HL Deb 22 July 1982 vol 433 cc1032-7

7.9 p.m.

Lord Cockfield rose to move, That the draft regulations laid before the House on 8th June be approved.

The noble Lord said: My Lords, I beg to move that the House approves these regulations. The draft regulations have been considered by the Joint Committee on Statutory Instruments, who have made no comment upon them. The levy was set up on a voluntary basis in 1950, following negotiations sponsored by Sir Wilfrid Eady of the Treasury, to provide a levy on cinema admissions for the benefit of makers of British films. The scheme was made statutory in 1957. The National Film Finance Corporation receives £1.5 million from the fund, or 20 per cent. of the total, whichever is the greater; and other payments to the Children's Film Foundation, the British Film Institute Production Board, and the National Film School can be approved by me following consultation with the Cinematograph Films Council. The balance is then distributed to makers of eligible films in accordance with the Distribution of Levy Regulations which this draft seeks to consolidate and amend. The distributions are carried out by the British Film Fund Agency.

Registration as a British film requires that 75 per cent. of the labour costs, with some exceptions, should be paid to British subjects or citizens of the Commonwealth or the Republic of Ireland. This was widened by the 1980 Films Act to allow inclusion of citizens of any EEC member state. The modification will be brought into force by a commencement order to take effect on the same day as these regulations.

A European Community maker of a British film can already share in the levy distribution if he meets the residence qualification, although none has in fact so qualified. These regulations will extend this residence qualification to include, in conformity with our Community obligations, residence in or, in the case of a company, registration and control in, any member state.

These regulations impose new restrictions in order to protect the infrastructure of the United Kingdom film industry. There will now be an abatement of the entitlement to levy to the extent that eligible films are not shot within the United Kingdom, unless that shooting is based on the United Kingdom, when there will be no abatement. The abatement applies only when 20 per cent. or more of a film is shot outside the United Kingdom and the application is gradual so that a film wholly shot abroad, and not based on the United Kingdom, is not entitled to any levy. The film industry has given considerable help in framing the restrictions.

The other major amendment in these draft regulations is the removal of the ban on levy entitlement for films that at the time of registration for cinema exhibition were the subject of an agreement for showing on television. This follows the recommendation of the Cinematograph Films Council, the statutory advisory body on film matters, and that of the Interim Action Committee on the Film Industry. The intention is to allow film makers to pre-sell to TV in order more easily to raise finance, not to divert TV funds into film making away from in-house production. Films will continue to be ineligible for levy if they are shown on television before 12 months have elapsed from the date of registration. The industry's current arrangements which, with exceptions, prevent a TV showing within three years, remain in force and are not affected by these regulations.

These regulations will provide the basis for decisions on the transitional tax régime announced in the Budget. This régime will cover not just films for the cinema, but TV films as well. Other amendments of a minor nature have been made. Paragraph 11 has been amended in order to permit one "intention to claim" form to last for the entire levy-life of a film. Definitions of "earnings" and "standard film" have been added to paragraph 3 to clarify current practice and in paragraphs 6 and 9 current practice on the distinction between short and long films has been restated. Action has been taken to eliminate the possibility of eligible makers exploiting the system in the future by altering the playing time of a film after registration. I commend these regulations to your Lordships.

Moved, That the draft regulations laid before the House on 8th June be approved.—(Lord Cockfield.)

Lord Ponsonby of Shulbrede

My Lords, I should like to thank the noble Lord for explaining these regulations. I was glad to hear that in fact they include measures for the protection of the United Kingdom film-making industry and to hear from the noble Lord about the proposed new arrangements. I think one's fear is that one of the effects of the new arrangements could be that the amount of levy which can be paid could be more thinly spread, and of course is no indication that the amount of levy income might in fact be larger in the future. One is aware that over a considerable period of years falling audiences in the cinemas have reduced in real terms the value of the levy collected, despite increases in the amount of levy collected from time to time, as a result of inflation. I wonder whether the noble Lord is satisfied that the income received from the levy is enough for the purposes which he has outlined.

Lord Beaumont of Whitley

My Lords, I should like also to thank the Minister for explaining the regulations. It is, of course, an extremely worthy aim, if rather long overdue, to stem the abuse of Eady money and the laundering of dubious cash-flow through film enterprises. To a certain extent, it is rather sad to think that it is locking the stable door after the horse has gone. The Eady money is diminishing; the coming year's projection, I believe, is that it will be less than £6 million; and the NFFC will be getting less than £1,500,000, which is half what is needed for one modest feature film.

The record of the NFFC at the moment is a very worthy one and I am not saying anything against it. At the moment "Gregory's Girl", one of the NFFC films, is doing extremely well in New York and there are other indications that the judgment and the administration of the NFFC has been good. Nevertheless, we are reaching a stage in the British film industry where we are dealing with rock bottom and "bottoming-out" procedures rather than in any way encountering a situation in which we can find hope and try to inject money which will really help.

The fact is that we have missed the bus. This is particularly sad considering what a great reputation our film industry has had in the past. France, Germany and Italy have all done better recently, and one of the reasons for that is because they have serious state support. One cannot expect more than that from this particular Government, who are ideologically opposed to it; and it is only fair to say that under no Government has there been sufficient support given to a film industry which could have been, and to an extent was in the past, one of our glorious glories in the artistic field and at the same time a great benefit to us financially.

Of course, that has been one of the troubles. One of the basic problems with the whole of the film industry has been this division between the artistic side, dealt with to a certain extent by the Ministry for the Arts, and the commercial side, dealt with by the Board of Trade. This has been a very great pity.

I do not know whether the noble Lord, Lord Jenkins, would agree with me on this point, but it seems to me that an industry like this, which is divided between two Ministries, must suffer as a result. The area to which I should have thought this should go is the area which concentrates on the artistic side, because there it will be considered to be an important venture, whereas in the Board of Trade it is another industry like many others. I mean no disrespect to the present Minister, to any past Ministers or, indeed, to the board as a whole, when I say that there are a great many of these ventures and it is quite natural that films, as such, do not get the attention which they necessarily deserve. There should indeed be a shift of responsibility for the whole of the film industry.

There is only one question which I should like to ask. I will study what the noble Lord the Minister said about the television arrangements, but it seems to me that, with the state reached in the film industry, we are no longer in a situation where we should be going along the old conventional paths. The future for any film industry in Britain is certainly in a diversified field. It is to do not just with cinematograph films as such; it is to do with the intelligent use of the television industry; it is to do with video; it is to do with satellites, it is to do with all the coming inventions, and inventions which have already arrived, which can have a considerable amount to do with providing the area in which films operate.

It is that that we want to do something about and I should have thought that the limitations on the television film, particularly the limitations which mean that a film cannot have been shown as a television film in excerpts of more than five minutes, or whatever it may be, in order to benefit from the Eady levy, are probably the wrong approach. I know the reason why they were introduced. They were introduced in order to narrow the bounds—and this needed to be done for some time—and not to spread the money too far. But I wonder whether we have now reached a stage which has gone rather beyond that, and whether we should be looking again at the whole of the industry in a rather more forward-looking way. I should very much appreciate a reply on that point, but I welcome the regulations. It is merely rather a pity that they were not introduced earlier.

7.24 p.m.

Lord Jenkins of Putney

My Lords, I should also like to join in the general welcome which has been given to these regulations, and I join with the noble Lord, Lord Beaumont, in feeling that it is rather sad that they represent a redistribution of a declining sum. As he said, this is particularly sad at a time when the British film is beginning to recover—and many people would say that it has already recovered—the artistic reputation which it enjoyed in the past. At the moment, the industry is receiving considerable acclaim in various parts of the world, and one of our leading writers and actors, Colin Welland, announced in Hollywood when he received his Oscar for "Chariots of Fire" that the "Brits" are coming—a terrible word which I hope we shall never hear used in your Lordships' House.

But I wonder whether the "Brits" are coming. A couple of swallows do not make a summer, and I see nothing in these regulations which will make that summer come much more quickly. As the noble Lord, Lord Beaumont, said, the trouble with the British film industry is that the money has never been recirculated fast enough within the industry, and there has never been enough Government input to give the necessary impetus to the industry to get off the ground. On the other hand, it can be said that the decline in the British cinema industry, which we hope has now reached rock bottom so that it can only go upwards, is to some extent a reflection of the excellence of the British television industry in that, on the whole, people tend to stay at home and look at what they can see on the "box" rather than go out to the cinema. In other words the programme at the local cinema has to be especially good before people will leave the "box" to go to see it. Now that the industry is producing specially good films, I hope that there will be more inducement for people to go to the cinema, and that when, on another occasion, we discuss these matters, we shall be discussing them on a rising market, as well as on a rising artistic level.

The noble Lord, Lord Beaumont, asked what I thought about the question of the governmental distribution of responsibility in these matters. It has always been my view, and it was so when I myself was a Minister, that one of the greatest absurdities that we have in Government—and no Government have put it right—is the ridiculous distribution of responsibility in the whole field of entertainment, art and sport, where we have about five Ministries dealing with little aspects of the matter and none of them able to deal with it properly.

When I was a Minister, I suggested that films should be transferred to the Ministry for the Arts. However, this was thought to be empire building. I thought that the Board of Trade, as it then was, would be only too happy to get rid of films and regard their departure with some relief. I was entirely mistaken. This was regarded as pinching a piece of the empire. The notion that any Ministry or department is willingly ready to cede a part of its responsibility is one of which I was quite quickly disabused. It would have to be a matter of prime ministerial decision, and I hope that, with that firmness which we understand she displays in every respect, on this occasion Mrs. Thatcher might be persuaded to exercise it beneficently, and to act in a manner which will not only be beneficial financially, but will also do a great deal of good in other ways as well—which it would not be appropriate for me to go into this evening.

Before I sit down, I would add that it would not be sufficient merely to bring the film industry into the Ministry for the Arts. It would also be desirable—indeed, essential—to take responsibility for television away from its present home which is, of all departments, the Home Office. Believe it or not, that department is responsible for television! With one or two other additions, one could make a really viable department which would justify a Cabinet Minister. This is the basis upon which the whole film entertainment and sport in this country—because that would have to come away from Environment, too—could be united.

I am tempted to be out of order by the noble Lord, Lord Beaumont. But I must resist that and return to the regulations, with one question before I sit down. It is stated that the regulations—and, certainly, this is always the case—were framed after consultation with the Cinematograph Films Council. I wonder whether the noble Lord can say if the consultation was entirely affirmative, as I hope it was, and if it was unanimous. One can consult with people, and after the consultation is over one may do what they advise one to do, or one may do something entirely opposite. We wonder whether the Minister could reassure us that, in this case, the regulations follow the advice which was tendered to him by the Films Council? That would be useful information for the House to have. That said, with the qualifications which I have made, I join other noble Lords in welcoming the regulations.

Lord Davies of Leek

My Lords, according to the explanatory note, the aim of the regulation is to widen the basis upon which EEC film-makers may share in the distribution of levy collected from film exhibitors for eligible films. Members of the public are already beginning to be satiated with lumpen films. People are beginning not to look at television or go to the theatre or to the cinema. There is a great deal of unemployment among theatre, stage and film artistes. May I ask the noble Lord whether these regulations are likely to increase the opportunities of employment for British artistes? We seem to be using Americans, Australians, and artistes from all over the world while many of our own people are not getting the chance in our own films that they should. I do not wish to develop that theme because we have had a good discussion. I welcome the main theme of the Minister's statement.

Lord Cockfield

My Lords, I am grateful for the favourable reception which these regulations have received. The noble Lord, Lord Ponsonby of Shulbrede, is entirely right in saying that the effect of the regulations is to spread the levy perhaps more thinly, although in practice we think that the effect will not be very significant.

With the decline in cinema attendances, the major factor is that the levy itself in real terms is falling. This underlines the fact that these regulations are of very narrow compass. They deal with only two points. First, they bring our rules into line with the EEC requirements. This is the answer to the noble Lord, Lord Davies of Leek. Infringement proceedings were threatened against the United Kingdom. We think that the effect of these changes will be to stave off those infringement proceedings. But the films do have to comply with all of the same requirements as apply to films which would have qualified before the change in the regulations was made. It is simply a question that we are carrying through into the distribution of this levy the same general principles of freedom of movement of goods and services which underlie the Treaty of Rome generally.

The noble Lord, Lord Jenkins of Putney, asked a specific question about the consultations with the Cinematograph Films Council. Perhaps I should say to him that the main change which is made in these regulations, apart from the change to which I have just referred—to bring the regulations into line with the EEC requirements—was made at the specific request of the CFC. This was to remove the disqualification of films which at the time of registration were subject to an agreement to show on television. That came from the council. It is true that on one specific point the council was not unanimous. One does not always expect people to be unanimous on everything. But apart from that one point where there was a clear majority of the council, the council otherwise gave complete approval to the regulations.

The noble Lord, Lord Beaumont of Whitley, raised a very large number of points which went a very long way outside the scope of these regulations. They were interesting points, all the same—as, indeed, were those raised by the noble Lord, Lord Jenkins of Putney. Perhaps I might give this one answer to both noble Lords. My honourable friend the Parliamentary Under-Secretary of State when speaking in another place on 9th July did indicate that we should be embarking upon a wide-ranging review in this field. We shall take the points that both noble Lords have made into account in the conduct of that review. Therefore, I am grateful to them for the points which they have made.

On Question, Motion agreed to.