supports an arts centre and took over the old Odeon cinema and turned it into a city hall.
It is often said that cinemas are unattractive, tatty and cold, and that performances are spoilt by interruptions from yobs and the activities of vandals. That may be true, but how should we respond to it? Should provincial prices be raised to west end levels, or should cinemas be turned
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into clubs? I do not like that idea, because old films which one can see on television or hire from a video shop would be shown in such clubs.
The problem facing provincial cinemas is that of marketing their product and changing social attitudes. West end theatres and cinemas have learned much about that recently. If one considers the marketing of some of our theatre musicals, such as "Starlight Express", which has been highly successful and innovative, one sees what can be done to market films in the provinces. I hope that the success of "Starlight Express" will soon be repeated in the United States of America. Last month I had the pleasure of travelling on a train called "Starlight Express" from Portland to San Francisco. I warned the company to await the musical and see its profits increase as a result.
All hon. Members want the British film industry to succeed. That is the spirit of our debate. It is clear that more people in the provinces are prepared to sign a petition to save a local cinema than to support it by taking their families to see films at it. No Government can solve those problems, nor can local councils. We are dealing with social attitudes, and the importance that the public attaches to the film industry. I sincerely hope that the Bill will help and not hinder the renaissance of the British film industry.
6.54 pm
Mr. Gerald Bermingham: I listened with interest to the speech of the hon. Member for Salisbury (Mr. Key). I regret that I cannot give a list of declared interests to match his, or advertise a current production as he did so excellently. He has convinced me that I must see "Amadeus" when it comes on general release. However, I hope to convince the hon. Gentleman and other hon. Members that the Government have got it wrong. It is not the first time that they have got it wrong and their Tory Back Benchers have got it right.
I had the privilege of serving in Committee on the Cable and Broadcasting Bill. Hon. Members who served on it will know that Back Benchers got it right, and that the Home Office Minister did not always understand what they said. However, we managed to change the Bill a little and at the end of the day we got it right. I hope that in Committee on this Bill the same intelligent approach will adopted by Back Benchers, that Ministers will remain silent on occasion, listen to those who know about the industry and ignore their civil servants—that is essential if we are to achieve sensible legislation from this Bill—and that eventually we shall get it right.
No hon. Member wants to harm the British film industry—[Interruption.] At least those who understand it do not want to harm it. The Government Front Bench have been badly briefed. I do not blame the Minister. He has had only six weeks' experience, and many other pressing matters face him, such as insolvency, takeover bids in Nottingham Manufacturing and Johnson's. Therefore, the Minister has not had long to consider the matter in detail. That is a tragedy. We had a good chance when the White Paper was published.
I remind the hon. Member for Salisbury what the Association of Cinematograph, Television and Allied Technicians said about the removal of the Eady levy. No one objects to its removal, because it has outlived its purpose. It was introduced at a time when we needed to finance films, and it was a good way to do it. Cinema audiences were large enough to sustain a realistic levy. However, times have changed and cinema audiences have

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decreased alarmingly. That is a tragedy for those who represent constituencies, such as mine, which lie between large cities. Unless we have a Rank or EMI cinema, we get behind in showing modern films. Indeed, we do not get modern films unless there is an EMI or Rank cinema nearby.
The cable industry is beginning to get off the ground. I believe in cable. Cable is bigger than entertainment. The Government sought to have cable led by entertainment. That was a big mistake, as I told them time and again in Committee. However, the Home Office did not listen. The Home Office was responsible for an industry Bill, for which the Department of Trade and Industry should have been responsible. The entertainment industry must live with that kind of mistake under this Government. The Government are an entertainment in themselves when one considers how they deal with these matters.
The Parliamentary Under-Secretary of State for Trade and Industry (Mr. David Trippier): Come off it.
Mr. Bermingham: The Minister should listen to all Back Benchers. Some of us understand the industry and are prepared to help it. Unfortunately, such Members are not in the Government. We are prepared to educate and assist the Minister if only he will listen. We want an industry that can take its place in the world, support itself and produce the quality product that we know it can produce.
The United Kingdom has some of the finest producers and technicians in the world. We have the facilities and the capabilities to produce quality films. All the industry needs is the financial stability to produce them.
The majority of our cinemas show American-based films because they are controlled by two companies: EMI and Rank. Obviously, they will show those films which will make the most money for them. They are bound to be subject to influences and pressures, especially from the American market. That has been going on year after year. It is obvious if one looks at cinema placards. It is difficult to get financial backing for a film if there is no distribution point.
We do not have the breakthrough in the American cinema market that we should like. Anyone will say that, but one has only to go to Washington or Detroit to see what is on in the American cinema. Only spectacular English films of Oscar-winning potential, such as "Chariots of Fire", break in. We have to make our own films and they must be supported financially. It is no use asking the City for money as it does not speculate on the film industry. That is a tragedy. The American financial markets are prepared to back their industry, because they realise that if good films are made and sold they are money earners. The Americans, the Japanese, the French and everyone else knows that, but somehow the City of London has not realised it. We have to live with that.
With regard to the development of cable, I have said repeatedly that we have the facilities to produce the programmes. I believe that cable will come, just as I am sure that direct broadcasting by satellite will come. They will compete with each other, but they will both come. In that event, we shall need the programmes to feed those sources of entertainment. Where will the programmes come from? If we kill off our industry, we will have to buy from America. I suggest that the next time a Minister travels in Europe, he switches on to channel 8, which is
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in English. It is a satellite station putting out programmes in English—but watch for the American accents. That is the tragedy.
Our cable will suffer the same fate if, through this Bill, we kill off our ability to make programmes. That was one of our major fears in Committee on the Cable and Broadcasting Bill. I plead with the Government to think again. This is not the last time that I shall make that plea. If I am a member of the Committee which considers this Bill, I shall say it again and again. I hope that many Conservative members of the Committee will have the same courage as they showed on the Cable and Broadcasting Bill. Perhaps then we shall get somewhere. It is possible to restructure film financing in Britain without it costing a vast amount of money. That would enable us to compete.
In an intervention during the speech of my hon. Friend the Member for Dagenham (Mr. Gould), I said that we produced about 34 major films in 1983 whereas the Germans produced 70 and the French produced 131. I am not suggesting that quantity equals quality, but drawing attention to the funding that enables such an output. Why the difference? The answer is simple. The rest of the world appreciates that there should be tax allowances for those investing in the production of films. In 1984 the Government took away such allowances here, automatically putting us one down and making it that much more difficult to acquire finance. Why? Could it be that the Government simply do not understand?
Right hon. and hon. Members on both sides of the House have made some sensible suggestions about funding, such as putting a small tax of 14p or £1 on blank tapes. Anything that can be done to inconvenience pirates who are messing about with the video industry has my wholehearted support. Piracy is theft. There is no other way in which to describe it. It has been suggested that a tax of 14p would raise £10 million a year and that a tax of £1 would raise about £35 million a year. if that money were put into a newly formed National Film Finance Corporation, it would have a substantial annual base budget. If there were added to it a tax on films shown on television, the corporation would have several million pounds more. It has been suggested that the tax should be 0·25p per head of population and that that might increase the licence fee by 30p a year. I am sure that nobody would object to 30p a year. If the Government, who keep telling us that they are keen about the United Kingdom getting off the floor and beginning to invest, put just a few pounds in, perhaps by knocking the odd £1 million off Trident—only £9 billion is involved there—that would help. It would also help if the Government underwrote the structure of the National Film and Television School. I am not asking the Government for much; I am merely showing where they can raise money. However, I beg them not to set up a body that is dominated by the two greatest distributors in the country. That would do nothing for the financing of films.
If I were a director of Rank or EMI and a member of the National Film Finance Corporation and I had a little project of my own coming up, I know that I should instinctively be inclined to support my idea. The body is supposed to support producers who create the new works. I am always suspicious of vested interests, no matter how well intentioned they might be. We are supposed to be establishing a properly funded financing corporation to enable independent producers, people with good ideas and

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talents, to get finance. There are plenty of such people in Britain, but they desperately need the finance if we are to produce the type of programmes that Britain is capable of producing and which are of such great export potential. A properly funded film industry is an investment for the future. It is regrettable that the Government seem not to understand the real meaning of the word "investment".
We are dealing not with an industrial problem or a City-type problem, but with the unique creation of artistic programmes which demand a slightly different approach. I hope that the Government will take the Bill away and that, when they bring it to Committee, they will have ensured that it reflects many of the views that are held on both sides of the House. We have a chance to fund the British film industry properly, and we should be fools not to take it.
7.7 pm
Mr. David Crouch: Before considering films I should like to refer to the problems in the theatre and on the stage.
The theatre is an important part of our national life. We could claim that we lead the world in the theatre and on the stage. We are justly proud of that. The theatre is supported by the state through the Arts Council. The Theatres Trust, of which I am a member and which was founded by Act of Parliament in 1976, is a small body without much money that sustains the live theatre and saves it from decay and decline. It operates throughout Great Britain. The only part of the United Kingdom that it does not touch is Northern Ireland.
I speak as deputy chairman of the Theatres Trust. I am also a chairman of a theatre company. What has all this to do with the film industry and the Bill? I note your nodding eagerly, Mr. Deputy Speaker, as you might think that I shall be out of order. The cinema, the television screen and the live stage are all of the same family and should be recognised as such.
Live theatre is thriving not only in the west end of London but in the provinces. Theatrical success often results from the presence in the cast of actors and actresses made famous in the cinema and on television screens. Parliament and the Government have a cultural and commercial duty to secure the future of all theatre productions, including live stage shows, the cinema and television.
The Bill puts forward a new plan for the development of the cinema in the light of recent changes. In that respect it will be a help, and today's debate has shown that there is interest on both sides of the House in sustaining and securing the future of the cinema and the film industry. I hope that Ministers recognise that hon. Members on both sides of the House have shown that they do not believe that the Bill goes far enough. The White Paper of some months ago recognised the changes in the film industry, but the Bill fails to do so. The White Paper properly recognised the changed economic conditions, the reduction in audiences and the decline of many cinemas. It spoke of a massive decline in the exhibition of films during the past 20 years. However, the Bill does not live up to the hopes that were expressed in that excellent White Paper.
The White Paper also looks ahead. It does not simply moan about the decline of the cinema, but comments on the change in the way in which we see films today. Films
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are still made in great numbers. In 1983, more than 1,500 films were exhibited on the ITV and BBC channels, so although they are not being seen to a great extent in cinemas, they still attract enormous audiences. In 1983, there were 66 million cinema admissions, whereas 10 years ago the figure was about 3,000 million. That enormous difference was reflected in the White Paper, but it is not properly reflected in the Bill's provisions for maintaining the film industry.
The White Paper looks ahead to the new market for films. As many hon. Members have said, the market will become bigger and better, although not so much in the cinema. I am sorry that Britain does not have good small cinemas such as one finds on the continent, where going to the cinema is still part of weekly entertainment. It is a pleasure to visit small, intimate cinemas in Rome or Paris, because they are clean and show good films. The same is not true of British cinemas.
The White Paper talks enthusiastically about the great opportunities for the cinema industry and of the opportunity presented by video. There will be many opportunities in cable television and in DBS, and the Government have already provided one DBS channel for films alone.
I said earlier that live theatre was of the same family as television and the cinema. Paragraph 2.11 of the White Paper considers the relationship between films and television, and makes this telling comment:
"It may well be that this interface of films and television is where the key to much of the film production industry's future is to be found, although the importance of theatrical exhibition in the cinema will remain. For it is in the cinema that a film establishes its reputation and its value to the small screen."
Many films are made for television, but when a film has achieved fame on the big screen, the television companies clamour to buy it within three years and broadcast it. We have seen "Gandhi" and "Chariots of Fire" not only in the cinema but at home, because their reputations were established in the cinema.
The Bill seeks to re-establish the British film industry against the changed climate of audience. It must be re-established on a sound commercial footing, but the Bill fails to do that completely. The Government are not offering much money, but I do not suggest that they should. It is difficult to get anything from the Government these days because we are living on a restrained budget, to say the least. However, there are other ways to tackle the problem. In 1983, the film industry earned about £93 million in exports, which was a great achievement. However, the giant television industry, whose turnover is three times that of the cinema, earned only £8 million in exports. I take my hat off to the struggling film industry.
In 1983, there were 66 million cinema admissions and 300 million film viewings on television. We need new measures to respond to the changed market conditions. Television shows films to a vastly bigger audience, but it does not pay a fair price for those films. The BBC and ITV companies have great power over cinema production, which enables them to buy films on the cheap and to show them to large audiences who wish to see the product of the British film industry as well as that of other countries. Television gets the benefit of the work and art of the British film industry for almost nothing.
Following the publication of the White Paper, some have suggested that a levy could be made on all films shown on television. A farthing—or in new penny

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terms, a quarter of a penny—levied on each viewer would raise about £10 million, which could be used through the Government agency to back new investment and production and sustain this side of British theatre. As many hon. Members said, we must also examine the video cassette revolution in film viewing. The cost of viewing a film in one's home is about £1·50 for the rental of the tape. That is extremely cheap, and the entire family can watch the film, provided that it is suitable. There is surely merit in the idea that a levy be applied to the video cassette that we watch in the home. That would hurt no one. It is suggested that the levy should be of the order of £1 per cassette bought, and an average cassette costs £40. This could yield as much as £25 million to be put into the kitty to help the film industry's investment.
We should also consider a levy on blank cassettes, because we are only too well aware of the black market in home recording through dual use of recording machines to make copies of rented films. Such levies could produce as much as £50 million or £60 million a year with no charge to the Government or the Chancellor or strain on the Treasury.
That sum would be no more than the Australian film industry is receiving today—and what good films the Australians are beginning to produce. That is becoming notable. I used to want to see French or Italian films, but now I tend to make a point of seeing Australian films because they are so good. Whether that is because they are properly financed is another matter. All I know is that Australian films are well acted and well produced.
We are grateful for what the Government have proposed in the Bill, but it is not enough. If they are wise, they will take on board the great amount of advice they have received from many hon. Members. The aria they received from my hon. Friend the Member for Salisbury (Mr. Key) was well worth hearing, and I was pleased that he was able to declare such a delightful interest.
I am not suggesting that there should be a large Government subsidy, rather that we should obtain a fair return, by means of a levy, for the important cinema industry which is part of our great national heritage—the theatre as a whole.
7.23 pm
Mrs. Gwyneth Dunwoody: This is a fairly miserable wake which does not even have the advantage of booze. However, it is an important occasion. Many years ago it became clear to the Government of this country that we are divided from the Americans by the same language and that the kind of economic imperialism at which they are so good was rapidly overtaking our weak, although imaginative, cinema industry. The Eady levy was therefore created. Harold Wilson was extremely intelligent. He had difficulty with the Treasury. As well as wisely suggesting this way out of the difficulty, he named the levy after the Treasury official concerned, and that almost guaranteed that the measure went through the House fairly effectively.
It may show my terrible naivety, but I had hoped that the Government would have taken this occasion to look at the dire situation now facing anyone working in this industry. I hoped that they would have said, "We are about as low as we can get in terms of production without ceasing to operate altogether; therefore, we shall take this opportunity to do something imaginative. We shall not fiddle around with minor changes here and there; we shall
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look at the whole thing and decide how to fund production in this country." The reality, which has been spelt out time and again today, is that more and more people are looking at film and tape material than ever before.
The Government are prepared to reach all sorts of deals with people about direct broadcasting by satellite or cable. When the Government's failure to insist on modern technology results in the cable companies being frightened that they will not be viable, the Government look for a means of giving the companies a small sweet to keep them in being. When there is a problem with direct broadcasting by satellite, the Government go to the ITV companies and say, "Because we want you to be involved in this, we shall give you a much longer period before your franchises come up for examination." They thereby guarantee the companies a certain amount of money.
However, when we must decide something which will determine the future of British film production for the next one or two generations, the Government run away from any sensible thought. Several hon. Members have already made points which reflect the extent of the difficulty. The Government are saying that they will wind up the NFFC and hand over its assets—not sell them—to a private company. They will have a tiny stake in that company to encourage people to invest their own money. but the determining factors in that private company will be the very people who over the years have failed to attract money for production. We need only look at the history of the British cinema and at what happened to the duopoly. I know that we are not supposed to use foreign language, but plus ca change, plus c'est le duopoly.
Whether we talk of distribution, production or exhibition, the two major companies are always involved. There is now the suggestion that we need not worry because in future a private company funded by a partnership between the Government and private industry will provide all the money for production. That has not been so in the past, and there is absolutely no guarantee that it will be so in the future.
What was so important about Eady? We could have said, "We have now reached the point where cinemas are closing at a tremendous rate. We ought to be using some money to improve the facilities available to the general public." France does, as do the most bourgeois set of shopkeepers in the world, because they know that people want to be comfortable when looking at films. Therefore, we have not helped the exhibitors.
It was claimed that the Eady levy was killing the cinema. What rubbish. It could have been used to support the exhibitor and to provide him with the money that the banks will not lend to him. It is noticeable that when the large companies sell off their cinemas they take care to ensure that written into the sale is a bar on anyone using the property as a cinema. Just as they used the bar to control what is paid for films and where they are shown, so they put the same brake on the development of the small independent exhibitor.
Equally, the measure will not help the producer. If we are serious about putting up seed money for production, we must make the sums sensible. When the Government decided to give capital allowances, my view was that, although it was a Conservative method of doing so, it was reasonably effective. Of course some people tried to get round the restrictions placed on those tax allowances. I have never known any industry in which people did not

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seek to bend the rules to their own advantage. However, the Government then decided to remove even that small incentive.
We have been told more than once that we should consider the business expansion scheme as a useful means of replacing some of the money. The business expansion scheme will be of little benefit to film makers who will have to raise production finance for major films. With a maximum of £40,000 allowable from each investor under the scheme, there will have to be about 200 such investments before we get anywhere near a budget. It is not even a serious attempt to replace the money that was lost through the loss of capital allowances. It is worse than that. The Government have abolished the Cinematograph Films Council, which had at least some representation from various sections of the industry.
We have been told not to worry because that council will be replaced with something based on the interim action committee. But that committee was intended to do something very different from what has been suggested today. It was meant to set up a large production fund. It was meant on its own to- generate enough activity for a production line on films. That is the only way that British interests can be safeguarded. It was a much rounder and more deeply thought out plan than anything that we have today.
We have no guarantee from the Government who will sit on the committee, what it will do, or what powers it will possess. As far as we can see, we shall have a private company with a limited production budget that will be controlled by people with a vested interest in trying to keep the best productions for themselves. Why should we assume that there will be independence of thought in deciding on scripts and encouraging independent producers? We have never seen that before. At what point shall we have a completely different approach? We shall see a specific rundown of the remaining sources of production finance.
The Government have failed disasterously in their duty. If the scheme goes ahead, within five years virtually no British productions will be available. Instead of looking for a means of offering some kind of real production incentive, the Government have run away from the basic problems. We could at this moment say that television is using more and more original material and that that ought to be British, not the moving wallpaper that we are increasingly buying from America. We could say that cable has a chance to generate new production and new ideas, not to become what it is in some countries—a continuous re-run of ancient films, hired at disgracefully low rentals from any tatty old library that happens to have been acquired by a company. We could say that direct broadcasting by satellite offers us an opportunity to show the world that we have not just the best actors and producers but modern techniques and ideas. We do not always want to do "Barchester Towers." We do not always want to make films which present the classic view of the British way of life.
It took 20 years to raise the finance for "Gandhi". I was involved in the early stages of that. I argued with the Indian Government for the money that eventually went into that film. Do not tell me that what we are supporting
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today will in any way do anything other than underwrite perhaps one hour of one independent production that may eventually finish up on somebody's television screen.
The Government have funked the opportunity of creating a really live British production industry—not just a film industry, but a production industry that could span television, cable and all the means of tape and film that everybody in Britain enjoys.
I want to see a tax not just on blank tape but on hardware. I see no reason at all why those who, certainly until recently, have had a flourishing industry in VCRs should not contribute towards the production end of the industry. What was to stop them? I see no reason why companies in the television industry should not take up their responsibility and stop moaning about what that would mean to their overall profits.
Above all, the Government today are asking the House of Commons to accept a tatty little arrangement. It will do nothing to produce new films. It will do nothing to keep independent producers in Britain. It will not help those people who have cut their teeth on advertising films and who need the budgets to go over to features. It will not protect the producer of short films or encourage those who are looking for finance for new television programmes. It will, yet again, hide the British industry in some dusty little corner where Rank, EMI and the other large companies have a little panel on the cupboard door which says, "Don't bother us. If we can't work with the Yanks, we are not going to bother to work with anyone."
7.34 pm
Mr. Roger Gale: I welcome the abolition of the Eady levy. I am sorry that my hon. Friend and neighbour the Member for Canterbury (Mr. Crouch) finds the standards of our cinema somewhat lower than those he has experienced on the continent. If, in the near future, I can invite him from his cathedral city to the seaside resort of Westgate-on-Sea, I shall be able to show him a small independent cinema, which provides an excellent service to the community in comfortable surroundings, which would not survive were the Eady levy to remain. The seat penalty price demanded by that levy has come close to putting such cinemas out of business. It is imperative that such small cinemas, never mind the big two chains, should survive. They provide an invaluable social service, both to the elderly who go there for companionship as well as for what they see on the screen, and, still, to the young, who, as I said in the debate on cable television, cannot hold hands in the back row of a video tape screening.
The hon. Member for Crewe and Nantwich (Mrs. Dunwoody) intimated that had the Eady levy been made available to film producers, that would have financed film production. On that economic basis I can well understand why it took her 20 years to raise the money for "Gandhi".
Mrs. Dunwoody: I did not raise it.
Mr. Gale: I am sorry. I thought that the hon. Lady was claiming that she was instrumental in raising the money for "Gandhi". I am glad to be corrected.
In recent years the Eady levy, while having been a penalty on the exhibitor, has been of small value to the producer, and it is entirely right that it should go.
I agree with my hon. Friend the Member for Canterbury on the importance of cinema and television to the theatre.

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I have worked in all three and I am acutely aware of the value of big star names from the cinema and television to theatre productions. It can make the difference between a show surviving and going under.
Much of the discussion has centred on alternative funding. During the debate on cable television, I said that the major television companies made small contribution to the work of independent producers. That applies equally to television and film producers. The Independent Television Companies Association Ltd. has a purchasing cartel. When it buys in programmes made for television, or when it buys in films, it has the power virtually to dictate its own price. Any independent producer will say that that price seldom meets even the cost of production, never mind re-investment.
To be fair, the BBC—at present on its knees and asking for yet more money—exercises the same right. I am in favour of a television levy on films, but with one constraint. That levy must depend upon the ending of the craft unions' restrictive practices. I mentioned that to the hon. Member for Dagenham (Mr. Gould) who is a former colleague of mine. We both worked for Thames Television before we were elected to this place a year ago. The practices of my former colleagues in the Association of Cinematograph, Television and Allied Technicians and in the National Association of Theatrical and Kine Employees, which effectively prevent the major independent television companies from buying made-for-television films through their insistence that production should be financed only by those companies if it is done in-house, are extremely damaging to the industry. Therefore, it is not fair to take a stick with which to beat television companies unless one is also prepared to take the same stick to the craft unions in that industry. If we can end the restrictive practices and at the same time impose a levy on films shown on television, we shall be able to offer the small programme and film producers a real stimulus.
I suspect that most hon. Members have received lobbying documents through the post. I have received two: one from the Association of Independent Producers and the other from the British Film and Television Producers Association Ltd. My hon. Friend the Member for Salisbury (Mr. Key) has already quoted from it, but it says:
"The development of cable and Direct Broadcast by Satellite is now highly questionable."
The British Film and Television Producers Association Ltd. and the AIP have produced two highly depressing and wildly inaccurate documents. I believe that the future for cable television at least is extremely bright. I also believe that one or two companies that may have achieved franchises without having done their sums correctly may get their fingers burnt. But behind them there are plenty of others coming through which have confidence in this new industry and are determined to make it work and will do so. It will be a voracious industry that will demand an enormous number of products to put on its screens day after day and night after night. As we said during the debate on the Cable and Broadcasting Bill, where the product comes from will depend entirely on the industry.
Between the wars the American film company, Universal Films, for which I have also worked more recently, decided to go into film production and stockpiling. The other major film companies then believed that Universal would go bust. They failed to recognise
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something that Universal had seen, which was the advent of television and its phenomenal requirement for products. Within two years of the serious advent of television as a medium, Universal's shelves had been cleared, it had got back all of its money and. not surprisingly, had made a very handsome profit. Since then, Universal has been one of the foremost—if not the foremost—suppliers of film to the television world.
Within the next five years we are likely to be faced with the same situation. The advent of cable, not only in Britain but worldwide, will create a similar demand. It is up to us whether the film is made here or in the United States. If our film producers have the courage that I believe them to have, they will start to stockpile now. It was said that the companies involved in the new film company had clone nothing for film. However, Euston Films, which is a major and very good producer of small films, is a wholly owned subsidiary of Thorn EMI and has made a major contribution to the film industry in Britain. If those companies are prepared to stake their productions now, they will sell, and in five years' time the British film industry will be thriving. They need the incentive of a levy on television film to help them, but it is up to them. They have the opportunity, and they must act now. Either they stockpile now, or in five years' time the Americans, not the British, will produce the films for cable television.
7.44 pm
Mr. Tony Banks: The Bill owes far more to ideology than to the needs of the British film industry. I think that the Government will experience considerable difficulty in Committee, because thoughtful criticisms have been made today by hon. Members on both sides of the House. Most hon. Members seem to agree that the Bill will do little to secure the industry's future.
Clearly, the Government would like to move towards a free market for the British film industry rather than a market that deserves greater and not less public support. We would clearly argue for greater public support for the industry because it is far too important to be left to the random machinations of the free market. However, one of the problems we face is that insufficient recognition is given in our society to the cinema's cultural role.
Unlike theatre, dance or the visual arts generally, cinema is essentially seen as entertainment rather than as an art form. That does not mean that something qualifies as an art form only if it bores the pants off everyone. Clearly, entertainment and art go together, but we nevertheless tend to regard cinema as essentially entertainment and not an art form. That makes a big difference, because something that has been delineated as an art form can then tap into quite extensive public support from the Arts Council, local authorities and so on. The amount is never as much as we would want, but it is considerably more than the cinema can attract.
Great emphasis has been placed on the reputation and skills of those in the British film industry. Obviously, one would wish to be associated with those. plaudits. Bat we have tended to talk about the big international successes, most of which have been largely financed by the United States. As has been said., the British film industry is dominated by the United States. The ending of the screen quota, of the NFFC and Of the Eady levy will merely accentuate that decline. I cannot see how the removal of the various support mechanisms will in any way advance the film industry's cause.

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Hon. Members have tended to talk about the industry at an international level and about the big blockbusters, but at the small independent producer level, the British film industry is still very active, although desperately in need of more support. There has been little mention in the debate or in the Bill of the need for much greater support for the film workshops within the industry.
I do not believe that the Government recognise the value to the economy in general of the British film industry. The hon. Member for Canterbury (Mr. Crouch) mentioned £93 million as being earned last year by the British film industry. I assume that that was the direct earnings from overseas sales of British films. But there is another figure that is more difficult to quantify in terms of the benefits of the industry for the British economy.
British films tend to create a much higher awareness of British culture in the world, and that can have a direct spin-off for the sale of British manufactured goods. I know that it is sometimes difficult to see the connection, but it is there. One has only to think back to the pop culture of the 1960s to realise how British manufactured goods achieved significant market gains as a result of Britain's role as a swinging nation. Therefore, popular culture can have a direct spin-off for manufacturing industry. I do not think that that is something the Government have recognised.
The British film industry is currently little more than an offshoot of the north American industry. If we allowed an entirely free market to operate—which even the Government are not proposing, but which I suspect they want—the British film industry would be swallowed by the United States film industry, rather as the British computer industry has been.
There is much talk about the way that the American film industry has been using our expertise and mounting significant productions here. Much of that is due to the favourable exchange rates. As those alter, there will probably be a move away from production in Britain to production in the United States, and a leaching of United Kingdom native talent. That has happened in computer and microchip technology.
The disappearance of the British film industry appears to be very much on the cards, and will not be mitigated by the Bill. That is worrying in two major respects. First, there is the gradual domination by the cultural imperialism of the United States. More and more of our television time is being taken up by cheap American imports. I do not doubt that hon. Members from both sides of the House enjoy watching "Dynasty" and "Dallas"—frankly, I do not. As we move towards deregulation, with the advent of more cable television, the floodgates will be opened to cheaper and cheaper American films.
My second concern is that the cultural industries in Britain comprise the fastest growing area of our economy. In London, the cultural industries employ 112,000 people. That makes them the largest sector of the economy in London. They also have the largest growth potential. It cannot be beneficial for that sector to be wholly unplanned and left to free market forces.
The Bill will do nothing for the film industry. It does not recognise the role of the film industry in British society. There have been many complaints from Conservative Members about the unions and restrictive practices. The ACTT, which is the main technicians' union, recognises the need to develop the film workshops.
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It has drawn up a model workshop agreement. That is the way to proceed for the future of the film industry. Unless the film workshops and small producers are working well and producing films, and unless the industry is healthy at the bottom, it will not be healthy at the top.
My hon. Friend the Minister for Easington (Mr. Dormand) said that the Labour party had called for a film authority—ACTT has done precisely the same. It has asked for a broadly based, adequately funded and powerful interventionist film authority with a mandate to revitalise the indigenous British film industry. That needs income. What is left after taking away the Eady levy? For all its problems, it represented a source of income. I am glad that Conservative Members have spoken of alternative ways to raise finance. The suggestion of a levy on films shown on television is gaining ground in the House. I hope that the Government will consider it seriously in Committee. It has support from all sides of the House.
The basis of finance for the British film industry should change as the medium itself changes. People have stopped going to the cinema for a variety of reasons—many of them good reasons, such as cinemas tending to be rather uncomfortable. If someone can sit in the comfort of a front room and watch a film, so be it. However, there is no reason why he should contribute nothing to the financing of the British film industry. A levy on films shown on television would be a sensible way forward.
If we are to finance a British film authority, a levy on pre-recorded and blank tapes would be appropriate. They represent one of the fastest growing areas of the communications market. The levy should be made at the point of purchase. It may do something to bring back into the industry all the profits of piracy that tapes have extracted from it. I hope that the Government will think along those lines. We need the restoration of capital allowances and a concentrated application of the business expansion scheme.
The Government are wrong not to regard the film industry as part of the important cultural sector of Britain. As we have seen in other countries, any film has a marked influence on national culture, both in domestic and international terms. The Government fail to recognise the essential difference between the film industry in Britain and the hotel or catering industries. They tend to see all industries in the same way. They miss an important and essential difference.
The Bill is not good news for the film industry. All informed opinion agrees on that. I trust that the next Labour Government will scrap the Bill and give the British film industry the material and cultural recognition that it deserves.
7.56 pm
Mr. Toby Jessel: I have crossed swords with the hon. Member for Newham, North-West (Mr. Banks) so often that—with the exception of his last two or three sentences—it is a pleasure to congratulate him on a thoughtful and constructive speech. I regret his last few sentences, but I shall not dwell on that.
I was interested in the hon. Gentleman's analysis of the distinction between the concepts of entertainment and art form. Whichever category it comes under, the product must be good to keep its public. In that, it is different from most standard manufactured or service products.

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Entertainment and art form must be excellent to survive. Much of what the British film industry produces reaches that high standard.
The British film industry is growing. It has a new confidence and is an important national asset. The hon. Member for Dagenham (Mr. Gould) said that there were now fewer films, but surely quality is better than quantity. Such fine films as "Gandhi", "Star Wars", "Indiana Jones and the Temple of Doom", "1984", "Chariots of Fire", "Gregory's Girl" and— as we heard from my hon. Friend the Member for Salisbury (Mr. Key) who has seen a preview—Amadeus" have been produced in Britain during the past five or 10 years. Those, and many others, are great achievements.
There is a "renaissance" in the British film industry. The improvement in quality has been achieved in the face of an absolutely massive drop in audiences. The tables in annex B to the White Paper are interesting. A number of hon. Members have said that during the past 12 or 15 years the audience figures have dropped from 338 million to 66 million—a drop of 80 per cent. The table, which starts in 1953, shows that in 30 years there has been a drop from 1,300 million to 66 million. That is not, as my hon. Friend the Member for Canterbury (Mr. Crouch) said, merely a massive drop; it is catastrophic.
The prime cause was the switch by the public from cinemas to television which took place mainly during the 1950s and 1960s, but which has gone on since. The "box" almost destroyed the screen. Cinemas everywhere have been closing. In my constituency, the last one to shut was the Odeon, two or three years ago. The previous one to close was the Regal, 20 years ago. Its name is perpetuated in a huge and ugly office block called Regal house, which, as my hon. Friend the Member for Richmond and Barnes (Mr. Hanley) is well aware, houses much of the work of the local authority.
Somebody said that cinemas were closing at the rate of one every week. There are now only 1,300 screens left. Obviously, there are fewer than 1,300 cinemas, because many cinemas now have three or four screens. They are mostly to be found in city centres, although some are in the centres of smaller towns, a long way from the major cities. In the face of such a major change in social habits, it is remarkable that the film industry and the cinema, taken together, still employ about 70,000 people. Their export achievement is about £26 million per year—£100 million more than the figure for imported films. The British do not much understand foreign languages, whereas many foreigners learn English, but the disparity may also owe something to the excellent quality of British films.
Annex A to the White Paper shows that Britain is now producing more films than a year or two years ago, whereas the EC countries are producing fewer films. There has been an enormous drop. Our performance is much better than that of the other EC countries taken together.
The success of our film industry flows from the fact that British films give tremendous pleasure and enjoyment, not only through cinemas, but increasingly through new outlets such as television and video. We hope that in future they will also have an outlet through cable television. Some of the films are made by television companies.
My hon. Friend the Member for Thanet, North (Mr. Gale) said that he used to work for Thames Television. I hope that the hon. Member for Crewe and Nantwich (Mrs. Dunwoody), who has left the Chamber, will not mind if
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I mention that her mother, Baroness Phillips, the Lord Lieutenant of Greater London, recently came to Thames Television studios, in my constituency, to present the Queen's award for export to Thames Television for some films that it had produced That was a great achievement.
My hon. Friend the Member for Canterbury wondered how cinemas could increase their audiences. He compared our cinemas unfavourably with many continental cinemas, where the interiors are maintained to a higher, and perhaps cleaner, standard. That comment has often been true of British cinemas in the past. The smaller ones especially have been regarded as "flea-pits", with low standards of cleanliness and comfort. People no longer tolerate those standards and most of the "flea-pits" have closed. Obviously, it is necessary to have high standards of comfort, cleanliness and convenience.
My hon. Friend the Member for Canterbury and the hon. Member for Newham, North-West mentioned theatres and drew analogies between cinemas and theatres. It is valid to do that. A few years ago there was a report commissioned by the Society of West End Theatre Managers. It instructed a firm of public opinion pollsters to assess the reasons for people choosing to go to one play rather than another, and their motivation for going to the theatre. It found that people were not deterred from going to a particular play because of the cost of the seat, with or without VAT, because, on the whole, they found that the price of a theatre seat, including VAT, was good value; they were deterred by the whole cost of the evening, including a meal in the west end and transport into central London and from there to the theatre, with perhaps the inconvenience of parking and getting to the theatre. I am sure that the same objections apply to visiting cinemas. If going to the cinema could be made easier and pleasanter, the takings of cinemas in the west end of London and in other city centres could be increased considerably, although I do not think that cinemas could ever win back a very large proportion of the audiences lost to television.
If the British film industry has such great achievements to its name and is so successful at standing on its own feet, why does it need increased Government support? It is already improving its performance with smaller support than it received hitherto.
As a country we must build on our strengths; we must concentrate on what we do well. Britain is one of the great arts capitals of the world, in film as in other arts. Films are having a renaissance. They are developing as an art form, they are important to Britain, and we must prime the pump.
A tax of £4·5 million will be removed from cinemagoers with the ending of the Eady levy. Another £3 million a year will be added in subsidy to replace subsidies of £1 million to £1·3 million paid hitherto. That is an improvement in the financial provision for the cinema. It does not go as far as we might like it to go, but we cannot pretend that it is not there, or that it is nothing. It is churlish of the Opposition to disparage it and try to stir up resentment in the film industry. The House should give short shrift to that disparagement and support the Bill.
Hon. Members: Hear, hear.
8.7 pm
Mr. Tom Clarke (Monklands, West): The hon. Member for Twickenham (Mr. Jessel) received very little support from his own side for the views that he has just expressed—
Mr. Jessel: They have just said, "Hear, hear."
Mr. Clarke:—so the hon. Gentleman should be somewhat less churlish in his own views. When I worked in the film industry, it was my practice to edit ruthlessly, and in preparing my speech I have attempted to follow that rule. If there are interruptions, I may be unable to keep my promise to my hon. Friends to be no longer than 10 minutes.
This has been an interesting and wide-ranging debate. I am sure that those who have given a great deal to the British film industry—and will no doubt be following our proceedings—will feel that, almost for the first time in recent years, we have addressed ourselves to the real problems that the British film industry is facing.
My hon. Friend the Member for Stalybridge and Hyde (Mr. Pendry) asked me to say— I am delighted to respond to his request—that when the Monopolies and Mergers Commission expressed its views on the industry, it paid tribute to the Glasgow experiment.
References have been made to the various Ministers who have been involved in the exercise. I shall not be saying much that is flattering about the White Paper or the Bill. With the greatest respect to the Minister of State, I have to note that, in dealing with the film industry, all the Ministers concerned have shown themselves to be accident-prone. I am glad that the Minister has been involved for only six weeks. I can imagine the damage that would have been caused if he had assumed his responsibilities earlier. Mr. Iain Sproat spent some time on this issue and it is clear that his influence on Government thinking was considerable. It is clear also that the people of Aberdeen had a greater affection and affinity for the film industry than Mr. Sproat. The right hon. Member for Mole Valley (Mr. Baker), the Minister for Local Government, made his contribution and his fate was even worse. It is now his task to dismantle local government. He will meet even greater opposition and even less success than his predecessor.
I was granted an Adjournment debate on the film industry before the summer recess and the Minister who had responsibilities for the industry made some comments which, even tonight, are worthy of reflection. The White Paper and the Bill will be damaging to the film industry but the events of the recent past have also been damaging. When the White Paper was published on 19 July, questions were asked by my hon. Friends and myself and the then Minister, the right hon. Member for Mole Valley, suggested that my hon. Friend the Member for Dagenham (Mr. Gould) had relied on leaks for his information. I asked:
"Does he think that Mr. Hassan depended on the same leaks when he resigned from the NFFC, given that most of his predictions proved to be correct?"
However, the Minister observed:
"His predictions did not prove to be correct. Mr. Hassan resigned from the NFFC because he wanted to go into private film production, which is an expression of great confidence on his part."—[Official Report, 19 July 1984; Vol. 64, c. 527.]
If Mr. Hassan were present, I am sure that the last thing that he would say is that he has confidence in the White Paper or in the policies that are being put before the House. I deeply regret the damage which has been inflicted, which was reported in the Daily Telegraph, of all newspapers, on 26 July, a few days after the then Minister with responsibilities for these matters spoke so confidently. Even the Daily Telegraph observed:
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"The Government's film policy unveiled last week will fail to solve any of the problems of the industry, Mr. Mamoun Hassan, managing director of the National Film Finance Corporation predicted.",
It is clear that the British film industry has little confidence in the Bill. The Government should think seriously before they take up the time of the House of Commons in Committee.
The Government's policy will not succeed because they have not considered seriously the industry's real problems. The Eady levy was out of date and we know that not as many people are going to cinemas these days. Audiences began to decline after the war. Film production is having its problems in spite of excellent personnel within the film industry. The Government have failed to identify the industry's real problems, and it is surprising that they took over two years to produce a White Paper of 26 pages—in other words, a page a month. If that is the productivity that we can expect from the Government, it is no wonder that there is so much wrong with British industry and that the Minister has been so preoccupied with other matters.
The Government are going wrong because they seem to be suggesting that monetarism and movie making are one and the same thing. Monetarism and movie making do not match. We have heard properly and rightly from hon. Members on both sides of the House of the success of film industries in other countries. It must be recognised that we are facing serious competition from countries such as America and Australia. It comes also from countries that we would not normally associate with film making. It seems that those who are involved in our film industry are having their hands tied behind their backs by the Government. Given the effect that that will have on the livelihoods of those people, that is almost unforgivable.
It is interesting that the White Paper refers to only two films-"Chariots of Fire" and "Ghandhi". We know that the producers of those films would not approach the British industry in the same way that the Government have chosen. As my hon. Friend the hon. Member for Crewe and Nantwich (Mrs. Dunwoody) said, Sir Richard Attenborough spent 20 years trying to persuade the British film industry that it would be feasible to produce a film on Gandhi.
I am sure that it will be acknowledged on both sides of the House that Scotland has been making a contribution to the film industry recently. I represent a Scottish constituency and I shall say something about Scottish film making experience. Scotland has produced Bill Forsyth, perhaps the most acclaimed new film-making talent in British cinema for many years. His work has been so successful that even the Government might have heard of it, and that represents a considerable achievement. This proves that artistic and cultural successes are compatible and that films that are apparently the most local in setting and subject matter and the closest to their roots are most likely to have world wide appeal. We should base our consideration of the film industry on an examination of films like his and do our utmost to facilitate the emergence of more Bill Forsyths.
The Scottish Film Council is involved in production and training, the promotion of film education the work of the Scottish Film Archive and the development of new patterns of exhibition through regional film theatres and societies. The Scottish Film Council manages to carry out its wide range of work on an annual grant of £338,000. This is excellent value for money but we must ensure that

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the traditional Scottish virtue of thrift is not carried too far. The council will celebrate its 50th anniversary this year and I am sure that both sides of the House will wish to congratulate it on that achievement. I understand that the Lord Provost of Glasgow will do so next week. The council should receive a much enhanced grant to enable it to do even more good work in projecting the image of film making in Scotland.
Many films have been referred to during the debate and we have all paraded our favourites before the House. I liked "The Gold Rush". As I look at the Government Front Bench, consider their policy on films and reflect on the White Paper, I think of the scene which shows a party taking place inside a cabin which is slipping gradually over the edge of a cliff. It seems that the Government's role is to encourage the slippage of the cabin over the edge and not to stop it. That is the direction in which they are moving and consequently they can expect the utmost opposition from Opposition Members.
8.19 pm
Mr. Edward Leigh: I welcome the Bill. The system of redistributing finance around the film industry which is based on the quota system that developed in 1927, the NFFC which developed in 1949, and the Eady system, which developed in 1957—all based on 4 billion viewings when we now have only 66 million viewings—cannot last. I listened with interest to the speech by the hon. Member for Dagenham (Mr. Gould). Although he argued for more public money to help the independent producers, I do not think that he or any other Opposition Member denies that the present system of finance needs reforming.
There has been a large amount of cross-party agreement during this debate. We are agreed on the ends, the cultural and national value of film-making, and the diagnosis. I believe—the hon. Member for Monklands, West (Mr. Clarke) may find this difficult to understand—that, by restoring the discipline of the free market, we can do much for the plight of the independent producers. I do not believe that they are given a fair deal at the moment.
The small producer is not allowed to operate in the free market. Four distortions affect that freedom: first, the subsidy received by overseas films; secondly, the domination of the United Kingdom distributive system by United States studios; thirdly, the duopoly of United Kingdom broadcasting companies—the BBC, ITV and the independent television companies whose fees do not reflect the enormous audiences— and, fourthly, the switch from cinema viewing to home viewing, including the theft of copyright.
How can those distortions be overcome? The Eady system is based on the principle of substantial cinema audiences being taxed, in effect, to help the producer. Clearly, that system cannot continue. We can no longer underwrite a blank cheque for large amounts of public money for new films. I agree that £1·5 million a year is inadequate, but what is the alternative?
I echo what has been said by a number of my hon. Friends, especially my hon. Friend the Member for Hendon, North (Mr. Gorst), although the point had been qualified earlier by my hon. Friend the Member for Wealden (Sir G. Johnson Smith). I am concerned that the White Paper rejected the argument that a levy can be imposed on the BBC and the independent television companies because, according to the White Paper, it
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would involve large increases in licence fees. Is that right? I believe that a number of Conservative Members will be interested to hear the reply of the Minister.
According to the Association of Independent Producers, the impact of a levy on the licence fee would be insignificant. The association says that, even if the entire cost of a levy on the BBC were passed on through the licence fee, the maximum increase required would be only 30p. I am interested in hearing the view of my hon. Friend on that point. The association says that, although there would be a reduction in the price paid to the distributors by the television companies, there would still be a benefit to British films, because they could contribute and receive funds from the levy at the expense of non-United Kingdom films.
The idea of imposing a levy on the television companies meets the point made at length by the hon. Member for Dagenham about the need for support for the independent producer, yet it avoids the difficulty of the Department involving itself in funding what must be a commercial decision. I hope the Government will at least say that they are prepared to look seriously at the AIP's suggestion and that a levy of 2·5p per viewer per film should be paid and then distributed to the makers of British films. ln talking about this matter, we are looking at the future. The Bill contains the mechanism to allow those changes. I welcome the Bill and shall support it in the Lobby.
8.23 pm
Mr. Mark Fisher: Few hon. Members who have spoken in this debate have been as optimistic about the effect of this legislation as the hon. Member for Gainsborough and Horncastle (Mr. Leigh). Even the Minister of State in introducing this Bill did not make the grandiose claims made by the hon. Member for Gainsborough and Horncastle. The Minister must have regretted, by the time he reached the end of his speech, his generosity in giving way so many times. At one stage the Minister had to plead for mercy and say plaintively, "I have been in the job only six weeks. Please forgive me if I do not understand much of what I am talking about."
The truth is that the Minister's brief, far from being an international blockbuster, was low budget. The legislation is in every sense of the word low budget. To be fair to the Minister, the film industry is curious. No Government of either persuasion have come to terms with the dual and curious hybrid nature of this industry. Perhaps that is why, during the past 24 years, there have been as many as six films Bills in an attempt to achieve a financial structure for the film industry. The fact that the industry has reached its present state shows that Governments of both persuasions have failed.
The film industry is curious in that it is a highly commercial, capital-intensive, high-risk, venture capital industry which, as the Minister said, gives great benefits if a person gets it right. Most of the time, however, expert producers get it wrong. The only way in which most producers reckon they can get it right is by going for the softest options and the reassuring entertaining film. Films are also an art form. They are a way of telling stories about the way we live. If the industry is to be taken seriously, those stories should be provocative, challenging and questioning and should seek to change our perceptions of our society. That is not always a fast road to make a lot of money. Those conflicting views on and demands of the industry make it extremely difficult to legislate for.

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If the Government have not come to terms with the film industry, it must be said also that the industry has seldom come to terms with the two conflicting demands on it. Many of the greatest film-makers that this country has produced—such as Grierson, Jennings and Basil Wright—have been unlauded and unacceptable to the industry in terms of finance. If the industry cannot get it right, it is asking an awful lot of a Government to get it right.
I must disagree with some points made by my hon. Friend the Member for Dagenham (Mr. Gould) in his very good speech. I regret to say that I heard only part of it because I had to attend a Select Committee meeting. I understood him to say that he felt that the Government had got the analysis wrong. I believe that the White Paper's analysis of what is wrong with the industry is acute and well researched—it is the prescriptions that are wrong. Paragraph 5·6 of the White Paper states:
"We considered three possible ways of dealing with the present situation:

(i) retain the levy on cinemas only …

(ii) keep the levy concept …

(iii) abolish the levy outright".

That approach to the industry characterises the Government's measures, because they are all mechanical and logistical approaches.
The film industry demands more of the Government than such a mechanical and technical approach. The Government's approach in the White Paper and in this legislation— in so far as the Government have a coherent approach in the Bill—does, to some extent, address the industry's commercial problems. The Government do not, however, even begin to approach the cultural problems that this industry poses. The Government have a duty to recognise that fact. That is what is wrong. The Government's attitude is deficient. In introducing the Bill, the Minister said that he was letting the industry get on with its business, while at another moment he said that he was concerned with the commercial interests.
That is a simplistic definition of the industry's aims. The Minister did not give the House the sense that he comprehended the fact that the film industry is an artistic medium of expression and a way of telling the stories of our culture to ourselves. The Minister and the Bill do not show the Government's vision of the industry. The Minister would say that he wants the industry to be profitable and healthy. I do not know whether that is a fair characteristic, but it is not adequate to the demands that the industry lays on the Government. Those aims may be necessary—I do not deny that— but they are by no means sufficient. It is difficult to come up with a coherent vision of what this industry should be and how the Government should approach it. The idea that we should ever return to the vision of 1·3 billion attendances is nonsense. There is nothing that we can do to go back. We probably cannot even return to the levels of the 1960s. However, in the past few years the United States has shown that growth is possible. If we are to see growth in this country we should go for quality of spectacle and of the serious artistic film. That is probably the only way that we shall keep the 1,300 screens that we have at present, or more than 1,000 screens.
With 1,000 screens, we could still provide a national means of expression and communication and a basis for an international approach by the industry. The
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Government lack vision and any form of coherent belief in what they are seeking, so it is hardly surprising that the Bill has neither character nor personality.
Members on both sides of the House will agree that Eady should go. No one regrets its passing. [Interruption.] There may be one or two hon. Members who do, but I do not wish to take issue with any of my hon. Friends on that. The Bill fatally lacks any guarantees, even in the logistic terms in which it sees the industry. There are no guarantees—the Minister could not give one today—about the National Film and Television School. He has a responsibility towards the broad training of technicians in the industry because the craft and technique demands of the industry are great. If he leaves it to television money exclusively to fund that, inevitably within a few years the school will become an in-house television school, and that will not be in the interests of the country or the industry generally.
The same applies to the NFFC. The specific arrangements for that were spelt out in section 7 of the White Paper. The Minister puts flesh onto the bones of the legislation, but the Bill lacks detail and does not pin down the guarantees that he was suggesting as the way in which his mind was working. In Committee the Bill must be amended to be far more specific if we are to feel confident that the Government can deliver on some of their aspirations, much less their promises.
There is a danger—I hope that the Minister will take this on board and accept it in a decent spirit—that there will be complete commercial control of the NFFC. I am not sure that he said specifically that he would appoint the chief executive; perhaps he will only advise on the appointment. But even if he does appoint him, the chief executive and one board member are inadequate control. To whom would they be accountable? Will they report to him? Will he report to the House on their representation on that board? If most of the money is coming from commercial interests, surely the Minister, a believer in the free market, will allow the industry to manage itself. He should not control the chief executive.
The Bill contains no guarantees of production or quality, and when it came to assets, the Minister had the impertinence—if I may call it such—to ask for the applause of the House when he said that he was giving away public assets. The Government have an appalling record of flogging off national and public assets for less than their real value. British Telecom is an ideal example of money that is given away, but at least the Government are asking something for it. Here, the Minister has asked for credit for completely giving away public national assets to a private company. He must reconsider that. If Rank, Thorn EMI and Channel 4—I believe that they are the participating elements—are to benefit, does the Minister not believe that they should pay something for the residual asset rights of films, or does he believe that they should be given away for nothing? How will he explain to the Chancellor of the Exchequer the fact that he is giving away money so casually and easily?
There are other curious aspects of the Bill. We need not go into them in too much detail at the moment. The Minister leaves the NFDF in a curious, ambivalent position. Once it is cut off from the present form of the NFFC and the development agency, it has only a minor role. I am sure that it will be grateful for the small amount

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of money thrown in its direction but to whom is it to relate and how will it fit into the market-oriented and market-conscious industry that the Minister is considering?
The Minister has given £10 million over five years. He will say that figure is realistic, and he would characterise the Opposition as unrealistic in asking for more public money. However, when it suits their case, the Government are keen to show the realism of the French Administration in what the Government regard as cutting public expenditure. Many Opposition Members and many people in the country who are unemployed would love to have the cut-back levels of public expenditure that the French nation is even now enjoying.
The Government like quoting France, so let us quote France back to them. Even after only six weeks, the Minister should know that the French Government subsidise the industry—it is difficult to calculate exactly—to the tune of approximately £77 million a year. Of that,—55 million goes directly to production, distribution and exhibition, and—22 million goes on training, conservation, festivals and other forms of promotion. The money comes from box office receipts and a television levy and from the Government directly. That aid to the French industry is across the board. That is another aspect of the Bill which is inadequate. It recognises just the production and distribution problems; it does not recognise the wider problems of training, short films, development money, workshop activities, as mentioned by my hon. Friend the Member for Newham, North-West (Mr. Banks), non-professional film-making, or even the Minister's role.
Those matters all conic under the French Minister of Culture, Jacques Lang. He has a fund of his own which supports films of international importance. It supports film-makers such as Bresson, and Orson Welles and Andrej Wajda who are not even French film-makers.
Under clause 4 the Minister will have the important right to invest in production. I hope that he takes the opportunity and enjoys his role as a film producer. Something that even the French do not do, and which I believe we should, is to take a far greater role as a country and Government and build up a new film audience by becoming involved in education. There is a role for commercial film-makers—documentary and feature—in polytechnics, schools and colleges to create an understanding for film and to put it onto the educational curriculum; to create a language of film and understanding of what film is about; and how it can relate to people's lives in the same way as the short story, the novel, the painting or any other medium of expression.
I believe that the Bill tackles a difficult subject, but that the Minister has missed a golden opportunity. It is not too late for him to repent. After only six weeks in the job, I hope that he will have the modesty to accept that he has not learned everything about it and will accept constructive amendments in Committee. We cannot have the film industry that the Opposition believe the country and the people deserve, but in Committee at least we can obtain a much better Bill.
8.37 pm
Mr. Jeremy Hanley: While I welcome the Bill, I welcome all the more my hon. Friend the Under-Secretary's second son, who was born within the last half hour. If the British film industry can be as fruitful as the Minister, we have nothing to worry about.
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Over the past few years we have welcomed "Superman", "Superman II", and "Superman III"— I hasten to add that the analogy falls a little short there—but may I welcome "Rossendale and Darwen III" to the earth today. I am sure that I speak for the whole House when I wish mother and child and, from the Conservative Benches, the Minister well.
My father made 64 British films; my mother made 27 British films; and my sister some 18. My mother and sister would like it to be known that they are available for offers some time after Christmas. I made two films, although I must add that I retired at the peak of my career aged one and a half following "Holiday Camp". I just could not follow that. It was shown again recently on Channel 4. I am grateful that I and my children could see it, but I believe that it is right—I shall mention this later—that levies should be paid for blank tapes because I shall not now have to go to the cinema and I shall not ever again have to pay to see that little gem of the British cinema and the little gem that appears in it.
I was born in Beaconsfield and for the first few years of my life lived in Denham. Those names echo loud and clear around the film world. In my constituency of Richmond and Barnes I am proud to have Twickenham studios. In fact, my hon. Friend the Member for Twickenham (Mr. Jessel) said just before the election that one of his greatest losses due to the boundary changes was not only the film studios but the many people who worked there, many excellent artists.
British cinema has had the most remarkable renaissance. I think that it is fair to say that the films of my parents over many years were low-budget films, but British films of quality, whatever their budget, have been around for years. Only occasionally did they find international acclaim, but the fame that they found was regular enough to give all producers, both independent and tied, some hope. What the British film industry did with small funds, occasionally even with rare colour film, was often second to none. I should like to think that the British film industry has not wasted its funds, as the industry in other countries has wasted much bigger budgets.
The new dawn began with "The Railway Children". With such films, the independent producer heralded the new dawn. Then came "Gregory's Girl" and "Local Hero". I thought that the hon. Member for Monklands, West (Mr. Clarke) did a beautiful job of an audition for Bill Forsyth's next film. He has exactly the right tone of voice and reminded me of half the cast of "Gregory's Girl" and two thirds of the cast of "Local Hero", although he did not remind me of any of the cast of "Chariots of Fire". There was also "Gandhi" which was produced by one of my constituents, Sir Richard Attenborough, although he would wish that I were not his representative. Films of that ilk have without doubt put Britain into the forefront of the industry—not just in our rightful place, but on top of the world, as the recent Oscar awards showed.
Those who saw "Chariots of Fire" in the cinema could not have failed to feel their breasts swell with pride. The cinema was the right medium for seeing that film. I have seen it both in the cinema and on video tape at home. While I admire video, use it and think that the video tape player is one of the greatest inventions of my lifetime, I believe that those who have not seen such a creation as "Chariots of Fire" in the local cinema have missed out terribly. The sound, the effects, the size, the scope of the

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spectacle and the atmosphere are still absolutely unbeatable. What a tragedy it is that the average Briton is turning away from the cinema even today.
Today, I am glad to be able to call on those who enjoy films on television to try the cinema now. Great steps are being made. People are trying hard to design a modern emporium that is more suited to the needs of British entertainment. The cinema is no longer the old flea-pit that we used to have. It is now comfortable and air-conditioned, and even smokers are segregated. But my hon. Friend the Member for South Ribble (Mr. Atkins) will still find comfort in the back row.
To encourage the return to the cinema, I welcome the scrapping of the Eady levy. The hon. Member for Stoke-on-Trent, Central (Mr. Fisher) said that almost everyone in the House would support the scrapping of the Eady levy. I find it difficult to understand why it has been in existence for so long, except that it has provided useful funding for many worthy causes. I shall mention those in a moment.
Since everyone agrees that the Eady levy should be scrapped, why do we have to wait until 12 October 1985? There are powers for the Secretary of State to scrap it earlier. I ask my hon. Friend the Minister to announce that date as soon as possible so that cinema owners can plan for its abolition.
I support a levy on television films. I fully understand the extra cost to the licence that that might bring. Some say that it is just a recycled Eady. I would say that it is an up-to-date Eady because it recognises the way in which films are seen by most people. Eady was relevant and necessary in its day. Now it is not necessary, and it is disadvantageous and destructive to the cinema. I would encourage people to go back. Now that people hire films for £1, £1.50 or £2 a night, as my hon. Friend the Member for Canterbury (Mr. Crouch) said, and if we are to have a levy, which can be justified, the modern Eady should be on blank tape and on cinema films shown on pre-recorded tapes on television. There should be a levy on blank tape not only for sensible funding purposes but because, as my hon. Friend the Minister will know, there should be compensation for what I regard as institutionalised theft of intellectual property— case that I have long supported.
The hon. Member for Crewe and Nantwich (Mrs. Dunwoody) said that the Bill did not give the vast support that she wanted. It is her job to oppose, but she could have been more constructive. The Bill is not the gathering together of film, television, video, audio, radio and everything that she required, with massive central funding. It does not nationalise the entertainment industry. However, it removes some of the last vestiges of state interference without removing state funding. That is the best combination that anyone in the House can wish for.
With regard to the replacement of the NFFC, the contribution of £1·1 million annually for three years from organisations in the film, television and video sectors to partly finance low-budget feature films is excellent, but that is the same amount as the NFFC budget beforehand—
Mr. Fisher: What about the portfolio of rights?
Mr. Hanley: Indeed, the portfolio of rights is being given and it will produce £200,000 a year, but I believe that if one is to give benefit to the film industry, it is not
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right to carp on the fact that it has not been sold for a vast amount to those who own it at the moment, or even to the Government, with their central funding.
It is constructive to give the new company a good start with some of the jewels in the crown of the British film industry. As has been rightly said, the Government will make £1·5 million available per year for the next five years to co-finance films with the new company.
There is also £500,000 a year for five years to continue the work of the national film development fund. That is helping at the earliest stages of creation and is greatly to be desired. I would not have fully supported the death of the Eady levy without the £600,000 a year for the National Film and Television School. The independent television companies, the BBC and the cinemas all benefit from that school. It is truly the cradle of this great industry, of which we are all so proud. The sponsorship of British Film Year is also an excellent and progressive step.
There are also tax changes in the Bill. I support them in the main. The effect of the change in the system of capital allowances is being felt genuinely by those in the film industry, but over the next few years taxation in general will be such that the benefits of lower corporation tax on a regular year-by-year basis will outweigh the immediate disadvantages of the change of system.
One other change that I must mention on behalf of some of my constituents is the change in taxation status of those working in the film industry. It has nothing to do with the Bill, but the Inland Revenue is too harsh in assessing people under schedule E rather than schedule D when they work in the film industry. Many of my constituents have either been driven outside the country or have had to change their job. That has helped to increase the costs of the film industry.
Therefore, on behalf of my constituents, myself and my family, and particularly on behalf of "Rossendale and Darwen III," I welcome the Bill.
8.48 pm
Mr. Chris Smith: This has been a remarkable debate in several ways. Most hon. Members on both sides of the House are agreed that the present financial structure of the British film industry is unsatisfactory. Most of us are also totally committed to the welfare and prosperity of the future of the British film industry. Most of us, again on both sides of the House, have said that we do not think that the Government have got it completely right. I for one will say exactly that. I hope that when we consider the Bill further in its passage through the House, the Government will listen to the genuine points that are being made via hon. Members on both sides of the House about the detailed provisions for the future of what is an extremely important industry for this country.
First, we must recognise the importance of films as an art form. In this country we quite properly believe that it is right to support the creation and performance of the arts. By means of central Government support through the Arts Council we make about £14 million per year available to support the production of opera at Covent Garden. When one compares that with the sums envisaged by the White Paper and the Bill one must ask the Government to pause and consider whether they have got their funding priorities right. As the hon. Member for Canterbury (Mr. Crouch) said, the arts are all of the same family. We must therefore

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consider how the Government and the community should foster and ensure the prosperity of the film industry in the context of policy towards the arts as a whole.
The thrust of the White Paper and the Bill relies very heavily on the commercial sector and on commercial motives. I believe that that is misguided. As my hon. Friend the Member for Newham, North-West (Mr. Banks) said, we must remember that the film industry is a major income producer for this country through the films sold and distributed abroad and the way in which British goods and materials as well as British culture are promoted by the film industry and its products. That is extremely important. It is thus absolutely right that there should be a commitment to sustain and support the future of the industry.
The question then arises as to how that support and sustenance should be provided. With regard to the encouragement of new film-makers, the Government state in the White Paper:
"In keeping with the main thrust of our policy for film we believe that this important work should be firmly based in the private sector and directed towards the development of talent for the commercial market."
The core of the Government's policy is the private sector and the commercial market. I believe that in the White Paper and in the Bill the Government rely too much on that sector and on the good will of its two dominating companies, Rank and EMI.
Like other hon. Members on both sides, I support the abolition of the Eady levy as an inefficient, expensive and not very effective means of raising funds. The tax is at the wrong point of delivery. When cinema audiences throughout the country are dwindling and private video viewing is increasing it is clearly nonsense to maintain a levy on cinemas while there is no levy whatever on video.
I take just two examples of the Government's proposals to replace the levy. On funding for the NFFC, the first problem is that there is no apparent guarantee beyond three years, although the Minister hinted that funding might well continue. The White Paper refers to
"arrangements with certain organisations in the film, television and video sectors".
When the Government refine the legislation before bringing it back to the House they must be far more explicit and give much more substantial guarantees about that funding. Concern has also been expressed about the National Film and Television School. The same problems arise in that context—the dependence on the good will of the commercial sector and the restriction of guarantees to five years. The entirely insufficient funding envisaged for both the NFFC and the NFTS in the White Paper and the Bill is most disappointing.
The hon. Member for Canterbury mentioned Australia. When one compares the Government's proposals with the way in which the Australian Government support, nurture and provide finance for the Australian film industry, the prospect is depressing indeed.
It has been said that the British film industry is undergoing a renaissance. To a certain, very limited extent, that is true, in that a number of extremely good and successful films have been produced in recent years. Looking deeper at the spread of work in the industry, however, there is less cause for hope. We must be concerned about the spread of support for the industry and the way in which new talent is enabled to work. In my constituency brilliant young technicians in film production and in the artistry that goes with it are currently
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unemployed and their talent is going to waste because the commercial film industry has no opportunities for them. That is the problem facing the British film industry. The alternative proposals put forward by many hon. Members— a levy on blank tapes and on films shown on television, amounting to a tiny amount per viewer—could bring enormous amounts of money into the British film industry and bring about a real renaissance, not just a few more star turns such as "Chariots of Fire", "Local Hero", "Gregory's Girl", "Ghandi" or "The Killing Fields", but real breadth of support for the British film industry and British talent.
I strongly echo the comments made about the phasing out of capital allowances through the Finance Act 1984 as a tax incentive to film production. That has imposed a real burden especially on small film producers and it is a major threat to the welfare of the industry.
Very little has been said today, and nothing is said in the White Paper or the Bill beyond a passing reference to the extremely good work of the British Film Institute, about the need to preserve our film archives.
We have a precious heritage of old and original film material, some of which is at serious risk because there are no proper facilities to maintain, catalogue and preserve it. That is something that we should be extremely concerned about. That material is part of our cultural heritage and an aspect of our genius through the ages, and we ought to preserve it.
Similarly, we should cherish the British genius and talent that is now waiting to be tapped and to produce the many films that I am sure that we are capable of producing in future. We should enable that genius to flourish. I do not think that the Bill provides the framework for that quality and quantity of production, and it is sad that that is so. I hope that in the corning months the Government will make enough changes to the Bill to ensure that it provides that framework, and that the British film industry will flourish rather than die
9 pm
Mr. Derek Conway: Many interesting aspects of film have been covered in the debate. Before I was elected to the House I served on the board of a regional cinema. The experience was valuable. I joined the board with serious misgivings about the way in which the film industry and such organisations were financed—
sometimes with the aid of considerable public support. However, my period of service on that trust changed my attitude towards the film industry.
I welcomed the remarks of the hon. Member for Islington, South and Finsbury (Mr. Smith) who made a positive contribution to the debate. He welcomed the abolition of the Eady levy, so perhaps we do not have too far to go. With one or two exceptions, the tenor of the debate has suggested that there is all-party support for the British film industry. What is being debated, therefore, is the best way forward. With that aim in mind, and hearing in mind that the National Film Finance Corporation has been in existence since 1949, I draw the attention of the House to clause 3 and to future financing methods.
The industry has had quite a good run since 1949, with support from successive Governments of all political persuasions. It is uncharitable of hon. Gentlemen to suggest that the Conservative party does not support the film industry. In 1980, after the Government review introduced by my right hon. Friend the Member for

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Chingford (Mr. Tebbit), then Under-Secretary of State for Trade, a further £13 million was devoted to the financing of the corporation. It is interesting that in 1981 and 1982 the Select Committee on Education, Science and Arts urged in its report that the NFFC should be reorganised—although it may not have envisaged a reorganisation such as this. The Committee observed that there was no guarantee, according to the evidence that it had heard, that Eady money returned to the producers of films or was reinvested in film production. One hopes that the new private company will receive—as we are assured it will—money from the film, television and video sectors amounting to £1·1 million per annum over three years in order to finance low-budget feature films. Opposition Members, and some of my hon. Friends, have voiced doubts about the return of £200,000 per annum from past projects. I should be happy to see that as a form of underwritten grant rather than a straightforward contribution to the rights from past years. Perhaps the Government might consider such an arrangement. It would help to ensure that the new private company was taking the right path.
We have been assured that the Government will provide a further £1·5 million a year for five years to co-finance films with the corporation, but there is nothing in the Bill to explain what will happen to the rights from those projects when they return to the Department. Will they go to the Exchequer or be reinvested in the industry?
My hon. Friend the Member for Canterbury (Mr. Crouch) commented dramatically on the income that the British film industry earns for this country. I am sure that he and other hon. Members will recognise that the flexibility which the Bill will ensure will stimulate rather than harm the industry.
Much has been said today about the National Film and Television School. It has been justifiably praised for its international reputation. As we know, it receives £500,000 a year from the Eady levy. I understand that the cinema corporations, the independent television companies and the BBC have undertaken to provide £600,000 a year for the school for the next five years and that the Government will provide £200,000 to update the facilities in the next financial year. I wonder whether the support is sufficient and long-term enough to ensure that the school's justified reputation is enhanced still further.
The possibility of a levy on video tapes has been discussed. The one thing that worries me as a matter of principle is that once such a levy is introduced, similar ones could be introduced on audio tapes. That would have serious effects, especially on the blind. Nevertheless, I accept that pirating is a problem. Although I would not oppose such a step now, it should be taken with a great deal of caution and after much consideration.
As the hon. Member for Newham, North-West (Mr. Banks) said, there is a need for specialist cinemas as they concern cinema as an art form. One of my anxieties about the Government's proposal to abolish the GLC, and especially the metropolitan county councils, is the effect that abolition will have on regional arts councils and, therefore, the support that they provide for specialist cinemas throughout the country.
I hope that the British film industry will not suffer from the snob appeal with which we tend to regard other art forms. That has been the tenor of the debate. It is essential
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that the Government's undertaking to prime the pump continues. The Bill will give the industry greater flexibility. I am sure that it is flexible enough to make maximum use of it.
9.6 pm
Mr. Frank Haynes: I am not surprised at some of what has been said about Ministers not having a close association with the film industry. I do not wish to embarrass them but the Under-Secretary for Trade and Industry and the Minister of State, Department of Trade and Industry both look quite debonair and capable of playing opposite many of our gorgeous ladies in the film industry.
The film industry has declined slowly but surely. I welcome the opportunity being given to Back Benchers to change that in Committee. I have no doubt that they will put Ministers in their places and point them in the right direction. They should be helping our ailing film industry, which has been famous throughout the world for many years. Nevertheless, it has been declining. When we watch television, we cannot help noticing some of the rubbish that we get from the United States of America. There are gaps for British films and actors.
I have a list of some famous British actors who have been encouraged to go to the United States. Right hon. and hon. Members will remember some of their names, especially more elderly hon. Members. I refer to Sir Cedric Hardwicke, Charles Laughton, Gladys Cooper, C. Aubrey Smith and, last but not least, Boris Karloff. They were all famous British actors who were drawn across the Atlantic because we were not sensible. Even now we are losing famous actors to the United States. The Government should provide greater encouragement for them to stay.
We have premiers of famous films and usually a Minister attends. His chest stands out for a yard with pride for British films. I want to see that at the Dispatch Box, especially from the Chancellor of the Exchequer. I have seen his chest puffed out, but I should like to see pride in the House for British films.
The United Kingdom has marvellous acting talent and the Government should encourage it. They should provide proper facilities for British films to be made, and for British people to see them, whether in the cinema or on television. We should build more cinemas and encourage people to see films there. We have the facilities, and the Government should find the money to finance the job.
9.10 pm
Mr. Norman Buchan: I am pleased that I returned to the Chamber in time to hear the speech of my hon. Friend the Member for Ashfield (Mr. Haynes). The Government take credit for everything that British people do and refuse resources for them to do more. My hon. Friend is absolutely right, even if he goes back further in time than I do.
I follow the hon. Member for Richmond and Barnes (Mr. Hanley), who was first to congratulate the Under-Secretary of State for Trade and Industry on another useful production. The Minister represents Rossendale and Darwen and he is now doing his bit to secure the survival of the species. I, too, congratulate him. I have seen no greater sign of nobility than the Minister sitting doggedly throughout the debate. Whether his wife will approve of that as highly as we do is another matter.

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The debate has been marked by one singular fact. It was expressed by the hon. Member for Hendon, North (Mr. Gorst), who said that it could have been an all-party debate with all hon. Members on one side except for the Government Front Bench. Without exception hon. Members have said that the White Paper is insufficient and will not work. The hon. Gentleman also said that it was strong on analysis but weak on prescriptions.
Both Opposition and Tory Members have spelt out regrets at the Government's failure to grasp opportunities. My hon. Friend the Member for Stalybridge and Hyde (Mr. Pendry) said that the Government praise but do not listen, and my hon. Friend the Member for St. Helens, South (Mr. Bermingham) said that the Government had got it wrong. Those are echoes of what is being said by the industry. The main producers' association states:
"The Association was extremely disappointed with the direction of the White Paper, in that it failed completely to provide some form of financial incentive to offset the loss of Capital Allowances."
Conservative Members echoed that view. The memorandum continues:
"The Association was deeply shocked by the 1984 budget proposals for the abolition of Capital Allowances in the face of pledges made for their continuation by the same Government in 1983."
It will be a long time before the Government are forgiven for breaking that pledge.
The association further states:
"The White Paper suggests that home video, cable and DBS will provide a number of exciting new market opportunities for the future. It is our view that the developments are likely to be considerably delayed … The development of cable and Direct Broadcast by Satellite is now highly questionable."
The Association of Independent Producers echoes that even more strongly. It states:
"The White Paper and the Films Bill indicate that the Government intends to give financial assistance which will not exceed £1·5 million. We feel very strongly that the organisation should be given sufficient funding to enable it to produce between ten and twelve feature films per year, and six short films … the cost of one low budget film in 1984 is £1·5 million."
The Association of Independent Producers talks devastatingly about the White Paper, which states:
"Production levels are being sustained."
The association says:
"The paper notes an increase in production of seven films … to a total of 34."
In 1982, Germany produced 70 films, and France produced 131. The White Paper states:
"Domestically … the cinema checked its previously steady downward trend."
The association states:
"Yet, admissions dropped a further 30 to 35 per cent. in the first part of 1984."
The White Paper claims:
"In the all-important North American market there was a much greater acceptance of British films."
The association states:
"Two Oscar-winning films do not demonstrate a significantly higher penetration of the United States market."
The ACTT echoes the criticism. With regard to feature films, the union states:
"The industry in the United Kingdom is clearly dependent, at this time, on the flow of American investment to generate employment and income."
The union says that the Government have failed to understand that the Hollywood style of feature, where our only input is one of technical expertise, is different. We have heard much about that expertise today, but it does not produce one low-budget or middle-budget film, which is what we need.
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The union states:
"But it is this type of production, which expresses social and cultural concerns genuinely indigenous to British society, and budgeted way below the level of Hollywood fantasies, that we believe can be richly assisted by Government-aided investment. Without that assistance this sector will be unable to develop systematically, creatively, and in defiance of the American hold on the world market."
We are facing a double problem—the sell-out of the funding to the two major firms and the problems with broadcasting, television and pirate videos.
To answer those critic isms we have what, by any standards, is a fairly shabby document. It is disappointing because it does not share the producers' and the union's anxiety about the future, and they are outraged by the Government's failure to take the opportunity that we have here.
There are three reasons for the Government's failure. First, they do not understand the impact of the new technologies, such as cable and DBS, and the feedback from those technologies to films. The hon. Member for Canterbury (Mr. Crouch) understood that, but: the Government have not. The British film industry now has inadequate funding to compete with the money that will flow in from abroad.
Secondly, the Government have failed to see beyond their blinkered devotion to private enterprise and private profit. They are replacing the levy with a private structure that is based upon the two main elements of the industry. Since the Government cannot see beyond private enterprise, they have decided to subsidise it. They will not subsidise the public sector, but they will subsidise EMI and Rank to control the financing of the industry.
Thirdly, the Government have no imagination. They do not perceive film as anything but a commercial commodity—an object to be produced, bought and sold. They do not understand the importance of film to our cultural life.
Those failures of imagination and understanding led to the inadequate White Paper. The proposed system will fail because the funding is insufficient and because there will be no control over the new body. The Government have proposed nothing new to create funding or a different structure for the industry.
Among the many Back Bench suggestions was the possibility of levies on blank tapes or film cassettes. I am tempted towards that for two reasons. The first is that no one doubts that the kind of piracy that is now taking place means that the film producers are not getting an adequate return for their work, from which they could obtain the seedcorn for the future. Secondly, I am concerned about copyright.
The introduction of something like video has a number of implications. The blockbusters will make their money in the commercial cinema, but copyright is vital for small or medium-sized budget films. I do not discard the concept of additional funding through a tiny levy on blank tapes or the possibility of a slightly bigger levy on film cassettes which, after all, are sold for commercial purposes. Such a move would at least help in the fight against copyright piracy, which has gone on since the times of Shakespeare. It could also be argued that it is necessary, given our present economic needs. However, none of that is a substitute for proper public subsidy of this industry.
Conservative Members. particularly those on the Government Benches, have suggested that a useful opportunity is in front of us. They argue that, as we share the same language as the United States, there is a huge

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market to be penetrated by our industry. My hon. Friend the Member for Dagenham (Mr. Gould) and I remember hearing the same argument about the Common Market. We were told, "Here is a consumer market of 200 million people into which we can flood our goods." But the opposite happened, and their goods flooded into the United Kingdom with the result that we now have the largest deficit in trade in manufacturing goods in our history.—[HON. MEMBERS: "Whose fault was that?"] The Conservative party has been in government for six years, and Conservative Members ask that. They have destroyed British industry around their ears, and they ask whose fault it is. They are now trying to do the same to the British film industry. I do not want to spend too much time on such idiotic remarks, but if we look at what happened two years before, when we joined the Common Market in 1972, the answer is evident.
If the opposite is true in relation to that, it is even truer in relation to an organisation whose mainspring of production is the American Hollywood film. That is why we have reason to be anxious.
I am also perplexed by the curious way in which Conservative Members have tried to separate the artistic from the commercial. They make a curious distinction between films as commercial products and films as art. I do not understand what gives rise to that point of view. Was Chaplin or Buster Keaton commercial or artistic? In my view they were commercial, good film and culturally valuable. Is "Gregory's Girl" commercial or art? It is both. I cannot for the life of me understand why we should seek to make such a distinction in defence of a shoddy commercially based White Paper.
If there is no difference between the commercial and the artistic, there is a difference between film for television and film for cinema. There is a major difference between the product for the cinema and the product for the small screen in the home. The comparison in painting is between the big public statement—the religious paintings in the churches or the statues in the square— and the easel painting for the home. That distinction has not always been fully seized upon by our producers. If we neglect the cinema and allow films to die away, a major part of our culture will disappear. That is why it is important to get this right.
One sees the same in the social response involved. I remember a marvellous 10-second shot of Chaplin going into a hotel, tramp's costume and all, and as he put his elbow on the reception desk, his left foot came up and started circling, feeling for the customary brass rail to rest his foot on. The audience responded because that demanded a community response. It would not get the same kind of response in the home. Therefore, we must pay attention to this distinction.
My hon. Friend the Member for Newham, North-West (Mr. Banks) took up the point of my hon. Friend the Member for Dagenham that we are seeing a kind of colonisation— a commercial and cultural surrender to the United States. We are not facing a free market. We are surrendering to an extent to the mercies and good will of EMI and Rank in order to survive. The market will be taken over by the Americans because it is already half rigged in their interests. Only if we understand that shall we be able to combat the problem.
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In Committee—we give fair warning now—we shall need to probe deeply the nature of the strange beast that the Government are creating to replace the present funding of our films—that rough beast, composed of EMI and Rank, slouching towards the bank to be reborn. The concept is wrong, first, because it removes public involvement—public support, subsidy and return—and hands it over to an organisation whose operations must be determined fundamentally by its own interests. It is not only that it is insufficient, but it is doing the wrong thing. Middle and low-budget films and the independent producer will be squeezed out. We shall probe that deeply and do all that we can to reverse it in Committee.
We must also discover in Committee what kind of locus there is for the educational aspects. There has been some argument as to what will happen to the film school. I should like to know what the Minister has in mind. Will it be an education department responsibility or the same kind of structure as now? Funding is available and the kind of funding that my hon. Friend the Member for Crewe and Nantwich (Mrs. Dunwoody) suggested, should be forthcoming, both to develop and to fund the film school.
Films are more than commercial projects. The White Paper neither answers nor begins to answer some of the problems that arise when we consider the future of our films. The funding of the arts in Britain is a disgrace. It is the lowest in the western world. Mr. Deputy Speaker was tempted to intervene when the hon. Member for Canterbury spent some time talking about the theatre and the Theatres Trust. But he was correct. Just as the intense work that was done in his field by the Select Committee on Education, Science and Arts, which reported two years ago, has been largely ignored by the Government, so too its recommendations in relation to film have been ignored and ignored for the same reasons. This is a penny-pinching, mean-minded and ultimately completely philistine Government. I absolve some Back Benchers, but the Government, with their monetarist theories, are the most philistine Government that we have seen for a long time. Until they understand that film is more than a commercial project and more than a commodity to be bought and sold, they will not get it right. They cannot even get it right for national reasons. I shall give a historic example to illustrate the importance of film. After the war, the Italian film industry developed with films such as "Rome— Open City" and "Bicycle Thieves". Hon. Members will remember that the importance of the great Italian directors of that period, such as Rossellini, da Sica and later Visconti lay in helping to liberate Italy from the ignominy of Fascism. In the eyes of the world it was largely the Italian film industry that helped to slough off the ignominy of Fascism and helped Italy to emerge with dignity into the world. Those of us who lived through that period recall that vividly.
Therefore, film even more than domestic television is a vital instrument for our people and the nation. Just as it served a purpose in Italy after the war, it can serve another purpose for us. The British Council may fall victim to the cuts instituted by the Foreign Secretary, by the grace of the Chancellor of the Exchequer. I hope that the same thing will not happen to our film industry. It would seem that the Government just do not understand. As my hon. Friend the Member for Ashfield said, the Government praise the films but refuse to provide the resources that will enable other films to repeat their success.

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What shall we do when in their place? I shall take up some of the suggestions of Conservative Members and the Select Committee. One problem is that we have neglected to place the arts and the film industry in their rightful place in the nation's thinking. For the first time, there is this year a Minister for the Arts in the Cabinet. However, it has been made clear to the world—God knows why—that he has been included in the Cabinet not for that, but for other reasons. We should have a single Ministry for the arts that encompasses not only music and the theatre but also films. We should recognise the importance of film not only in our commercial but in our cultural life. In addition, a British film authority should take over the main job of guiding, advising, funding and educating for a proper film industry.
British films have played a notable part in presenting an image of Britain to the world at large. But they are now being starved of the resources that they need to do that job properly. Nevertheless, independent producers and directors such as Bill Forsyth have produced films such as "Gregory's Girl" and, more recently, "Comfort and Joy", and there have also been bigger scale films, such as those directed by Attenborough. Hon. Members should bear in mind the response that one finds in the cinema to a film such as "Gregory's Girl". It is quite different from the community response that that sort of film meets with when it is shown on the small screen. One of the most important features of "Gandhi" was the sense of spaciousness within India. Those aspects cannot be repeated on television. The fight is on not merely to provide a cheap and subsidiary product for television, but to save the film industry both for our cinema and for what it can do for this country's image abroad.
9.33 pm
The Parliamentary Under-Secretary for Trade and Industry (Mr. David Trippier): I thank my hon. Friend the Member for Richmond and Barnes (Mr. Hanley) and the hon. Member for Paisley, South (Mr. Buchan) for the kind things that they said about the recent arrival in the Trippier family. For as long as I have been privileged to be the Minister with special responsibilities for small firms, I have been saying that small is beautiful, but tonight that phrase has taken on a whole new meaning in the form, I understand, of a boy weighing 6 lb 11 oz who is to be called Edward David. I know that it is your privilege, Mr. Speaker, to name people, but I hope that you will be kind enough to allow me to get away with having done so. [HON. MEMBERS: "Hear, hear".]
I have listened with interest to the debate, but what has struck me most forcibly is not so much the support that our policy has received as the wholly negative approach of much of the opposition. The sort of tone adopted when many of the points were made suggested that we had a patient who was seriously ill and fading fast, and that all that would save him was a blood transfusion—regardless of the identity of the donor. Nothing could be further from the truth.
Turnover in feature film production in Britain is the highest for years. Alan Sapper, the General Secretary of ACTT, made it clear when he met my right hon. Friend the Member for Mole Valley (Mr. Baker), now the Minister for Local Government, that more of his freelance film members were in work than for many years.
Leading members of the industry know that production in all areas is stronger than ever before. They know that we have more new talent than ever before and more quality
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films than ever before. Yet Opposition Members persist in the pretence that the industry is some kind of lame duck. That is patently untrue.
Everyone says that the film industry is special, and in many ways they are right. Film production has no settled industrial structure like other industries—a point made by my hon. Friend the Member for Hendon, North (Mr. Gorst) and the hon. Member for Easington (Mr. Dorniand) and touched upon by the hon. Member for Stoke-on-Trent, Central (Mr. Fisher).
My hon. Friend the Member for Salisbury (Mr. Key) was right to say that cinemas are declining fast. However, new technology is allowing the strong underlying consumer demand for films to show itself in new ways. In many ways, the film industry is a microcosm of British industry generally in the nature of its problems. My hon. Friend the Member for Gravesham (Mr. Brinton) touched on that point in his excellent speech. There is an urgent need for Government to stop fiddling around with parts of it through endless regulations which not only waste everyone's time but remove vital degrees of freedom from both the industry and the consumer in certain key areas.
In replying to the debate and a number of the points raised, I wish to concentrate on two areas—cinemas and production. I agree with the comments of my hon. Friend the Member for Thanet, North (Mr. Gale) about the need to remove the Eady levy from cinemas. It has been an unreasonable and unjustifiable piece of discrimination. It is imperative that it is removed, but I wish to make it quite clear exactly why we are doing so. It is most definitely not a question of legislating to support the ailing cinema. In the consumer demand for films, the film industry faces strong competition from newer technological means. Television shows an enormous number of films—a trend that began in the 1960s. It has now reached the point where in 1983 BBC1 and BBC2 showed 786 films., the ITV companies about 350 films and Channel 4 about the same number. They were all pre-existing films to winch they had acquired the TV rights and not films that they had either made themselves or commissioned from outside.
The thing that especially distresses cinemas about TV competition is that there is no direct market relationship between the consumers and the films that they see. The TV licence is, of course, paid by the consumer, and TV advertising obviously comes through in the prices of the goods and services advertised. However, it is not like the cinemas, where the patron makes his choice of film and pays his money to see it.
Video also provides strong direct competition for the consumer's money. Here again, the market relationship is not completely clear cut. Video recorders are used to timeshift TV programmes and, like TV itself, the consumer tends to regard them as an overhead.
Even the tape hire transactions have had distortions in the high level of piracy. However, thanks to private Members' legislation—fully supported by the Government—the means have been made available for rights owners to seek effective redress. That has cut piracy dramatically. However, there are signs of a levelling off of growth in video recorder ownership. With the past fragmentation of ownership rights, the industry has squandered 30 years of film in three years. Also, as the video market matures, there are signs of a diminution in the viewing of pre-recorded material as the length of

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ownership of a VCR grows. Signs of contraction are there, and it may be that that element of competition with the cinema will become less intense.
It is probably reasonable to assume that there are 4 billion individual film viewings via TV, where it is, in terms of marginal cost, free. For VCR owners, three prerecorded items, mostly films, in two weeks is a reasonable estimate. In audience terms, those are now well ahead of cinema, but in the fight for the consumer, cinemas are tied by the levy. We are removing it to allow cinemas to compete more effectively for their place in the consumer's priorities. Whether they do or not is up to them.
The various outlets for film represent a series of separate market windows. There are clearly interrelationships, the most important of which is that cinemas are the showcases. A successful cinema release is a major factor in determining the prices paid by other market outlets and, indeed, the timing of the release of a film in those media. Not only are we standing back from interference with the cinema sector; we are indirectly giving producers additional freedom in determing the exploitation pattern that will let them maximise their earnings from their films.
I listened carefully to the hon. Member for Easington, who made a valid point in regard to the other aspect of the cinema that I regard as being of high importance. Cinemas provide a social and leisure activity, particularly in city centres and deprived urban areas. It is essential that those cinemas, all of which are private sector operations, should have the financial burden of the levy removed so that they can continue to contribute to a balanced development in inner urban areas.
The hon. Member for Easington also referred to clause 4(3), which gives the Secretary of State powers to engage an outside person to make recommendations and discharge his functions in regard to the development finance scheme only. I think the hon. Gentleman will find his point answered there.
Mr. Tony Banks: Will the Minister give way?
Mr. Trippier: With great respect to the hon. Gentleman, I have so many points to make that I must press on with my speech.
The film industry's links with the educational system are very interesting. One particular area of promotion is films relating to set books in the educational curriculum. Wherever possible, cinemas try to offer reduced prices to children. Extra freedom there will be very welcome.
Cinema is also the reason why people such as David Puttnam make their films in the way they do. I was very impressed with a report that I read of his comments at the launch of British Film Year, when his new film, "Killing Fields" was shown. He said:
"I loathe seeing films on television. I loathe seeing films on video cassettes. For me there is a wholly diminished image. There's absolutely no point (for TV and video) in Roland Joffe and all the rest of the people I've worked with over the past four years killing ourselves to get the sound perfect and the image perfect. Why on earth did Chris Menges ever bother to take his light meter out? There's no point because basically the image you see on television is vastly diminished. It's a terrible way of seeing a film and I'm not prepared and neither are my colleagues to see cinema vanish in this country without a hell of a fight."
That was, as I mentioned earlier, at the launch of British Film Year. It is another excellent example of a diverse industry that is determined to get people back to the
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cinemas to promote the United Kingdom as a film-making country and sell more films abroad. But in the United Kingdom it will seek to do more than that. It will seek to promote greater awareness of the present place and future potential of film in industry and education.
It is an exciting initiative and the Government fully support the objectives as well as the strong and determined self-help theme implicit in the initiative. The Government have agreed to provide £250,000 to support that activity. Particularly impressive is the way that all parts of a highly individualistic industry are working together in a common cause.
I turn to the arguments that have been advanced on the problems raised by the removal of the Eady levy by the hon. Members for Stalybridge and Hyde (Mr. Pendry) and St. Helens, South (Mr. Bermingham). I shall refer to the Government's decision not to extend Eady-style levies to other exhibitors' media. I find the analysis in the White Paper on this issue perfectly clear and the conclusions completely logical. I am at something of a loss to understand the justification for the "levy everything" school of thought. Most of the consequences of Eady abolition have already been dealt with by my hon. Friend the Minister of State but there is the issue of the "loss" that will be suffered by producers, who were the principal intended beneficiaries of the levy when it was first introduced. The final figure for this year's Eady levy payments into the British films fund was £3·8 million. I remind the House that the levy year ends in October.
With the prior charges, the £1·5 million to the National Film Finance Corporation and the payments to the National Film and Television School and the British Film Institute production board, payments to or on behalf of producers will be about £1·6 million. It is virtually impossible to estimate what the current levy year will bring in. However, if the payments fall off in reasonable proportion to the decline in cinema audiences, which is running at a fairly consistent 25 per cent. down on last year, the payment to producers will be a good deal less, especially when the additional payment to the British Films Institute is allowed for.
Let us take a generous view of the loss of expectations of producers and take the £1·6 million in payments that is likely for this year. The first thing to realise is the significance of "on behalf of'. Most of the Eady payments are assigned by producers to distributors. The figure varies from year to year but it averages out at between half and two thirds being assigned in this way. Again, taking the most favourable assumption for producers, their loss from Eady abolition is about £600,000. We have already made it clear that the Government are putting back into production nearly twice that sum via the new company. The "loss-to-producers argument" is clearly unjustifiable as an argument in favour of levy extension.
One of the arguments for extending the levy is that television is somehow unfair to film-makers. It appears that the independent side is reasonably well endowed with money. There seem to be two slight variants of the argument. The first is that television has a general duty to the film industry and should pay it more than it pays for the purchase of film rights. The second variant seeks to introduce a degree of sophistication into the proceedings by expressing the argument in competition policy terms. The argument goes that the BBC and ITV are a duopoly and conspire together to pay trivial prices for television rights to films. The facts do not bear out that assertion.

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It is generally known that a film should have three years to establish its full potential before it goes on to the small screen. I doubt whether there are more than about 120 new films in the English language, pre-promoted in the cinema, that are suitable and newly available in the most recent 12 month period. The rights owners are enormously skilled at packaging films in groups, rather like auction lots. There will be one highly desirable film offered with some which are mediocre and few which cannnot be got rid of in any other way. There are slight differences in the list of large films that ITV wants from the ones that the BBC wants but it is a question of strong competition for scarce goods forcing the price up and definitely not the reverse.
For the BBC, an extra payment in favour of the rights owner would be in effect an addition to the licence fee. That would be a problem for my right hon. and learned Friend the Home Secretary. I regard the proposition as utterly unreasonable. Among the leviers, the Association of Independent Producers has sought levies on various items to raise about £35 million for the independent maker. I have good news for it. There is a levy on ITV companies and £45 million now goes straight to that area of independent programme making. The mechanism is, of course, Channel 4.
The last major area to be cast in the role of sacrificial lamb is the video industry. Again, I suspect that the choice has much to do with the growth image the industry presents. In its early days it was unquestionably disorderly. Major video rights were held in a fragmented way and there was no clear "best" solution to the right retail mechanism. The question was, should it be sale or hire? Piracy was rampant in the chaos. Maturity has, however, come quickly to this industry and, as is so often the way, the highly enterpreneurial small firms in the sector can give a lead where one might have expected longer established companies to set the tone.
With the dramatic reduction of piracy, for the reasons I have already mentioned, a more settled pattern to rights ownership and the dominance of renting now clearly allowed for, there is simply no justification for saying that any producer suffers an economic loss in this sector either because it is disorderly or because he suffers as a result of someone else's dominant market position. Those would be the only arguments for an Eady-style levy on video tape, and it would, of course, have to be on pre-recorded tape. The Government have made it plain, and I repeat it now, that this argument does not stand up.
The argument then turns to blank tape, and I can assure the House, particularly my hon. Friend the Member for Salisbury (Mr. Key) that the Government will open the question of a levy on blank tape for copyright purposes to a further process of consultation. This levy should be the subject of further consultations because it would be a levy on copyright grounds only—to protect copyright owners. It would not be to recycle funds from one part of the industry to another—a process that the Government regard as wholly inappropriate.
Considerable dissatisfaction has been expressed here and elsewhere about the tax regime for films. The hon. Members for Dagenham (Mr. Gould) and for Cambridgeshire, North-East (Mr. Freud) have made that point. While this is, of course, a matter for my right hon. Friend the Chancellor of the Exchequer, who made the Government's new corporate tax strategy completely clear in his Budget statement, it seems that I will have to reiterate the point. Although there has been extensive
106
debate about the implications for films, it might be useful if I remind the House of the regime that we have now and just how we arrived at it.
The main rate of corporation tax is being reduced from 52 per cent. to 35 per cent. by the financial year 1986. The small company rate has been reduced to 30 per cent. already. To help business further, the national insurance surcharge has been abolished. We maintain that lower tax rates will encourage enterprise and risk-taking and will reward success and profitability. Just as important, the distorting effect of excessive tax subsidies will be removed, so that investment decisions will be influenced more by the commercial judgment of managers and less by the characteristics of the tax system. In particular, businesses will no longer be drawn into investment by distortions in the tax system, which have led to the multitude of avoidance devices of one sort and another. That point was correctly made by my hon. Friend the Member for Wealden (Sir G. Johnson-Smith). These changes apply to the film industry as much as to others, but the film industry has pointed out special aspects of its business which it believes deserve special treatment.
There are three main principles underlying our approach. First, we recognise the contribution to the economy and to employment that a prosperous and innovative film industry can make. We have shown that we are good at making films. Secondly, the taxation of the film industry has to be properly integrated into our overall tax policy. All industries can claim to be special in some way. Thirdly, we are firmly opposed to the use of films for artificial tax avoidance purposes by people who have little or no interest in films or film making.
The Government have recognised, however, on the basis of detailed discussions with the industry, the special nature of the film industry. We have introduced four special measures to help. First, the entitlement of films to capital allowances—which was due to run out in 1987—has been made permanent for British films, but the rates of capital allowance are to be those applicable to machinery and plant generally.
Secondly, the film industry will have the option of choosing to take the capital allowances—at the going rate—or to be taxed on an alternative basis which allows expenditure to be written off on revenue account, broadly in line with the income accruing to the film.
Thirdly, the industry is to have a further option, which is to graft a system known as "cost recovery" on to the write-off basis I have just described. In effect, that will mean that expenditure on a film can be written off even more quickly in certain circumstances. I want to make it clear that that option is available to no other industry. It goes as far as we reasonably can. To go any further would effectively reintroduce the distorting effect of investment subsidies, and it would also reintroduce the distorting effects of the tax treatment to which I referred earlier and which was the basis of crude tax manipulation.
That brings me to the fourth special provision for the film industry, which is the one that I regard as of key importance. It is the extension of the business expansion scheme to the film industry. It was clearly misunderstood by the hon. Member for Crewe and Nantwich (Mrs. Dunwoody).
The House will be familiar with the provisions of the scheme, whose aim is to encourage the creation of new firms and the expansion of existing small firms. Those companies are vitally important as a source of new jobs

107
and prosperity, as the recent CBI Gallup survey shows. The aim is also, of course, to encourage investment in activities which may be high-risk and which might play a valuable part in creating prosperity tomorrow. We provide, through the business expansion scheme, a generous level of relief which to some extent matches the risks.
The business expansion scheme is now in its second year. The evidence is that it has already been a success. The picture that is emerging for the first year—1983–84—is that the scheme has attracted a great deal of money, and that most of it has gone into new businesses. That is particularly relevant to the film industry. It is plain that the scheme is directly applicable to films. The scheme is designed to mobilise a new source of financing—equity investment by individuals—for start-up companies and small established companies wishing to expand. As I have said, the idea is to provide growth of real activity including jobs.
Film production, as has been said by a number of hon. Members, is an extremely risky business. It also involves real economic activity at every stage from production through to shooting and editing and arriving at the original master negative disc or tape. The risks can be particularly high and raising finance can be hard for the small independent film producer, especially one who has yet to make his name.
The film industry lobbied for inclusion in the scheme and we accepted that. Film production companies are indeed involved in the sort of active and high-risk business which the scheme is designed to help. I should like the Oliver Twists among Opposition Members and in the industry to bear in mind the following facts. There is strong Government support for film as art from my right hon. Friend the Minister for the Arts of about £7·5 million. The Government commission about £4·5 million of "shorts" a year. There is already a £45 million levy on ITV paid direct to independent producers through Channel 4. All that added to the new support already announced amounts to some £57 million of support, which is well in excess of what the most demanding lobbies have asked for, and well in excess of the £35 million that is referred to as the money that France gives to its film industry.
All that is important. It is a fantastic sum of money. The industry is strong and diverse. There is a clear choice. We have a commercial film industry. We can have it debilitated by subsidy, or we can have an industry which is dynamic and diverse. I know which I would rather see, and Government policy, by removing bias from the business framework and by getting rid of three quangos, eight Acts and 25 statutory instruments, will achieve that success.
Question put, That the Bill be now read a Second time:—
The House divided: Ayes 216, Noes 106.

Division No. 11]

[10 pm

AYES

Alexander, Richard

Baker, Nicholas (N Dorset)

Amess, David

Beaumont-Dark, Anthony

Arnold, Tom

Bellingham, Henry

Ashby, David

Benyon, William

Atkins, Robert (South Ribble)

Best, Keith

Atkinson, David (B'm'th E)

Bevan, David Gilroy

Baker, Rt Hon K. (Mole Vall'y)

Biffen, Rt Hon John

108

Biggs-Davison, Sir John

Harris, David

Blackburn, John

Harvey, Robert

Blaker, Rt Hon Sir Peter

Haselhurst, Alan

Boscawen, Hon Robert

Hawkins, Sir Paul (SW N'folk)

Bottomley, Peter

Hawksley, Warren

Bottomley, Mrs Virginia

Hayes, J.

Bowden, Gerald (Dulwich)

Hayward, Robert

Braine, Sir Bernard

Heathcoat-Amory, David

Brandon-Bravo, Martin

Heddle, John

Bright, Graham

Henderson, Barry

Brinton, Tim

Hickmet, Richard

Brooke, Hon Peter

Higgins, Rt Hon Terence L.

Brown, M. (Brigg & Cl'thpes)

Hind, Kenneth

Browne, John

Hirst, Michael

Bruinvels, Peter

Hogg, Hon Douglas (Gr'th'm)

Bryan, Sir Paul

Holland, Sir Philip (Gedling)

Buchanan-Smith, Rt Hon A.

Hooson, Tom

Buck, Sir Antony

Howard, Michael

Budgen, Nick

Howarth, Alan (Stratf'd-on-A)

Bulmer, Esmond

Howe, Rt Hon Sir Geoffrey

Burt, Alistair

Hubbard-Miles, Peter

Butler, Hon Adam

Hunt, David (Wirral)

Butterfill, John

Hunt, John (Ravensbourne)

Carlisle, John (N Luton)

Hunter, Andrew

Carlisle, Kenneth (Lincoln)

Hurd, Rt Hon Douglas

Carlisle, Rt Hon M. (Wton S)

Jackson, Robert

Carttiss, Michael

Jessel, Toby

Cash, William

Johnson Smith, Sir Geoffrey

Chapman, Sydney

Jones, Gwilym (Cardiff N)

Chope, Christopher

Jones, Robert (W Herts)

Clark, Dr Michael (Rochford)

Jopling, Rt Hon Michael

Clarke, Rt Hon K. (Rushcliffe)

Kellett-Bowman, Mrs Elaine

Clegg, Sir Walter

Kershaw, Sir Anthony

Cockeram, Eric

Key, Robert

Colvin, Michael

King, Roger (B'ham N'field)

Conway, Derek

King, Rt Hon Tom

Coombs, Simon

Knight, Gregory (Derby N)

Cope, John

Knight, Mrs Jill (Edgbaston)

Couchman, James

Knowles, Michael

Cranborne, Viscount

Lamont, Norman

Crouch, David

Latham, Michael

Currie, Mrs Edwina

Lawler, Geoffrey

Dorrell, Stephen

Lawrence, Ivan

Douglas-Hamilton, Lord J.

Lawson, Rt Hon Nigel

Dunn, Robert

Leigh, Edward (Gainsbor'gh)

Durant, Tony

Lennox-Boyd, Hon Mark

Emery, Sir Peter

Lester, Jim

Eyre, Sir Reginald

Lewis, Sir Kenneth (Stamf'd)

Fallon, Michael

Lightbown, David

Favell, Anthony

Li 1 ley, Peter

Fenner, Mrs Peggy

Lloyd, Peter, (Fareham)

Finsberg, Sir Geoffrey

Lord, Michael

Fletcher, Alexander

Lyell, Nicholas

Fookes, Miss Janet

McCrindle, Robert

Forman, Nigel

McCurley, Mrs Anna

Forsyth, Michael (Stirling)

Macfarlane, Neil

Forth, Eric

MacKay, Andrew (Berkshire)

Fox, Marcus

MacKay, John (Argyll & Bute)

Franks, Cecil

Maclean, David John

Fraser, Peter (Angus East)

McQuarrie, Albert

Freeman, Roger

Major, John

Gale, Roger

Malins, Humfrey

Galley, Roy

Malone, Gerald

Gardiner, George (Reigate)

Marlow, Antony

Gardner, Sir Edward (Fylde)

Mates, Michael

Garel-Jones, Tristan

Mather, Carol

Gorst, John

Maude, Hon Francis

Gower, Sir Raymond

Maxwell-Hyslop, Robin

Grant, Sir Anthony

Mayhew, Sir Patrick

Greenway, Harry

Merchant, Piers

Gregory, Conal

Meyer, Sir Anthony

Griffiths, E. (B'y St Edm'ds)

Miller, Hal (B'grove)

Griffiths, Peter (Portsm'th N)

Mills, Iain (Meriden)

Ground, Patrick

Mills, Sir Peter (West Devon)

Gummer, John Selwyn

Miscampbell, Norman

Hamilton, Hon A. (Epsom)

Montgomery, Fergus

Hamilton, Neil (Tatton)

Morris, M. (N'hampton, S)

Hampson, Dr Keith

Morrison, Hon P. (Chester)

Hanley, Jeremy

Moynihan, Hon C.

Hargreaves, Kenneth

Mudd, David

109

Murphy, Christopher

Ridsdale, Sir Julian

Nelson, Anthony

St. John-Stevas, Rt Hon N.

Neubert, Michael

Shaw, Sir Michael (Scarf)

Nicholls, Patrick

Silvester, Fred

Norris, Steven

Skeet, T. H. H.

Onslow, Cranley

Soames, Hon Nicholas

Oppenheim, Phillip

Stewart, Allan (Eastwood)

Osborn, Sir John

Stewart, Andrew (Sherwood)

Ottaway, Richard

Taylor, John (Solihull)

Page, Richard (Herts SW)

Taylor, Teddy (S'end E)

Pawsey, James

Thomas, Rt Hon Peter

Percival, Rt Hon Sir Ian

Thompson, Donald (Calder V)

Pollock, Alexander

Thompson, Patrick (N'ich N)

Porter, Barry

Thome, Neil (Word S)

Powell, William (Corby)

Trippier, David

Powley, John

Wardle, C. (Bexhill)

Proctor, K. Harvey

Warren, Kenneth

Raffan, Keith

Watts, John

Rathbone, Tim

Yeo, Tim

Renton, Tim

Rhodes James, Robert

Tellers for the Ayes:

Rhys Williams, Sir Brandon

Mr. Tim Sainsbury and

Ridley, Rt Hon Nicholas

Mr. Ian Lang.

NOES

Archer, Rt Hon Peter

Dunwoody, Hon Mrs G.

Atkinson, N. (Tottenham)

Eadie, Alex

Bagier, Gordon A. T.

Eastham, Ken

Banks, Tony (Newham NW)

Evans, John (St. Helens N)

Barnett, Guy

Ewing, Harry

Barron, Kevin

Fatchett, Derek

Beckett, Mrs Margaret

Faulds, Andrew

Beith, A. J.

Field, Frank (Birkenhead)

Benn, Tony

Fields, T. (L'pool Broad Gn)

Bermingham, Gerald

Fisher, Mark

Boyes, Roland

Foot, Rt Hon Michael

Bray, Dr Jeremy

Freud, Clement

Brown, Gordon (D'f'mline E)

Golding, John

Brown, N. (N'c'tle-u-Tyne E)

Gould, Bryan

Buchan, Norman

Gourlay, Harry

Caborn, Richard

Hamilton, James (M'well N)

Callaghan, Jim (Heyw'd & M)

Hardy, Peter

Campbell-Savours, Dale

Harrison, Rt Hon Walter

Carl Me, Alexander (Montg'y)

Haynes, Frank

Clark, Dr David (S Shields)

Hogg, N. (C'nauld & Kilsyth)

Clarke, Thomas

Holland, Stuart (Vauxhall)

Clwyd, Mrs Ann

Howells, Geraint

Cocks, Rt Hon M. (Bristol S.)

Hughes, Dr. Mark (Durham)

Cook, Robin F. (Livingston)

Hughes, Robert (Aberdeen N)

Corbyn, Jeremy

Hughes, Sean (Knowsley S)

Cowans, Harry

Jones, Barry (Alyn & Deeside)

Crowther, Stan

Kirkwood, Archy

Dalyell, Tam

Lamond, James

Davis, Terry (B'ham, H'ge HI)

Leighton, Ronald

Deakins, Eric

Lewis, Terence (Worsley)

Dewar, Donald

Lloyd, Tony (Stretford)

Dormand, Jack

Loyden, Edward

Douglas, Dick

McCartney, Hugh

Dubs, Alfred

McGuire, Michael

Duffy, A. E. P.

McKay, Allen (Penistone)

110

McNamara, Kevin

Rowlands, Ted

McTaggart, Robert

Sheerman, Barry

McWilliam, John

Short, Ms Clare (Ladywood)

Madden, Max

Skinner, Dennis

Marek, Dr John

Smith, C.(lsl'ton S & F'bury)

Maxton, John

Smith, Rt Hon J. (M'kl'ds E)

Maynard, Miss Joan

Soley, Clive

Miller, Dr M. S. (E Kilbride)

Spearing, Nigel

Nellist, David

Thome, Stan (Preston)

Oakes, Rt Hon Gordon

Tinn, James

Park, George

Wainwright, R.

Pavitt, Laurie

Wallace, James

Pendry, Tom

Warden, Gareth (Gower)

Penhaligon, David

Wareing, Robert

Prescott, John

Welsh, Michael

Redmond, M.

Williams, Rt Hon A.

Robertson, George

Rogers, Allan

Tellers for the Noes:

Ross, Ernest (Dundee W)

Dr. Roger Thomas and

Ross, Stephen (Isle of Wight)

Mr. Ray Powell.

Question accordingly agreed to.
Bill read a Second time.
Bill committed to a Standing Committee pursuant to Standing Order No. 42 (Committal of Bills).

Films Bill

  BUSINESS OF THE HOUSE
  Ordered,
  That, at this day's sitting, the motion relating to Ways and Means may be proceeded with, though opposed, until any hour.—[Mr. Archie Hamilton.]

  FILMS BILL [MONEY]
  Queen's recommendation having been signified
  Resolved,
  That, for the purposes of any Act resulting from the Films Bill, it is expedient to authorise the payment out of money provided by Parliament of any sums required by the Secretary of State in connection with the giving of financial assistance under the Act.—[Mr. Archie Hamilton.]

  WAYS AND MEANS

    FILMS
    Resolved,
    That, in connection with any Act resulting from the Films Bill ("the Act")—

    (a) charges to income tax and corporation tax may be imposed by provisions made by or under the Act and restricting the operation of section 72(7) of the Finance Act 1982 (expenditure on production and acquisition of films etc.); and

    (b) it is expedient to authorise the payment into the Consolidated Fund of sums required to be so paid by virtue of the Act.—[Mr. Archie Hamilton.]

Consumer Protection
10.10 pm
The Parliamentary Under-Secretary of State for Trade and Industry (Mr. Alexander Fletcher): I beg to move,
That the draft Gas Catalytic Heaters (Safety) Regulations 1984, which were laid before this House on 22 October, in the last Session of Parliament, be approved.
The regulations now before the House put on a permanent basis the prohibition which I placed last year on the supply of liquid petroleum gas catalytic heaters and replacement elements containing unbonded or loose asbestos.
The original prohibition was made by the Gas Catalytic Heaters (Safety) Order 1983, which was laid before Parliament on 18 November last year and came into operation three days later. With the expiry of the order on 21 November this year, a decision now has to be made on the future of the ban. It is my view that, in the interests of public safety, the ban should continue indefinitely.
Question put and agreed to.
Resolved,
That the draft Gas Catalytic Heaters (Safety) Regulations 1984, which were laid before this House on 22 October, in the last Session of Parliament, be approved.

Legal Aid and Advice
10.14 pm
The Solicitor-General (Sir Patrick Mayhew): I beg to move,
That the Legal Advice and Assistance (Financial Conditions) Regulations 1984, dated 16th October 1984. a copy of which was laid before this House on 31st October, in the last Session of Parliament, be approved.
Perhaps it will be for the convenience of the House if the following three motions on the order paper relating to legal aid were discussed at the same time.
Mr. Harry Ewing indicated dissent.
Mr. Speaker: If there is disagreement, the motions should be taken separately. However, would it be the wish of the House to take the two motions relating to England and Wales together and then the two motions relating to Scotland?
Hon. Members: Yes.
The Solicitor-General: In that case I shall direct my remarks also to the second motion relating to England and Wales:
That the Legal Aid (Financial Conditions) Regulations 1984, dated 16th October 1984, a copy of which was laid before this House on 31st October, in the last Session of Parliament, be approved.
Last year my noble and learned Friend the Lord Chancellor decided to revert to a November uprating for the financial limits. That was more administratively convenient because the legal aid dependants' allowances are automatically increased in line with those for supplementary benefit which are, of course, uprated annually in November. The first two motions increase, respectively, by 4·7 per cent. the income and upper capital limits for civil legal aid and for legal advice and assistance. The increase maintains the present relationship between legal aid and supplementary benefit. However, there is no increase in the lower capital limit for legal aid. The alignment of this limit with the supplementary benefit capital limit was introduced last year, and the supplementary benefit level is to remain the same as last year—£3,000—because last year it was increased substantially in excess of the rate of inflation.
The legal advice and assistance regulations raise the upper disposable income limit for the green form scheme from £103 a week to £108 a week. The capital limit above which assistance is not available increases from £730 to £765. The legal aid regulations raise the lower disposable income limit—the level of disposable income below which no contribution is payable—from £2,050 a year to £2,145. The upper income limit—the level above which legal aid is not available—increases by the same proportion from £4,925 a year to £5,155. The lower capital limit is to remain at £3,000. The upper capital limit above which legal aid is not normally available is to be increased from £4,500 to £4,710.
My noble and learned Friend the Lord Chancellor proposes to increase the capital limit for assistance by way of representation. It is an extension of the legal advice and assistance scheme and provides representation for certain specified proceedings before courts and tribunals to £3,000—the same level as the lower legal aid capital limit. As this increase requires primary legislation, it will have to wait for an appropriate opportunity. That opportunity will arise on the Administration of Justice Bill, which is to be

113
introduced this Session. It is intended that the Bill should contain an appropriate amendment of the Legal Aid Act 1974. I believe that the increases are useful.
10.18 pm
Mr. Alex Carlile: I welcome any increase in the legal aid limits and it would be churlish to over-criticise these provisions. However, several matters worry me. The first relates to capital limits. We all know the hardship that the supplementary benefits capital limit creates. In a constituency such as mine, many people own small amounts of land of no practical utility and virtually unsaleable; yet such ownership can exclude them from supplementary benefit. The same considerations can arise in relation to legal aid. I can understand the considerable reluctance of people to enter into litigation, however justified, if the price is the sale of their only remaining assets.
It is right to remind the Government that one cannot be glib or smug about the new levels set in these instruments. Private litigation is still fully available only to the very rich and to those who are at the lower end of the income bracket. Families in receipt of national average incomes, in the middle income bracket, will be virtually excluded from litigation except in the most desperate circumstances, because the financial limits still require substantial contributions to be made, even if legal aid is available.
To take a higher income bracket, I strongly doubt whether a right hon. Member who has only his parliamentary salary with which to keep his family could afford to go to law on a serious issue, because the cost of litigation would be too great a risk for him to undertake. It is regrettable that people on middle incomes are faced with the choice between possible bankruptcy and not going to law. I hope, therefore that the Government will accept that we have a long way to go before we have a fair legal aid system.
I now turn to a related issue which has caused considerable concern during the past few days. The Master of the Rolls, whose views we respect and pay great attention to, appears to have suggested that our civil litigation system should in some extraordinary way become self-financing. I hope that the Government will wholeheartedly reject that notion now. It is no part of our legal tradition—I am proud of that tradition and reject many of the criticisms made of it—that litigants should have to pay for the courts to which they take their cases, except in some arcane commercial spheres of which the Solicitor-General is aware. I hope that the Government will unequivocally say that the civil courts, the county court and the High Court, will remain open to all litigants and that judges' services and court services will not be charged for.
Mr. Deputy Speaker (Mr. Harold Walker): Order. The hon. and learned Member is going wide of the regulations before the House.
Mr. Carlile: I have made my point and I shall not labour it further. I accept your rebuke, Mr. Deputy Speaker.
My only additional point is that these limits—we await with interest the Administration of Justice Bill—should be available to people appearing before various forms of tribunal, especially industrial and the medical appeal tribunals, and that the legal aid system should be extended—
Mr. Deputy Speaker: Order. I cannot allow the debate to move in that direction. The hon. and learned Member is leading the House into a debate about the scope of legal aid. He must confine his remarks to the regulations before the House.
Mr. Carlile: With respect, Mr. Deputy Speaker, I am concerned about the financial limits and I am suggesting the sphere in which they should be applicable. I think I have made the point. I hope that the Government will give those who are worried about such matters some encouragement tonight.
10.24 pm
Mr. Douglas Hogg: I hope that I shall not fall foul of you, Mr. Deputy Speaker, during my observations on the regulations. With the hon. and learned Member for Montgomery (Mr. Carlile), I support the uprating and feel it would be rather churlish to be too critical of it. However, there are several questions that the Solicitor-General might wish to answer regarding the legal aid regulations. The first point that the House should bear in mind is that, although the two sets of regulations sound similar, they are not in thee least similar. The legal aid regulations cover representation at trial, whereas the legal advice and assistance regulations relate to the green form scheme and to many other non-litigious matters.
There are several other important distinctions between the two regulations. The first and perhaps the most obvious, because it appears on the face of the regulations, is that the financial eligibility criteria are different. Another distinction is that the calculation of disposable income for the purpose of the civil legal aid regulations is done on a much more generous basis than for the green form scheme.
The Solicitor-General may wish to answer some questions that flow from the Royal Commission's report on legal services, which is the latest and by the far the most comprehensive examination of legal aid. It contained three specific recommendations, which touch on the regulations and which the Government have taken no steps towards implementing. The most pertinent recommendation for tonight's purposes is the positive suggestion that the financial eligibility limits for civil legal aid and for the legal aid and advice scheme should be merged and assimilated. The Benson commission report says in terms that the time of an uprating is the time when the financial criteria should be merged. Why have not the Government moved more positively towards assimilating the financial limits for both classes of legal aid? I see no reason why the financial criteria should be different.
The second question that flows from the Benson commission's recommendation follows what the hon. and learned Member for Montgomery said about the cost of litigation. The Benson commission said that, in its opinion, all financial eligibility criteria should be scrapped and that no financial criteria should apply to the regulations or to legal aid. The commission recommends that there should be no cut-off point, but that there should be a sliding scale of contribution, so that those with higher incomes pay much higher contributions. However, anyone who practises in the courts knows that the possession or legal aid is an enormous advantage to a litigant. Those who fall just outside the upper limit are put at a severe disadvantage compared with those who receive legal aid. Do the Government have any long-term intentions of

115
implementing the recommendation of the Benson commission so that the eligibility criteria determined by income and capital are scrapped? I do not press the Government to do it now because I recognise that it will have spending implications, and I despise those who call for economies in general and expenditure in particular.
The final question that flows from the Benson commission relates to the calculation of disposable capital for the purpose of the eligibility criteria. One is obliged to take into account redundancy payments and personal injury damages awards. As we all know, personal injury damage awards frequently include a large loss of earnings element. A certain amount of double counting goes on if we include those sums both in the computation of capital and the computation of income. It was for that reason that the Benson commission said in positive terms that personal injury damages should be excluded from the computation of disposable capital. Do the Government have any long-term plans to implement that recommendation? Incidentally, the Benson commission also recommended that redundancy payments be excluded from the computation of capital. Do the Government have any long-term plans to implement that recommendation?
However, I differ from the hon. and learned Member for Montgomery on the question of the contingency fee fund. Once one recognises that these regulations exclude many people from access to the courts and legal advice, one must ask, "Why not a contingency fee fund?" It has the advantage of being self-financing and would help a number of people who would not have assessments under these regulations. Although I know that this has not commended itself to the Lord Chancellor—and it did not commend itself to the Benson commission—do the Government have any sympathy at all with that proposal?
I have asked four specific questions. I am not calling for immediate increases in public spending, of which I do not approve. However, we are entitled to some clear indication from the Solicitor-General about the Government's long-term views on these matters. Save for those minor considerations, I support the uprating.
10.31 pm
Mr. Humfrey Malins: I too support the regulations, but the House ought to bear in mind the fact that in the last few years the cost of legal advice and assistance has gone up dramatically, from £11·9 million in 1979–80 to an estimated £57·4 million in 1984–85. That is a considerable increase in the cost of this scheme.
Mr. Andrew Hunter: Do those figures cover criminal legal aid or merely civil legal aid?
Mr. Malins: They cover legal advice and assistance under the green form scheme. From £60 million spent on criminal legal aid in 1979, it is expected that next year we shall spend about £130 million. We should always be cautious of the increasing cost of legal aid.
The assessment of legal aid has hitherto been carried out by the DHSS. In my own constituency, the DHSS has been responsible for assessments over many years. It is planned that the assessment will now take place by means of a postal declaration form. A number of people at the DHSS feel that the result will not be a financial saving to the legal aid fund, because, when given a form and asked
116
to state one's means, the temptation is perhaps to minimise one's capital and income. A person may perhaps not disclose matters which he should. Apart from fearing possible job losses if their work is replaced by a pro forma which an applicant completes, people in the DHSS are also concerned about whether the proposal will save money in the long run.
Does the Solicitor-General believe that the postal declaration form for civil legal aid applicants will save money, or does he fear that it will cost jobs, as my constituents fear that it will?
10.34 pm
The Solicitor-General: I am grateful to the hon. and learned Member for Montgomery (Mr. Carlile) and my hon. Friends the Members for Grantham (Mr. Hogg) and for Croydon, North-West (Mr. Malins) for their contributions to this short debate and for the welcome that has been given to the upratings.
I think that all hon. Members would agree that there are advances that we would like to make, but anybody who knows about litigation knows that legal aid support falls short of what most of us would like to see. One must concede that there are many people for whom litigation is a considerable personal hardship but who none the less fall outside the respective criteria. On the other hand, I know that the hon. and learned Member for Montgomery and my hon. Friends will recognise that that must take its place in the substantial and keen competition for existing resources and we must simply do the best that we can. I am glad that we have been able to make the advances that are embodied in the regulations.
The hon. and learned Member for Montgomery asked about capital limits, and in particular the inclusion within assessable capital of small land holdings. I cannot hold out any hope to him that there will be the amendment that he proposes. On the other hand, I can say that the hon. and learned Gentleman knows that the legal aid and advice committee is, at the request of the Lord Chancellor, considering the whole question of eligibility for legal aid. It is expected to report to my noble and learned Friend in December, and I do not doubt that that is one of the questions it will wish to take into account.
The hon. and learned Gentleman's last point related to a recent speech by the Master of the Rolls. Any speech by the Master of the Rolls is entitled to considerable attention and respect. It was made recently. My noble and learned Friend the Lord Chancellor will wish to give that speech full consideration, and he will note what has been said today by the hon. and learned Gentleman.
My hon. Friend the Member for Grantham said that the financial criteria for legal advice and assistance under the green form scheme are different from those for legal aid. He is right about that, but there is a relatively simple explanation. The average bill for advice given under the green form scheme is about £50. In other words, it is a low-cost scheme, and in those circumstances much lower criteria in terms of personal assets, whether of income or of capital, are appropriate. Therefore, I cannot hold out any prospect of the kind of change that my hon. Friend would like to see, although that is one of the questions that the committee appointed by the Lord Chancellor will, I do not doubt, consider.
My hon. Friend drew attention to the Benson committee's recommendation that the criteria for legal aid and advice should be merged. What I have said already

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comprehends the answer to that and to his second point that financial criteria should be scrapped and a sliding scale substituted. He was, as he nearly always is, fair enough to concede that that would involve substantial increases in costs, and I have to say the gloomy thing that we all have to say about resources. None the less, the committee is considering that and there is not long to wait before its report in December.
My hon. Friend asked why take into account, when looking at capital assets, the proceeds of a successful redundancy claim and a successful claim for personal injury compensation. Everyone must have some sympathy for that idea, but if it is looked at closely it does not stand up. The purpose of legal aid support is to enable somebody who lacks the financial resources to do so to bring proceedings. It matters not very much that a person's financial resources have entered his bank account by reason of a claim for personal injuries compensation or whether by reason of, let us say, inheritance. For the purpose of deciding whether the legal aid scheme will support one, what really matters is whether one has the means of financing litigation onself. That is why I do not for my part see any prospect of meeting my hon. Friend's third question.
Finally, my hon. Friend raised the question of the contingency fee. I am dead against contingency fees. The contingency fee system, which is run—
Mr. Douglas Hogg: A contingency fee fund.
The Solicitor-General: If I have understood the matter correctly—and I am not at all sure that I have—it is a development of what we already have. The legal aid fund has a statutory right to obtain its expenses from what has been recovered. However, if my hon. Friend writes to me—or perhaps more importantly to his noble and learned father—he may receive a fuller, and certainly more authoritative reply.
Mr. Douglas Hogg: He always signs "Hailsham of St. Marylebone."
The Solicitor-General: No doubt my hon. Friend can interpret who that is.
My hon. Friend the Member for Croydon, North-West mentioned a pilot scheme in certain parts of England and Wales which is designed to reduce the cost of applications for legal aid. I agreed with him when he drew attention to the increased cost of legal aid. He gave us certain figures with which I do not disagree. I could give others, but it is too late now to do so. There is no doubt that the claims on the legal aid fund have increased alarmingly. But, equally, the number of claims that has passed the scrutiny of the legal aid committee has also increased. The reasons for that are complex. However, I know that the Lord Chancellor agrees that claims for legal aid should be subjected to close scrutiny. I shall certainly draw his attention to what my hon. Friend the Member for Croydon, North-West has said.
I was asked by my hon. Friend to say something about the postal scheme. The purpose of the pilot postal scherne was to test whether we could save money without losing the degree of scrutiny that is necessary. It has been rather successful, so to a limited extent it is going to be adopted. I hope that what I have said has reassured my hon. Friend to some extent. We are keen to see that there is the same degree of financial discipline over the legal aid scheme and its administration as we look for elsewhere in the public sector. What he has said about it will, I think, he very helpful.
Question put and agreed to.
Resolved,
That the Legal Advice and Assistance (Financial Conditions) Regulations 1984, dated 16 October 1984, a copy of which was laid before this House on 31st October, in the last Session of Parliament, be approved.

Legal Aid and Advice

  LEGAL AID AND ADVICE
  Resolved,
  That the Legal Aid (Financial Conditions) Regulations 1984, dated 16 October 1984, a copy of which was laid before this House on 31st October, in the last Session of Parliament, be approved.—[The Solicitor-General.]

Legal Aid and Advice (Scotland)
10.43 pm
The Parliamentary Under-Secretary of State for Scotland (Mr. John MacKay): I beg to move,
That the Legal Advice and Assistance (Scotland) (Financial Conditions) Regulations 1984, dated 24th October 1984, a copy of which was laid before this House on 31st October, in the last Session of Parliament, be approved.
The two sets of Scottish regulations that require an affirmative resolution this evening, the Legal Aid (Scotland) (Financial Conditions) Regulations 1984 and the Legal Advice and Assistance (Scotland) (Financial Conditions) Regulations 1984, make the same increases in the financial limits for Scotland. I shall remind the House of what they are.
The advice and assistance regulations raise the upper disposable income limit for the green form scheme from £103 a week—[Laughter.] Sorry, am I reading the wrong thing? The Legal Advice and Assistance (Scotland) (Financial Conditions) Regulations raise the weekly sum from £103 to £108, and the Legal Aid (Scotland) (Financial Conditions) Regulations 1984, as my hon. and learned Friend the Solicitor-General has explained, raise the lower limit from £2,050 to £2,145 and the upper limit from £4,925 a year to £5,155.
Mr. Harry Ewing: Will the hon. Gentleman give way?
Mr. MacKay: I am going to sit down so that the hon. Gentleman can make his speech. I commend the regulations to the House.
10.44 pm
Mr. Harry Ewing: We sympathise with the Parliamentary Under-Secretary who has drawn the short straw. As the Minister who should have dealt with the regulations is absent, he has had the great misfortune to have to pick up the brief without even beginning to understand it. We objected to the regulations for Scotland and for England and Wales being taken together. It was no reflection on the Solicitor-General, because he will appreciate that there are major differences between the two systems. The first major difference is that for the legal advice and assistance scheme in Scotland the colour of the form is pink, whereas in England and Wales it is green. The form in Scotland is known as the pink bomber. I am sure that the House is interested in that.
I am sure that the Minister will appreciate that there is a major difference in the system for criminal and civil legal aid in Scotland compared with England and Wales. Civil legal aid in Scotland is granted by the legal aid committee and criminal legal aid by the court. In England and Wales, all legal aid is granted or refused by the legal aid committee.
My first question relates to those charged with offences arising from the dispute in the mining industry. There appears to be a variation of practice in the sheriff courts. I understand that the responsible Minister has given information to my hon. Friend the Member for Carrick, Cumnock and Doon Valley (Mr. Foulkes) to the effect that in Kilmarnock and Dunfermline little or no legal aid has been granted to such persons. What is the current position for the granting of legal aid for such accused persons? I assure—
Mr. Deputy Speaker (Mr. Harold Walker): Order. I hope that the hon. Gentleman will not take us too far outside the scope of the regulations.
Mr. Ewing: I assure you, Mr. Deputy Speaker, that my feelings are hurt by you thinking that I would take the House too far. I hope that I have left sufficient with the Minister to receive an answer to my question. It affects the granting of legal aid. I trust that the Minister will especially refer to the granting of criminal legal aid.
Mr. Gordon Brown: We want an assurance that the limits will be properly applied. My hon. Friend the Member for Falkirk, East (Mr. Ewing) referred to legal aid, advice and assistance to miners involved in the present dispute, some of whom have been charged with offences. We want an assurance that everything is being done to ensure that they receive legal aid. In my constituency and that of my hon. Friend the Member for Dunfermline, West (Mr. Douglas), the evidence is that no miner who has been charged with an offence has received legal aid, advice or assistance paid for by state funds.
Is a notional income assumed to have been earned by the miners, as is the case with social security regulations? Is there another, more sinister reason? It is that which prompts us to ask whether the limits are properly applied?
Mr. Ewing: I am grateful to my hon. Friend for his intervention, to which I hope the Minister will give a definitive answer. I would be astonished if anyone, whether a miner or anyone else, was refused legal advice and assistance. That is a different matter from an application for legal aid when a person comes before a court to defend himself—whether it be a miner charged with an offence arising from the dispute, a person charged with a traffic offence, or anyone else. I hope that the Minister will give us a definitive answer to the question, particularly in relation to my hon. Friend's constituency and Dunfermline and Kilmarnock sheriff courts. Through the years—it was the case when I had some responsibility for these matters—we have always discussed the possibility of extending the legal aid scheme to tribunals and to other areas of representation throughout Scotland. Even at this late hour, could the Minister enlighten the House as to the thinking—
Mr. Deputy Speaker: Order. I hope that the Minister will not respond to that question. The regulations do not allow hon. Members to discuss legal aid. They may discuss only the increases in the capital allowances and returns.
Mr. Ewing: I can see that I shall have to ask for legal advice and assistance in dealing with the matter. We have traditionally asked questions about the way in which the scheme could be extended. I hope that the Minister will respond in the traditional fashion and tell us that serious consideration is being given, and that some advance can be expected next year.
10.51 pm
Mr. Archy Kirkwood: I declare an interest, in that I am technically still a partner in a small provincial firm of solicitors, Messrs Andrew Haddon and Crowe, in Hawick. Anything that I say should be taken in that context.
I heard what the Minister said about the opportunity being taken at this time of the year to uprate the legal aid limits in the context of and in proportion to the social

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security increases. That, as far as it goes, is right and proper, but I should like to refer to the pink form scheme, which had its genesis in the 1972 legislation. There was a much more accurate reflection of the increase in costs when increases were made in the capital and income limits. It related to the increase in litigation costs, rather than the movement in the retail price index.
If the Minister speaks to whichever of his colleagues is dealing with these matters, and does the arithmetic in the cold light of dawn tomorrow, he will find that, measured by that yardstick, the income and capital increases necessary to keep pace with the position in 1972 will be far higher than the figure of nearly 5 per cent. that we are discussing this evening. In future, when the Minister is battling with the Treasury to get the necessary annual upratings, I hope that he will bear that calculation in mind rather than the change in the RPI.
My next point derives directly from my experience in administering the pink form scheme. It was £600 prior to June 1983. That was the disposable capital limit for the pink form. It is now increased in the orders from £730 to £765. That is a very restrictive disposable capital limit. As a practising solicitor, I frequently had to tell people that because of that limit they could not go to the courts. There were old age pensioners who had saved up a nest egg so that they could have a proper burial. They had legitimate causes to take to the courts and could not do so because they had £800 or £900 put aside for burial costs. It happened on several occasions in a small provincial office, so I assume that it is a much greater problem in some of the bigger city offices. That matter, more than anything else, requires urgent attention.
I hope the Minister will consider the points that I have raised, and that he will have some answers next year, apart from trying to do something about them in the meantime.
10.55 pm
Mr. John MacKay: First, I respond to the contribution of the hon. Member for Roxburgh and Berwickshire (Mr. Kirkwood) on his point about the the pink form. He urged that the limits should be increased at a faster rate. I repeat what has already been argued—that the priorities for Government spending must be balanced. The balance is being achieved in the form of upratings— a method which has been adopted by previous Governments. The regulations limit the cost which the applicant has to meet even if legal costs increase at a greater rate. There is a departmental review of legal aid, both civil and criminal. My right hon. Friend will read with interest what the hon. Gentleman and the hon. Member for Falkirk, East (Mr. Ewing) have said.
The hon. Member for Falkirk, East had a little fun at my expense at the beginning of his remarks. My hon. and learned Friend the Solicitor-General tells me that in England and Wales legal aid is provided for criminal cases and that the issue is decided by the courts, not by a legal aid committee.
I am in some trepidation about following the course which I was invited to take by the hon. Member for
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Falkirk, East. Most of his questions turned on legal aid for criminal cases, whereas we are talking about civil legal aid. That point should be remembered. Criminal legal aid is determined by the courts, which consider whether the award would be in the interests of justice and whether it would occasion financial hardship to the accused or his dependants if he were not to be granted legal aid. That is a matter entirely for the courts. There can be no intervention in these matters by my right hon. and hon. Friends. The comments that have been made about the miners and other matters will be considered in the departmental review. I shall draw my right hon. Friend's attention to the issues that have been raised.
Mr. Gordon Brown: Will the Minister give us an assurance that the inconsistencies in the administration of legal aid to miners during the course of the current dispute when they have appeared before the courts will form the subject of at least part of the review that is being conducted by his right hon. and noble Friend the Minister of State?
Mr. MacKay: Opposition Members are always drawing attention to inconsistencies in the courts, whether in sentencing or in other respects. The answer is always the same. The courts are free to make their own decisions on the cases before them. That applies to sentencing and the granting of legal aid.
Mr. Donald Dewar: There have been allegations—I cannot verify them because I have not been involved— that some sheriff courts—Dunfermline and Kilmarnock are two examples— are denying certain categories of accused persons legal aid as a generality and almost in universality. Presumably legal aid is being denied on the basis that it would be against the interests of justice to make it available. There is widespread concern about this, but there is no general beef about the administration of legal aid. Will the Minister give an assurance that the suggestion that legal aid is being denied in some instances will be examined as part of the review to which he has referred, or perhaps more urgently, to ascertain whether something can be done?
Mr. MacKay: The hon. Gentleman has fairly said that he has heard general allegations. If hon. Members representing the relevant constituencies wish to write to my right hon. Friend, I am sure that he will respond.
Question put and agreed to.
Resolved,
That the Legal Advice and Assistance (Scotland) (Financial Conditions) Regulations 1984, dated 24th October 1984, a copy of which was laid before this House on 31st October, in the last Session of Parliament, be approved.

Legal Aid and Advice (Scotland)

  LEGAL Am AND ADVICE (SCOTLAND)
  Resolved,
  That the Legal Aid (Scotland) (Financial Conditions) Regulations 1984, dated 24th October 1984, a copy of which was laid before this House on 31st October, in the last Session of Parliament, be approved.—[Mr. John MacKay.]

Coal Industry Dispute
Motion made, and Question proposed, That this House do now adjourn—[Mr. Durant.]
10.59 pm
Mr. Dave Nellist: For nearly nine months, 145,000 miners and their families have stood out against all that the Government have been able to throw at them. The miners have thwarted the Government's plans to destroy several communities, to seek directly the end of 70,000 mining jobs, to seek indirectly the end of a further 85,000 which depend on those miners being in work and to destroy the already tarnished hopes of a new and young generation growing up in the mining communities. For nearly nine months, despite everything that the Government and the media have thrown against the miners, their families and their communities, this strike remains solid.
The strike remains an inspiration to workers as a whole on how to resist the attacks of the Tories. It has destroyed the myth— often propagated by Tory Members of Parliament in the House— that trade unionists are selfish, greedy and always out for themselves. This strike is not principally about today's jobs for today's miners. It is also about miners fighting for the generation hoping to inherit those jobs and, on behalf of their class, to reverse the general tide of unemployment in the black spots of Britain.
Tory Members of Parliament, as shown by their peals of laughter, have no chance of understanding the sacrifice of the past nine months, when families have sold cars, houses, furniture, televisions and videos and told children, "There are no birthdays this year. There is no Christmas coming up and there will be no holidays." The sacrifice that those families have made on behalf of themselves and their class is something that Tory Members of Parliament, with their salaries and their family background, would never understand.
This generation of miners has refused the bribes handed out by the Tory Government. They have refused to be bought off by redundancy payments— the lump sum social security benefits—which in recent months have been dangled as carrots in front of miners. The miners have resisted the Government's attempts to starve miners and their families back to work, with the criminal removal of £15 a week from the benefits paid to the families of striking miners. The families of strikers are worse off than the families of those who have committed major crimes—murder and so on—who now rest in the prisons. The families of striking miners have resisted the Government's attempts for nine months with the magnificent support of ordinary workers and their families in the rest of their class, whose collections of food and money, especially in the period to Christmas, have helped to alleviate some of the suffering and to sustain the families.
The families of striking miners have also resisted nine months when 8,000 workers—brothers and sisters of mine—were arrested. One in six of those arrested have been released without charge. That is an indication of the blanket nature of the arrests. Three quarters of the rest of those who have been arrested have been taken under what I would describe as the bogus charges of obstruction of the pavement, obstruction of the highway and obstruction of a policeman. They have been charged under section 5 of
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the Public Order Act 1936 and other legislation used by the police to remove the pickets and picket organisers from the picket lines.
In addition, during those nine months of attacks, the miners have had set against them daily, every evening on the television screens, a biased media and, often, the twisted propaganda of the National Coal Board. The finger of the Government hovers behind that campaign of misinformation. That is what we have come to expect from a Tory media and Tory press. [Interruption.] When one looks at the number of editors of daily newspapers who have received knighthoods from the Government who are in the pockets of their millionaire owners—
Mr. Alexander Eadie: On a point of order, Mr. Deputy Speaker. Obviously, some Conservative Members have had a very good dinner. This is a serious subject, and my hon. Friend is entitled to be heard and to put the point of view representing his constituency.
Mr. Deputy Speaker (Mr. Harold Walker): No matter how unacceptable or unpopular their opinions may be to some, hon. Members are entitled to express them, provided they keep within the rules of the House.
Mr. Nellist: The campaign of misinformation launched by the media is what we have come to expect from those editors who received knighthoods from a Tory Government who are in the pocket of their millionaire owners.
One of the aspects—
Mr. Anthony Beaumont-Dark rose—
Mr. Nellist: If the hon. Member wants to make a point he has plenty of opportunity with the Tory propaganda that comes out daily in the media.
One of the aspects of the strike—
Mr. Beaumont-Dark rose—
Mr. Nellist: One of the results of the strike and the campaign of disinformation by the Tory media against miners has been the spur that that has given to Socialists and trade unionists within the Labour movement.
Mr. Beaumont-Dark rose—
Mr. Deputy Speaker: Order, the hon. Member for Birmingham, Selly Oak (Mr. Beaumont-Dark) must restrain himself. Clearly the hon. Member for Coventry, South-East (Mr. Nellist) is not giving way.
Mr. Beaumont-Dark: He is not restraining himself.
Mr. Deputy Speaker: Order. The hon. Member must not shout at me from a sedentary position.
Mr. Beaumont-Dark: I will shout at you standing up.
Mr. Deputy Speaker: Order. Neither will the hon. Member stand on his feet while I am on mine. The hon. Member for Coventry, South-East is entitled to express his view and make his speech—
Mr. Beaumont-Dark: Rubbish.
Mr. Deputy Speaker:—and I hope that the House will allow him to do so.
Mr. Eadie: On a point of order, Mr. Deputy Speaker. Did you hear the hon. Member for Birmingham, Selly-Oak (Mr. Beaumont-Dark) say "rubbish" to you while you were reprimanding him?
Mr. Deputy Speaker: Order. No, I did not hear him say that. If the hon. Member said it, I deprecate it, but the hon. Member has already left the Chamber.
Mr. Nellist: One of the consequences of the media attacks on the NUM, the miners' families and trade unionists in general will be the spur that it gives to Socialists and trade unionists within the Labour movement to create a daily Socialist alternative to the Tory papers of Fleet street. Contrary to the attempts that have been made over the past two weeks to give the impression that the strike is crumbling, three quarters of the miners on strike remain solid. If Tory Members present in the House at this late hour wish to take some comfort from this afternoon's figures from the Coal Board, I offer them figures to destroy their case. In Scotland 225 miners returned to work making a total of 1,258 miners at work trying to weaken the strike. That is 9·5 per cent. of work force; 90·5 per cent. remain on strike. In Yorkshire—Tory Members seem to be overjoyed about this— 450 went back, according to the National Coal Board. That makes 1,785 at work according to the NCB, and means 3 per cent. of the work force. It means that 97 per cent. of the miners are on strike.
In south Wales, according to the NCB, nine miners went back this morning. That makes 85 miners at work—less than 0·5 per cent. It means that 99·6 per cent. of the miners are on strike.
When do we hear Government spokesmen, the press or other parts of the media use figures of 90, 97 or 99·6 per cent. of miners on strike as a demonstration of the strength of the dispute? It is an illustration of the misinformation that pours out of the "tube" daily. Those figures do not give confidence to the Tory Government. It is a sign that time is running out for them. [Interruption.] It explains the marked reluctance of Tory Ministers and others in the House to give straight answers to questions about the dispute.
If a Member asks a Minister in the Department of Energy whether he will answer questions on the consequences of the strike on power stations, to gain an admission about the power stations that have already closed because of the strike, the simple answer is no. The Minister is afraid to tell the truth.
When we ask about the depth and penetration of oil imports over the past 12 months— where they are coming from, and how much they cost the Government—the information, apparently, is unavailable. Either the Government are not telling the truth when they say that the information is not available, or they ought to organise the Departments better, because senior civil servants are being paid a great deal of money not to collect information to give the Government a picture of what is happening. When we ask how many power stations have been built over the past 10 years, apparently the information is not readily available. Plainly, the Department of Energy cannot even count. When we ask about the movement of coal and whether imports are coming through the ports, the Department of Energy is not prepared to tell us. And those are just the questions that the Table Office accepts.
Then there are all the questions that the Department of Energy will not even take from the Table Office. The Department is not prepared to say what happened on 5 November, when there was a yellow alert and the grid was in a state of partial emergency. It will not list the power stations having difficulty generating electricity. The
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Department is not prepared to give any form of answer to those questions. It is a sign of the Government's weakness that they are not prepared to back up their claims with detailed facts and figures.
The blame for the dispute rests not with the miners, who have conducted a heroic struggle in the past nine months, nor with the NUM leadership, but squarely with the Cabinet and the Government. The Government planned for the dispute seven or eight years ago when they were in Opposition. A report by the present Secretary of State for Transport, commonly known as the Ridley report, was released by The Economist in 1978. It spoke of dealing with the enemies of a future Tory Government— in particular, the miners—and set out a plan for doubling the coal stocks, which took place in the first four years of the Tory Government, reaching a record total of 58,500,000 tonnes. It referred to contingency plans for the import of coal— we have seen the effect of that at Hunterston in Scotland— and spoke of encouraging hauliers to recruit non-union drivers. It also referred to establishing dual oil and coal-fired power stations the oil for which, despite the Government's refusal to answer questions, is widely rumoured to be costing £25 million to £30 million per week.
The Ridley report also spoke of cutting off the money supply to strikers and establishing a large mobile squad of police to deal with picketing. [Interruption.] That, together with the appointment of MacGregor, after he had butchered the steel industry, a subject on which my family has a personal axe to grind—[Interruption.]
Mr. Deputy Speaker: Order. The hon. Gentleman is entitled to make his speech in his own way without continual barracking and jeering from hon. Members.
Mr. Dennis Skinner: On a point of order, Mr. Deputy Speaker. Can you give an assurance that all the bars in this place have been kept open? If they have not, it might not be a bad idea if you made the necessary arrangements to get them open so that the Tories can get back where they came from and carry on drinking.
Mr. Deputy Speaker: This is a very serious subject. I hope that whether or not hon. Members agree with the hon. Member for Coventry, South-East (Mr. Nellist) they will at least give him the chance to make his speech in his own way.
Mr. Nellist: The Government's preparations for the dispute included the appointment of MacGregor, with his record of butchering the steel industry—my family has personal experience of those cuts— and his record as head of the Amax corporation in America in the 1970s. But all that preparation has not succeeded— despite those who worked throughout the dispute and are rightly described as scabs and despite pressure from the Government's starvation policies and direct pressure from the police. Miners in my area of Warwickshire have experienced that pressure in the past two or three days, with threats that unless individual miners went back to work the police would press more severe charges to ensure that they got sacked. Despite all the pressure on individual miners in recent days and weeks, the Government's preparation has failed.
The Government's preparation has failed largely because of the heroic role played by the women in the coal mining areas. In the first week of the dispute, MacGregor

127
said that he would like to hear from the miners' wives. He said that once and he never said it again, because there are now 170 support groups established by the women in those areas. After the dispute is over, there will be a legacy of women who were previously trapped within four walls listening to interviews with the Prime Minister on the Jimmy Young show and being told that their only role was as providers for their menfolk and their children without any political or industrial role in the community. They have learnt what it is to struggle, to sacrifice and to organise and they will put those talents to use when the strike is over by coming into the organised labour and trade union movement.
Despite all those attacks, and in particular the organised, cynical and calculating use of the police against mining communities throughout the country, the Government have failed. I remember visiting my brother-in-law, an NUM member, at Selby three or four months ago when my sister was about to have a baby. We watched the television. At 20 minutes to six o'clock we watched the BBC news headlines. There was a story about seven policemen being sent down south to arrest post office robbers who were known to have sawn-off shotguns. Two of those policemen were shot. One was shot in the head and groin. He ended up on a life support machine and subsequently died. At a quarter to six I switched over to watch the ITV headlines, expecting the same sort of story. But the story was about 1,000 policemen on horseback, with dogs, truncheons and riot shields, escorting one man—Brian Green— into the Gascoine Wood area of the Selby coalfield.
That shows eloquently that, when it comes to the real issue of law and order, the Tory Government think it a bigger crime to stand on a picket line and defend jobs than to use sawn-off shotguns, attack post offices and kill police officers. [Interruption.] That is the sort of attack that has separated communities in the mining areas from the police and created gaps that will take generations to heal.
This morning on Radio 4 was one of the few occasions on which the voice of a miner's wife has been heard. She was a woman from Yorkshire. She said that before the strike, if someone was attacked in the street, he would telephone the police. "If the police are attacking you, who do you phone?", she asked.
That is the price that the Tory Government will have to pay—[Interruption.]
Mr. Deputy Speaker: Order. Unless the hon. Member for Great Yarmouth (Mr. Carttiss) desists from interrupting from a sedentary position, I shall have no option but to ask him to withdraw from the Chamber. I hope that we can have order for the remainder of the hon. Gentleman's speech.
Mr. Nellist: That is the tab that the Government will have to pick up for the blitzkrieg that they have conducted against the pit villages of south Yorkshire—Armthorpe, Grimethorpe and Fitzwilliam. They have tried to soften up the pit communities. They have tried to warn the communities that surround power stations that when they try to move that coal in the weeks ahead police and perhaps troops will be used in a similar way in those communities.
Throughout the dispute, inside and outside the Chamber, we have heard the Government talk about economic and uneconomic pits. The Secretary of State has
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talked about a subsidy of £130 a week to keep miners working in what he describes as uneconomic pits. They would more accurately be described as pits starved of investment, or facing difficult geological conditions. Even if it costs £130 a week to subsidise getting that difficult coal, would it really matter? That rabid Left-wing newspaper, The Sun, estimates that it costs £150 a week to keep someone on the dole. That would be the net economic cost of the sacrifice of the communities that the Tories are attacking.
So far, the Government have been prepared to spend £4,000 million attacking the miners and their families. They say that there is not enough money for houses or for education. That £4,000 million would be enough to provide an increase of £25 a week for everyone registered as being on the dole. [Interruption.] It would be enough to provide a tax cut of £4 a week for every insured worker. Yet the Tories say that there is not enough money to give benefits such as that, but they have the money to attack the National Union of Mineworkers, because the dispute is not about economic and uneconomic pits. It is about attacking a trade union and attempting to destroy it as a preface to weakening the rest of the trade union movement. It is not about the sequestration of NUM funds. In the words of the Secretary of State for Trade and Industry, it is about the castration of the NUM. It is about neutering the trade union movement.
The reasons are plain to see. Despite the Chancellor's attempt to deny it, and the talk from the Government Front Bench, there has been no economic upturn for working people. Five million are unemployed. Six million live in damp houses, and 9·7 million cannot afford a week's holiday away from home. Eighteen million people live on the poverty line. The Government's only solution is to mount further attacks on the unions that protect working people. That is the rationale behind the attempted destruction of the NUM. The miners are a shining example of how to oppose the Government. They show that workers have not been bought off in their struggle. They have not been bought off, as some sections of society have suggested, because they now own cars and houses with brass knockers on the front door.
In the past nine months I have been proud to stand on picket lines shoulder to shoulder with miners. It is where every Socialist, every trade unionist and every Labour Member from the bottom to the top of the tree ought to have been. The Tories have tried to isolate the NUM from the rest of working people using the media, the police and cuts in benefit. The miners will not be broken and the Tories will reap a whirlwind from the dispute. They are responsible for the rebirth of Socialist traditions in the NUM and the trade union movement as a whole.
The Prime Minister is respected in Britain for one thing alone. She stands resolutely for her class, for the moneyed, for the aristocracy, who pay for her to come to this place. She fights for her class. Among the miners and other workers there is a new generation of young men and women who are fighting for their class. The blame for the dispute rests with the Cabinet and the Government. The miners will not be broken. The whirlwind that the Government will reap will lead in the not too distant future to their downfall and an early election. Those in the ranks of the miners and the trade unions who are now joining the Labour party are doing so because of the dispute and because their eyes have been opened to capitalism and the way in which the Tories have attacked working people.

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They will not be satisfied with trying to patch up capitalism and piecemeal reforms, such as Labour Governments have, unfortunately, put through in the past. They will want to ensure that no young person goes without work when they leave school, that no pensioner dies of hypothermia while the Government gather coal stocks of 58 million tonnes, that our children have the same sort of education as those who go to Eton and Harrow and that they have the same sort of homes as those on parliamentary salaries and above. That is the language of Socialism. Through their attacks on the workers, the Government are creating a new generation of Socialists out of the miners' strike.
11.22 pm
The Parliamentary Under-Secretary of State for Energy (Mr. David Hunt)rose—
Mr. Deputy Speaker: Order. Before I call the Minister, I have an apology to make to the House and the hon. Member for Great Yarmouth (Mr. Carttiss). I am afraid that I have done him an injustice. It appears that the hon. Member that I sought to reproach earlier for sedentary interventions was not him but the hon. Member for Leicestershire, North-West (Mr. Ashby).
Mr. Hunt: It will be difficult to respond to the stream of irresponsible invective that we have heard from the hon. Member for Coventry, South-East (Mr. Nellist), but I should like first to observe the normal courtesy of congratulating him on securing this opportunity to debate the important issues in the coal mining dispute. May I ask him to reflect for a moment that he was able to do so because he was successful in a ballot? It is a sad fact that precisely such an opportunity to participate in a ballot has been denied to the NUM and its members. That is especially inappropriate for a union that has a great tradition of democracy, and whose book states clearly in rule 43:
"A national strike shall only be entered upon as the result of a ballot vote of the Members".
Some areas were given an opportunity to vote and they decided two to one against joining a strike and many of those who voted in favour of a strike have carried on working pursuant to that democratic decision. The rest have chosen the only alternative. Deprived of the democratic right to a ballot, miners have been voting with their feet for an end to this tragic and unnecessary dispute. They are voting now with their feet in ever-increasing numbers.
Only a month ago, when I first came to this important responsibility, an average of 10 men a day braved the mobs to return to work. Three weeks ago about 75 men a day were abandoning the strike, two weeks ago the numbers rose to an average of 500 a day, and last week it doubled to an average of 1,000 men a day who rejoined their colleagues at the pits. Today, more than 2,200 have returned to work, bringing the total of NUM members no longer on strike to more than 60,000. That means that there are now more than 90,000 men at work in the industry, from a total of 222,000 employees.
Five times as many Conservative Members are present in the Chamber as Opposition Members. My hon. Friends
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will ask why there has been this surge to work and why so many NUM members have defied the barricades. They are some of the bravest men in the country. As Lord Stockton said in the other place last week, they are some of the best men in the world. One must be brave to be one of the first four men who defied abuse and intimidation to return to work at Bilston Glen colliery on 5 June. This morning, 642 men were at work at that important pit.
Only two weeks ago, two men returned at Bersham colliery for the first time. Today 307 worked at that north Wales pit on the first two shifts. The hon. Member for Coventry, South-East has tried to exercise some influence at the Coventry colliery. I understand that he has been on the picket line there regularly. Nevertheless, today nearly 700 men are at work, which is a 60 per cent. attendance.
The hon. Gentleman talked about a struggle by the working classes, but he is talking about a fight in which miner is set against miner and community against community and about damaging internal strife within a great and proud industry.
Faced with a leadership of the NUM which openly boasts that its position has not budged an inch since the dispute started, miners must feel a growing sense of disillusionment about their leadership's totally intransigent attitude. Before them is the most generous offer ever made to miners since nationalisation. That offer includes: a guaranteed job for every mineworker who wants to stay in the industry—the kind of guarantee that makes my constituents in Merseyside green with envy; no compulsory redundancies and the highest redundancy benefits in western Europe; a pay increase to keep miners well ahead of average industrial wages; continuing investment on a substantial scale in the industry's future—£650 million more than originally envisaged in "Plan for Coal"; an undertaking now to examine the 4 million tonne capacity reduction proposed in March and to consider the future of the five particular pits under the industry's review procedures; a new independent advisory body within the colliery review procedures; and an enterprise scheme to bring new jobs to mining communities.
That is what the Board has offered. By contrast, what is Mr. Scargill offering his industry? Twenty producing coal faces have already have been lost during the dispute so far, and a further 80 coal faces at about 50 collieries are causing serious concern.
The hon. Gentleman did not leave me much time to reply, so I must conclude my remarks. The Governrnent want this great coal industry back to normal working as soon as possible. Those of us who care about the industry want to see a coal industry that increases its markets and makes itself highly competitive. The only way ahead for the industry is for the miners to reject the extremism of their leadership. The support for the hon. Gentleman is shown by the absence of his; hon. Friends tonight.
The Question having been proposed after 10 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 twenty-nine minutes past Eleven o'clock.