§ [Relevant documents: The Second Report from the National Heritage Committee of Session 1994–95, on the British Film Industry (House of Commons Paper No. 57-I,-II and-III), and the Government Reply thereto (Cm. 2884).]
§ Motion made, and Question proposed, That this House do now adjourn.—[Mr. Streeter.]9.34 am
§ Mr. Gerald Kaufman (Manchester, Gorton)
Madam Speaker, on behalf of the members of the National Heritage Select Committee, I thank you for making this period available for us to debate the National Heritage Select Committee report on the British film industry, which was published last year, and such developments as have taken place since then.
We are in a period of some rejoicing in this country because British artists have won Oscars, a whole collection of British Academy of Film and Television Arts awards last Sunday evening and awards at the Cannes festival. I should certainly like to congratulate everyone who won those awards and everyone who was involved in those achievements.
I must go on to say that that plethora of awards, which is a great credit to British film makers, conceals the absence of anything resembling a structured film industry of the type that we once had in this country. British film makers scramble around in their attempts to obtain finance for projects in a way that is often disheartening and only too often demeaning. Any hon. Member who has any doubts about that fact should read the newly published history of Palace Pictures, which collapsed while it was making "The Crying Game".
Our film makers go to Hollywood to make American films because they are in huge demand there. If they are able to make films here, those films are very often financed by foreign money, and the profits therefore go abroad. The enormous profits from "Four Weddings and a Funeral" ended up—via Hamburg, where the film was registered for tax purposes—in Eindhoven.
Many congratulations to Emma Thompson on scooping up awards at the Oscars and at the BAFTA ceremony for "Sense and Sensibility", but the profits of that film will go back to Columbia Tristar Pictures, in Culver City, because it financed the film. "Restoration" won the Oscar for best costumes, but it is an American-financed film.
"The Madness of King George" won the Alexander Korda BAFTA award as the best British film, but it was mainly financed by Samuel Goldwyn Jr., whom our Select Committee visited and with whom we had discussions in 348 Hollywood when we went there. Mr. Goldwyn required Alan Bennett not only to "mid-Atlanticise" his original play, but to change the title from "The Madness of George III" to "The Madness of King George", because he feared that American audiences might think that it was the third film in a series about George.
Tim Roth won the BAFTA award for best supporting actor for his performance in "Rob Roy", but that was an American-financed film and the profits went back to the United States.
Our Select Committee issued its report on the British film industry 13 months ago. The report was praised throughout the film industry, which one may think is not surprising, because it met a very great many of the industry's demands. But on 6 June 1995, the then Secretary of State also lauded our report as "thorough and perceptive". I feared that that kind of praise was a prelude to total inaction, and that has indeed been the case. We made a raft of recommendations, but scarcely a single one has been implemented.
Some of the recommendations are quite simple and, I should have thought, uncontroversial. For example, we recommended a season ticket for work permits for key personnel from abroad to enter and re-enter the United Kingdom to work on films financed by inward investment. The then Secretary of State paid lip service to that recommendation, but nothing has been done about it.
We recommended the fullest support for the London Film Commission Initiative. The then Secretary of State promised "direct pump-priming support". A grant of £100,000 was given last October, but I am afraid that that was the end of that. As I shall explain later, there is great need for such a commission because the facilitating of filming, especially on location, is one of the most important ways to attract inward investment. Indeed, the lack of a commission was one of the reasons why the filming of "Braveheart" moved from Scotland to Ireland.
§ Mr. David Harris (St. Ives)
Is the right hon. Gentleman aware that a film is being made of a book by a Cornish author, Judith Cook? The book is set in Cornwall and the intention was to film it in Cornwall but, because of the tax incentives given in Ireland, the shooting is to move there. Is not that absolute nonsense?
§ Mr. Kaufman
I know Judith Cook well and have read some of her books. She wrote one about Hilda Murrell, for example. The problem affects not only the disgraceful example cited by the hon. Gentleman. The BBC has filmed British-located television productions in the Republic of Ireland because of Ireland's section 35 incentives. The hon. Gentleman's intervention leads me directly to my next point and the next recommendation made by the Select Committee.
We recommended establishing and co-ordinating regional film commissions, which would be of enormous importance in getting productions filmed not only in London but across the country. That proposal has not been taken a single step further by the Government, even though overseas experience has demonstrated how useful such commissions can be in attracting film makers. Canadians have that system, and much Hollywood film making is taking place in Canada. The American states have that system, which means that filming is done across the United States rather than in Hollywood alone.
349 "Judge Dredd" is an example of what I am talking about. It is a £50 million film starring Sylvester Stallone. It was brought to this country, but filming was almost brought to a halt because of obstruction in the use of the most elementary locations in the capital. When the film was completed, its producers said that they would not wish to repeat the experience and come here again, but when they read the Committee's report, they said that if the recommendations were implemented, they would happily come back to Britain. Ministers cite "Judge Dredd" as an example of inward investment, yet it is also an example of the obstruction that inward investment meets.
We also proposed something which I should have thought was completely non-controversial and which would have cost the Government no money—that the Government hold discussions with the industry about a job placement scheme. However, as far as I can tell, the Government have ignored that recommendation, too. They have certainly ignored our recommendations on immediate write-offs of production expenditure of qualifying British films, which could help to sustain indigenous film making. They have also ignored our proposals for an amelioration of the withholding tax and our recommendation for introducing a tax incentive scheme similar to Ireland's section 35 initiative. Our recommendations for attracting inward investment and promoting indigenous film making have been ignored by the Government.
Our proposal to revoke the Channel 4 funding formula—it is extraordinary that such an anomaly is allowed to remain on the statute book—was at first rejected by the previous Secretary of State. It is now being botched, and on Second Reading of the Broadcasting Bill, I am sorry to say that the Secretary of State showed that she still has no real idea of what she is doing about that formula. However, Mr. Grade has made it clear that any moneys accruing to Channel 4 from the revoking of that formula will go towards indigenous film and television production.
The Minister will no doubt say that my approach is negative, that the Government have done other things and that, in any case, nothing much needs to be done because the British film industry is flourishing like the green bay tree.
Last June, the previous Secretary of State made a statement in which he promised £80 million of national lottery money for film production and distribution over five years. In October last year, the present Secretary of State announced £5.5 million of new money for 13 new British films.
As it happens, the Select Committee did not recommend cash subsidies for the film industry. We do not believe in them or regard them as appropriate. We do not believe in subsidising manufacturing, of which the British film industry is a part as well as being an artistic endeavour. However, if the Government promised £80 million of national lottery money for film production, they should have at least fulfilled their promise. The Government promised that film would obtain 15 per cent. of all national lottery arts funds but, so far, it has received 4.07 per cent. What the Government claimed as a great initiative is not being carried out.
350 The Government promised an advisory committee to recommend steps necessary to improve access to capital markets for film makers. That is extremely important because banks in this country are extraordinarily backward-looking in that respect. I and my colleagues had discussions with the Lord Mayor of London and some of his advisers in the hope that we could obtain such an advance but, so far, we have not done so. The establishment of the advisory committee promised by the Government was not even announced until December. The names of those involved have been announced, but we have yet to see any positive results of its work.
The Secretary of State promised a feasibility study into establishing a west end showcase dedicated to British films. Ten months later, consultants have just been appointed and terms of reference agreed. Indeed, we have gone backwards.
In its report, the Select Committee listed aspects of finance and assistance for British film making and drew attention to the Eurimages scheme. That scheme provided funding for 55 UK co-production films between 1993 and 1995. Quite inexplicably, the Government have now withdrawn from the scheme at a saving of £2 million. Unlike our Government, other countries accept an obligation to provide incentives for their film industries. Although its cost-effectiveness has been questioned, Ireland has now renewed its section 35 incentive at a modified rate for another three years. Even the Isle of Man is extending its tax credit scheme for film and television production.
The result of section 35 in Ireland has been phenomenal. The expenditure on film and television production in the Republic has risen from 2 million punts in 1992 to 180 million punts last year. Although the direct trade-off between tax revenue forgone and gain to the Irish Treasury may not have worked out precisely as had been hoped, the multiplier effect in Ireland has been of great value, as has the linking of section 35 with training young Irish men and women in film production. It is required that they are attached to film productions.
Compared with that 180 million punts attracted to the Republic in 1995, in Britain, despite the fact that expenditure has risen substantially in recent years, total investment in UK-linked production in the UK fell last year by 3.4 per cent. to £420.79 million. The figures are not directly comparable. It is difficult to obtain such figures. Nevertheless, there is an enormous disparity between that £420 million in the UK and the 180 million punts, taking into account the fact that we have nearly 20 times the Republic's population.
Of course, "Braveheart", the Oscar winner for best picture, is the most telling example. It is of course about a great Scottish hero, and it was decided to film it in Scotland. Pre-production work and a few weeks' filming took place there. Production was then moved to Ireland because Mel Gibson not only became aware of section 35 incentives, but was given assistance with, for example, extras for battle scenes, which was simply not available in this country. Therefore, of the £35 million spent on that high-budget epic about a Scottish hero, £3 million was spent in the United Kingdom and about £30 million in Ireland.
Britain per capita probably has the greatest roster of film-making talent in the world. Yet in film production per million population in 1995, the UK was behind not 351 only the United States, but France, Italy, Spain, Australia, Denmark, Finland and Norway, as well as Ireland. Only west Germany was behind us.
Our screens are swamped by American films. Last year, 83 per cent. of box office receipts in British cinemas were for American films, compared with 8.6 per cent. for UK films. In 1994, the latest year for which I have available figures, box office receipts from national films were higher in France, Denmark, Italy, Germany, Australia and Spain than in Britain.
I repeat that I am not calling for subsidies for the British film industry or for the stringent and in many ways absurd bureaucratic controls imposed by the French, under which they even lay down the nights on which films can be shown on television. I am calling for incentives. As the Select Committee report made clear, we are not asking for incentives that favour the film industry and single it out. We are asking for incentives that are available to certain other industries.
It is ludicrous, for example, that the withholding tax does not apply in the same stringent way to Barbra Streisand when she comes here to record a CD as it would if she came here to make a film. It is ridiculous that the castle built at Shepperton studios for the filming of the Sean Connery and Richard Gere film "First Knight" was regarded as a capital asset and therefore not available for write-off, although of course the moment that the film was finished, the castle was of no use to anybody. It ought to have been written off. The Select Committee asks for the same treatment for film making as is already available for television, sound recording and even shipbuilding.
Let me make it clear that although the domestic audience for films exhibited in theatres is not large—even though it has doubled in recent years—film making is not a marginal industry. It is a $53 billion-a-year global business. It is bigger than the music industry, it is expanding at about 8 per cent. a year, and, most important for us, it is predominantly an English-speaking industry. We have the huge advantage that the lingua franca of film in the world is English, and we are the custodians of the language.
More than 70 per cent. of films worldwide are in English. Yet when Kenneth Branagh made "Much Ado About Nothing", he was ordered by Samuel Goldwyn Jr. to cast Hollywood stars regardless of whether they were suitable. As I have said, when Alan Bennett adapted "The Madness of George III" for the screen, he was made to mid-Atlanticise it. The cast of Branagh's new film of "Hamlet" includes Robin Williams and Jack Lemmon—neither of whom is known as one of the world's foremost Shakespearean actors. Laurence Olivier never had to put up with that.
In this centenary year of British cinema, we can celebrate the contribution by the British industry, of some of the greatest films ever made, the role of some of the greatest directors in world cinema, and the contributions of marvellous actors and brilliant scriptwriters. A new century of cinematic endeavour in Britain is about to begin, in which our film makers not only should demonstrate their own genius, but ought to make British films whose profits return to this country, to fund further indigenous film making, instead of going to Holland, Tokyo and elsewhere.
Film is not only an important industry, but it is a voice for Britain and a face for Britain, and it provides a view of Britain from Britain by Britons. We have the talent. 352 I deeply regret that the Government do not have the will and resolution to give that British talent the opportunity to make truly British films.
§ Mr. Kenneth Baker (Mole Valley)
I am delighted to be speaking in this debate, for three reasons. First, this is the first occasion on which I have spoken during a morning sitting of the House since the previous experiment in 1969. So I am not making a habit of such early-morning sittings. On that previous occasion, I remember speaking on a Bill to reform the House of Lords—a feature film that I believe that the Labour party is going to make again and is billing as a forthcoming attraction. It might fill this House, but it will not play in Peoria.
The second reason why I am very glad to speak is that I warmly support the excellent report of the Select Committee on National Heritage. I congratulate the Select Committee Chairman, the right hon. Member for Manchester, Gorton (Mr. Kaufman), on it. It owes a great deal to his personal enthusiasm and commitment to the industry, and, like him, I support all its recommendations.
§ Mr. Baker
Jolly good. I am glad that the Labour party spokesman is saying, "Hear, hear." I shall be interested to hear his speech and the commitment that he makes to the report.
The third reason why I am glad to speak is that, for some 18 months in the 1980s, I found myself the Minister responsible for the British film industry—the responsibility that my hon. Friend the Minister of State, Department of National Heritage now has. Just after the 1983 election victory—yes, those were the days—I had added to my responsibilities as Minister for Information Technology that for the publishing and film industries. It was the first time that the responsibility for communicating technologies came together under one Minister. I drew several conclusions from that.
The first was that responsibility should not lie with the Department of Trade and Industry and the second was that responsibility for broadcasting should not lie with the Home Office. I was glad to be the first Home Secretary to recommend that responsibility for broadcasting should be moved to a new Department and I think that my proposal led to the creation of the Department of National Heritage. We now have in that Department full responsibility for all communicating technologies involving film. One of the great advantages that the British film industry has is the English language. If there is one Department that has responsibility for the development of the potential of the English language, it is the Department of National Heritage.
When I was responsible for the film industry in 1983–84, I put together a package of support. Among several proposals, it included support for that excellent institution, the British Film School, which is a real centre of excellence, and the removal of the Eady levy because I thought that recycling in the industry was not the right way in which to support the film industry. The essential element of that package was that tax incentives would be available to people who wanted to invest in British films. My whole package was based on that idea.
353 Unfortunately, that main pillar was struck down by the Chancellor of the day, now Lord Lawson, in his reform of corporation tax, because he removed all tax incentives. Being a mere Minister of State, I was not informed of his decision before the Budget, so the main pillar of that proposal, which would have built on the successes of the film industry, was struck away and I was left with a rag-bag of proposals rather similar to the statements on the film industry that we have had recently from the Government.
I strongly support, therefore, what the Committee says. In 1983–84, film admissions to cinemas were 53 million to 54 million a year; admissions are now 124 million a year. I can claim absolutely no credit for that increase over the years. It is due to a variety of factors—
§ Mr. Baker
My natural modesty would not allow me to claim credit for the increase. It is due to a variety of factors, one of which is a change in social behavioural patterns. Others are the cleaning up of old cinemas and the creation of multi-screen complexes. Above all, the increase is due to the making of better films, because, ultimately, that is what pulls people back into the cinema.
The sad history of the British film industry is that it has erratic and inconsistent bursts of real excellence. In the 1980s, we had "Chariots of Fire", "Local Hero" and a clutch of other films, but that burst sputtered out, largely as a result of the removal of tax incentives in the 1984 Budget. There have since been intermittent bursts of great glory, as the right hon. Member for Gorton said, such as "The Madness of King George", "Four Weddings and a Funeral" and "Restoration". But what has not happened in the past 20 years in the British film industry is the build-up of a critical mass. That is disappointing.
As the right hon. Member for Gorton said, the talent is here. The acting talent is here, the writing talent is here, the producing talent is here and the directing talent is here. When it comes to the technological manipulation of images and related areas, we are the world's centre. We should build on that and there is a great opportunity here for the Government.
It will not be adequate for the Government to say, "Well, it is going very well. There has been quite good investment, some of the studios have been revived and Warner has invested £75 million in multiplex screens around London." That is all very well. However, the opportunity is much greater than what has been achieved.
There was a conference last year at the Queen Elizabeth II conference centre, which the Prime Minister and the Foreign Secretary attended. One of its purposes was to try to enhance the potential of our country, and one of the things on which it focused was the importance of the English language. Central to that is software and film production. I believe that the Government's response so far has not been adequate.
The right hon. Member for Gorton made it clear, as does the report, that those of us who support the Committee's proposals are not asking for extra special treatment for the film industry. In many cases, we are asking for parity of treatment. As the right hon. Gentleman said, if a film is made for television facilities 354 in this country, one gets the 100 per cent. write-off. If, however, a film is made for the cinema, one is left with capital assets, such as a castle, stuck on one's books and they are written off over three years.
I do not believe that it is defensible for the Treasury to say that there should not be parity of tax treatment. I believe that there should be and that there is an unanswerable argument. I do not see the logic of the Treasury's position. I suspect that in his heart, my hon. Friend the Minister supports parity of treatment, but that the Treasury and the Inland Revenue will not allow it. That would not surprise me, because their job is largely one of negation.
When the history of the present Chancellor of the Exchequer is written, as long as he does not write it himself, two points will be made. The first will be that his economic judgment on the whole has been good and right. I do not expect any Opposition Member to agree with that, but I believe that impartial observers will say that he has got it right and that the Governor of the Bank of England has got it wrong. The second point will be that on tax, his approach has been unimaginative and not very exciting—a matter of trying harder next year or trying harder later this year.
I hope, therefore, that my hon. Friend the Minister will relate those comments to the Chancellor of the Exchequer and the Treasury. There is an unanswerable case for parity of treatment for the production costs of films in relation to the television industry and sound recording.
I agree with the right hon. Member for Gorton that there should not necessarily be direct production subsidies, such as money from the lottery. I would much prefer to operate within a generous and incentive-laden tax system. However, if subsidy is the course on which the Government have embarked and if money is to be made available, the amount available should be the amount that has been promised. The right hon. Gentleman said that there had been a promise of £80 million over five years and that so far, only £4.5 million had been made available. When my hon. Friend the Minister stops talking to the hon. Member for Stoke-on-Trent, Central (Mr. Fisher), I shall ask him specifically—[Interruption.] I am so glad that my hon. Friend is now back in his place.
Like the right hon. Member for Gorton, I do not believe that subsidy is the right way. However, if that is the course that the Government have followed and if £80 million is to be made available—so far, only £4.5 million has been made available—I hope that my hon. Friend the Minister will announce that there will be another £10 million or so today and that he can chart how the remaining £75 million will be made available. That may be the only card that my hon. Friend has left to play today. I believe that the Select Committee's proposals should be accepted.
I agree with the right hon. Member for Gorton that investment in the film industry is mobile. Investment moves from country to country and goes to the countries that have the best facilities and the best tax treatment. Therefore, we have to set out our stall to attract that investment. Certain factors bring people to invest in this country. I think that I am right in saying that about 70 per cent. of all films are made in English, but that we happen to make only 4 per cent. in this country. We really must do better than that.
I am not talking about propping up an ailing industry; the film industry is not a lame duck industry, but a very successful one. However, the natural hurdles that the tax 355 regime places in front of the industry should be removed. I very much hope that the Minister will be forthcoming in his reply. I, having held responsibility in this area, suspect that he will be totally constrained by the Treasury, but that is not good enough.
I hope that my hon. Friend realises that my vote is keeping the Government in office, as are the votes of my hon. Friends the Members for Southport (Mr. Banks) and for Macclesfield (Mr. Winterton). We expect our voices to be listened to very carefully in these matters. After all, there is an open door and we should push at it. The British film industry is life-enhancing and it is actually rather good.
I hope that for all those reasons, my hon. Friend the Minister will be sympathetic and warm to the Select Committee report. I congratulate the right hon. Member for Gorton on producing the report. He will continue to have my strong support for the Committee' s proposals.
§ 10.9 am
§ Mr. Jim Callaghan (Heywood and Middleton)
I am proud and privileged to be a member of the Select Committee on National Heritage, which is so ably led by my right hon. Friend the Member for Manchester, Gorton (Mr. Kaufman). However, that leaves me with a problem, because my right hon. Friend's expertise on the film industry is so great that I cannot think of anyone else in the House with such a depth of knowledge, and it is therefore difficult to follow the speech that he made on behalf of the Select Committee.
In the few moments that I have for my speech, I shall be positive. The former Secretary of State for National Heritage, now the Secretary of State for Health, said of the Select Committee's report:The Government welcomes your report, and the clear, detailed and perceptive overview it provides of the history and current state of the industry".I welcome those words, because, although the Committee has produced many reports, I feel that the best one so far is our report on the film industry. The Committee took a lot of stick when it announced that it intended to report on that industry, so I welcome the former Secretary of State's statement.
The right hon. Gentleman continued:Like the Committee, we believe the United Kingdom film industry is an important one, whose skills, talents and creativity have justly earned an international reputation"—the right hon. Member for Mole Valley (Mr. Baker), too, said as much—the Government has been able to accept a number of the recommendations in your report".As children ask for many presents at Christmas, knowing that they will not get all of them, although the Committee has made a lot of recommendations I am realistic enough to know that they will not all be accepted by the Government.
The response to the Committee's tax recommendations was as follows:tax decisions are by tradition announced in the Budget. This paper cannot, therefore, respond conclusively to this area of the Committee's Report. Nonetheless the Government will certainly bear in mind the Committee's recommendations, and the logic which underpins them".So I shall not refer to the tax recommendations either.
356 I am delighted that the Government agree that we have a film industry in which we can take genuine pride. There is considerable opportunity for growth, as is shown by the following statistics. United Kingdom cinema admissions have increased from an all-time low of 58 million in 1984 to 124 million in 1994—a notable growth. The number of screens in the United Kingdom increased from 1,250 in 1985 to 1,929 in 1994, and overall investment was up from £245 million in 1986 to £457 million in 1994.
Despite those encouraging figures, the industry has two main problems. First, British films captured only 2.5 per cent. of British box office receipts in 1993, compared with the United States product, which took a 94.2 per cent. share. So we have a long way to go to catch up with the American film industry. The United Kingdom industry is a cottage industry in comparison.
Nevertheless, there are opportunities, because the United Kingdom cinema audience is growing fast, and Britain offers skills and facilities of international renown, as well as the advantage of the English language, which the right hon. Member for Mole Valley mentioned. The Americans are making good use of those factors.
Another major problem for the United Kingdom film industry is the fact that most of the distribution in this country is in the hands of the United States majors. As a result, many British films have great difficulty in gaining large-scale distribution here. One witness who came before the Select Committee, representing the Cinema Exhibitors Association, runs a cinema in Withington in Manchester, and he spoke at length about the difficulties that private cinemas experience in trying to show major films.
§ Mr. Michael Fabricant (Mid-Staffordshire)
Does the hon. Gentleman share my sadness at the fact that, when the major American production companies approached what were then the large cinema chains in the United Kingdom, Rank and EMI, and said that there was a future for the film industry not only in the United States but in the United Kingdom, that that industry would not be permanently dominated by television, but that cinemas would have to be refurbished and made more attractive, Rank and EMI rejected the idea, so that now, sadly, the large cinema chains in the United Kingdom, the UCIs and the MGMs, are based in the United States?
§ Mr. Callaghan
Yes; the hon. Gentleman is a little ahead of me, I shall come to that point in a few moments. Most of the new multiplex cinemas are owned by American companies, and account for 33 per cent. of all United Kingdom screens.
The Monopolies and Mergers Commission's report of October 1994 found that a complex monopoly existed. It did not attribute the low proportion of United Kingdom films shown in cinemas to any conspiracy but recognised that the United States studios are skilled in producing and promoting films that the United Kingdom public wish to see. However, the report suggested that the Director General of Fair Trading should monitor the market.
On the positive side, there is a new factor that could help to promote and develop the United Kingdom's film industry. The Arts Council of England has plans for using lottery money to encourage the production and distribution of films. My right hon. Friend the Member for Gorton has already mentioned those plans.
There is an absence of significant investment in the film industry in the United Kingdom, because the risks are high and the returns volatile and unpredictable. I therefore 357 welcome the Government's proposal to convene an advisory committee of representatives from the leading financial institutions and production companies to discuss and promote ways of addressing those problems.
Large-scale subsidy is favoured by neither the Government nor the industry. Nevertheless, since 1986 the Government have supported British Screen Finance Ltd., with an annual contribution to help to finance feature films. I drew attention to that body many times in our Committee deliberations, and welcomed what it had done. To date, British Screen Finance has invested in 101 feature films, 86 of which involved directors, writers, actors or producers embarking on their first or second project. I welcome that development.
The Government have announced their intention to use lottery money to support British film makers as British Screen Finance has done, and their hope that the lottery support will encourage the private sector to back British films. I hope so, too.
The Arts Council estimates that it could spend more than £70 million up to the year 2000 on film production, which would enable it to attract more private sector support, and to increase the level of film support and the range of investment opportunities. It also estimates that it could spend more than £14 million up to the year 2000 on distribution and cinema refurbishment. I am sorry that the hon. Member for Mid-Staffordshire (Mr. Fabricant) is not listening now, because I am talking about refurbishing cinemas, and I hope that what I have said meets the point that he made earlier.
I am delighted that the Government welcomed the Select Committee's report. It also drew attention to training, and consequently the Government propose to lead discussions at ministerial level on how the Committee's proposals can best be given effect. That is because its skilled work force is one of the UK film industry's main strengths. Our seedcorn lies with our youth. Youngsters who want to study dance or drama and apply for local authorities often find that grants are discretionary, not mandatory. That is a great tragedy. I hope that the Government will consider that.
I would have liked to comment on many of the Government's other responses to the Select Committee's recommendations, but time will not allow it. However, I draw attention to the Committee's visit to the United States of America and our two-day visit to Ireland to discuss their film industries. I was surprised by what I saw in both countries. I was impressed by the Irish film initiative, which encouraged an increase in film and television production from £1 million to £100 million over two years. That is a tremendous leap forward.
§ Mr. Nicholas Winterton (Macclesfield)
I am sorry that the hon. Gentleman has said that he will not venture into the subject of taxation, because it is primarily through that that the Irish Government have attracted film makers to Ireland. I hope that he will say that a 100 per cent. write-off of production costs in the first year would be a positive way of enabling the British film industry to achieve its immense potential.
§ Mr. Callaghan
I agree with the hon. Gentleman. The Government have said that they will not deal with tax 358 matters in this debate because they are for the Chancellor. I was keeping to the recommendations that the Government have put before the House. Having visited Ireland, met Mr. Higgins, of whom I shall say more, and examined their section 35, I know that the Irish tax incentives encouraged Mel Gibson to stop filming in Scotland—it was a film about Scottish heritage—and take the whole production to Ireland. I would have liked to speak at length on that, but I am trying to keep to the brief.
Ireland's tremendous leap forward was due in no small measure to the enthusiasm and drive of its Minister for Arts, Michael D. Higgins. I was impressed by that gentleman, as was the whole Committee. I do not want to pour cold water, but I am saddened that we have not in recent times had an Arts Minister with a similar drive and love of the arts. The heritage and arts portfolios have been safe havens for Ministers who have had difficulties in their previous ministerial posts. I hope that I am wrong, but none of our Ministers has matched the drive and enthusiasm of Mr. Higgins. However, I always live in hope and I look to our present Minister to match them.
§ Mr. Anthony Coombs (Wyre Forest)
I want to support a generally well-received report and pay tribute to the excellent and well-informed chairmanship of the right hon. Member for Manchester, Gorton (Mr. Kaufman). It was the Committee's basic intention that the report should bring about steps to improve the British film industry. To be fair, it does that against a promising backdrop in terms of the market for film in Britain. We have heard about the massive increase in cinema audiences and the huge improvement in facilities for exhibition, especially the increase in multiplexes. I shall be looking for the development of Kidderminster town centre to include a multiplex cinema.
We also heard of the increase in the number of British produced films, at least when compared with the low levels of the past 10 years, and the increase, to £176 million, in expenditure on films made in this country by British and foreign producers. That is small compared with what it could be, but it is evidence of a buoyant market. The best evidence of that is the expenditure in the UK on film over the past 12 years, which, according to the Department of National Heritage, has increased by some 500 per cent. in real terms. That is a buoyant market in which the British film industry should be specifically involved.
One problem with the industry is that it is difficult to define a British film. Does it involve a film being produced in Britain, the genesis of the idea or the people involved? Secondly, the film industry is, by definition, footloose. I have reservations about the consistency of the position of people in the film industry who bemoan the fact that they cannot make films in Britain but who, as soon as an opportunity presents itself, zoom off to Hollywood. They take large salaries and sit there thinking of nice warm beer and sandwiches back in good old blighty.
Thirdly, the British film industry is heavily fragmented compared with the American monoliths. As a result, there is no continuity of supply. We noticed that only seven of 49 British films last year had a budget of more than £6 million, while the average for the US product made in Britain was £22 million. More than that, the mortality rate of feature film production companies in Britain is very high.
359 Three issues must be addressed in acting on the report. First, there is the vertical integration of production, distribution and exhibition, and the huge power of the US and Japanese conglomerates. In what is, in essence, an international market, we have only 7.25 per cent. of the world market. No film will succeed, especially if it is in English—that is a two-edged sword in this case—unless it is oriented at the international market and especially the US market. Such integration, especially in the distribution and exhibition markets, will operate to the disadvantage of British film makers unless they have access to it. I note that the 1994 Monopolies and Mergers Commission report said that the commission would consult on alignment and minimum exhibition periods. It would be helpful if the Government could say what progress has been made in those discussions.
Although we are not likely to get worldwide integration in the British film industry, one of the Government's responses to the report, which, after all, was brought out just under a year ago, was an advisory committee to consider the problem of integration. Again, I would like to hear what the Government say about that.
To ensure continuity for film production companies, it is important that the issue of tax should be addressed. That has been well and truly rehearsed today, so I will not go on about it. However, only to say, as the Government's response does, that venture capital trusts and enterprise initiative schemes are the answer to the lack of continuity is mistaken. I suspect that the amount of money going into VCTs and EISs for film production finance is disappointing. That calls for more general tax write-offs.
The second major issue is the sort of films that the British film industry makes. There has been slight confusion about whether the British film industry is, as the hon. Member for Heywood and Middleton (Mr. Callaghan) said, a cottage industry making art films or one designed to compete substantively on the world stage. I have reservations about the Arts Council using subsidies to get more involved in film production. That would encourage art house films that may satisfy in terms of their intellectual artistic integrity but do not fully build the British film industry so that it can reach its potential. If the Arts Council of England is going to give £70 million of lottery money by the year 2000 to independent film companies, it should be conditional on a minimum budget size for films and be done on the basis of an active partnership with distributors or exhibitors to ensure that those films get a commercial hearing.
Another slight confusion is the role of television and feature films. Although the BBC, ITV and Channel 4 have to make available 25 per cent. of their product to independent film production companies, that could well be increased. The amount of film being shown on television has not increased significantly in the past 10 years and that is a valuable market for the industry.
On the other hand, the pricing policy has to be genuine. I have had representations from an independent film producer who talked about an effective cartel on pricing between the BBC, ITV and Channel 4—it is even proposed by Channel 5—which he said had contributed to the fact that television production, which was the 17th largest contributor to the balance of payments in 1974, has now fallen into an adverse balance.
We must deal with the problems of tax relief, attitude and structure in the British film industry, as well as taking commercial advantage of the large and increased market that is available to film.
360 Finally, the recommendations of the National Heritage Select Committee, on beefing up the London Film Commission Initiative and on its co-ordinating role with regional film commissions, which the Government dismissed slightly, are very important. One of the things that will sell Britain is for international audiences to see that films are made well here and are associated with different parts of our heritage.
It is interesting that "Braveheart", although it was not made in Scotland, has already had a significant impact on Scottish tourism. In Stirling, the national Wallace monument has seen an increase in visitors in the three months since the exhibition of the film from 10,000 to 30,000, which gives us a sign of the film industry's impact on another responsibility of the Department of National Heritage, tourism, which is the fourth largest industry in this country. I think that the report is excellent and the Government would do well to heed it, particularly the tax relief aspects.
§ Mr. John Maxton (Glasgow, Cathcart)
First, I congratulate my right hon. Friend the Member for Manchester, Gorton (Mr. Kaufman) on his introduction to this short debate and on leading us—I am also a member of the Select Committee on National Heritage—in producing the report.
I shall limit my remarks to the Scottish film industry, to some extent following on from the hon. Member for Wyre Forest (Mr. Coombs). First, I must express surprise at the fact that the representative of the Scottish National party, the hon. Member for Perth and Kinross (Ms Cunningham), is not present for this debate as she has been trying to make considerable play of the role of the Scottish film industry and the Scots in it. Although I share the delight of the hon. Member for Wyre Forest that tourism is coming to Scotland as a result of "Braveheart", as a politician I have reservations about the way in which the SNP blatantly tried to use it to further its cause, particularly when it is such historical nonsense—at least, a large part of it is. It may be a good cowboy film, but it has not got a great deal to do with Scottish history. Although I obviously cannot use the language that Mr. Billy Connolly used to describe it, I certainly share a fair amount of his sentiments.
The Scottish film industry has been undergoing something of a revival with not only "Braveheart" and "Rob Roy" but, more important, films such as "Shallow Grave", "Small Faces" and, of course, "Trainspotting", which represent a much more thoughtful side of Scottish film production.
It may be unusual for me to do so, but I must take the opportunity to say that, at least in Scotland, the Scottish Office and the Secretary of State for Scotland have gone further than their colleagues in the Department of National Heritage to try to bring some coherence to the Scottish film industry. In New York recently, the Secretary of State announced that he is going to streamline the various agencies in Scotland into a new Scottish screen agency, bringing together the Scottish Film Council, the Scottish Film Production Fund, Scottish Broadcast and Film Training Ltd. and Scottish Screen Locations. That is probably a step in the right direction, because it will give a coherence to all those organisations and will mean that they will start to work together.
361 The Secretary of State has also committed public spending of £3 million to film in Scotland in the next three years. I hope, therefore, that the Minister will promise today that an equivalent £30 million will be spent on film in England and Wales. Using the Barnett formula, that is roughly the sum that should be used to get an equivalency.
In my view, it was not just the tax incentives that caused "Braveheart" to go to Ireland, or even just the use of the army for extras, but the excellence of the Ardmore studio, which ensures that, when one has to move out of location because of bad weather or whatever, a studio facility is available close to hand in which one can do other production work.
The recent Hydra report in Scotland on the film industry suggested building a studio complex of the same type as Ardmore studio just outside Dublin—or even better, in Scotland—and the Secretary of State is committed to considering the viability of the suggestion. That would allow studio work to be done in Scotland, as well as major location work. Then we would have to do some post-production development in Scotland, to ensure the continuation of the whole package and the production of film in Scotland.
Finally—I am aware that the two Front-Bench spokesmen want to speak—I wish to comment on the continuing convergence of film and television production, which is the one point on which my right hon. Friend the Member for Gorton and I mildly diverge. Increasingly, that will also mean computer work, the Internet, and so on; a convergence is taking place in the way in which we produce all those. We have to be wary of not taking account of the base of directors, actors, production teams and so forth that our strong television work gives us.
I will finish on Scotland as I started on it; that is true in Scotland too. Without BBC Scotland producing more than it produces, without Scottish Television producing more than at present, giving employment to the directors, actors, producers and so forth in Scotland, it would not be possible to have a strong Scottish film industry. I hope, therefore, that when we consider the matter we take that into account as well as simply considering the film industry separately from the rest of audio-visual production.
§ Mr. Matthew Banks (Southport)
I congratulate the right hon. Member for Manchester, Gorton (Mr. Kaufman) on giving us the opportunity to debate this important issue; I also congratulate his fellow members of the Select Committee on National Heritage. I listened with great interest to what he said, and agreed with him on a number of points, particularly on tax concessions in preference to subsidy.
I also listened with great interest to the remarks of my right hon. Friend the Member for Mole Valley (Mr. Baker). It is frightening to think that his last contribution on a Wednesday morning was in 1969. when I was only eight years old. I also agreed with the comments of my hon. Friend the Member for Wyre Forest (Mr. Coombs) about tourism. Regrettably, a number of aspects have been touched on all too briefly in this debate, and tourism is one of the biggest earners for this country. I entirely endorse what he said about the Irish Republic and Scotland.
362 One of the biggest obstacles to building up the film industry appears simply to be producing even more popular films. As the Select Committee report makes clear, however, much more could be done to create a more welcoming atmosphere for movie makers in this country.
The British Film Commission has been successful in encouraging film producers to produce more films in the United Kingdom. During 1995–96, more films were made in this country than in any year since 1965. I back t he BFC's proposals for a production permit, for season tickets for key personnel, and for an accelerated process of work permits in general. I am also keen to see a greater interest taken by the European Investment Bank, especially in helping to reduce the risks incurred by banks and institutions in financing audiovisual projects.
The Irish Republic was successful in creating a more welcoming atmosphere for film making. I agree with the comments of the hon. Member for Glasgow, Cathcart (Mr. Maxton), particularly about the Scottish National party, but so far as "Braveheart" is concerned, it is going a bit too far to imagine that we could put our defence forces at the disposal of film makers. The armed forces have been a little busy of late as a result of the renewal of IRA terrorism, particularly in Northern Ireland.
In addition, when audiences around the world view "Braveheart", they do not think of visiting the Irish Republic. When they think about going to the places where the battles took place, they think of Scotland. We should not encourage the production of films in this country that encourage tourism elsewhere.
I am sorry that I do not have more time to touch on some of the nitty-gritty issues. I have listened to the remarks that have been made about tax concessions, and I know that the hon. Member for Stoke-on-Trent, Central (Mr. Fisher) is itching to get to the Dispatch Box to tell us about the tax concessions that the Labour party would introduce if it had the opportunity to do so. I think that Labour's current economic policies are a recipe for disaster, in the film industry and elsewhere.
The role of the British Film Commission to act as an inward investment body would be far harder if we did not have one of the lowest effective corporate rates of tax and one of the most liberal employment regimes in Europe. Signing up to the social chapter will not do a great deal for the British film industry. It is vital that we look at the issue of tax concessions—it is the way forward. I hope that that it is something that the Treasury, rather than just the Department of National Heritage, will consider.
§ Mr. Mark Fisher (Stoke-on-Trent, Central)
This is an excellent report, as hon. Members on both sides of the House have recognised, and I welcome the chance to debate it. The report is of real substance, and relates to an important industry. Therefore, one and a half hours in which to debate it—although welcome—is too short a time, as the way that speeches have been squeezed demonstrates. It is April 1996, and we are debating an important report that was published on 8 March 1995. We should have debated the report sooner, although it is timely that we are debating it in the centenary year of the British film industry.
The report has been needed for a long time, because the Government have perversely been neglecting our film industry for years, and have comprehensively failed to 363 produce a policy. As hon. Members from both sides of the House have recognised, the report is the bones of a policy. I hope that the Government listen to it, and that we will have a positive response from the Minister.
This is a thorough report: it asked the right questions, it took the right evidence, it went to the right places and—in my view—it came to the right conclusions. I join other hon. Members in congratulating my right hon. Friend the Member for Manchester, Gorton (Mr. Kaufman), the Chairman of the Committee. Everyone knows his commitment to, huge knowledge and understanding of, and love and passion for, the industry. The work of the Committee, and the people who gave evidence to it, was very good.
I care for the film industry a lot, having worked in it for eight or nine years in the 1960s and early 1970s in virtually every role—from documentary producer and writer, to editor, to negative cutter, to location manager and assistant producer. I was a terrific failure in the industry, because I failed to raise the money for the sorts of film that I wanted to make.
In the 1960s, the film industry appeared to be in decline, and, as my family and the number of my children got larger and the film industry got smaller, the two could not sustain each other. What appeared to be a small industry in the 1960s is something that we would very much like to have now. The problems we faced in the 1960s—of not being able to sustain investment year on year and of having peaks and troughs—have remained with us.
At last we have a report that says all the right things not only about the issues facing the industry but about the importance of film and the film industry. The report recognises the economic importance of the industry: the huge international industry of £53 billion—and that is without the wider audiovisual industries of which this is a key but only one part; the employment implications for the country; the relationship with trade—Samuel Goldwyn said that trade follows the film and he was right, as the Americans have demonstrated; and questions of national identity, pride and culture.
This is an important industry. As my right hon. Friend the Member for Gorton said, it is something that we are good at in this country. We have the creative talent but, too often, it does not have the opportunity to work in this country. It is not perverse that people go abroad—they have to do so to work. People such as Nick Hytner would like to make films in this country, but there are more opportunities to do so on the west coast of America. As my right hon. Friend said, we have the English language. We are uniquely well placed, and we ought to be taking advantage of that.
The report concentrates on the right problems—it looks at funding and at how we should have a structure of incentives and other initiatives to sustain funding or to provide a critical mass. It comes to the right conclusions on all those things. It is right to look at accelerated write-offs in paragraph 187, and it is right to look at and approve tax incentives—later, I shall refer to the types of tax incentive that I think are best. The report looks at the business incentive scheme, the enterprise investment scheme and the Irish Finance Act 1988, section 35, which would need to be adapted for our fiscal regime but takes the right approach.
364 The only area of tax reform with which I have difficulty in the report is its emphasis on withholding tax. There is not sufficient evidence that American films are being deterred because of that. My right hon. Friend is quite right: there are ridiculous anomalies about it in relation to the music recording industry, and the treatment of actors and other talent and film directors who are not caught by it. However, I do not see any evidence that American-financed feature films are being deterred. I am more sceptical.
In its excellent approach, the report is right not to go back to the days of the Eady levy. I also pay tribute to the report on arts funding, which came out a couple of weeks ago, but which has not had the attention it ought to have had. I hope that we will debate that report much sooner than a year from now, because it is very important. Obviously, the Select Committee is faced with many issues.
The report is not quite about the British film industry; it concentrates on feature film finance and production. The Select Committee did not have time to look at the other facets of the industry—training, exhibition, education, the relationship to new technologies, production and distribution. The quality of its work on feature film finance shows that it will come to interesting and important conclusions. As this is such a good report, I hope that the my right hon. Friend will go back to the Committee and extend the range of issues it examines in future.
The bipartisan spirit of the debate may be broken, because I believe that the Government have not done well in this area. The report's conclusions implicitly criticise the Government's lack of interest and action.
§ Mr. Kenneth Baker
I agree with much of what the hon. Gentleman has said. He warmly welcomed the report, but its recommendations are specific. Will he commit his party to implementing those recommendations, and if so, which ones? We can all talk of how much we love the British film industry, but if, by any chance, the Labour party wins the general election, what will it do to support that industry?
§ Mr. Fisher
I was going to take the Government to task before returning to the point that the right hon. Gentleman makes.
The right hon. Member for Mole Valley (Mr. Baker) was probably the last film Minister who had an interest in and passion for the industry; since then, things have gone from bad to the worse. The Films Act 1985 began dismantling the structural support: probably correctly, it abolished the Eady levy, but it did not replace it with anything. When, later, capital allowances were abandoned, the industry was left in a much worse position fiscally than any comparable English language film industry. The Government put nothing in their place.
Although Mrs. Thatcher took a personal interest, held high-profile meetings at Downing street, asked all the right people and listened to all the right evidence, she did nothing. I suspect that that is another example of the DTI, the DNH—then known as the Office of Arts and Libraries—and the Treasury being unable to agree. Without cross-departmental co-operation and work, we shall not get this industry right. As every Member who has spoken has said, the key is not subsidy or direct grant aid but fiscal incentive, so the Treasury must be brought on board. We had no action, no policy and no understanding.
365 The debate cannot pass without the Government being held to book for the disgrace about Eurimages. As was said, for a £2 million ante-up dividend, as it were, we are losing out on £40 million to £50 million of co-production. Everyone in Europe wants to be our co-production partner. The Minister knows that something went terribly wrong. It slipped through people's fingers, I suspect because they did not understand its significance. I suspect that the Foreign Office was as angry as we were about our withdrawal from Eurimages, because it did understand, as did the rest of the world. The Minister should say something about Eurimages, and make a commitment to rejoining as soon as possible.
I now come to the point made by the right hon. Member for Mole Valley. The Labour party will have a policy. It will be an updating of, and similar to, the policy that we published in 1991–92, which, I am glad to say, was developed with my hon. Friend the Member for Dunfermline, East (Mr. Brown), who is now the shadow Chancellor of the Exchequer, when he was Labour's trade and industry spokesman before the last general election.
If and when we are elected, we shall at last have, in my hon. Friend, a Chancellor of the Exchequer who knows about, understands and is committed to the cultural industries generally, and the film industry in particular. His knowledge is perhaps not as great as that of my right hon. Friend the Member for Gorton, the Chairman of the Committee, but it is considerable. Although, obviously, what I shall say now must receive the approval of the various committees of the Labour party before it becomes policy, I am able to give an idea this morning of the direction in which we are moving, and of our priorities and approach.
Our policy is largely based on the report. It is a matter not of subsidy but of fiscal incentives—accelerated write-offs, an adaptation of section 35 of the Irish Finance Act 1988. It is not difficult to do, and we shall do it, although we shall do it, unlike the Irish, for a specified period—probably of five years, with a review after two. It should not be a permanent regime. It is a way of kick-starting, and we shall monitor how and whether it is working.
The industry has problems of internal inflation, and such fiscal incentives may attract investment for investment's sake rather than for feature film production's sake. Nevertheless, our approach is right and practicable, and a Labour Government will seek to adopt it. It is necessary, but it is not sufficient, and we would need to develop the Green Light fund, the £5 million national lottery fund administered by British Screen—ably managed by Simon Perry. We shall consider with interest new ideas being floated for studio franchises. We shall certainly rejoin Eurimages.
We shall have a wider policy, covering training, educational, national and regional film production—including Scotland, which is doing so well—post-production, and relationships within the audiovisual industry. We have in this country a fast-growing multi-media sector and a relationship between publishing, publishing and CD-ROM and film.
Perhaps we shall need to reconsider the definition of the word "film" in the 1985 Act, because the scale of budgets for CD-ROM interactive videos is about the same 366 as that of full-length feature films, and very profitable. We are very good at creating those interactive videos, but once again the investment is coming from Time Warner and so on. We should use our talent, but we are not making the investment. We need to, and the Labour Government will, see film in that context.
Most particularly, our attitude will be supportive of film. As the hon. Member for Heywood and Middleton (Mr. Callaghan) said, the most interesting thing about Ireland is not the fiscal incentives. The Minister for Arts, Culture and the Gaeltacht, Michael D. Higgins, is committed and passionate, and goes out and beats the drum for the Irish film industry. His commitment, wanting people to come to Ireland to make films, is as important as the fiscal incentives.
We need a Government who are equally enthusiastic about our cultural industries, and specifically about the audiovisual industries and film; we do not have one at the moment. The Labour Government will be such a Government.
§ The Minister of State, Department of National Heritage (Mr. Iain Sproat)
I start by paying a true tribute to the work of the right hon. Member for Manchester, Gorton (Mr. Kaufman) and the National Heritage Select Committee. Their report is extremely valuable. Unfortunately, I have but five minutes to reply to the debate. I do not complain about that, because it is more important for as many Back Benchers as possible to say where their concerns lie than for Front-Bench Members to take up time saying what we already know.
Nevertheless, five minutes is obviously not enough time in which to describe the considerable framework of help and support for the film industry, and I hope that another time will be found for hon. Members to discuss the different elements in depth.
The hon. Member for Stoke-on-Trent, Central (Mr. Fisher) rightly said that the report was not, in a sense, about the film industry, but about the important part of the film industry. My hon. Friend the Member for Macclesfield (Mr. Winterton) has deep concerns about the exhibition process in this country, which merits a speech in itself. I therefore hope that it will be possible to get a real crack at this, consonant and commensurate with the importance of the industry.
I agreed with much of what the hon. Member for Heywood and Middleton (Mr. Callaghan) said, but I am sorry if he gained the impression that the Department is not interested in the film industry; he is mistaken. Last night, my right hon. Friend the Secretary of State went to the premiere of "Richard III". She is extremely keen to get this matter right. I know that she would point out that not only is "Richard III" a British film, but it was made in conjunction with the National theatre—another element of the Department's interests, the National theatre having recently received funds from the national lottery.
The film pulls together several threads, and we need time to debate them, but I can assure the House that my right hon. Friend is determined to work out a policy, which I hope would have bipartisan support, to support and encourage the industry.
In the few remaining minutes, I shall speak, not ludicrously fast but as speedily as is sensible, to say as much as I can.
367 The Government's detailed response to the Select Committee's report was published in June 1995 in our policy paper, "The British Film Industry". Our policy addressed all the recommendations made by the Committee except for those on tax incentives, which are, as the House has noted and said this morning, a matter for my Treasury colleagues. We had no hesitation in accepting many of the Committee's recommendations, and we are now advancing the work involved in implementing them. I am sorry that time does not allow me to say in detail what that work is, but I hope that we shall find another occasion.
We have also announced further initiatives of our own, which are proceeding. The debate takes place against a background of the growing success of the British film industry. Of course, we still wish to do many things that we have not yet been able to do.
It would be quite wrong if, in concentrating—as did some hon. Members—on what still needs to be done, we failed to remember the successes of the British film industry. The recent academy awards ceremony in Los Angeles underlined once again the excellent reputation that is enjoyed by British talent across the whole range of the film makers' arts. Britons were nominated in virtually every category, from acting, directing and writing to our costume design, documentary films and animation.
All our nominees deserve high praise for achieving that recognition in such a competitive international industry. I know that the House joins me in congratulating Emma Thompson, Nick Park, Jon Blair and James Acheson on their achievements in winning Oscars.
Will there be a prospering film industry to support those talents in the future? I believe that the answer is strongly yes. Last year, 81 films were produced in the United Kingdom—the highest figure for 20 years. The total value of the films produced amounted to more than £420 million—almost seven times the equivalent figure for 1981. In real terms, the value of films produced in this country—