HC Deb 30 January 1996 vol 270 cc909-16

Motion made, and Question proposed, That this House do now adjourn.—[Mr. Conway.]

11.45 pm
Ms Roseanna Cunningham (Perth and Kinross)

I am glad to have the opportunity to raise the matter of the Scottish film industry in the House. It would seem that this is the first occasion in a very long time on which the industry has been debated here in a Scottish context. That is surprising given the high profile accorded to the industry in the past year, even by the Secretary of State. I regret the absence of Scottish Labour Members, with the honourable exception of the Member for Linlithgow (Mr. Dalyell). I understand, however, that the Labour party's indifference to the industry as a whole extends even to its Front Benchers, and that is very unfortunate indeed.

In the past few years, there has been an enormous growth in interest in the film industry, not least because of the sudden upsurge in the number of Hollywood feature films to which we have been host. Naturally, we are pleased that we have apparently become flavour of the year, but there is concern that, when all the razzmatazz has died down and the Hollywood caravan has moved on, the indigenous industry will be no further forward.

Last year, the Secretary of State made much of his commitment to the industry; indeed, he even wore a kilt to the "Braveheart" premiere—something he might have regarded as a sacrifice. But so far, all we seem to have had is words. Even the long-awaited report from the Scottish Office has yet to materialise. Indeed, all that has happened in the meantime is that two more reports have been commissioned. I hope that tonight we will be given the date for the appearance of the Scottish Office report at least.

I hope that the opportunity will be taken tonight to make a concrete commitment to the industry. That is vital if we are to build a sustainable film industry in Scotland and move away from the boom and bust scenario that seems to be our lot at present. Future success can be ours in Scotland only if we can ensure a minimum sustainable level of production at all times.

It is fortunate that we have an existing infrastructure on which to base expansion, an advantage that the Irish did not have before they set their minds to building up their own film industry. They are, however, now rapidly developing one. Indeed in Scotland, Ireland is viewed with a certain rueful admiration. Ireland's achievements have been considerable, and have been brought about by a combination of Government intervention in the form of tax breaks, meaningful grants to the industry and the creation of a film-friendly atmosphere. Taken together, these have resulted in an irresistible pull on overseas productions. That has sometimes resulted in a relocation from Scotland to Ireland, a fact that did not escape the public's attention, particularly in relation to "Braveheart".

The Minister may not be aware of some of the invidious comparisons that can be made between Scotland and Ireland. For example, the Scottish Film Production Fund receives a Scottish Office grant of £190,000, which, in effect, has been frozen for three years, whereas its Irish equivalent receives 3 million Irish punts. That is the difference between 0.038p per head of population in Scotland and £1 per head in Ireland and it does not reflect well on Scottish Office commitment. Will the Minister at least commit more funds to the SFPF?

Lottery money has certainly been made available, but it should not be seen as, and was never meant to be, a substitute for public funding. Sustainability will be dependent on a growth in both indigenous production and development over a long period. It should not be dependent on the vagaries of lottery grants.

We all need to remember that film is an industry like any other, with an enormous potential. It is easy to forget that, at a most basic level, it is about jobs, not just for the actors, directors and producers but for the carpenters and painters who build the sets, the folk who hire out the vehicles, the caterers who provide food, the dressmakers and make-up artists and the whole panoply of trades that are required in the making of any film, which is a very labour-intensive venture.

The industry is not just about jobs. Film is just one of the ways in which any society and culture find its own expression. That involves not just making films that are based on one's history or are about present-day experiences in a country, or features that are self-referential; it can also extend to the viewpoints through which other issues are seen and through which we view the rest of the world. It is important that we get the opportunity to do that as well.

Thus, it is important to get it right. Scotland needs a film policy implemented by Government and agreed by the principal bodies and players, which will do a number of things. The most important are: to prioritise commercial and employment issues, which does not appear to be being done; to attract investment, both internally and externally; to develop the skills base of the Scottish industry; to assist the commercial and non-commercial development of missing parts of the infrastructure; and to create a national organisation that can carry forward policy and strategy with the agreement and co-operation of the industry as a whole.

If I were to pick out the two first steps that are vital if the industry is to develop fully in Scotland and to fulfil the potential that is shown, the first would have to be the introduction of tax breaks for film production, modelled on the Irish section 35 scheme, which is highly admired and has become very successful in attracting the film industry to Ireland. It requires no new money from Government sources and I should have thought that that would be very attractive to the Government. Unfortunately, thus far, they do not seem to have been able to bring themselves to copy the Irish example—perhaps it is difficult to admit that a small and independent nation in Europe may have something to teach such a country as the United Kingdom.

Implementing those tax breaks would require no new money, merely a willingness to forgo income, which in any case might not otherwise come if the tax breaks were not there in the first place. Although tax breaks of themselves will not do the trick—in some cases, when films have moved to Ireland, they have merely made the film break even—they are nevertheless an important part of attracting external interest in a country.

Equally important, Scotland needs the development of a powerful new body to oversee public film policy and strategy. It will need to be properly set up and properly funded if it is to be successful. It is no use introducing any such new body if it is not going to be resourced. I understand that the possibility of such an organisation is being canvassed under the working title of Scottish Screen. I expect to hear that the resourcing of any such new organisation would be sufficient to make it work in the long term. Any such organisation should be federal in structure, bringing together existing bodies such as the Scottish Film Council, which does good work, the Scottish Film Production Fund, Scottish Screen Locations and the Scottish Broadcasting and Film Training Trust.

In that structure, new bodies should be established, including one responsible for marketing and distribution. One big advantage of that would be the provision of a one-stop shop for those from furth of Scotland, who would find Scotland an even more attractive prospect than it is at present. It is in creating that attractive prospect that Ireland has been so successful. We would like Scotland to be able to follow that example.

One of the difficulties for interested parties from furth of Scotland is that they have to deal with a myriad of organisations. In some cases, they find it almost impossible to get help, especially as so few local authorities have dedicated film officers, or people in their economic development sections committed to attracting this important industry, which has enormous potential. That would allow the easy introduction to Scotland of a one-stop shop and make things much simpler.

We also need a properly functioning large sound stage on which big feature films could be made. Until we get one, we will have difficulty in dealing with bigger films. That means that they will end up going to places such as Shepperton or Pinewood, which would be a great loss to Scotland.

Unfortunately, successive UK Governments have regarded film as more a matter of infrastructure than of investment, and have oriented their support to a London-based industry that makes use of studio facilities. That has left Scotland exposed and without practical support. That is not good enough for such an important developing industry.

An independent Scottish Government would be certain to give the industry the priority it deserves and avoid the sort of nonsense that we currently face on the international front, where our industry may not be represented at all. For example, on the EU's Media 2 programme, UK representation comprises two people from the Department of National Heritage in London. There is no representation from the Scottish Office. I understand that, until recently, the Department of National Heritage somehow forgot to advise about the availability of a place for a representative from the industry in Scotland. Direct Scottish representation is essential for all such international bodies and is increasingly demanded by professionals, who recognise the need to insist on and maintain the distinctiveness of what is happening in Scotland.

It is the combination of practical measures and real encouragement that is vital in Scotland but currently absent. Sexy soundbites there have been in abundance, principally those uttered by the Secretary of State for Scotland, but the Minister will have to do much more than utter platitudes tonight if he expects people in the industry to have any confidence in Scottish Office commitment. He could make a start by answering some of the direct questions put to him and make some firm commitment here and now that could be reported to the industry in Scotland as evidence of a real commitment rather than simply a commitment to tomorrow's headlines.

11.58 pm
The Minister of State, Scottish Office (Lord James Douglas-Hamilton)

I warmly congratulate the hon. Member for Perth and Kinross (Ms Cunningham) on securing this debate on an important and fascinating subject. She has addressed it in her customary forthright manner.

We provide substantial funds to the film industry. The Scottish Office allocated £1.5 million to the support of film in 1995–96. The bulk of funding goes to the Scottish Film Council, which is currently concentrating on Scotland's response to the EC's Media 2 programme and on encouraging each unitary authority and local enterprise company to adopt a development strategy for its moving image industry. We provide £190,000 a year to the Scottish Film Production Fund, and the Scottish Office funding is a catalyst for more funding to a total of almost £750,000.

With regard to a Scottish Studio sound stage, Hydra Associates will consider the case for a new studio, but it is widely acknowledged that a studio suitable for major Hollywood films would probably be unused for most of the year. To justify such an investment, it would be sensible to secure shared usage with television companies or build the studio as part of a larger entertainment complex. We are currently looking at the pros and cons of that.

The hon. Lady mentioned the Irish film industry, which has enjoyed a resurgence in recent years, partly as a result of tax incentives which are especially useful in attracting overseas productions to be filmed in Ireland. But the tax regime is rarely the principal consideration in deciding where to shoot a film. The suitability of the production facilities and the director's personal preference are also influential. The Government will certainly consider any lessons to be drawn from the Irish experience which can be applied to Scotland in the light of the consultants' report.

Before responding in detail to some of the other points that the hon. Lady has raised, I should like to put the Scottish position in the United Kingdom context. The number of films produced in the UK has risen from just 30 in 1989 to 81 last year, the highest figure for 20 years. Between 1990 and 1994, the UK was one of only four countries among the top 20 film-making nations to show an increase in the number of films produced. The number of films produced in the United States fell by 12 per cent. over that period.

Total investment in film production in the UK had increased from £253 million in 1990 to £421 million in 1995. As a result, the UK's share of total European investment in films rose from 18.4 per cent. in 1990 to 28.1 per cent. in 1994. In 1994, UK cinema admissions rose by some 120 million for the first time since 1978, eclipsing even 1993, which had the benefit of "Jurassic Park", the biggest grossing film in cinema history. The latest estimate for 1995 is a healthy 113.5 million.

Mr. Andrew Welsh (Angus, East)

Will the Secretary of State give way?

Lord James Douglas-Hamilton

No, I should like to develop my reply to the hon. Lady.

The Scottish film industry has shared in those boom years. Having made only five or six films in the early 1990s, the number of Scottish productions soared to 12 in 1994 and reached an impressive nine last year. Films are financed in a variety of ways, but it is interesting to note that "Chasing the Deer", which starred Brian Blessed, was the first Scottish production to raise the bulk of its budget through public subscription. The film has recently gone into profit and investors should now see a return on their investment. "The Bruce", which will be released in March, has been financed in a similar way. The national lottery provides yet another new source of funding to build on the successes of recent years.

It is, therefore, fair to say that the film industry in Britain is in a buoyant state. With the dollar exchange rate in our favour, the UK's film studios are full. The recent purchase of Shepperton and Leavesden studios further demonstrates the confidence that exists in the industry.

Ms Roseanna Cunningham

Is the Minister seriously suggesting, with his examples of "Chasing the Deer" and "The Bruce", that we can build a sustainable film industry in Scotland on the same do-it-yourself basis with which we might build a garden shed?

Lord James Douglas-Hamilton

No. A variety of measures are necessary. If the hon. Lady will await my remarks, I shall develop the theme across a range of subjects.

As the hon. Lady said, the main activity continues to be in and around London, where the major television companies and film studios are located. The challenge facing the film industry in Scotland is to produce quality films with a distinctive Scottish feel, which are commercially successful, such as "Local Hero". The responsibility for achieving that rests ultimately with the writers, producers, directors and other skilled staff working in the industry in Scotland.

However, public funding supports some of the infrastructure for the industry. As I said in answer to a question about film production in Scotland from my hon. Friend the Member for Chingford (Mr. Duncan Smith), we are looking at a number of ways to strengthen those arrangements and the current film initiative announced by my right hon. Friend the Secretary of State last September is important so that we can ensure that the industry in Scotland breaks through to a new, more dynamic era.

The film initiative is intended to maintain the momentum of the current success story. After the release last year of "Braveheart" and "Rob Roy", the 1995 Scottish theme at the cinema will be reflected in a gentler and more contemporary vein in 1996 by "Loch Ness", which is to be released next week following its premiere at Inverness this Saturday.

Such films can give a significant impetus to marketing Scotland as a tourist location, and I am very pleased indeed that the Scottish tourist board has been very active building on the high film profile that Scotland now has. The impact is already apparent in tourism receipts.

For example, in 1995 twice as many people visited the Rob Roy and Trossachs visitor centre in Callender as in 1994. That, in turn, prompted several agencies to come together to fund a £400,000 improvement programme at the centre to double the size of the facility. Admissions to the National Wallace monument at Stirling increased almost threefold in the four months after the release of "Braveheart". Passenger numbers on the SS Walter Scott on Loch Katrine are up 25 per cent. on last year—that had been Rob Roy country. We wish to build on those encouraging benefits to tourism.

To ensure that film-makers continue to come to Scotland, it is vital that all potential locations are marketed as effectively as possible. Accordingly, as a first priority for the film initiative, the Government have commissioned a CD-ROM, which will contain information about all Scotland's main screen locations. That will enable film producers throughout the world to have immediate access to visual and factual data about all the locations at the touch of a keyboard.

Mr. Alex Salmond (Banff and Buchan)


Lord James Douglas-Hamilton

I should like to develop my arguments further.

In support of that marketing initiative, we want to remove any unnecessary impediments to overseas films coming to Scotland. That means, if I may paraphrase the usual jargon, securing a one-stop shoot, which the hon. Member for Perth and Kinross mentioned. In practice, that entails applying the "customer first" approach on behalf of the many organisations and agencies with which film makers must co-operate in their production work. Time is of the essence when shooting on location, and effective co-ordination with local authorities and others is essential if that time is to be fully used.

Different considerations apply to Scottish-made films. There also, the picture is a great deal more promising than it has been for many years. "Shallow Grave" was a box office hit on both sides of the Atlantic. "Small Faces", shown to wide acclaim at last year's Edinburgh international film festival, will be released later this year in the United States and Europe. "Trainspotting", which will have its world premiere in Glasgow next month before going on general release, promises to be a third success for Scotland. All three films have relied, at least in part, on public sector support through the Scottish film production fund and the Glasgow film fund. All three are testimony to the fact that the present arrangements can help to bring about Scottish film productions that are both cultural and commercial successes.

Mr. Salmond


Mr. Welsh


Lord James Douglas-Hamilton

I should like to develop a few more points before I give way.

As more national lottery funds become available—to be dispersed by the Scottish Arts Council—the impact of public sector support for production is likely to be even more influential.

Those recent successes owe much to the judgment and determination of the board and staff of the Scottish film production fund.

The role that broadcasters can play in developing the film industry in Scotland must not be overlooked. BBC Scotland, through its "Tartan Shorts" scheme, in conjunction with the Scottish film production fund, is helping to nurture talent. Indeed, the success of the Scots actor Peter Capaldi in winning an Oscar last year for his "Tartan Shorts" film, "Franz Kafka's It's a Wonderful Life" shows the high quality of that initiative.

Recent Scottish Film Council initiatives, including its First Reels and Movie Makers projects, coupled with training initiatives spearheaded by Scottish Broadcast and Film Training Ltd, are working towards the creation of a new generation—indeed, a renaissance—of talented Scottish directors, producers, technicians and writers. That is extremely welcome.

Mr. Salmond

I thank the Minister for giving way and I apologise for knocking him off his stride. At the beginning of his remarks, when he compared the Scottish situation with that of Ireland, he said that tax was not crucial to film location. However, the Government argue that tax is crucial in every other area of Government policy on inward investment for every other industry. Why does the Minister argue that the taxation position of this industry does not matter and is not crucial?

Lord James Douglas-Hamilton

There are a variety of reasons why that is so. In the case of one film—part of which was filmed in Ireland—I understand that the cost of transporting the crew wiped out much of the tax difference. I said very clearly to the hon. Lady earlier in the debate that we shall consider any lessons to be learnt from the Irish experience which can be applied to the Scottish situation in the light of the consultant's report. We shall fulfil that commitment, and I shall bear in mind the hon. Gentleman's remarks and his strength of feeling on that point.

Despite the relatively rosy picture overall, there is always scope for improvement. In order to examine ways in which the present infrastructure might be improved further, two studies have been commissioned from Hydra Associates as an important element of the fact-finding phase of the film initiative. The first wider study is examining the overall organisation of the film and television industry in Scotland and the opportunities which exist to develop and improve it. The second study focuses more specifically on the mechanisms for funding film productions and, in particular, how to secure more private sector investment. Both studies are now well under way and they should be completed next month.

It is obviously too early to know what will emerge from the studies by way of final recommendations. However, Hydra Associates has held two brainstorming sessions with representatives from the industry, drawn from both the UK and beyond. They have identified six key themes requiring further analysis and consideration: the need to develop and provide training; strengthening the institutional arrangements within Scotland; the importance of attracting new sources of finance; the dominance of London in the United Kingdom film and television industry; improving the marketing effort; and the availability of adequate production and post-production facilities in Scotland.

The final component of the film initiative, which addresses one of the themes identified by Hydra, is the policy and financial management review of the Scottish Film Council which was carried out by Scottish Office officials last year. The review considered how to obtain maximum value for money from the central Government resources available for film in Scotland. The review will be published shortly and I will make certain that copies are made available in the Library.

Inevitably, there has been much speculation about the content and conclusions of the policy review. While I do not want to pre-empt its publication or Ministers' consideration of the review, I can say that it highlights the many developments which have taken place since the Scottish Film Council was established as an non-departmental public body in April 1990. It also draws attention to the contributions made by Scottish Screen Locations, Scottish Broadcast and Film Training Ltd. and by the Scottish Film Production Fund. Despite the progress made over the past five years, the review concludes that, in order to overcome a significant overlap in functions between the Film Council and the other three agencies, there might be merit in merging the bodies into a single new agency.

We will consider that and other recommendations contained in the review, alongside the two studies currently being undertaken by Hydra Associates. That will provide an opportunity to consider the future direction for the next five years in a strategic and a holistic way. We obviously need to be clear about our overall objectives so that they are reflected properly in any new structure to be created. We expect to be in a position to announce our conclusions later in the spring.

The hon. Lady seems to believe that the industry's salvation lies in yet more public funding. I do not think that that is necessarily the case. We must remember that, even beyond the increasing resources that will flow from the national lottery, film is an industry. Its practitioners in Scotland must be flexible, versatile and imaginative, and those qualities will flourish when opportunity knocks.

The Government carefully considered last year's Select Committee report on the film industry, which called for tax concessions. We were not persuaded that that should be a priority in last November's Budget. The tax rules for writing off film production expenses are already more generous than for industry as a whole.

Furthermore, in order to examine the availability of finance for film production in its widest sense, my right hon. Friend the Secretary of State for National Heritage has established a high-level advisory committee under the chairmanship of Sir Peter Middleton to look at obstacles to the industry's growth. We are hopeful that Sir Peter and his colleagues will produce practical and effective recommendations.

I should say how welcome it is to see the hon. and learned Member for Fife, North-East (Mr. Campbell) in his place as he is a trustee of the Sean Connery trust. Many young people have benefited from the substantial contribution that a distinguished Scot has made to the film industry.

We want to give whatever support we can to the Scottish film industry. We want many more successes, many more tourists coming to Scotland and many more films being made in Scotland. We shall work flat out to that purpose and I am grateful to the hon. Lady for having raised the subject today.

Question put and agreed to.

Adjourned accordingly at fifteen minutes past Twelve midnight.