HC Deb 03 December 1985 vol 88 cc253-73 10.13 pm
The Minister for Information Technology (Mr. Geoffrey Pattie)

I beg to move, That the draft National Film Finance Corporation (Dissolution) Order 1985, which was laid before this House on 19th November, be approved.

Mr. Speaker

It will be convenient to discuss at the same time the following motion: That the draft National Film Finance Corporation (Transfer of Assets and Liabilities) Order 1985, which was laid before this House on 19th November, be approved.

Mr. John Gorst (Hendon, North)

On a point of order, Mr. Speaker. Would it be possible at this stage, before the Minister deals with these instruments, to inquire whether, in view of the fact that the British film industry is now the subject of takeover rumours, it would be more appropriate for the Minister, far from moving the orders, to withdraw them so that matters which are totally contingent for the realisation of these orders can be resolved first?

Mr. Speaker

That is not a matter for me. We frequently debate rumours in this House.

Mr. Pattie

The draft orders provide for the transfer of the assets and liabilities of the National Film Finance Corporation to its private sector successor, the British Screen Finance Consortium, and for the dissolution of the NFFC once that transfer has taken place.

When the Films Bill debates were taking place earlier this year we envisaged that there would be a straightforward dissolution of the NFFC, with BSFC becoming operational immediately afterwards. It subsequently became apparent that, if that route were followed, NFFC's accumulated tax losses, a valuable means of increasing the sums available to BSFC, would be lost. However, if it were possible to transfer NFFC's assets and liabilities to a subsidiary company—BSFC Limited—in advance of the corporation's dissolution, the tax losses would also pass to BSFC as long as there was no major change in the nature or conduct of the business within three years. This does not mean that BSFC would be receiving special tax treatment. Those arrangements are frequently used by companies in the public and private sectors. However, it would mean that BSFC would have the benefit of an NFFC asset, which would not be available to it if a straightforward dissolution took place.

We were keen to maximise the funds available for film production through the new company and decided that this was the route we would take. Unfortunately, that has considerably increased the documentation necessary to effect the transition from NFFC to BSFC and also the complexity of the transaction. In particular, six separate items of documentation relating to the arrangements had to be prepared; copies of each have been placed in the Libraries of both Houses. All the documents have been signed by the various parties, but their completion is dependent on the two draft orders being approved.

It might be helpful if I described briefly the various documents and the sequence of events that is envisaged.

The first document is a hive-down agreement, operative on 23 December, by which NFFC's assets and liabilities at that date will be transferred to BSFC. In return, NFFC will receive shares in BSFC and a sum of money sufficient to cover dissolution costs and the total funds not committed to film project by NFFC. Those funds are destined for the British Film Fund Agency for distribution to film producers under the normal Eady rules. The sum of money will not be paid at this stage; it will be left outstanding on loan account to be paid on demand later.

On dissolution day, scheduled for 30 December, the loan account and shares in BSFC will pass to the Secretary of State. The Secretary of State and BSFC will complete an agreement, under which BSFC will transfer the portfolio of film rights, received on the transfer of NFFC's assets and liabilities, to the Secretary of State in return for a licence to operate the portfolio, upon certain conditions. The purpose of the agreement is to protect the assets contained in the portfolio and to ensure that the licence may, if necessary, be terminated, and the portfolio returned to the Secretary of State. The Secretary of State will also at this stage, demand and receive from BSFC repayment of the loan account moneys which I mentioned earlier, for appropriate disbursement. The financing agreement, by which the Secretary of State agrees to provide £1.5 million a year for five years to BSFC on appropriate conditions, will come into operation. The Secretary of State, under a separate agreement, will exercise his option to transfer the shares held by him in BSFC to the consortium members. The agreement between the consortium members and the Secretary of State, by which they commit themselves to fund BSFC, will become effective. This agreement has been expressed in the form of a finance letter so that it can be altered more readily when—as we hope and expect—more investors join the original members.

Finally, as a measure of protection for the funds available to BSFC, the Secretary of State has agreed to indemnify the company in respect of acts, omissions and liabilities of NFFC which were incurred before the corporation's assets were transferred to the company.

The arrangements should be completed by 2 January and BSFC should be fully operational from that date.

It is also intended that BSFC will operate the Government's project development scheme, which will provide finance of £500,000 a year for five years for the earliest stages of film production and for short films. The detail of this contract is still under discussion between the Secretary of State and BSFC, but I can assure the House that it will fairly reflect the assurances contained in the memorandum of understanding which my hon. Friend the present Minister of State for Defence Procurement placed in the Libraries of both Houses during the Films Bill debates earlier this year.

I would like now to update the House on BSFC. Hon. Members will recall that the memorandum of understanding stated that there would be four participants in the consortium: Channel Four Television providing £300,000 for five years, Thorn-EMI Screen Entertainment Ltd providing £300,000 for three years, Rank Group Holdings Ltd providing £250,000 for three years and members of the British Videogram Association also providing £250,000 for three years. The current position is that Channel Four Television, Rank and TESE have contracted to meet their commitments. Unfortunately, however, not all of the appropriate commitments from member companies of the BVA have yet been secured. That is disappointing, but I have no reason to believe that it is anything more than a temporary setback caused by the nature of this participant's structure and the number of interests involved. As regards TESE, I am pleased to tell the House that all three of the companies which appear to be leading bidders have given assurances that they will take on TESE's commitment to the consortium. Therefore, whatever the outcome of developments with regard to TESE's future ownership, on which I am sure hon. Members will wish to comment during the debate, we are following closely proceedings to ensure that there will be no adverse impact on the consortium.

Mr. Gorst

Can my hon. Friend assure the House that, if there is a change in the ownership of TESE, the Secretary of State would be concerned to find that the British company was no longer a British company? Under the statutory instrument for the transfer of assets, the Secretary of State must satisfy himself to that effect. If the company that takes over TESE is American-owned, would that undermine the arrangements that are being made?

Mr. Pattie

My hon. Friend knows the procedures that will be followed in the event of a transaction during the next few days. The Office of Fair Trading would immediately set its machinery in progress and would submit advice to my right hon. Friend the Secretary of State. My hon. Friend's point would be considered by my right hon. Friend at that time.

Mr. Bryan Gould (Dagenham)

I am interested in the Minister's answer. Do I understand from what he said that the question of whether BSFC remains a British company is not a matter of statutory definition but would fall within the more general considerations to be taken ino account by the Office of Fair Trading and would be relevant only in that sense?

Mr. Pattie

The hon. Gentleman must have misunderstood me. We are not talking about whether BSFC would be a British company. Unless I have misunderstood my hon. Friend the Member for Hendon, North (Mr. Gorst), I believe that his intervention was triggered by speculation, whether well-founded or ill-founded, in the newspapers about the ownership of one member of the consortium that will fund BSFC. I had addressed that point.

Mr. Gorst

May I clarify the matter for my hon. Friend? The draft statutory instrument uses the words, whereas the Secretary of State is satisfied that the Company is and will remain a British company. It will not remain a British company in the moral sense, whatever may be the legal sense, if one quarter of it is American-owned. What my hon. Friend said in reply was that that would be for the Office of Fair Trading to consider, whereas the draft statutory instrument says that it is for the Secretary of State to decide. I do not understand his reply.

Mr. Pattie

I was simply dealing with the sequence of events should TESE be sold. I cannot anticipate my right hon. Friend's reaction to the advice that he might receive. I am seeking to make clear what the Government want to see happen.

A moment ago I said that the three companies which are currently involved and have given commitments, Channel Four television, Thorn-EMI Screen Entertainment Limited and Rank Group Holdings, have each given undertakings with specific figures and times to the BSFC. The Government have taken soundings from the three bodies involved in the current negotiations with TESE to ascertain whether they would be prepared to take on the liability, and they have all confirmed their commitment to do so.

Mr. Tim Brinton (Gravesham)

Will my hon. Friend give way?

Mr. Pattie

I do not want to give way at the moment. I hope to have the opportunity to reply to the debate, but it would be helpful if I could proceed at this stage.

The internal structure of BSFC will be a board consisting of a chairman, a chief executive and representatives of each of the contributing organisations, including a Government nominated director.

I am pleased to be able to tell the House that Lord Barnett has accepted the post of BSFC chairman. Lord Barnett is well known in this House and the other place and I need say little about the personal qualities that he will bring to the post. BSFC participants consider that his paticular skills and expertise will complement those of their chief executive, Mr. Simon Relph, about whom I shall say more in a moment.

I am sure that hon. Members will also wish to know that Mr. David Berriman has been invited to be the Government nominated director to the BSFC board. Mr. Berriman is a non-executive director of Guinness Mahon and Co. merchant bankers, with a special interest in film finance. He holds a non-executive directorship in Cable and Wireless plc and was chairman of Satellite Television plc from its formation in 1981 until earlier this year. He is also a governor of the National Film and Television School and a member of the British Screen Advisory Council.

The BSFC board will lay down broad parameters for the company's operations—set out in guidelines for the chief executive—which must be approved by the Secretary of State. The board will not have an active involvement in individual investment decisions. These will be left to the chief executive, who will have responsibility for the management and efficiency of the organisation.

As hon. Members will be aware, Mr. Simon Relph was appointed BSFC chief executive earlier this year. Mr. Relph is an experienced independent film producer with an impressive catalogue of films to his credit and he follows a long and successful family tradition of involvement in the film industry. I was pleased to have the opportunity to meet Mr. Relph recently and was impressed with his plans for the consortium and the drive and enthusiasm that I believe he will bring to the post. I understand that he is already considering film projects and hopes to make BSFC's first commitments early in the new year.

The intention is that Mr. Relph will use the BSFC's funds selectively, providing "front" money to encourage others to invest or "end" money, which is often the hardest to find, to enable part-financed projects to go into production. Thus BSFC's funds will be used to maximum effect, increasing the number of low and medium budget British films available for audiences to enjoy. As I have said previously, the decision on which projects to support will be his, although the approval of the independent chairman, Lord Barnett, will be required if he wishes to invest more than £500,000 in any one film.

I hope that it will remove any lingering doubts about the manner in which BSFC will operate if I briefly outline some of the guidelines presently laid down by the board for the chief executive's use. These include the requirement that he should aim to foster the development of British films and film makers. As well as trying to secure a return on the funds put up by participants, the chief executive will aim to invest in films which provide opportunities for new creative talent or where the film makers may find it difficult to raise the whole of the funds required from other sources. He is also specifically charged with endeavouring to foster the availability of finance from other quarters. Finally, the chief executive will ensure that, subject to the objectives of the company being met, BSFC will act consistently with the long-term interests and well-being of the film industry in the United Kingdom.

I should like to take this opportunity to refer to developments in the industry since film matters were last considered by the House earlier this year. It is just over six months since the Films Act received the Royal Assent. Since that time, the Eady levy has been abolished and the quota and licensing requirements have also ended. These steps have been widely welcomed by the industry.

I am sure we have all been greatly cheered by the evidence of a continuing marked upturn in cinema admissions during this time. I think that most would agree that the British Film Year initiative has significantly contributed to the increase in cinema attendances and has been largely responsible for the higher profile that the industry has enjoyed this year. As hon. Members will be aware, the Government contributed £250,000 for BFY domestic events, including its most successful regional road show and the valuable film educational material that it has produced and made available to secondary schools. In addition, we were pleased to give £75,000 towards its overseas activities and I very much expect and look forward to a substantial BFY presence at the Cannes film festival next year.

Also encouraging has been the enthusiasm of the cinema sector in introducing experiments in pricing into a variety of locations and the large scale investment in the refurbishment of existing stock which is being carried out. The new development of multi-screen cinemas is another positive step for the future and I am sure that we shall all look with interest at the fortunes of the first of these developments, the recently opened 10-screen cinema in Milton Keynes.

I believe that the advent of BSFC will assist the production sector of the industry to sustain its recent success, and I invite the House to support the two orders.

10.31 pm
Mr. Bryan Gould (Dagenham)

Behind the two orders, as I believe that the Minister admitted, lies a web of complexity far greater than many of us envisaged when we debated these matters during the passage of Films Bill. I welcome the Minister for Information Technology to these debates, but it is perhaps regrettable that the Minister who piloted the Films Bill through the House, who is present in the Chamber, was not at the Dispatch Box to introduce the orders.

The Minister for Information Technology will have been informed by his colleagues, especially those who took part in the Committee on the Films Bill, that the proposals to which the orders gave effect were strongly opposed in the Committee not only by the Opposition but by many Conservative Members, especially those with a particular interest in and affection for the film industry. Furthermore, the proposals were specifically and vehemently opposed by every organisation with a claim to speak for the industry. That is the background against which we must consider the order today.

It is right that I should begin by paying tribute to the National Film Finance Corporation. Tributes were paid during the Committee stage of the Films Bill when it first became clear that the Government were intent on doing away with the corporation, but I repeat them today because the purport of one of the orders is to bring about the dissolution of the NFFC.

Many people, including some of our leading producers, have made it clear that in their own personal careers they owe a great debt to the NFFC. Many people also agree that the British film industry as a whole is in the debt of the corporation, especially in view of the meagre resources with which it has had to contend in recent years.

The real problem, however, is not just the demise of the NFFC but the nature, role and function of the institution proposed to replace it. That problem in turn arises from a fundamental, almost philosophical difference between the Government and those who perhaps most persuasively claim to speak for the film industry. The latter group argued throughout the passage of the Films Bill, and would do so tonight, that the importance of film as an industry transcends its commercial significance.

Film is an important expression of British cultural life and it cannot be left to the vagaries of the market place and the pressures of commercial forces. We and many beyond our ranks have argued it is important that the Government and British society should recognise the continuing contribution of film and should express an interest in the survival and future expansion of the industry. That can be done only through a publicly financed and supported institution, such as the NFFC.

The Government's proposal is familiar. It does not appear in its usual guise, but it is privatisation. Privatisation is to be achieved by a slightly convoluted procedure, a side wind. The Government believe that the future of the film industry can be safely entrusted to commercial forces. That immediately focuses attention on a number of matters of concern which the Ministers' opening remarks did not allay.

We made it clear in Committee that there is an absence in the Film Act 1985 of anything approaching a statutory obligation imposed upon the successor body to pay attention to the continued good health of the British film industry. We are left with the frailty of a commercial contract, the difficulties of interpretation, enforcement and, as the Minister rightly concedes, the difficulties of parties to the contract changing identity by virtue of commercial reorganisations.

We are left with an unequal contract. I leave aside the point which I attempted to emphasise in Committee, that the participant companies are required, in return for the derived advantages, to do something which they would do anyway, if they are concerned about the future of the British film industry, and that is to produce British films.

That is the extent of the consideration which they are required to offer under this arrangement. The problem is that the commercial commitment is to last for three years. The Government, oddly enough, have agreed to maintain their commitment for five years.

The question which has occurred to us and other critics of this arrangement is what happens at the end of the three years if the British Screen Finance Consortium says that it gave it its best shot but the industry is in a parlous state, a terminal condition, and that nothing can be done to save it. If it withdrew and did not renew the arrangement, who will pick up the bits? Who is there to step into the breach that is left as a consequence of the demise of the only public institution capable of fulfilling its functions? Nothing we have heard tonight or on previous occasions has answered that question satisfactorily.

Mr. Brinton

The hon. Gentleman has talked about a possible three or five years, but in a sense are we not thrusting out into the dark? My calculations tell me that, in spite of the Minister's pious hope that things will go all right, if two of the major parties were to merge in the form of a takeover and the present partners were ruled out of court because of the Monopolies and Mergers Commission and British Videogram Association not coming to an agreement with its members, the NFFC would be left with one partner, Channel Four Television.

Mr. Gould

The hon. Gentleman is right. He addresses a problem which I shall take up later. In the financing agreement, which we were invited to consider, there is a yawning gap. There are three parties only and not the four that we were told would be involved. The Minister has explained that there are difficulties in getting the British Videogram Association into a position in which it can fulfil what I assume were undertakings. However, many months have passed. We were told that £1.1 million would be made available over at least the three-year period, but his contracting partners have come forward with only £85,000.

Mr. Chris Smith (Islington, South and Finsbury)

Does my hon. Friend recall that during our discussions in Committee on the Films Bill, as it then was, the British Videogram Association suggested to the Government and the Committee that it would not be prepared to make any contribution if there were a danger of a levy being placed on blank tapes? Will he press the Minister on whether there is any remnant of that discussion in the present reluctance of the association to come up with the goods?

Mr. Gould

I am grateful to my hon. Friend. His excellent memory is correct. We put the issue to the Minister in Committee and he denied that any such thought was in anyone's mind. We watch with interest the reports that are starting to appear in the daily press to the effect that perhaps the Government are having second thoughts on a levy on blank tape. I wonder whether that is what the British Videogram Association is waiting for. I invite the Minister in his reply to comment upon that.

As I understand it, there are other peculiarities about the financial arrangements. Will the Minister confirm that the £1.5 million per year which the Government are committed to providing will be taxable in the hands of the recipients? Is that why the deal to write off the tax losses of the NFFC is so important? Will he confirm that that deal will last for only three years whereas the Government's commitment to pay £1.5 million will last for five years? Are we to assume that that sum will be taxable for the remaining two years and will be worth much less than would appear at first sight? Perhaps the Minister will comment on the £500,000 that is to be made available to the national film development fund. It may be that that money can be used for any given film, but that will be for only two thirds of development costs. If that is so, there has been a significant change in practice. It will mean that, far from the fund being able to absolve film producers from the difficult business of raising finance for development, they will still have to turn to private sources for finance, with all the attendant difficulties. I hope that the Minister will be able to tell us that that is not the position.

Our objection in principle to what is provided in the orders remains as strong as ever. Our difficulties with unresolved problems also subsist. However, there has been in the past few days a major new development. One of the parties to the BSFC—Thorn—EMI Screen Entertainment Limited—is in danger of being taken over. Perhaps "in danger" is the wrong term because Thorn—EMI seems extremely keen to sell. We must assume that the deal will go ahead with some purchaser.

The House will see that the timing of the development is extremely unfortunate for the Government. It underlines, highlights and emphasises all the doubts and difficulties that we felt about handing over the future of the film industry to commercial forces. These forces are subject to all the usual market pressures and the difficulties of maintaining commercial viability, and they change identity in unpredictable ways. The Minister must take account of the fact that TESE is vital to the British film industry. In some respects, it is half of the British industry as a distributor, exhibitor, a producer of films and the owner of a major film studio, a major film archive and an extensive film and video library.

The problem is compounded when we look at the list of potential bidders and realise that the leading contender, certainly the contender that has offered the most money, is an American company—Cannon. It is based in America, owned by two Israelis and operates internationally. It has no record of commitment to the British film industry. That is the relevance of the question of the hon. Member for Hendon, North (Mr. Gorst). Is the British Screen Finance Consortium, in which a major participant will be Cannon, a British company for the purpose of the orders? We need to know the Minister's answer, not that of the Monopolies and Mergers Commission.

Mr. Gorst

The problem is even more worrying than the hon. Gentleman has presented. If a takeover or a sale took place along the lines that the hon. Gentleman and I have been concerned about, it would not only be a question of British film making and whether it would be taking place at the level promised by the Government, but whether the cinemas would continue to exist. Even if the motives of the Cannon group are to remain in the cinema exhibiting side of the business, there is no guarantee that it will not close some of the cinemas which are in parallel with the people that it has taken over.

Mr. Gould

I hope to consider a little later in my remarks precisely the point that the hon. Gentleman has made. I agree with the concern that he has expressed.

For the moment, I want to concentrate on Cannon as a British film producer, having taken over TESE, as one assumes it might. On its record one is bound to conclude that although occasionally it might, for straightforward commercial reasons, depending on exchange rates and other factors, choose to use British technicians and facilities for the making of films, that is a different concept from the business of making British films. We made it clear in Committee that by "British films" we mean films that reflect British life and British themes and are a true manifestation of British culture. I would defy the Minister or any other hon. Member, looking at Cannon's record, to express any confidence that Cannon, having taken over such a large chunk of the British film industry, would be in a position to maintain, or would even wish to maintain, that concept of British films.

Mr. Gorst

I shall interrupt just once more because I think that my point is relevant. It was reported in the Daily Mail two days ago that the next film of one of the partners in that operation will be a modern version of 'King Lear' with a script by Norman Mailer and set in America, with Lee Marvin as the King who runs a conglomerate and Woody Allen as the Fool, his accountant. If that is British in its content, I do not know what "British" means any longer.

Mr. Gould

I hestitate to offer any judgment on the value of such a project, but, however meritorious it is, as the hon. Gentleman says, it cannot be regarded as an expression of the British film industry.

Many interventions from both sides of the House have made it clear that the proposed takeover raises wider issues. For example, there is the well-founded fear, which has been the case in many recent takeovers, that part of the purchase price will be obtained through asset stripping. Perhaps the obvious asset to be stripped in this case is the Elstree studio. That would be an immense loss to the British film production industry. There is the matter of the destination of the extremely valuable film archive. Perhaps potentially the most worrying aspect arising from the deal would be the reinforcement of the distribution duopoly from which we thought we might have been escaping.

Without making too much fuss about it, Cannon has moved into second place already through its takeover of the Star cinema chain. The merger between Cannon and TESE would give the new body 57 per cent. of British cinema screens. On monopoly and merger grounds alone, that is sufficient to begin a large number of alarm bells ringing. That is what has happened. The industry has reacted to the prospect with horror. David Puttnam has described the proposed takeover as a disaster for the British film industry—

Mr. Jack Dormand (Easington)

And Richard Attenborough.

Mr. Gould


The Film Industry Council of Great Britain, the membership of which reads like a roll of honour, has too. All the bodies that claim to speak for the industry have called upon the Secretary of State and the Director General of Fair Trading to make sure that the bid is referred to the Monopolies and Mergers Commission. The British Screen Advisory Council fears, as it says in its letter to the Director General, if the takeover takes place, the elimination of anything which could be called the British film industry. I am sure that the Secretary of State will be aware of this. I draw the Minister's attention to the MMC report on film distribution in 1983, which said paragraph in 8.57: It appears to us unlikely that EMI or Rank"— then the two major film distributors— would seek to acquire cinemas, with the result that they increased their market shares in exhibition. But in the eventuality that they did, we believe that it would be detrimental to the public interest. The report was describing an increase in market share by either of the then two leading operators. We are now considering the prospect of a much greater concentration of cinema ownership than anything contemplated by the MMC at that point, but which, even at its much lesser degree, it condemned as being detrimental to the public interest.

Therefore, I hope that the Minister will accept—perhaps he will say tonight that he does—that any bid by Cannon to take over TESE would cry out for reference to the MMC. I hope that that would happened.

It is conceivable, as the hon. Member for Hendon, North said, that, having taken over TESE, if permitted to do so, Cannon would seek to deal with the problem of excessive market share simply by closing down capacity. That might be one of the consequences, but it would be almost equally detrimental to the future of the British film industry. I hope that the Minister will not allow that to happen, or accept it with equanimity.

The proposed sale of TESE has arisen perhaps fortuitously for those of us who have criticised the Government's proposals, and perhaps unluckily in its timing for the Government. It is no doubt embarrassing to the Government to discover that the rock of the British Screen Finance Consortium on which they propose to build the future of the British film industry is quicksand. In another sense it is poetic—not to say filmic—justice. Having deliberately handed over the future of the British film industry exclusively to commercial forces, the Government are now compelled to live with the consequences. But we the critics of the Government are entitled to say not only, "We told you so," but that it is now the Government's responsibility not just to live with the consequences, but to ensure that the British film industry, particularly in British Film Year, does not have to die with the consequences.

Now, many of the Government's assumptions have turned out to be false. The British film industry is facing developments of an unpredictable nature and its very survival is at stake. Therefore, tonight is the wrong moment for the Government to propose the orders. I urge them to accept that some time should be given to see what happens to one of the major elements in the industry. We need to see the future shape of the British film industry; we need to know who the participants and the contracting parties to the arrangements will be.

For those reasons, I urge the Government at least to wait until the dust has settled. I urge the Minister to withdraw the orders. I believe that I do so with the support of many hon. Members on both sides of the House.

10.54 pm
Mr. Tim Brinton (Gravesham)

I start by echoing the words of the hon. Member for Dagenham (Mr. Gould). The more one considers the scene of these few days, the more one doubts the wisdom of the two orders being passed by the House tonight. It seems to be the wrong moment in every way.

Before I continue, I must, as is traditional, declare my interests which conflict slightly with each other. I am the part-time chairman of Airtime Publicity (Newsflash) Limited, which has as one of its many clients Thorn-EMI; on the other side I am a member of the Association of Cinematograph, Television and Allied Technicians, and Equity, who seek employment in films. When the parent legislation was being considered, I was also a consultant for the British Videogram Association Limited, but I am no longer because I suspect that it did not like my views about a levy on films being shown on television. So I am free to express my views without any taint in that direction.

I started my contribution to the long debate on the British film industry about a year ago with a question—do the Government want a British film production industry? That question has still not been satisfactorily answered. We have had a compromise. I understand entirely the suggestion of the hon. Member for Dagenham that the British film industry should be publicly supported if it is to survive, but I do not go entirely along that line.

There was another method—of saying to the television authorities which show feature films that a levy should be paid. After all, it is not taxpayers' money; it is money raised by licence or by commercials on television. That levy should go as a contribution not necessarily to distributors or exhibitors but to film producers.

The proposed partners in the curious marriage of four produce as well as distribute and exhibit. But the main concerns of the two major partners—Ranks and Thorn-EMI, in my estimation—are the cinemas, distribution and exhibition. If we go back to the history of the Eady levy, we find that it was originated to help the film producer, but it tends to get syphoned away from the creative end of the market.

The position has been eloquently described by my hon. Friend the Member for Hendon, North (Mr. Gorst) and by the hon. Member for Dagenham. There is doubt as to whether there will be any partners within a week or two. I support the views put forward about the concept of the Cannon company coming in and buying up Thorn-EMI. Like many of my colleagues, I received a postcard today from David Puttnam. On the front of it, with some pictures, was written the word "Bodyline". I thought that was a description of what the Government were about to do to the British film industry, but it turned out to be an advertisement for his latest film.

The whole British film industry—trade unions, actors, producers, exhibitors and distributors—is fearful that this arrangement, far from just not working, may pull the whole castle down. If Cannon does buy Thorn-EMI, I hope my hon. Friend the Minister will reassure us that that must go to the Office of Fair Trading straight away.

I should like my hon. Friend to answer another question. What happens if the Rank organisation buys Thorn-EMI? Am I right in suggesting that if the British Videogram Association does not reach agreement, that strange financing unit will be left merely with Channel 4? That seems sad. Ironically there is one virtue about it; the level of funding suggested by the Government is so low that that is the size of product which the Government are thinking of supporting, not the true feature film.

10.59 pm
Mr. Clement Freud (Cambridgeshire, North-East)

The case against these orders has been eloquently made by almost all hon. Members but perhaps most eloquently by the hon. Member for Dagenham (Mr. Gould). The orders manage to create a structure beset with uncertainties and contradictions which will do little to foster the British film industry. It must have been noticed that no part of the British film industry welcomes them.

The orders are part of the central Government belief that everything goes better if it is private. It is clear that in this case that is an ill-considered belief. They fail to recognise any Government responsibility towards the industry.

The French Government have given £9 million to their film industry. The Minister's pride at having pulled £500,000 from the Treasury compares pretty pathetically with that.

Two sets of questions must be asked about the new body—finance and structure. The hon. Member for Gravesham (Mr. Brinton) mentioned the postcard that he had received from David Puttnam about "Bodyline". The Minister has six slips and a gully in the box beside him, but he has not been well served. The hon. Member for Hendon, North (Mr. Gorst) asked him about the nationality of the bidder. We might have thought that we would have had a promise that if it turns out to be non-British the orders will be withdrawn.

The Government input was described as taking the place of the abolished Eady money. They continue to claim that they are giving about twice the inadequate money that Eady gave. When considering that contribution we are forced to return to the point that we reached over and over again in Committee, which is that given that Eady was largely abolished because it was so inadequate, to double the amount does not make it adequate.

The claim should be examined more closely. There are a number of aspects to be examined—the tax incentives and the business expansion scheme, about which we heard so much. It would be interesting to know how many films have been made with business expansion scheme money. What representations has the Minister received about the rules governing the length of time for which the money must be committed and the number of interests that the company can have under the scheme. It appeared during the passage of the Films Bill—the Under-Secretary of State for Employment said that he would consider the points—that the business expansion scheme was irrelevant given the special nature of the film industry. I hope that the Minister can tell us about that.

The point has been made that the Government's contribution is subject to tax. The Government have said that they will put £1 million to £1.5 million into the new body for five years. By Government standards, if not by those of the industry, that may sound reasonably generous. The belief in the industry is that the amounts will be subject to tax. It seems insane to give money with one hand and take it away with the other. It also seems to be mean because it reduces the amount by nearly one third.

I should also like a reply to the question that the industry is asking—is the amount a loan rather than a grant? Section 5 of the Films Act 1985 provides that the Secretary of State may provide the money by loan, grant or guarantee. However, the document sent from the Minister of State's office which contains the agreement between his Department and the four contributors' solicitors specifies a loan. It states: The Secretary of State proposes to make available to the consortium funds of £1.5 million each year for a period of five years. This is presently intended to be in the form of a loan. That document is dated February 1985. The House needs clarification of that point. Why is the money to be a loan rather than a grant? Does that not undermine whatever confidence the industry might have had in the Government's commitment? It would be fair to announce the conditions of repayment. Why has the money always been described as a grant? Why should Britain be the only major country whose Govenment give no solid financial support to the film industry?

It is also fair to point out that the Government are misleading themselves about what can be achieved with the money. There is the point about basing the contributions on the pathetic Eady money. They may be misleading themselves that many films can be made with the money available because the BFFC has been active recently on a small budget. If the Minister studies the matter, he will realise that success has been achieved by saving its money for several years.

As many hon. Members wish to speak, I shall close with the possible take over of Thorn-EMI by Cannon. It is extraordinarily important to consider that from the point of view of both nationality and monopoly, and to remember that Cannon has shown no commitment whatsoever to the British film industry. It has not even given money to British Film Year, and it has no record of making good artistic films. There is a case for the take over to be referred on grounds of cinema share, which would rise to nearly 60 per cent. of the total, and the consequent impact on distribution practices, which have already been described by the commission as dubious.

As I have asked for the withdrawal of the orders, it would only be right for the House to compliment the Minister on his choice of Lord Barnett, whom we all respect and admire, and to welcome Mr. Simon Relph, a second generation film maker, who is equally acceptable. In view of our representations, I ask the Minister to think most carefully about withdrawing the orders now for the time being, if not for ever.

11.6 pm

Mr. John Gorst (Hendon, North)

I have not heard a word in the speeches after that of the Minister with which I disagree. I agree with them so much that I can cut my speech short. Every speech has been hitting the target. I hope that my hon. Friend the Minister will bear that in mind in his reply.

Nevertheless, I endorse the tribute paid to the NFFC's work over the years by the hon. Member for Dagenham (Mr. Gould). Indeed, I pay tribute to the reputation of those whom the Minister has selected as part of the upper echelons of the structure. However, I echo the hon. Gentleman when I say that the structure will be on shifting sands. I agree with all that he said about Cannon.

My hon. Friend the Member for Gravesham (Mr. Brinton) mentioned the possibility of a monopoly, but the third threat, of which not much has been made, is that about 60 per cent. of what is being sold by Thorn-EMI Screen Entertainment is library material. Other bidders—they have been referred to in press reports—will be extremely hungry to acquire the other assets, and will have no commitment to cinemas per se, or to making British films. That is another cause for anxiety, even if the concerns about a monopoly or foreign buyers do not arise. I hope that if the time comes, the Minister will consider that seriously. The major weakness of the structure is that it is being formed on a basis of which at least one quarter is up for auction before the operation starts.

I wish to drive it home to the Minister that in discussing the two orders we are doing worse than putting the cart before the horse. We are asking the cart and the horse to travel along a road which has not yet been decided, down a route and in a direction that we do not know, and without their having even the necessary sustenance with which to make the journey. This plodding, pleading and over long-suffering beast is the British film industry, which is now facing a botched up future, worse than anything predicted during the debates on the Films Act.

Mr. Freud

The horse and cart do not even have a valid tax disc.

Mr. Gorst

Perhaps it is in such a state that it cannot afford to buy one.

The House will recall that my right hon. Friend the Member for Mole Valley (Mr. Baker) scrutinised the film industry, and disappeared. He evaporated before the Bill ever came before the House. His position was then taken by my hon. Friend the Member for Kingston upon Thames (Mr. Lamont), who piloted and enacted the proposals that he had inherited. He then moved on to procure the defence of the realm.

Now we have my hon. Friend the Member for Chertsey and Walton (Mr. Pattie), who picks up the shreds and remnants of what they left behind them. One wonders whether he will be here in a year's time to give us further answers to the questions on which he will be replying tonight. I hope that he will be here, because I hope that he will give us satisfactory answers to the points that we are making. If he does he will deserve to be here to answer our subsequent questions and receive our thanks.

The important questions are those of monopoly, asset stripping and foreign ownership. My hon. Friend the Minister owes us answers on these points because they are absolutely central to whether the orders are approved or not. Today's statistics, like yesterday's promises and tomorrow's predictions on the film industry, will have to be good to take in those who have witnessed the Government's continued retreats throughout the past few years. There cannot be any secret about this. The only satisfactory immediate step would be a re-examination of the financing of British film making, and these orders are only a paltry aspect of that.

Although my hon. Friend the Minister made much of the small trivialities—for which small mercies we must be thankful—they are trivialities in relation to what is required. Some of my hon. Friends and Labour Members will remember that during the debates on the Act I said that what was being proffered to the film industry was less than the price of a tank. With his early experience in the Ministry of Defence, my hon. Friend will know that we need many tanks to have an army, and many films to have a film industry.

I hope that my hon. Friend will candidly admit that events are overtaking these orders. If he admits that, he will also appreciate that they belong to a situation for which they were never an answer, and, if approved, will come into effect to meet a situation that no longer obtains.

I draw my hon. Friend's attention to what his predecessor said to the House. In answer to me and the hon. Member for Dagenham, the Minister said: I recognised the legitimacy of the point … about wanting to be assured that this was not just a commercial organisation but a body which would have regard to the cultural aspects of film making and would be a force towards underpinning that important aspect of our cultural life. I remind my hon. Friend of the quotation from the Daily Mail that I read out during the speech of the hon. Member for Dagenham. Although one does not want to pre-judge the Cannon organisation and its plans, if it has any, for the British industry, the portent of that quotation will need to be carefully taken note of by any Minister.

My hon. Friend the Member for Kingston upon Thames also said: If anything went wrong with the consortium, or if we felt that it was not doing what was in the interests of the British film industry, the Government would be able to retrieve the assets." —[Official Report, 5 February 1985; Vol. 72, c. 801–7.] I put it to my hon. Friend the Minister for Information Technology that that does not have to arise in the future; it has arisen now.

11.15 pm
Mr. Austin Mitchell (Great Grimsby)

I cannot echo the remarks of the hon. Member for Hendon, North (Mr. Gorst) about putting the cart before the horse. Given the nature of the Minister for Information Technology's speech, the Government are putting the cart before the hearse. Another nail is being driven into the coffin of the British film industry. It is going out not with a bang but with an ideological whimper. We are confronted with the spectacle of yet another Minister being in the job long enough to throw a few more shovelfuls of dirt into the grave of the British film industry before he moves on to another portfolio.

The orders are a sad postscript to the Films Act 1985. It was a botched-up job even then. It has been made even messier by the transmutation of Thorn-EMI into a bottomless hole into which it is desperate to shovel money at any cost. The original mistake was that this Government assumed that the British film industry, which reflects our national life and our national character, can survive without the financial help that is given by Governments to the film industries of nearly every other advanced country. It could easily become a production outhouse for the American film industry, producing a mid-Atlantic culture that represents nothing.

The British film industry could become a production facility for films such as "Star Wars." Britain cannot have a film industry that reflects our stupidities, complexities and claustrophobia without Government help. The Minister boasted of providing £1½ million per annum over five years. It contrasts sadly with the £1 million per annum that was provided by the Labour Government in 1948 when the National Film Finance Corporation was established.

The new body is to produce films for television. This category excludes the industry's most recent and major successes. "Another Country" was financed by the existing body, as were "The Dresser", "A Private Function", "Local Hero", "Nineteen Eighty-Four", "The Company of Wolves", "Chariots of Fire", "The Killing Fields" and "Gandhi". If the British film industry is to concentrate on television films—which ought to be financed by television—it will not be doing the job that it ought to do.

I do not object to privatisation. I do not mind gratifying the Government's prejudices if they will provide financial support for the industry. However, privatisation raises problems about the life of a private company, because of the possibility of a takeover and the portability of the private company, with control going overseas. The real problem is the provision of finance for a viable, healthy national industry. The Government offer no solution to that problem.

To all that has to be added the problem of Thorn-EMI. This company must have some kind of financial death wish. It demonstrated real incompetence by taking a major stake in a major commercial television contract and turning it into a financial disaster. It is desperately dredging around for money. It would have sold off the Thames Television contract if the Independent Broadcasting Authority had allowed it to do so. It has tried to raise money from the film libraries of both Thames Television and Thorn-EMI. These have become a profitable source of investment. That was demonstrated by Rupert Murdoch's takeover of Twentieth Century Fox in the United States.

There is a rich pot of gold there for exploitation which is now up for grabs, along with selling off the cinema activities for property development.

We have seen the growing crisis in Thorn-EMI, characterised by the comment of a Thames executive, "It did not actually want to sell Thames, but even your grandmother has a price." That is a reflection on its attitude towards the company. It must be emphasised that this takeover bid, and particularly the Cannon bid, poses real problems. While Thorn-EMI might have a death wish, all that Cannon has to offer is the death wish of gratifying the psychological prejudices of Michael Winner.

It is essentially a foreign company. It is not really a production house but a body of financial manipulators which sells the rights to films before it produces them. The takeover of the Star chain means that Thorn-EMI's screen share of 33 per cent. of audiences plus Cannon Classic's 24 per cent. makes a total share of 57 per cent. of audiences. In other words, the company, if merged, would be two and a half times the nearest competitor, which is Rank.

As my hon. Friend the Member for Dagenham (Mr. Gould) said in his powerful opening speech, the Monopolies and Mergers Commission warned in 1983 that it would be detrimental to the public interest to have such a concentration of audiences. It would be detrimental not only in terms of cinemas but in video distribution, where Thorn-EMI has 15 or 16 per cent. of the audience, and detrimental to the British film industry.

The new company, Cannon, is essentially an American-controlled company with no loyalty to the indigenous British film industry. It will remain what it is now, an American-based international group controlled by two Israeli citizens. There is a strong probability—because it will concentrate on its production base in California—that it will sell Elstree studios, the one remaining pride of the British film industry, to raise money for its other activities.

This bid for Thorn-EMI must be referred to the Monopolies and Mergers Commission, which, if its words of 1983 mean anything, will almost certainly refuse it. It cannot consistently accept such a concentration of power in the British film industry. The orders should be held up, otherwise the only appropriate words tonight will be some lines on the funeral of Sir John Moore at Corunna, words that are indeed appropriate, given the contribution of another John Moore to the death of the British film industry in his refusal to make the tax concessions that the industry needs: Not a drum was heard, not a funeral note,

As his corse to the rampart we hurried. There has been a sound tonight. It has been the sound of a united protest from hon. Members about what is being proposed by the Government. That sound should be heard.

11.23 pm
Mr. Derek Conway (Shrewsbury and Atcham)

As a Light Infantryman, I welcome words concerning Sir John Moore being quoted to the House. Having listened to five hon. Members in what I would describe as a well-balanced Chamber speak against the Minister, I rise with some trepidation to advise him to stick with it.

While accepting the greater knowledge of my hon. Friends the Members for Gravesham (Mr. Brinton) and for Hendon, North (Mr. Gorst), I come to the debate, having served on the Committee which dealth with the main legislation, as a newcomer to the industry. While, therefore, I may see it without knowledge, at least I see it through unbiased eyes and not through rose-coloured spectacles. In that sense, I hope that, in his new role, the Minister will see through the smooth transition from the National Film Finance Corporation to the British Screen Finance Consortium.

While hon. Members on both sides have welcomed the appointment of Lord Barnett, who was a Member here before I was privileged to join the House, it sometimes causes me despair that it should be difficult for my party, when in government, to find those of its own philosophy to hold these allocations to quangos. But I am sure that Lord Barnett will prove me wrong. I wish him well.

In Committee on the Films Bill, my hon. Friend the former Minister for Information Technology—the hon. Member for Kingston-upon-Thames (Mr. Lamont)—was very supportive of the film industry. He had no qualms about saying in Committee that the Government wanted a successful British film industry. They did not want just an industry, but an industry that was part of our British culture, with films made in British studios about the British way of life. In that respect, my hon. Friend the Minister said tonight that the BSFC would project the well-being of the film industry in the United Kingdom. The NFFC provided start-up and last part finance, and I have heard nothing from hon. Members who oppose the orders to suggest that the BSFC will do anything different.

Mr. Gorst

Does my hon. Friend know the difference between crumbs and a square meal?

Mr. Conway

Indeed, but my girth is not expanding as rapidly as my hon. Friend's. No doubt I shall work on that as I spend more years in this place.

Hon. Members have been less than generous to the Government and, more importantly, to those who finance the Government—taxpayers and viewers—when dealing with their contribution to the film industry. But this move to privatise, albeit with substantial Government incentives, will still encourage the industry to raise funds.

On 11 December—it hardly seems a year ago that we were listening to some interesting but long-winded speeches as we approached the Christmas recess—my hon. Friend the former Under-Secretary of State for Trade and Industry, the hon. Member for Rossendale and Darwen (Mr. Trippier), who steered the Films Bill through Committee, said that the private sector contribution to BSFC was estimated at £1.1 million. He went on to say—the fact has not been disputed tonight—that the Government's contribution would be more than £1.5 million, with an additional £500,000 for the project development scheme of the National Film Development fund. That, in addition to the assured external funding, comes to rather more than some hon. Members have suggested.

Mr. Brinton

Is my hon. Friend aware that the total figure about which he is talking would not get near to completing one feature film, let alone fund 20?

Mr. Conway

I understand my hon. Friend's point, but the NFFC was involved in start-up and last part financing, and the BSFC will presumably do the same. The assured external funding, especially from Channel Four Television, which the hon. Member for Dagenham (Mr. Gould) suggested was for three years, but which we both know is for five years, and the three-year contributions from Thorn EMI and from Rank, are subject to some controversy. But we must not forget—

Mr. Gould

The hon. Gentleman said earlier that the figure of £1.1 million to be raised and contributed by the participants in the consortium was not disputed. But if he adds up the contributions of the three participants whom he has mentioned, they come to £850,000.

Mr. Conway

Yes, but we have not reached the end of the calculation, so perhaps the hon. Gentleman will bide his time. Then we have the generated internal income from the repayment of loans for previous film production. The NFFC's external funding since 1980 of £1.5 million will compare interestingly with the BSFC funding, which will be twice that, plus the NFFC's film portfolio of 800 films made since the 1940s, which, at its last estimate, was worth £200,000 per annum. But those who served on the Committee will recall that, taking into account repayments for the first three years at least, that would bring up to £600,000 per annum.

We are getting down to the nitty gritty of the financing. Although my hon. Friends were scathing about the amount of Government funding available, the fact is that more than twice the amount of help towards start-up and final part financing is now available.

The vagaries of day-to-day business are not appropriate to tonight's debate because the Secretary of State will still have the licensing power that will give the House the necessary safeguard.

The hon. Member for Great Grimsby (Mr. Mitchell) spoke of the concentration of audiences. It is a changing industry. Those of us who try to project into the future are not always right. Fallibility is not the prerogative of those who serve in this House. I hope that some of my hon. Friends, including the Minister, will have seen the programme on BBC 2 on Sunday, when Mr. Stafford, the managing director of ABC cinemas, was interviewed. He has managed to turn a dreadful loss into a substantial profit by responding to the demands of the consumer who wants to see the British culture that I hope we are here to support—not the demands of those with a vested interest in the industry or those out for more Government cash.

I hope that my hon. Friend the Minister will stick with that and that the order will be supported by the House tonight.

11.30 pm
Mr. Chris Smith (Islington, South and Finsbury)

In Committee on the Bill, many hon. Members on both sides of the House voiced a number of major worries about what would succeed the National Film Finance Corporation. Those worries have not been eased by what the Minister has said tonight, and they have certainly not been eased by developments during the past few weeks on the future of Thorn-EMI.

One worry that we expressed was the sheer lack of good funding for the future of the British film industry and the promotion of new films. Even if all four partners come together, even if the Government's contribution is at the top end of their prediction, the money available will be only £2.5 million in one year—compared with the £12 million that goes each year to Covent garden and the £29 million that goes to the four major artistic institutions in this country. I do not wish to remove a single penny from the amount that goes to those institutions, but it is a strange ordering of priorities when the entire funding for the promotion of new films and talent within the British film industry is only £2.5 million a year.

Secondly, hon. Members voiced a major concern that the time limit placed on the guarantees given by the four partners in the supposed agreement of the consortium was three years. That worry has not been removed by anything that the Minister has said tonight.

Thirdly, hon. Members expressed concern about the impact of the domination of the two major distribution outlets for films—Thorn-EMI and Rank. They would be dominant in the consortium involved in the promotion of new films, and especially in the promotion of small-scale, independent productions with a non-commercial flavour. The immediate conflict between the commercial interests of the distributors and the non-commercial interests of the film makers has not been resolved or lessened by anything that we have heard tonight.

Most important of all, we voiced our concern about the need to have a specifically British flavour in the British film industry. We wanted to remove our film industry from the domination not of American money but of north American culture. We want the British film industry to be a voice for the people and the cultural heritage of Britain. We now hear news of the possible takeover of Thorn-EMI by an American company. Thorn-EMI will have a leading role in the consortium if the order is approved. We cannot but express our concern about the future and nature of the British film industry in the light of those discussions.

It serves to underline the major point, made by my hon. Friend the Member for Dagenham (Mr. Gould), that the promotion of new film, new initiatives and new talent within the film industry should not be subject to the vagaries of commercialism. Public interest is not being served by the orders or by the Government's action in bringing them forward.

11.35 pm
Mr. Pattie

With the leave of the House, I shall reply to the debate. In coming to the Dispatch Box in this role, I have felt all the warmth of greeting of a Hammer films spectacular. None the less, hon. Members have trotted out the various objections that they expressed in Committee on the Films Bill. Among the more bizarre contributions was that of the hon. Member for Great Grimsby (Mr. Mitchell), who seemed to think that the BSFC would produce filss only for television. I must inform the House that the BSFC will have considerably more funds than its predecessor, the NFFC.

In case the House has forgotten that the NFFC has produced or has been the agent in producing an impressive catalogue of low and medium budget British films, I mention just three low budget films, all made for less than £1 million, which are currently achieving very good cinema audiences—"Letter to Brezhnev", "Supergrass", and "My Beautiful Laundrette". I understand that the latter was originally conceived as a television film, but is now the fifth most popular cinema feature in London.

The House and the hon. Member for Dagenham (Mr. Gould) may have forgotten, too, that the original legislation on the NFFC was the National Film Finance Corporation Act 1981 which expires on 31 December 1985. The NFFC then ceases to trade, so there is no question of the orders being withdrawn. Unless the BSFC is in existence, no support will be provided for the industry on New Year's day 1986. I am sure that the hon. Member for Dagenham would not wish that to happen.

Mr. Gould

The demise of the NFFC is a direct consequence of the Government's failure to renew its life as happened on previous occasions. Even with the earlier deadline of 23 December on which the orders are to take effect, the Minister still has a matter of weeks in which to try to resolve two questions—the continuing unwillingness of the British Videogram Association to play its part in the BSFC, and the precarious situation of Thorn-EMI, with the question mark over its participation in the BSFC. I put it to the Minister in good faith that it would be in the interests of the British film industry to withdraw the orders today to give the House time to see what is likely to happen to the future structure of the industry.

Mr. Pattie

I will not agree to do that, although I do not doubt the hon. Gentleman's good faith in the matter. As I told the House in my opening remarks, the three members of the consortium have undertaken certain sums for certain periods and all the bidders currently interested in TESE have undertaken to take over the liabilities.

Hon. Members seem to be assuming that a particular purchaser will be successful. There are two other possible outcomes—a management buy-out by the present company or purchase by Rank. Hon. Members have leapt to the conclusion that the third party will be successful. As the House would expect, the Government are watching the matter with extreme care and expect to receive advice and submissions from the Office of Fair Trading if a deal is struck. The Government will of course, consider that advice urgently and take action accordingly. The House need be in no doubt whatever about our commitment to the future well-being of the British film industry.

In their comments today and in their belief that the BSFC will be unable to do its job in raising finance the Opposition seem to have ignored that fact that the whole thrust of finance will be on a partnership basis. There will be Government finance in all good faith of £1.5 million per year for five years and the consortium will be able to raise additional finance itself. I am glad that the appointment of Lord Barnett has been welcomed. If he were in any doubt as to his and Simon Relph's ability and that of their fellow directors and members of the consortium to raise that independent finance, he would presumably not have accepted the appointment. I have a very high regard for Lord Barnett's capabilities and he is not the kind of person to be casting around for extra activities.

Mr. Gould

I happily concur in the Minister's welcome for the appointment of Lord Barnett, but will he confirm that Lord Barnett agreed to take on this onerous task long before it became clear that one of the major constituents was in the process of being taken over? I understood the Minister to say that he expected there to be a reference to the Monopolies and Mergers Commission in the case of the bid by Cannon and one assumes that the same would apply to a bid by Rank. If that is the implication of his remarks, it reinforces the fact that Lord Barnett's inheritance is an extremely dubious and confused one. Is not that a further reason for withdrawing the orders today?

Mr. Pattie

No, it is not. The hon. Gentleman is a past master, if not a genius, at attributing to me things that I have not said. I said that the Office of Fair Trading would consider any deal that was made and give us advice which we would consider, as the hon. Gentleman would expect.

I welcomed the speech of my hon. Friend the Member for Shrewsbury and Atcham (Mr. Conway)—I was glad to have some light infantry solidarity in the debate. My hon. Friend has been a shining light of perspicacity in seeing that what is needed for the well-being of the British film industry is that the House should accept the orders and that the BSFC should be established on 2 January. We look forward to that eventuality.

Question put and agreed to.

Resolved, That the draft National Film Finance Corporation (Dissolution) Order 1985, which was laid before this House on 19th November, be approved.