§ 7.52 p.m.
§ Lord WINTERBOTTOMMy Lords, may I descend from the sublime to the mundane and commend this Bill to the House. It is short, and it has the support of all sides of the industry. Its aim is to divert a very small part of the British Film Fund to the National Film Finance Corporation where it will be used for financial assistance at the pre-production stage of film production, including script-writing.
I think I should first explain the circumstances which have led to this Bill being brought before the House. For years past the cinema and film production industry in this country have been declining. There are now just over 1,600 cinemas in Great Britain compared with nearly 2,000 ten years ago, and nearly 5,000 at their peak in the late 1930s. The number of admissions has fallen from 385 million in 1964 to 138.5 million in 1974. We must accept that many people wish to sit at home and watch television, and we cannot hope to put the clock back to the 1950s. Nevertheless, while the huge attendances of the immediate post-war years are unlikely to return, there is still a large audience for good films in cinemas. The number of admissions has recently gone up by nearly 4 million, from 134.2 million in 1973 to the 138.5 million in 1974 which I mentioned earlier. Cinema takings in 1974, including VAT, totalled £69.8 million and are up by about £11 million on the previous year. I hope it will be possible to continue this upward trend and maintain the cinema as a means of family 970 entertainment. I should however add a further note of warning. These increased takings are due far more to inflation than to increased business; and credit is due to the many cinematograph exhibitors who throughout this economically difficult period have remained in business despite their many problems, which cannot always be met simply by increasing seat prices.
The effect of the growth of multi-screen cinema complexes on the size of the British Film Fund was mentioned in the brief debate we had last week on the draft regulation which raised the exemption limit for small cinemas to £700. This problem was first raised in the Cinematograph Films Council in October 1974. This was prior to the receipt of a joint proposal from the Cinematograph Exhibitors' Association and the Association of Independent Cinemas for an increase in the limit of weekly cinema takings at or below which a cinemais exempted from payment of levy. In considering the proposal the Council were thus able to take into account the possible effects of the growth of multi-cinema complexes on the British Film Fund.
The Cinematograph Films Council made a number of useful and constructive proposals in their Annual Report for 1973–74 which were intended to remedy the present situation. The particular proposal which led to the Bill has the unanimous support of all members. It is also supported by the Film Production Association of Great Britain, the Writers' Guild of Great Britain, and the Federation of Film Unions—all of whom played a part in devising the scheme. The proposal was put forward because, however attractive a project may appear to its sponsors, it must be effectively worked up before it can attract financial backing. The experienced and well-known film producer may well be able always to raise finance for his films whenever he has a good project to offer. This is not true, however, of the younger and less well-known producers and writers who, if they are not permitted to develop their ideas and abilities because of economic difficulties, will be lost to the industry in 971 years to come, so that there may eventually be no one to succeed today's experienced producers.
It is hoped that this Bill will go some way towards solving this problem and remedying the shortage of good projects. The scheme will enable someone who comes up with a good idea, but who has not sufficient funds himself to develop it to the point where he can attract investment capital for production, to get additional finance to enable him to develop his idea. He would be able to prepare a complete script and plan for the proposed film, and so reach the stage where he could convince potential backers that the project is worth pursuing.
The money for assistance under the proposed scheme will come, as I said, from the British Film Fund. It will thus be the industry's own money, and the Bill will not lay a new burden on the taxpayer. The rate of levy will not be increased, so there will be no additional burden on exhibitors. The money will, in effect, come from the makers of British films as the establishment of the Fund will mean that less money will be available for distribution to film makers. The Bill is necessary because the existing Cinematograph Films Acts prescribe the uses to which levy money may be put, and these statutory uses do not include the kind of financial assistance which we have in mind.
Although the Bill does not itself limit either the amount to be made available or the period during which the scheme will operate, it is my right honourable friend's intention to follow the recommendation of the CFC, and to make the sum of £200,000 available in each of the first two years of the scheme, after which it will be reviewed. That sum will be divided up so as to provide enough money for script-writing and pre-production expenses for about 20 projects in each year. The Bill would permit assistance to be provided in the form of grants; but the present intention is that assistance will be provided in the form of loans, repayable whenever a project actually goes into production. No single project will receive more than £10,000, including the script fee.
Turning to the Bill itself, the first clause authorises the British Film Fund Agency 972 to make payments to the National Film Finance Corporation. This is required because the use of the monies in the British Film Fund are confined, under the Cinematograph Films Acts 1957 to 1970, to payments to makers of British films and to payments to three bodies; namely, the British Film Institute, the National Film School and the Children's Film Foundation.
Clause 1 of the Bill will add the NFFC to the bodies which may receive payments. The Bill does not specify how much these payments will be, but follows the precedent whereby the Secretary of State is required to consult the Cinematograph Films Council in every case before approving a payment to these bodies. Hence, the industry will have ample opportunity to make recommendations as to the amount to be used. It is intended that the monies will be administered as a separate fund, unconnected with the other funds held by the NFFC; and Clause 2 of the Bill directs that the NFFC shall apply the payments in accordance with arrangements to be approved by the Secretary of State. I am sure that he will consult the industry fully before giving his approval to the initial arrangements, or to any subsequent amendments which prove necessary as a result of practical experience. Indeed, the Cinematograph Films Council has already been considering them; and I hope that it will be possible to bring them into force very soon after the passage of the Bill.
I think it might also be useful if I describe what are likely to be the main features of these arrangements. They will specify that an Advisory Committee, probably composed of six persons, will be appointed by the Secretary of State to advise the National Film Finance Corporation on the suitability of applications for assistance under the scheme. This Committee will have nothing to do with the other work of the Corporation. I expect that, as in the case of the arrangements themselves, the Secretary of State will consult the appropriate bodies in the industry, including in particular the Writers' Guild of Great Britain, the Film Production Association of Great Britain, and the Federation of Film Unions, before making appointments. I hope that it will be possible to complete these consultation and appoint the members of the 973 Committee within a month or two of the Royal Assent to the Bill. The arrangements will preclude a member of the Advisory Committee from voting, forming part of the quorum, or taking part in the discussion on any application in which he, or any company with which he is associated by way of business, has an interest.
Responsibility for making loans will rest with the NFFC, but the NFFC will normally follow the recommendations of the Advisory Committee in selecting applicants and in determining the amounts to be loaned, subject of course to the terms of the arrangements. Under the arrangements, the Advisory Committee will, in recommending applicants, be expected to satisfy itself that the application is based on a genuinely thought-out proposal. The Advisory Committee will take account of the previous record of the applicants, who must include a writer and a producer or director in film production matters; but the Committee will not be expected to make any qualitative judgment on the story itself or on the treatment of a particular subject. No interest as such will be charged on loans, but if a project goes into production then the loan will be immediately repayable. In addition, a premium will also become due. This will enable the NFFC to receive a small sum from the expected profits, which will help to cover the losses resulting from loans made for projects which do not succeed in attracting backers and which do not go into production.
The question of the size of the premium is still being considered but, at least initially, it is likely to be 50 per cent. In any event, the amount of the premium will be spelt out in the arrangements, so that applicants will know what their liabilities will be. The arrangements will also require the NFFC to make a formal agreement with each successful applicant, and this will spell out the exact conditions of the loan.
Subsection (2) of Clause 2 is necessary because, in the course of its normal lending business, the NFFC is restricted as to the period of a loan and as to the interest which must be charged. Financial assistance under this new scheme will take a different form and these restrictions would be inappropriate. Subsection (3) of Clause 2 will confine the scheme to projects intended to result in 974 the production of films primarily for exhibition in cinemas. Clause 3 includes the normal statement on citation. Subsection (2) follows the precedent of other Films Acts which generally do not extend to Northern Ireland; but this subsection would not debar a citizen of Northern Ireland from eligibility to receive financial assistance under the scheme.
I appreciate that £200,000 in each of the next two years are small sums of money in relation to the problems facing the industry and to the very considerable sums which are normally needed to finance a feature film. But we must bear in mind the difference between, on the one hand, the money needed for the development of a script and of the preliminaries necessary to demonstrate that the idea has merit—this is the pump-priming part of the operation—and, on the other hand, the much larger sums needed to convert the project into a fully-developed production. This Bill is thus an interim measure, to provide some immediate help to the industry until the more far-reaching recommendations, which I hope will emerge from the Working Party set up by the Prime Minister, can be received and studied. It has the support of all branches of the industry, and I confidently hope that the House will accept it. My Lords, I beg to move.
§ Moved, That the Bill be now read 2a.—(Lord Winterbottom.)
§ 8.5 p.m.
§ Lord ELTONMy Lords, we must thank the noble Lord opposite for having introduced with such admirable succinctness the supporting programme after the main feature is over and also for having turned a favourable eye on the screen which he has unveiled. The cinema at the moment is struggling with increasing signs of success against the small screen, and in so doing it has to use material which is either outstandingly good or outstandingly controversial. In between, there must be a great deal of material which goes to waste, which is the work of potential writers and producers of great ability. If we now have a fund which will enable the script writers in particular to survive the arid years from inspiration to general release, then we are to congratulate them on having beaten the authors of printed works, who still await the introduction of the Public Lending 975 Right Bill promised to them before the last General Election. We now see the growth of a seed which was sown in the "reign" of my noble friend Lord Eccles, and we are glad to see that there is a recognition that the garret and genius syndrome rests upon the fallacious assumption that one is a genius because one lives in a garret when in fact one lives in a garret because one is a genius. One hopes that this small Bill will release funds to enable men of potential worth and ability in this field to be freed for productive work.
The noble Lord mentioned the reference he made in this Chamber last week to the film complex, when I suggested that it would be appropriate to examine the exemption limit in connection with a film complex where effectively a triple exemption was achieved for the same number of seats in the same ownership as there had been prior to the conversion of the building. Perhaps it would be appropriate to say that of course any such review, as I think the noble Lord implied, should be coupled with a review of what in the trade is called, I believe, "the equity factor"—that is, the lower limit which is the proportion of the receipt per ticket which is exempted from the levy.
The noble Lord, Lord Winter bottom, outlined matters which we may look at more closely in Committee, and in particular the reason (which had puzzled me) for the exemption included in Clause 2(2) from Section 2 of the Cinematograph Film Productions (Special Loans) Act 1949. This leads me on to ground to which we may return in Committee, because it appeared to me from what he said that the first beneficiaries from this new enactment would benefit by means of grant, whereas subsequent beneficiaries would benefit by means of loan. I may have misheard him, but it sounded as though he was saying that this was a transitional period, and it is something that we may want to look at later.
I do not wish to detain your Lordships after such a long and exciting evening, and it only remains for me to say that we were glad to hear the noble Lord say that although it will not be within the purview of the Advisory Committee of the NFFC to control the treatment of any subject which is accepted for grant or loan, it may be possible for them to bear 976 in mind his reference to the need for an increase is family entertainment when this subject is being looked at. This is in no way to advocate straight control or censorship of the screen, but I am sure nobody would wish public funds to be expended in a way which might subsequently give public offence. That said, we welcome anything which may bring encouragement to men and women of talent who are able to enrich the nation's life in preserving what is not only a means of communication, but also a valuable art form.
§ 8.10 p.m.
§ Lord BEAUMONT of WHITLEYMy Lords, I thank the noble Lord, Lord Winterbottom, for introducing and explaining this Bill. It is a Bill, which as he says, is welcomed on all sides; and I, for one, should like to welcome it, not just personally but also on behalf of the Liberal Party and in my capacity as President of the British Federation of Film Societies. As all noble Lords in this House already know, the Federation is at present celebrating its 50th anniversary —or, if your Lordships do not know, we have not been doing our publicity well enough. It is very important that this recommendation of the Cinematograph Films Council should have been put forward in a Bill as quickly as this without waiting for the other recommendations to be considered, as no doubt they will be by the Films Working Party.
This is an extremely necessary Bill. It is a great pity that there is no new money. Sooner or later, if the film industry is to prosper, new money must be put in. It is a pity that the amount in question is so ludicrously small. But we all know the problems which the Government have to face, and we all have sympathy with their efforts to try to be economical at these moments. All I can say is that we hope that in the future something much more far-reaching may be done. It is very important that money should be available to stimulate and help those people who have not yet achieved reputations, to enable them to put forward ideas for films, and to allow these films to reach the production stage.
I would make a point which was not made in another place but which is extremely important; that is, about the necessity to cultivate the people who are working straight from the idea through 977 the film. As we all know, a great many good films have been made from books. But the cinema is an art in itself; it is an art form on its own, and the more we can encourage those people who write scripts directly for the cinema from the original idea, the better it will be for the cinema as a whole. This Bill will certainly do this.
There is one serious point I wish to make, which I hope the noble Lord the Minister will take on board, and perhaps we may come back to it at another stage. I have not given him notice of it tonight, for which I apologise, and I do not expect an answer tonight. But we are told that the grants will become repayable with a premium when the film goes into production. It is absolutely right that the grant should be repayable. It is absolutely right that there should be a premium, and as hefty a one as 50 per cent. is not at all unfair, judging by the fact that there will obviously be a certain number of losses as well. But I do not think that the moment for both those things should be when the film goes into production. The moment for repayment should be when the film goes into production, but the moment for paying back the premium should be when the film begins to make a profit, and it should be done out of profits. Otherwise, we are deterring the very thing we want to encourage; we are deterring people from taking up the young, experimental film makers, from taking a risk in going into production, on something which may very well not make money. So far as I can see, this is a point which has not been seriously considered, and I ask the Government and the Department to take it on board, to look at it again and to come back to us with it.
All sorts of other things need to be done in this area. We need to ensure that films of this kind, made in this way, are in fact distributed. We all know that the structure of distribution of the industry in this country is such that it does not always happen. Such good films as, "England Made Me", both the recent versions of "A Doll's House" and "Zardos", have had exhibitions in London but very few outside. "Kes", which eventually made a great deal of money for its makers, got general distribution only because the critics shouted about it so much—and more power to them! 978 We must find some way of ensuring that good films receive a wider distribution. That is something which the Working Party will no doubt look at.
Another matter which they must look at again is the whole busines of the Eady levy, and the National Film Finance Corporation, and we look forward to that. In the meantime, we very much welcome this Bill. As the noble Lord, Lord Elton, suggested, there are one or two points we may want to take up at a later stage. Among others I should like to take up is the point of films being either outstandingly good or outstandingly controversial. I do not know whether that was a slip of the tongue, or whether the noble Lord was retreating into deep conservatism in thinking that a film which was outstandingly controversial could not be outstandingly good. It is hardly a point which arises—
§ Lord ELTONMy Lords, the inference from my remarks should be entirely the view of the noble Lord, Lord Beaumont. Whether a controversial film is good or bad is open to question. Some are very good and some are very bad. I do not think that being controversial is necessarily bad; it is not necessarily good, either.
§ Lord BEAUMONT of WHITLEYNo, my Lords, but I am glad to have that elucidation. Meanwhile, from these Benches I should certainly like to welcome this Bill.
§ 8.16 p.m.
§ Lord LLOYD of HAMPSTEADMy Lords, I too should like to thank my noble friend Lord Winterbottom for introducing this Bill and for the admirable way in which he did so. Naturally, I strongly approve the purposes of this Bill. I say, "naturally" because, being the chairman of the British Film Institute as well as of the National Film School, it is hardly surprising that I have a particular interest in any measures which are calculated to encourage the activities of young, creative film-makers. The only reason why I desired to intervene briefly in this debate was simply to give expression to a certain faint apprehension that I have, an apprehension which I hope will prove to be totally unfounded.
979 My apprehension stems from the fact that this further sum of £200,000, which of course in itself for this purpose is a very modest sum, as the noble Lord, Lord Winterbottom, conceded, is nevertheless to come out of Eady money—the Film Fund, the same Fund which is already providing grants for the Production Board of the British Film Institute, for the National Film School and also for the Children's Film Foundation. In these circumstances, one naturally feels some faint apprehension that those who are concerned with and have a say in the giving of these grants may feel that having another grantee included in the list might be a ground for reassessing the grants made to the other beneficiaries.
I was to some extent fortified in my apprehension and to some extent relieved by an exchange which took place in the other place, where Mr. Durant asked for an assurance that the proposal would not in any way penalise the other grantees. Mr. Deakins gave a helpful assurance, so far as it went. At column 438 of Hansard (Commons), in the Second Reading debate in the other place, on 21st October 1975, he said:
The hon. Member for Reading, North made an important point about whether there would be a penalty imposed in the form of, perhaps, reduced payments out of the Eady money to the Children's Film Foundation, the National Film School and the British Film Institute Production Board. I can assure the hon. Gentleman that that is not the case. The new scheme will in no way prejudice the payments made from the levy to those three institutions and the Cinematograph Films Council will continue to be consulted about all these payments. That is an adequate safeguard for those organisations and for the industry.As I say, I am relieved to have read of that assurance. It seems to me, however, that there remains a possible lacuna in this situation. One would like to have some kind of assurance that the Cinematograph Films Council has got the message and will accept the view and, in giving its advice in subsequent years, will proceed on the basis that nothing contained in the Bill should be regarded as diminishing the claims of the other beneficiaries.From this point of view, one has to consider how vulnerable the grantee is in this inflationary situation with which 980 we are all faced. Year by year one needs a good deal more to stand in the same position as one held in the previous year. If one receives a grant, it is no good being told, "You are getting the same as you had before". Indeed, this may mean a substantial cut in one's grant. Also, there is the fact that new developments occur and that from time to time there is a need for an increase in the grant. Therefore, one hopes that this matter will be left not simply to future deliberations but that it will be clearly understood and made manifest that the granting of the sum envisaged under this Bill to the new beneficiary—which I entirely applaud and think is a valuable proposal—must not be regarded as in any way affecting what would be granted to the other beneficiaries had this new provision not been made.
I hope very earnestly that the noble Lord, Lord Winterbottom, will be able to give an assurance that the matter will be looked at from that point of view and not regarded just as a pure matter of discretion, so that in future these claims are regarded as competing one with the other. The fact of the matter is that there is no competition between any of these claimants. All of them complement one another; in their different ways they are all serving the same end. Therefore, it is vital that the grants they receive should not be diminished simply because they are coming out of the same pool. Any kind of diminution in the flow of grant in relation to any of these beneficiaries (although I speak particularly in relation to the Film School and the Production Board) would deal a very severe blow to those avenues through which fresh creative talent can be injected into the industry. It would be a sad day indeed if this beneficial Bill, which has nothing but the advantage of the industry at heart, should eventually turn out to have caused more harm than good. I am sure that that is remote from the intention of the Government, but may I urge upon them that they should give very careful consideration to this matter and appropriate advice to all those who will be concerned with the administration of this Fund.
§ 8.24 p.m.
§ Lord WINTERBOTTOMMy Lords, what is important about this Bill is that although we are in the middle of 981 lean years we can, with some confidence, hope for better years to come. The one thing that lean years do not stop is the work of young creative artists who are moving in the field of creativity in the film industry. They are perhaps impelled by the lean years to develop their talents. This House has recognised that it is good that the fund which is being created should be available while a wider plan for the film industry as a whole is being worked out.
May I touch on one or two points. We can go into the more important ones in greater depth at the Committee stage of the Bill next Friday. I have great sympathy with the point made by the noble Lord, Lord Elton. In his final words he stressed "family entertainment". Today there is a tendency for many films to stress the sensational, in the wider sense of the word "sensational". Anybody who can make sex boring should immediately be abolished from this planet! For this reason we ought to consider the point made by the noble Lord. The noble Lord, Lord Elton, also raised the question of grant versus loan. We have a hybrid here. It is a question of heads I win both times". If the young script-writer with his sponsor is accepted, he obtains his grant. He has to repay it only if the script goes into production.
I have noted the point that was made by the noble Lord, Lord Beaumont of Whitley, that it would be good to repay the grant in two tranches—the money he had when the film went into production and the premium when it becomes profitable. That seems to me to be sensible and equitable, and I shall bring it to the notice of my right honourable friend. Very rightly, the noble Lord, Lord Lloyd of Hampstead, is defending his own two areas of responsibility. However, may I draw to his attention the Order which we passed on Wednesday, 29th October, 1975, which is called the Cinematograph Films (Collection of Levy) (Amendment No. 4) Regulations 1975—a very splendid title.
982 He is rightly worried about the impact of inflation. The value of money now is not what it was, nor what it is likely to be. It is recognised in this Order that the upper limit of £5 million was specified in 1957, and that at present price levels its value then is the same as £13 million now, almost exclusively because of inflation. While the limit that we are proposing need not approach this figure, it is necessary to raise it to a more realistic level and £7 million was the figure that we chose. Therefore, I do not think that competition between the various beneficiaries of the Fund need worry my noble friend. We are increasing the Fund and, if it were necessary, could increase it further by Order. I look forward to going into the various points on this Bill later in the week. May I thank the House for its general welcome to our proposals.
§ On Question, Bill read 2a, and committed to a Committee of the Whole House.