§ 3.56 p.m.
§ LORD DENHAM
My Lords, I beg to move that these Regulations be agreed to. I think it would be for the convenience of your Lordships if we discussed them and the following ones together Under the Cinematograph Films Act 1957, the operation of which has been prolonged until 1980 by the Films Act 1970, the Board of Trade is required to provide for the imposition of a levy upon film exhibitors from the proceeds of which the British Film Fund Agency make payments to or for the benefit of makers of British films.
The levy is collected from exhibitors on the basis of weekly earnings: but so that this should not inflict undue hardship on the smaller cinemas, many of which are finding it hard to keep going, an exhibitor is exempt from levy in any one week in which his box office takings do not exceed £400, or when his weekly average, taken over the preceding part of the levy period, does not exceed £400. The Board of Trade does this by regulation, subject to an Affirmative Resolution of both Houses, after consultation with the Cinematograph Films Council. The draft Collection of Levy (Amendment) Regulations propose no change of any kind. All that they do is to prolong the existing Regulations for another ten periods of fifty-two weeks. To save your Lordships from too much mental arithmetic, this brings us up to the week ending September 20, 1980.
The Cinematograph Films (Distribution of Levy) Regulations is a somewhat lengthy document, but most of it is concerned with consolidating the Regulations which were made in 1963 with subsequent Amendments, with adding drafting Amendments consequential on the 1970 Films Act, and with prolonging them for a further ten periods of fifty-two weeks. There are only two changes of substance. The first is the addition of sub-paragraph h, paragraph 1 of Regulation 3, which defines an "eligible film"; that is to say, a film which is eligible for levy earnings. Up to now, films otherwise eligible and made in studios in the Commonwealth or in the Republic of Ireland have been able to qualify for levy earn- 850 ings. The whole purpose of the levy is, of course, to encourage film production in this country, and there seems to be no justification for continuing an arrangement whereby film makers can make their films in studios in the Republic: of Ireland or in any Commonwealth country and still benefit from the levy. The revised definition in sub-paragraph h of the Regulations will have the effect, subject to one proviso, of requiring that if a studio is used it must be in the United Kingdom. The one proviso is this: it is recognised that sometimes when a film is being made on location, it may be more economical to use a local studio for a short time, and so long as photographs taken or sound recordings made in a studio outside the United Kingdom do not exceed 7½ per cent. of the total playing time of the film, the film will not be disqualified from eligibility. This first change will not apply to films registered up to March 31 next year, so that producers will have ample notice of the change.
The second change; of substance is also to be found in Regulation 3. Under the existing regulations a "low cost film" earns levy at two and a half times the standard rate. A low cost film was defined as:a long film the labour costs of which do not exceed £20,000 in the case of a film registered before 6th October, 1968 and £25,000 in any other case.The film producers have told us that experience is showing that the increase from £20,000 to £25,000 was not enough, and have asked that films with labour costs up to £50,000 should qualify for the enhanced rate. The Cinematograph Films Council recommended that this should be done, and we have accepted the Council's advice. I think that no section of the industry made any objection to the proposed change and I ask your Lordships to approve it. In my view, these new Regulations embody all the changes that are desirable at the present time. In administering the law concerning the levy the Board of Trade's job is to hold a balance between the interests of the producers and those of the exhibitors, and I trunk that the present Regulations, as amended by Regulations before us to-day, provide arrangements which are fair to both sides. My Lords, I beg to move.
§ Moved, That the Draft Cinematograph Films (Collection of Levy) (Amendment) Regulations 1970, laid before the House on July 2, 1970, be approved.—(Lord Denham.)
§ 4.2 p.m.
§ LORD STRABOLGI
My Lords, I should like to thank the noble Lord, Lord Denham, for explaining these Regulations so clearly. I should also, if I may, like to congratulate him, because although I realise that the noble Lord has already answered some Questions, I believe this is the first time he has moved Regulations of this kind from the Dispatch Box. My task is even pleasanter because these Regulations are of course continuing the legislation passed in the last Parliament by the former Government. As the noble Lord has said, they flow in part from the Film Act 1970. I hope, therefore, that this will be a precedent for the future and that we shall see the noble Lord, Lord Denham, moving other Regulations to continue legislation passed by the previous Government.
I also welcome the Regulations for themselves. What the noble Lord has said is quite right: that the levy should be extended for a further ten years. Indeed, this levy has now been in operation for a great many years, almost since the end of the war—the late 1940s—when the idea of the Eady levy and the National Film Finance Corporation was conceived by my right honourable friend the Leader of the Opposition in another place when he was President of the Board of Trade. I think all sections of the film industry acknowledge what a great contribution these two measures have made towards the stability of the British film industry during the last twenty-five years.
I am grateful to the noble Lord for explaining the three main provisions of these Regulations. I particularly welcome the one which refers to films which are made outside the United Kingdom, in Commonwealth countries and in the Republic of Ireland. It is absolutely right that these should not qualify for the levy if the 7½ per cent. limit is exceeded. Of course, these films will still qualify for quota. This matter was debated at length during the passage of the Film Act and the previous Govern- 852 ment gave an undertaking to watch the situation. I hope, therefore, that the present Government will do this. It is a matter that should be kept under constant review—that a film made away from this country should still qualify in this way.
I also welcome the increase for the low-cost film which will qualify for the enhanced levy payments: an increase from £25,000 to £50,000. I believe this was a recommendation of the Film Producers' Association, and I am glad that the Government have adopted it. It will have the effect of encouraging producers to make low-budget long films, which are becoming increasingly popular nowadays, particularly if they have some social content. They have great export potential. For this reason alone they should be encouraged, as well as for the fact that they provide better entertainment for home cinema audiences. Therefore, my Lords, I welcome these Regulations, and certainly from this side of the House we hope that the House will pass them.
§ LORD DENHAM
My Lords, I am most grateful to the noble Lord, Lord Strabolgi, for what he has said, both about myself and about these Regulations. The only point he raised which I have not mentioned myself at all concerned the quota. I assure him that we will look into this point of films made outside the United Kingdom being eligible for quota.
§ On Question, Motion agreed to.