HL Deb 07 March 1985 vol 460 cc1476-99

5.26 p.m.

House again in Committee on Clause 2.

[Amendment No. 2 not moved.

Clause 2 agreed to.

Lord Auckland moved Amendment No. 3:

After Clause 2, insert the following new clause:

Levy on pre-recorded video cassettes.

(" . The Secretary of State shall by order establish a scheme to impose a levy on all pre-recorded video cassettes sold in the United Kingdom, the proceeds of which shall be redistributed under the scheme to the makers of British films released on video cassettes, pro rata to their sales in the year in question, in the form of investment credits to be used for the production of British films.")

The noble Lord said: I should like first of all to say to the Committee that I have no personal financial interest in either the film industry or the video industry, so I do not speak on this matter with any business authority. I speak purely in a personal capacity. We have just been discussing a very important amendment about the financing of the film industry. I think it is fairly generally accepted that the industry is facing a number of problems which are beyond its control. On the other hand, it is equally true to say that the Treasury is being called on to finance a number of important matters, such as the health service, hospitals, roads, overseas aid and the arts, which was discussed at great length yesterday. The film industry must obviously for purely social needs come right down in the queue.

But we are discussing here something very new. The video industry is very new and I would be the last person to condemn it. It gives pleasure to a number of people including handicapped people who cannot get to the cinema and who cannot get to the theatre. I have no quarrel there. But there seems to me to be something very wrong. If the cinema industry cannot have sufficient central funds, why should the video industry not pay some kind of levy? I quite accept, having read the Green Paper which was published recently, that it is not an easy matter to adumbrate the amount of the levy. The problem here is very largely a matter of how one is going to equate the levy with the films concerned.

This amendment as I see it is, in a sense, a probing amendment to hear what the Government's feeling is. The live part of the cinema industry, so to speak, badly needs finance. It deserves finance. It employs a large number of people. The "undercutting" of the industry—I do not think that that is a unfair word—by video needs looking into. This amendment, whose other signatories—it is an all-party amendment—have much more professional experience in the industry than I, gives an opportunity for the Government to give their views on what is an important social matter.

It is of course accepted that the video and cassette industry is here to stay. There is no quarrel about that. But it should in my submission have to compete on fair terms. It is in that spirit that I beg to move the amendment.

Lord Somers

I should like to support this amendment. The Committee will be aware of the fact that normally composers and authors get performing rights from their works when shown on films or broadcasts; but when it comes to cassette recordings they are at a loss because it is absolutely impossible to trace them. This seems to be the best way of closing that gap and of enforcing a levy, and I am sure all noble Lords will welcome it. It is an excellent idea.


Lord Willis

Having briefly wandered into Indian country, I am delighted to be back in the fold and to support this amendment, on the basis that it is a probing amendment. My own view is that it does not go wide enough. The difference between this and the proposal that there should be a levy on films shown on television—discussed in the previous amendment—is this. A video recorder, which is the instrument by which these films are shown, is in fact an instrument of piracy. It can be used, and it is constantly used, to steal copyright from authors, composers, film makers, etc. I therefore welcome the Government's Green Paper which proposes that there should be discussion at least on the question of a levy not only on pre-recorded tapes but also on blank tapes.

I would go further and say that there should be a levy on copiers and on video recorders. A small levy imposed at the point of purchase would provide a sum of money that would have to be distributed to copyright owners. There would be, probably, some money left over to reinforce British film production. On the basis that this is a probing amendment, and that I should like to hear what the Government have to say, I support it.

Lord Graham of Edmonton

I rise to support the sense as well as the principle of this amendment. The Minister should take note that this Chamber, clearly, is genuinely trying to probe the Government, even at this late stage, to establish whether they are prepared to devise some mechanism that will provide the British film industry with a source of essential income. The Government appear to have made their arrangements, which are not unfair and which might not even be ungenerous, and have then said, "That's it. At the end of the day, you stand on your own two feet". As the many experts and people of experience both in this Chamber and outside it have said, that approach is not enough. The British film industry cannot even begin to operate because it cannot attract the investment it needs. It was in respect of its need to attract investment that my noble friend Lord Willis made a most telling point.

We want to see tax incentives that will induce people to invest in British films. The industry does not want handouts or levies. But faced with the action taken by the Government in last year's Budget and with their clear intentions for this year's Budget, the industry is asking. "What can we do?". Given the very close vote on Amendment No. 1—and 80 votes to 85 votes is close in any book—we now find ourselves presented with another opportunity. Like the first amendment, the amendment now before us is open to criticism. It is not the ideal, but the Government must understand that unless they are able and willing to listen at this stage, or at the next stage, or at the stage after that, there will be people who will continue in their attempts to find ways of improving this Bill.

With great respect to the Minister, and to his advisers, there are people outside this Chamber who have far more experience of the industry and a better feel of what the industry needs. They may be forced to say that Parliament has neglected the British film industry at its peril. One can compare our situation with what other nations have been doing for their indigenous film industries. We are entitled to be ashamed if we do not take the opportunities now before us. I certainly support this amendment.

Lord Lloyd of Hampstead

As one of the signatories, I should like to add my support to this amendment. I should point out once again that I do not altogether go along with the language of the amendment. In particular, I believe that it ought to cover blank tapes as well as pre-recorded tapes; and it is a little unfortunate that the amendment directs its aim at supporting individuals rather than creating a fund to support the film industry generally.

Having said that, and wishing to make clear that I have no desire to rehearse the arguments about levies which were put in respect of the previous amendment, in the light of the Government's persistent attitude I should emphasise the point that the aim of this exercise is not to find the most efficient way of giving further support to the film industry; the aim is to find some means of saving that industry.

If one rejects, as they have been rejected, tax concessions on the one hand—favoured by the noble Lord, Lord Willis, and many others—and a television levy on the other, then what is left? Unless the Minister can come up with some other notion, it would seem that this proposal is a last resort. On the whole, it is a sensible resort.

I am bound to point out, as I did on Second Reading, that the Government have, happily, devoted some further thinking to this matter since the 1981 Green Paper, when they scalped in a very dismissive way the notion of a levy on tapes. They have done some valuable rethinking, as I venture to believe. On a previous occasion I referred your Lordships to what seemed to me to be—and I hope I am right—a significant passage on page 9 of the new Green Paper. It is very short and perhaps the Committee will permit me to quote it once again. Paragraph 7.21 includes this statement: Similarly it is far less clear for video than for audio what basis could be used to sub-divide the levy proceeds among the main groups of beneficiaries, and within each group. One possibility might be for the film proceeds to be diverted to a central fund to be used in the film industry to support production". That is a fruitful concept and I hope that the Government will give it serious consideration, particularly, as I mentioned on a previous occasion, in the light of a report which I hope will shortly be in the hands of the department. It comes from the Interim Action Committee for the Film Industry, as it has hitherto been named, though it is likely to re-emerge under a slightly different guise in the very near future. I hope that the thinking which has gone into that report with considerable care will indicate lines to the department whereby such a notion can be rendered practicable. It is that which the department itself emphasises in the Green Paper. The department, quite rightly, says that it wants from those who are familiar with these matters suggestions which demonstrate how such a concept can provide a practicable solution to achieve the desired objective.

I conclude by expressing the hope that the Minister will indicate that it is the Government's intention, after taking due soundings by the date designated in the Green Paper, at the end of April, that they will not wait, as they have hitherto done, until they can produce total overall reform of the copyright laws. I remind your Lordships' Committee that the Whitford report was published in 1977 and nothing has yet emerged from that. If we have to wait until such a mammoth exercise has been performed, I am afraid that it will be postponed to the Greek calends. I urge the Government to deal with this matter separately, as is indicated by the fact that they have chose to issue at this juncture a separate Green Paper on this single issue. The need of the film industry, as many of us have emphasised, is a dire one and cannot wait on too prolonged and lengthy deliberations. Therefore, what is needed is a speedy decision that I hope will achieve the objective which I am sure is dear to all our hearts; that is, the survival and, ultimately, the flourishing of this immensely important British film industry.

The Viscount of Falkland

I, too, support this amendment, but somewhat more enthusiastically than I supported the last amendment because, although I hate to use emotive words such as "parasitic", one could justifiably, if in a rather liverish mood, say that the use of video tape, in the way that it potentially can be used, is parasitic. I have just acquired a video recorder. I have not yet used it because I am long-sighted and have not yet found a way to operate the controls. If there are any entrepreneurial noble Lords, there is obviously an opportunity to market a light, or something else, perhaps, that magnifies the controls so that one can learn to use the machine quicker.

My original intention in using the machine was to record programmes, principally films. If one thinks that through, I can record a film while I am in your Lordships' House late, as we seem to be sitting, and when I see fit to play it back on, perhaps, a Sunday evening I can show it to a group of friends and lend it to my son, so that before long 100 people could have seen the film. It therefore seems only reasonable on that basis, and, referring back to my remarks on the previous amendment, should we be on the threshold of a new era of films, that the video business is going to do even better. I foresee the time when everyone will have a television set and video recorder in the same case—the same ensemble, as it were.

It is obviously a huge business. Recently I went to a shop in London to investigate the possibility (when I learn to operate my machine) of hiring films. I actually purchased my first blank tape there, but I looked at the list of recorded films and, with all the work I have to do in your Lordships' House, I have not yet finished going through the list of titles which I obtained from that small shop in Fulham. There is clearly an area here where we could get a contribution and that contribution would obviously grow with the success of the film industry, which I hope we shall see when we have perhaps persuaded the noble Lord the Minister to make certain adjustments in the Government's thinking; and we shall be coming to that later.

I echo everything that has been said. Anything we can get into the new consortium, however it is composed, by way of finance will help, though I reiterate that we are still thinking way too low, even with video contributions and contributions from television. If we aim modestly, and we encourage one or two people to see the new film era as being possible, we are way too low. Certainly it is a good idea if we can get a contribution from video.

I add one point, to which we shall obviously come later. I am surprised to see the British Videogram Association involved as a prospective participant in this new company. I wonder whether it will be as pleased to participate if there is to be a levy. I do not see what function the video side of the business has in partaking in a company which is to be, as it were, the architect of the new film industry, but I daresay we shall come on to that 'ere long. However, I support the amendment.

5.45 p.m.

Viscount Massereene and Ferrard

I shall speak briefly in support of the amendment. It is an excellent idea that blank video cassettes should have a levy on them to help the film industry. I understand that under the Government's proposals the subsidy is to be £3 million. Is that right? However, to make a feature film now costs at least £1.5 million. If, as I understand it, the Government want to back about 12 feature films, that works out at only £300,000 per film, and that is not much. Of course, it depends on what you sell the blank cassettes for. If you sell them with a 50 pence levy, that will amount to about £10 million. If you sell them with a £1 levy, that will give about £20 million. That is an extremely good way of helping the film industry.

I have had a very slight connection with the film industry. I cannot remember whether it is £2 million or £3 million that the Government are proposing under the new arrangement, but it will be of very little use and so I support this amendment regarding these tapes. Having a levy on a blank cassette will certainly help the film industry.

Lord Lucas of Chilworth

. I am most grateful to my noble friend Lord Auckland for his explanation of the amendment, but I must say at the outset that the principle behind the amendment is practically the same as that which we have spent most of the afternoon discussing in Amendments Nos. 1 and 2. It proposes, again, a redistributive levy, the proceeds of which would be directed towards British film production. The target of the levy in this case is different—pre-recorded video cassettes rather than television. Therefore, this amendment raises a number of different, though in some respects similar aspects, which are equally important, I suspect, to my noble friend and his supporters.

With the leave of the Committee it might be sensible if I concentrate on these new issues rather than reiterate the points of principle set out in the White Paper which we have discussed. The Committee will know that the market for the rental and the sale of pre-recorded cassettes has been quite buoyant in recent years. However, I suggest to your Lordships that there is a risk that a levy on pre-recorded video cassettes introduced with the same reasoning as that which lay behind the introduction of the Eady levy would suffer exactly the same fate. I take the point made by the noble Lord, Lord Willis, when he referred to the Green Paper on the recording and rental of audio and video copyright material. I digress for a moment, since this subject matter has been introduced. The proposal here is that there should be a levy on blank tapes and the proceeds distributed to the copyright holders to compensate them for the unauthorised copying of their work. I think the noble Lord used the word "piracy", and I do not disagree with him in that description. It would be wrong if this afternoon we were to anticipate or prejudge the outcome of those consultations. The Government will be prepared to consider, in the light of the responses to the Green Paper, whether a levy should simply be paid to copyright holders or whether, perhaps, a central fund might be established the distribution of which may possibly go towards supporting the film industry.

Whatever we do in respect of a levy in that context of copyright, we will have to remember that the decision cannot be arrived at as a result of discussions we may have on the implications that this Bill, which is a films Bill, may have on copyright issues. They are separate at this time, and if there is an overlap which is beneficial, so be it. Therefore, I hope that noble Lords will not press me on that issue.

The noble Lord, Lord Graham, argues that the principle of a levy is the same. I would agree with him in that merely adding a levy onto pre-recorded video tapes or television screening time, which would then be distributed to a rather undefinable area such as the film industry, is not a practical proposition. He suggests that a subsidy is fair, but at the same time he argues that the industry does not want one. He suggested, as I believe did the noble Lord, Lord Briginshaw, and others at Second Reading, that what the industry was looking for were opportunities for investment and certain tax reliefs. Again, he will appreciate that I cannot go down that avenue this afternoon, whatever my feeling might be.

Lord Graham of Edmonton

Does the noble Lord not recall what my noble friend Lord McIntosh said earlier? Of course we appreciate that certain avenues of support are exempt from our powers in this place under this Bill. But if we acknowledge that we cannot go down that road, and if we accept the view of the Minister and his colleagues in another place that there are no other roads down which to go, quite frankly, it is a dead end. Many of us are not prepared to accept that.

Lord Lucas of Chilworth

It really is not a dead end.

Lord Graham of Edmonton


Lord Lucas of Chilworth

My noble friend Lord Massereene and Ferrard asked what the Government were doing. I would hardly call the Government's contribution of £1.5 million, plus £600,000 from the portfolio, plus additional support to the school, guaranteed over the next five years, a dead end. That is a considerable amount of money. It is in excess of what the Eady levy has produced in recent years. The noble Lord, Lord Graham, shakes his head.

Lord Graham of Edmonton

No, I am not shaking my head.

Lord Lucas of Chilworth

He must agree that the facts which I have laid before the Committee are correct. If he and my noble friend want to argue that £1.5 million is not very much, even when multiplied five times, that is totally different, but it is an argument which I do not believe holds too much water.

Lord Willis

I think that the noble Lord is using selective facts, with respect. I would draw attention again to the point which the noble Viscount, Lord Falkland, made. One can hire a pre-recorded video for one night for £1.50 or over a weekend for £2. One may ask a dozen people round to see it, as many young people do over the weekend. Many young married couples with children hire video cassettes rather than go to the cinema. If one goes to the cinema, however, it costs £2 or £2.50 a seat, or in the West End it is £6 or £7. There is a tremendous discrepancy there. The market is booming now. I believe that the penetration of video recorders into homes in this country now is between 40 and 45 per cent. It seems to me that this is an area which would get the Government off the hook. I wonder why they do not grasp the opportunity.

Lord Lucas of Chilworth

The noble Lord suggests that I pull out selective figures. The example that he gave is even more selective. There is no comparison whatsoever between cinema and television. The noble Viscount, Lord Falkland, made the point: the two cannot be compared. One involves an entire outing. A seat in the cinema may cost £2 or whatever, but it is a total experience. One may be watching a film on the screen in both cases, but going to the cinema is a totally different experience from watching a film on television at home.

Lord Lloyd of Hampstead

Does the noble Lord not agree that his recognition of that makes all the more important the fact that the cinema industry should be saved? If we simply say that we have films on television and that is good enough, that will result in letting the cinema industry fade out of existence. If I may add further to that, does he not recognise, in the light of all the arguments presented from so many informed quarters, that the great sum of £1.5 million a year over five years is trifling in relation to the problem that faces the film industry? I ask him to take seriously the points being urged by people who fear a dramatic and disastrous collapse of the industry if no further money is fed into it beyond those relatively modest sums.

Lord Lucas of Chilworth

I believe I answered most of the noble Lord's comments earlier. I find it extraordinary that the immediate call of any industry, whether films, shipbuilding, motor cars or whatever, is for more taxpayers' money. We have put up some money. As I sought to explain at Second Reading, we have set an environment in which the industry can help itself. The film industry is buoyant, as those in it have admitted. A quote that I gave earlier this afternoon illustrates that, and noble Lords have quoted the success of particular films.

If I came before the Committee and said that we would provide £1.5 million plus x, somebody would say to me that that was not enough because of so on and so forth. I do not doubt that the market for pre-recorded videos is at present a strong one. But I believe that we should bear in mind that it is a relatively new and highly competitive industry. Margins are fine. Although the range of outlets is still expanding, very many of them fail to achieve anything approaching their hoped for success.

I think that it was the noble Viscount, Lord Falkland, who spoke of the growth of video. I understand that although it has reached a peak of about 45 per cent. penetration in homes in this country there is already a tail-off. I understand that there is a change in the way in which those films are being made and produced. There are coming along all sorts of technical advances which I believe make that industry extremely vulnerable. It is a market which is very sensitive to price, and a drop in sales caused by having a levy attached to it would, I believe, be counter-productive.

Again, I say that I do not believe that a levy is the right way forward. There is an alternative, and it is from the pre-recorded video industry. That industry relies on good quality films, and it recognises that. Increasingly the industry is showing its readiness to invest in film production, and there have been some very good British films to show for that.

I want at this stage to refer particularly to the British Videogram Association. I believe that it should be praised for its general attitude to its responsibility, if I may call it that, to the videogram industry. They are now taking major steps towards an involvement in film production. Not only are the British Videogram Association one of the founder members of the new consortium but also through their members they continue to make contribution to the film industry. One of the larger members of the association is the Virgin Group. They have had successes with their film, "A Shocking Accident", which was part financed with the NFFC. They made "1984" and that is doing very well. Palace Video were responsible for making the "Company of Wolves", and that has been successful. Video Arts Limited have also been successful. Also other companies in membership have begun to support film production. There is no doubt in my mind that that industry is helping. They are of course at one and the same time in being founder members of the organisation supporting it financially, at least for three years, to the tune of a quarter of a million pounds. That is not insignificant and I do not think it would be fair if the Committee were to ignore that fact.

6 p.m.

I believe that this recognition of the link between video and film offers a far, far more dynamic way forward than the imposition—it is almost like a dead hand—of a levy. It seems to me that at the moment that industry is doing very well. It is stimulating precisely the kind of development in the industry for which noble Lords are looking. This is a way forward for the industry. It is helped by Government in pump-priming for the new consortium. It is costing the taxpayer a considerable amount of money, more than the support hitherto.

A levy of the type which is proposed in this amendment stands a very good chance of falling extremely short of expectation. I believe it would damage the trend in the video industry's investment in the industry. I do not believe it is needed and it could be positively harmful. I understand that my noble friend Lord Auckland said that this was a probing amendment; he wanted to find out what the government felt about it and why. I believe that I have answered him. I therefore hope that he will withdraw his amendment.

Lord McIntosh of Haringey

Before the noble Lord, Lord Auckland, returns to the issue, I must say that if ever there was a justification for a short debate on a probing amendment I feel that this was it. That is because every time the Minister opened his mouth his case weakened. He revealed more and more inconsistencies. He made exactly the same mistakes in respect of the video industry as he made on the last amendment in respect of the television industry. On the one hand he was saying that the video industry is enormously strong and that, for that reason, the British Videogram Association can afford to make this substantial contribution of £150,000 for at least three years to film production. In almost the same breath he is saying that the video industry is extremely competitive, that it is vulnerable to new technical developments and that therefore a levy of the sort proposed would be extremely damaging to its health—"a dead hand" was the phrase he used. He really cannot have it both ways. Certainly he cannot claim that £150,000 a year for three years, with no guarantee of success—or was it £300,000? from the British Videogram Association. Am I quoting the figures wrongly?

Lord Lucas of Chilworth

I do not wish to be unkind to the noble Lord, Lord McIntosh. He advances these arguments to destroy mine. At least he might have the courtesy to destroy them with accurate figures which have been well published through Second Reading and elsewhere. It is a quarter of a million pounds.

Lord McIntosh of Haringey

I beg the noble Lord's pardon. I was incorrect to the extent of £100,000 or £50,000. Nevertheless, the total amount has been universally agreed by everybody associated with the film industry to be totally inadequate for the purpose. If the noble Lord did not learn that lesson from the unanimous opinion expressed in all speeches at Second Reading, then, if I may say so, I do not think he was paying adequate attention to the debate.

The position is that there are three outlets for films. There are outlets for other things as well but there are three outlets for films. They are the cinema, television and video recordings. There may be more in the future but at the moment there are these three outlets for films. The film industry is in effect expected to survive financially and commercially on the receipts from only one of those three outlets. The amendments which have been proposed are designed to add the other two outlets for films to the resources for the further development of the film industry. It is for that reason that it has been so valuable to have the amendment proposed by the noble Lord, Lord Auckland.

Lord Auckland

I should like to thank all noble Lords from all parts of the House who have taken part in this debate and to thank my noble friend the Minister for his very full and, as always, careful reply, although I cannot say that I, for one, am entirely satisfied with it. However, I shall read it and I shall read all the speeches with great interest.

It is not any part of the purpose of this amendment, or indeed of my philosophy, to bleed the taxpayer. This is not the idea. But I think that where videos are concerned there is a case for some kind of money to be extracted from them. I leave it to the experts to decide the extent to which it should be done. I quite understand that there are people employed in the video industry who take a very different view. I do not possess a video but my two daughters do. I think it is probably the young rather than my own generation who enjoy that luxury, if it can be called "luxury".

The real problem here is this. It is all very well talking about the live cinema. There are fewer and fewer live cinemas. I believe that one of the main purposes of this Bill should be to encourage more provision for the live cinema. However, I quite understand that this is an amendment which has its defects. I think we should all agree with that. But I hope my noble friend the Minister will read very carefully what has been said on all sides of the House. I do not intend to press the amendment. However, when the next stage of the Bill comes, it may well be that another amendment along these lines may have to be put down. It is an important point. With those words, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 3 [Dissolution of National Film Finance Corporation]:

The Viscount of Falkland moved Amendment No. 4:

Page 3, line 30, leave out from ("transferred") to the end of line 41 and insert ("on the following legally enforceable conditions—

  1. (a) that the company will itself in the production of relevant films or will make available by way of financial facilities to those who wish to produce relevant films—
    1. (i) any income derived from rights acquired from the Secretary of State under this section
    2. (ii) any trading profit made in the preceding year
    3. (iii) a sum equivalent to any sum received by way of grant or loan from the Secretary of State.
  2. (b) that the company will obtain the approval of the Secretary of State to the appointment or re-appointment of its chief executive.
  3. (c) that the company, through its chief executive, will pay proper regard to the promotion of British film production as well as to the commercial viability of any particular film project and the commercial interests of the company.
  4. (d) that the chief executive will report to the Secretary of State each year as to his and the company's fulfilment of the condition specified in paragraph (c) and that this report shall be laid before Parliament.

(3A) In the event that no company can be found to meet the conditions specified in subsection (3), no order shall be made by the Secretary of State under paragraph 8 of Schedule 1 to the National Film Finance Act 1981 or under this section.").

The noble Viscount said: I think we now come to the very heart of the matter. I hope the Committee will bear with me if I touch again on some of the ground we have already covered this afternoon as a background to explaining why we who support this amendment feel that it is so central to our case.

How did this whole business come about?

Lord Lucas of Chilworth

Would the noble Viscount just forgive me for a moment? May I assume that in these remarks he is speaking to the whole group of amendments. He did not refer to it. I do not want to pick him up on a little detail but I want to have a mutual understanding of what we shall debate over these next few minutes.

The Deputy Chairman of Committees (Lord Nugent of Guildford)

It might be for the convenience of the Committee and of the noble Viscount if I explain that if Amendment No. 4 is agreed to, Amendments Nos. 5, 6, 7 and 8 cannot be moved.

The Viscount of Falkland

I am obliged to the noble Lord the Minister. I am addressing myself to these amendments together and I think that my remarks will terminate in such a way that we shall see that they are all dealt with.

Amendment No. 5: Page 3, line 35, leave out ("on a commercially successful basis").

Amendment No. 6: Page 3, line 38, at end insert— ("(c) that at least one independent director shall be appointed to the board of the company to represent film producers;").

Amendment No. 7: Page 3, line 38, at end insert— ("(cc) that it will have as a main objective the encouragement of new film makers;").

Amendment No. 8: Page 3, line 38, at end insert— ("(ccc) that the chief executive of the company shall have sole creative authority within a financial framework set by directors of the company under an independent chairman.").

One has to consider how this whole Bill came about and why, in the opinion of those who oppose the measure, it is so loosely drafted in the context of its intentions in regard to the future of the film industry. The decline in film audiences is well known. I have perhaps persuaded noble Lords that one of the main reasons for the decline has been the inability of the two major groups of cinema owners in this country to make a visit to the cinema an attractive experience. I am very much obliged to the noble Lord the Minister for reinforcing on a previous amendment my own feeling that going to the cinema in a cinema theatre is a very special experience. It lies at the whole heart of the matter. That is why we are discussing it. We want to encourage people to go back to the cinema theatres to see films made expressly for the big screen, whether or not they are shown afterwards on small screens or videos. We should take our rightful place. Most other countries in the industrialised world and many countries in the developing world have booming film industries, well supported, I might add, by their governments.

The Government have sought, rightly, to dismantle the whole idea of the Eady levy. The levy was the means of drawing something back into film production from the receipts of showing films. This has declined to a degree where the amount of money being put into the National Film Finance Corporation—the machinery by which this money was used to finance future productions—became irrelevant. One has to ask why on earth, if one takes a serious view of the future of the film industry, the existing structure was not modified to the new requirements. Why did we need to dismantle a perfectly good organisation, the National Film Finance Corporation, with its very creditable background of working for many years in very hard circumstances of declining audiences, with additional factors that made its operation increasingly difficult? Noble Lords, especially the noble Lord, Lord Willis, have on many occasions drawn the attention of your Lordships to the fact that much of the benefit unfortunately went across the seas to the United States. Whatever happens now, this awareness, I feel, will result in our putting double glazing on the windows to make sure that the Americans do not creep in and benefit from any arrangements that we make.

We could have had a National Film Finance Corporation with strong support from various parts of the entertainment industry and guidance from the Government. We could perhaps have created a very good vehicle for going forward into what I have called, although I fear I am boring your Lordships with this phrase, the new era—my optimistic vision of the new film era. What do we have in its place? We have an attempt to create a company—a consortium as it is now called. It took a long time for the Government to arrive at a suitable name. I noticed that honourable Members of another place were reaching a pitch of extreme frustration through having to call it "Son of NFFC" and other extraordinary names. One dreads to think what they would have arrived at if we had not found this name. I find it extremely difficult to remember what it is called now. It is so boring. But the consortium has been composed; and four members are proposed to be the structure of this new company.

6.15 p.m.

What is amazing—I have referred to this before—is that the two main parts of this proposed company are the two main groups in this country that have presided over the decline of our film audiences. Rank's performance in this field is absolutely deplorable. Rank would be out of business if it had not been for the Rank Xerox machine. It has shown no interest whatever in the film business and shows no interest now. All it has are cinemas which are declining. Its only interest in the film industry, I submit, is what it can get for the real estate on selling cinemas when they go bust.

Let us look at the other one. Let us look at Thorn. It has enormous and very profitable interests in other parts of the communication industry. I would not blame Thorn in the same way as I blame Rank. It does not have the motivation to go into a new company of this kind with the kick and the punch which is needed to build up a new British film industry. Then there is the Videogram Association, to which I have already referred. The only part of this organisation that I feel has any relevance at all is Channel 4. That is a company dedicated to the future of cinema, albeit cinema on a small screen. Many good productions have already been financed by Channel 4. I must congratulate Jeremy Isaacs on the amazing development of Channel 4. It was derided nationally in the press and run down by everyone. But clever tactical development and good taste—all the kinds of qualities we need to build up the film industry—have been shown in the development of Channel 4. There has been imagination, innovative thought and so on. I have no objection to the participation of Channel 4 in this company. I should, however, like to see it with slightly more motivated bedfellows. Channel 4's interest at the moment is in its own development for the small screen and for financing small films made on a very small budget.

The Government, in their vision of this new birth of the film industry, are making the change from the National Film Finance Corporation to a private company—for that is essentially what it is—and taking the hard-earned assets, or, rather, not the assets, but the income earned from the assets, which amounts to about £600,000 to £700,000 a year from royalties on films and so on. I must be careful; the noble Lord the Minister might pick up my use of the word "assets". Many of the achievements of films supported by the NFFC have been mentioned by noble Lords. We see that the two main companies, Rank and Thorn, have escaped, with the abolition of the Eady levy, what to them must be quite an onerous payment in a hard business because their cinema exhibition areas are poor. They are getting into this new company and getting cash that will recompense them for the scrapping of the Eady levy.

We have a new company that is very vaguely drawn. I fear that, if constituted in this way, it will fail. It will be underfunded and run by people who are not motivated. I do not believe that any additional money will come from outside. No one will invest because the future, with that kind of organisation, does not look bright. If, however, we assume that this is the reality, who will run the company? Rank is not interested in running it. Channel 4 is not interested in running it; it has its own fish to fry. Thorn is not interested in running it. It will be left to the chief executive of the company.

Very little is said in the Bill about the chief executive. Whose man will he be? That is what worries us. We believe that he should be a very independent man—a man who has the interests of the film industry at heart, a responsible man who has his duties enshrined in statute. After all, this man is going to be responsible for the administration of funds. One could say that they belong to the film industry, but they belong to the taxpayer. He must be a man who is independent of civil servants; he must be independent of commercial interests; he must be responsible; he must be accountable; and, above all, he must be a man of talent and vision and with the capacity of people such as Mr. Jeremy Issacs or even (dare I say his name in this Committee?) Sir Peter Hall. We need somebody with that kind of ability and with an independent nature—a man who is prepared to shout for the British film industry.

That is what we seek to achieve in these amendments. We think that various people should be represented on the board of this company and they should be similarly motivated. At present there is no provision in this Bill for this kind of creative autonomy. There is no indication in the Bill that what the Government wish to do is to go forward into the new film era, because their whole thinking behind the creation of this company is really to stand at further than arm's length—to stand right away and ultimately disengage themselves. They will disengage themselves. They will disengage themselves at the end of a disaster, because if this company is allowed to function as proposed in this Bill—in this loose way—it will surely founder and it will surely go bankrupt within a period of a very few years.

Then what happens to the money that has been put into it? There is no provision for that. I do not think there will be any other investors from outside, but what happens to the taxpayers' money? What happens to all the money from the assets which have been carefully built up over all these years? These things—I am sure other noble Lords will reinforce my view—are not catered for in this Bill, and these amendments, which we group together, seek through the appointment of directors and a chief executive with the proper powers, freedom and responsibility to give them at least a chance of success.

We hope that we can avoid a disaster. If the man in the post is good enough, probably he will press hard enough so that the constitution can be changed. We have to get over that hurdle, which I think is a doctrinaire hurdle put up by the Government. They will realise the error of their ways only when they begin to see the foundations crumble, as they surely will. At this stage let us try to get some sense into this new company, this new consortium, with proper accountability and proper responsibility, so that everybody can go forward with the confidence that at least it is pointed in the right direction. I beg to move.

Lord McIntosh of Haringey

I wish to say only a few sentences, because the noble Viscount has covered the waterfront extremely adequately. No doubt the Government will argue that the heads of agreement which have been placed in the Library and which we have an opportunity to see are the answers to the questions raised by the noble Viscount. I want to put it to them that if you have heads of agreement which themselves have no statutory force and you have a consortium which is itself the most unstable form of business enterprise, you are combining two sorts of instability in one. The Government will have to defend very strongly those two elements of instability if they are going to argue that there is a continued effective and adequate means of funding the British film industry.

Lord Lloyd of Hampstead

By way of supporting this amendment I should simply like to congratulate the noble Viscount, Lord Falkland, on his brilliant exposition of the deep unease that is felt on every side of the industry over the consequences of this removal from the scene of an excellent body—the NFFC—and its replacement by a purely commercial entity which seems to be totally ill-equipped to tackle the serious problems that face the film industry at the present time. I can only express the hope that the noble Lord the Minister will take very seriously indeed the devastating attack that the noble Viscount has made upon these proposals and the attempt in this amendment to reinforce the situation—so far as it is possible to reinforce it within the structure of this Bill. I think that those of us who oppose this arrangement feel that the only satisfactory way would be to scrap this whole concept of the consortium and go back to some genuinely independent body which could be expected to carry on the true tradition of the NFFC, which the Government have claimed it is their desire to maintain.

Lord Willis

I am positive that this amendment must appeal to the Government and that the noble Lord the Minister must accept it, because it would not cost the Government any money. All we are proposing in this amendment—I congratulate the noble Viscount, Lord Falkland, on bringing it forward—is simply some proposals to reorganise and tighten up a proposal the Government have already put forward about the consortium. I recognise that it is too late to go back to the NFFC, to those days. We have the consortium. What these amendments express are some very reasonable suggestions and ideas as to how it can more suitably serve the British film industry. Moreover, they are amendments which have been echoed in the cinema trade press in various articles and various forms. I hope therefore that they commend themselves to the Government.

For example, why would the Government be opposed to the suggestion that one independent director should be appointed to the board? It would do no harm to the Government. It would not lose them any votes; it might even win them a few. That seems to me to be a perfectly reasonable suggestion. Consequently, I hope that, although the Government have had to take a hard line on other matters in connection with this Bill, on this particular one they will either accept the amendment or, if they do not like the way it is worded, take it back but accept it in principle. I would certainly press very strongly that there should be a much greater independent element in this new company.

Lord Bernstein

I do not often speak in your Lordships' Committee, but I was involved in the original quota Bill. I was involved in the Eady fund legislation, and I have seen many things happen within the film industry. One thing we need, and need badly, is the opportunity for people to learn how to make films. We need a group of people who are film producers. I think the talk about the comparison between television and anything else is wrong. We produced a television-making group of people who were capable of eventually making "Jewel in the Crown". People must have training and experience. I cannot see anywhere any enthusiasm for developing a picture-making community of which we can be proud and which can make films worthy of international sales—I was waiting for the Ministers to finish their conversation.

I have been listening to the debate, though perhaps not for long enough. I cannot make out what the Government are trying to do. You have to have enthusiasm to make films. You have to have taste to select your subjects, and you have to work at it. The independent gentlemen, or the distributors of films, are not necessarily the people for that purpose. Until you can find a picture-making community and people who can train them, you will always be in difficulties.

I urge the Government—they still have time—to consider what the noble Viscount said: that the National Film Finance Corporation did quite a good little job. However, if you want to make films, you are talking about big money. The last film which David Lean made—and he had not made a film for 17 years—now represents millions. The good American films that are big successes over here cost millions. We have to compete with them, and we have to compete with money as well as with talent.

6.30 p.m.

Lord Lucas of Chilworth

I am obliged to the noble Viscount, Lord Falkland, for his explanation of the amendments. One matter that strikes me about our debate on this group of amendments is how much common ground there is between us, particularly when we come to discuss the successor organisation to NFFC, that is, the consortium—a word which the noble Viscount does not like. The full title is the British Screen Finance Consortium, but I shall refer to it as the BSFC. Frankly, it is the formation and the future of that consortium that should concern us. I believe that the fears expressed that it may act in a way which does not principally benefit the film industry and that the Government may not have sufficient control are not justified.

I should like to go back a little and answer the particular question that was raised by the noble Viscount. He said that the NFFC had a credible background; that it had gone along quite well, and he asked why we should dismantle it. He asked a specific question. The noble Lord, Lord Willis, said that we cannot undo it now because it is in the Bill. I should like to back track for a moment or two because it is by looking at the history that we are brought to the present.

Let me remind the Committee that the founding legislation in 1949 made provision for the NFFC to be dissolved by the Treasury if they were satisfied that there was no sufficient reason for the continuation of the corporation. In 1957 the Cinematograph Films Act added power to make an arm's length sale of the NFFC provided that certain conditions were met. The purchaser had to be a British company and had to be able to finance film making. Had the Government simply been interested in getting rid of the NFFC, an arm's length transaction under the existing law would have been the route. However, as I told the House on Second Reading, we have not in fact done that.

We were convinced of the case for retaining a way of carrying on the NFFC's type of operation when the NFFC's financial support from the Eady levy was removed. I regret that I have to repeat once again that the Eady levy has provided less and less money to the industry as the years have gone by. It has been the express wish of the exhibitors' side of the industry that the levy should be done away with. Therefore, that is what we have done. However, we believe that in this Bill we have been able to devise an arrangement that would enable the spirit of the corporation to continue in the private sector. This arrangement has brought together interests in the film, television and video sectors who espoused the purposes underlying NFFC. They themselves wanted to encourage the production of British films using largely British talent. One of the interesting differences that this Bill makes is to impose upon the BSFC, if it is to receive the NFFC's old portfolio worth some £600,000 a year, the statutory requirement that it shall use its best endeavours to encourage the production of British films—something to which the NFFC themselves have not been formally committed.

Perhaps I may turn to the founder members of the BSFC. I was perhaps a little disappointed that the noble Viscount should have spoken in somewhat disparaging terms about Rank. Let us look at Rank first of all. In the past they have made some of the great British films including, I am told, "A man for All Seasons". Of course, they are not active now in film production, but they still have an important stake in the production sector through their laboratories and Pinewood Studios.

Thorn-EMI also have a fine reputation for film-making over the years. I am told that their successes include "Murder on the Orient Express", "Elephant Man" and "Death on the Nile". Their more recent successes include "Comfort and Joy" as well as the recent David Lean film, "A Passage to India".

I turn to Channel 4. Channel 4's history is much shorter. Oddly enough, nobody has spoken ill of Channel 4. However, certainly that organisation has rapidly gained an enviable reputation. I have spoken already about the British Videogram Association.

We must remember that it is the interests of the companies concerned in the BSFC that are important in securing the success of the new consortium. Their success lies in a successful film industry. Certainly our discussions with them have shown that the essentials of the NFFC's operations will be maintained. There will continue to be an emphasis on developing new talent. The films to be supported are much the same in terms of budget; namely, low and medium budget films, which are particularly risky ventures when aimed principally at the cinema and not at television. Moreover, the Government decided to take over direct responsibility—and we have done that in Clause 5(1)(b)—for the funding of the project development work currently financed out of Eady funds by the NFFC through the National Film Development Fund.

I turn to the remarks of the noble Lord, Lord Bernstein, which I did hear—all of them. I point out to him that in no way was the NFFC—and this applies to its successor organisation—set up to compete with the multi-million dollar super films. That is not the business. If there can be a benefit through our work—and I am referring to the more risky ventures and the low and medium budget films—then well and good. However, I suggest that that type of activity is somewhat different.

Apart from ensuring, as I believe this consortium does, the continuance of the NFFC's major functions, the consortium has tremendous advantages over the old corporation. First, it is dynamic. The NFFC was, by the very nature of its build, static. The new consortium is structured and funded for growth. One cannot ignore the fact that Rank are putting in £250,000 per annum for three years as are the British Videogram Association. Thorn-EMI and Channel 4 are putting in £300,000 a year for three years. I have already said that the Government are putting in £1.5 million for five years, plus the other supports which are available. It is not an insignificant amount of money. Indeed, it is sufficiently attractive to have encouraged other people in the industry, other companies in the industry, to make inquiries about joining the consortium and putting up their money. That must be the basis of funding for growth.

I believe that we are laying the foundations for expansion and that the consortium will take root and will establish itself as a major force in the industry. It is that at which we are all aiming rather than at tying it down with unnecessary statutory provisions, which is what this series of amendments would do.

If the British Screen Finance Consortium does the job set out for it with the present participants' support, that will be to the benefit of the industry. If the consortium itself is also successful—and this is why I think that it needs to be in the private sector with what I have often described to your Lordships as the commercial "edge" which the private sector provides—then in all probability there will be a catalytic effect on its participants and all those others who recognise the need to foster domestic film production, and it will itself ensure that this can be a profitable business activity. We do not want BSFC to be estranged from other potential investors in films—and its chances of attracting additional finance to the film industry would, I believe, be very much diminished by imposing conditions of the sort that are set out in this series of amendments.

Lord Willis

If the noble Lord will give way, I have had assurances from Thorn-EMI that they will not interfere with the chief executive and that he will have complete independence. One has to believe in the good assurances of these people. Would the noble Lord the Minister be prepared to approach them and ask them if they would object to the appointment of one other independent director on the board? I think the noble Lord would find that they would agree. If the Minister did that, and if they did agree, that would be immensely helpful.

Lord Lucas of Chilworth

I return to the Box somewhat warily because I am reluctant to refuse the invitation of the noble Lord, Lord Willis. However, I am just wondering where he will lead me if I say "Yes". Perhaps the noble Lord will allow me to think about his invitation between now and the next stage. If I have anything further to say to him, I can either get in touch with him or we can deal with it at the Report stage.

With regard to the authority of the chief executive, I believe that the prospective participants in the consortium have made it quite clear to us that they would expect him to adopt much the same style as the noble Viscount's amendment, Amendment No. 8, seeks to impose by way of a condition. It may of course be necessary for the chief executive to seek assistance in exercising that authority, but I do not believe that that would be beyond his or her capabilities.

The Committee may like to know the terms of the advertisement for the chief executive which appeared in the week beginning 11th February. These include the statement that: The chief executive will be responsible for editorial and investment decisions and for the management and efficiency of the organisation. He or she will be free to operate within the framework of the policies established with the Board". The Government think that there is no need for this to be underpinned by law. Indeed, quite frankly, I think that it would be inappropriate when we are dealing with a private sector company.

6.45 p.m.

The Government understand and respect the sentiments which lie behind these amendments. But I must say that there would be very great danger if we accepted Amendment No. 4, which proposes to impose on a private sector company conditions and restrictions which I do not believe any company would accept. This amendment then provides that, in the predictable event of no company being found to accept the conditions, the National Film Finance Corporation shall be kept in being. I fear that the noble Viscount, Lord Falkland, has overlooked two inconvenient facts. The first is that the NFFC is funded by the Eady levy, which, for the cinema's sake, the Government are committed to remove at the earliest opportunity. The amendment does not itself propose how the NFFC would be funded. The second inconvenient fact is that under the present law the NFFC may not start any new work after the end of 1985. Therefore, for those two particular reasons Amendment No. 4 is a non-starter.

I believe that the Bill gives adequate power to impose conditions on the way in which the portfolio and the Government's contributions are used. The noble Lord, Lord McIntosh, suggested that I mention the heads of agreement. I do so. They are an earnest of our intention to exercise those powers to the extent necessary to secure the objectives on which in the Committee tonight there is certainly broad agreement.

I believe that the Bill contains all the provisions necessary for safeguarding the old portfolio and, taken together with the heads of agreement, I think that these arrangements more than adequately meet the concern which has been expressed. Were we to accept any one of this series of amendments, I believe that there would be a grave danger of stifling the products for the new venture's development and their expansion, in which we have much confidence. I am sorry to have been so long, but this is an important series of amendments and it is for those reasons that I urge the Committee to reject them.

The Viscount of Falkland

I shall be very brief. I must thank the noble Lord, Lloyd of Hampstead, for his complimentary reception of my speech. I did not mean to deliver a devastating attack—I do not like to be devastating, and I do not like to attack. That is why I sit on these Benches! Nor am I a "Man for All Seasons", if I may interject that to the Minister.

I think that there are differences between us, but I agree with the noble Lord the Minister that there are areas where we agree, and this is the problem. We have a different basic conception of the way in which we should proceed. I do not say that the Government are seriously anti the kind of vision that I have for the future, but I believe that their vision of the way in which to proceed is a disaster. I see it another way, and I know that many noble Lords see it my way. I hope that a few more noble Lords may see it my way after our deliberations. Therefore, I should like to test the opinion of the Committee on this matter.

6.48 p.m.

On Question, Whether the said Amendment (No. 4) shall be agreed to?

Their Lordships divided: Contents, 53; Not-Contents, 61.

Airedale, L. Hylton-Foster, B.
Ampthill, L. Jacques, L.
Ardwick, L. Jeger, B.
Attlee, E. Jenkins of Putney, L.
Avebury, L. John-Mackie, L.
Aylestone, L. [Teller.] Kilmarnock, L.
Beaumont of Whitley, L. Llewelyn-Davies of Hastoe, B.
Bernstein, L. Lloyd of Hampstead, L.
Beswick, L. Lovell-Davis, L.
Birk, B. McGregor of Durris, L.
Bottomley, L. McIntosh of Haringey, L.
Briginshaw, L. Marley, L.
Chitnis, L. Mersey, V.
Cledwyn of Penrhos, L. Morris of Kenwood, L.
David, B. Mulley, L.
Dean of Beswick, L. Munster, E.
Ennals, L. Nicol, B.
Falkender, B. Ogmore, L.
Falkland, V. Parry, L.
Fitt, L. Pitt of Hampstead, L.
Gallacher, L. Ponsonby of Shulbrede, L.
Graham of Edmonton, L. [Teller.] Prys-Davies, L.
Shepherd, L.
Greenway, L. Stoddart of Swindon, L.
Grey, E. Taylor of Blackburn, L.
Hatch of Lusby, L. Tordoff, L.
Houghton of Sowerby, L. Willis, L.
Ailesbury, M. Hives, L.
Avon, E. Hornsby-Smith, B.
Bauer, L. Lindsey and Abingdon, E.
Belhaven and Stenton, L. Long, V.
Belstead, L. Lucas of Chilworth, L.
Bethell, L. McAlpine of West Green, L.
Birdwood, L. Macleod of Borve, B.
Brabazon of Tara, L. Mancroft, L.
Brougham and Vaux, L. Mottistone, L.
Buckinghamshire, E. Mountevans, L.
Caithness, E. Norfolk, D.
Campbell of Alloway, L. Nugent of Guildford, L.
Carnock, L. Orr-Ewing, L.
Chelwood, L. Rankeillour, L.
Constantine of Stanmore, L. Reigate, L.
Cork and Orrery, E. Rochdale, V.
Craigavon, V. Rodney, L.
Craigmyle, L. St. Davids, V.
Croft, L. Skelmersdale, L.
Denham, L. [Teller.] Soames, L.
Dilhorne, V. Strathclyde, L.
Elton, L. Swinfen, L.
Ferrers, E. Swinton, E. [Teller.]
Fraser of Kilmorack, L. Teynham, L.
Gainford, L. Thomas of Swynnerton, L.
Gridley, L. Thorneycroft, L.
Hailsham of Saint Marylebone, L. Trefgarne, L.
Trumpington, B.
Hardinge of Penshurst, L. Vivian, L.
Hemphill, L. Ward of Witley, V.
Henley, L. Whitelaw, V.

Resolved in the negative, and amendment disagreed to accordingly.

6.56 p.m.

[Amendments Nos. 5 to 8 not moved.]

Clause 3 agreed to.

Clause 4 agreed to.

Clause 5 [Financial assistance by Secretary of State in connection with the production of films]:

Lord McIntosh of Haringey moved Amendment No. 9: Page 6, line 9, leave out ("with the consent of the Treasury").

The noble Lord said: These amendments may seem churlish in that they are amendments to concessions given by the Government in another place. We appreciate the attempt of the Government to provide some format for further financial assistance to particular causes within the film industry. Nothing that I say now—and I shall be very brief, I promise your Lordships—is intended to attack the intentions of the Government in protecting, for example, short films and in taking preliminary steps for the production of relevant films—"relevant films" being, as I remind the Committee, those as defined in Clause 3(7) regarding British films. The Committee will notice that no amendments have been put down at this stage to Schedule 1 on the definition of "British films". It is possible, in the absence of any suitable remarks from the Government, that it may be necessary to move amendments to Schedule 1 at a later stage in the debate.

Our purpose in all of these amendments is one and the same. It is to extend the powers of the Secretary of State under Clause 5 to give financial assistance to a wider range of films and to do so without some of the restrictions which we believe to have been wrongly inserted in this clause. May I apologise to the Committee for Amendment No. 11 which is in conflict with other amendments in the group. It came from a difference source in another place and it should not have been included. I am sorry to deprive the noble Lord, Lord Lucas, of his legitimate chance to crow at me for the inconsistency.

Nevertheless, the issue is important, even though the sums of money have not been specified. The issue here is that there may be at some time in the future a Secretary of State who does not have the same rigid theoretical approach which this Govenment have to the funding of one of our national, cultural and business heritages. It may be that there will be a Secretary of State who does wish to give significant financial assistance in place of financial assistance which I insist is insignificant in the light of the needs of the industry, and it would be a pity if such a Secretary of State were to be debarred from making such assistance available on as wide a scale as possible, if that were his wish and the will of the people, without further legislation.

With those words, I am really moving these amendments to see how far the Government are willing to commit themselves to further financial assistance. In view of the hour, I think it would be appropriate if I did not speak to the textual detail of each of the amendments concerned but invited the Minister to make such response as he can, to enable us to make progess. I beg to move.

Lord Willis

I want briefly to support Amendment No. 9. When I first read the draft of this Bill there was a phrase there that struck terror to my heart, and I am sure that it strikes terror to the hearts of all good British people: with the consent of the Treasury". I cannot remember any time when the Treasury has given consent under a period of about 10 years, and then only after tremendous pressure; so I would certainly support at least Amendment No. 9.

Lord Lucas of Chilworth

Let me thank the noble Lord, Lord McIntosh, for his charming persistence in describing in such brief terms this series of amendments. I am grateful to him for the manner in which he did that, and of course I am sorry that he deprived me of a little fun I was going to have at his expense.

The Committee will be aware of the White Paper, in which we stated that it would be inappropriate for a project development scheme requiring specialist knowledge to be operated by the Government and that the new body replacing the National Film Finance Corporation, the British Screen Finance Consortium, seemed an appropriate place for the work to be carried out. Clause 5(3) refers to the operation of the project development scheme and to the agent who will operate it. As the Committee will be aware, the term "person" may also cover a body.

Having, I hope, clarified our intentions in regard to this clause, I should say that of course I recognise the concern which the noble Lord expresses and particularly that there should be a distinct element of independence in the operation of the scheme. Let me emphasise that the Government intend to make it a condition of the agency contract with the consortium that they use an independent consultant with no financial interest in the consortium or in its component companies.

I think that perhaps I should also draw the Committee's attention to a further guarantee of the scheme's independence. That is contained in the heads of agreement between the consortium and the Secretary of State. Particularly, this is that the administration of the scheme will be placed under an officer whose appointment will be made with the consent of the Secretary of State. Although the officer will be an employee of the consortium and, I suppose, as such ultimately responsible to the chief executive, he or she, I confidently expect, will enjoy considerable autonomy. I should also say here that if either the Secretary of State or the consortium is dissatisfied with the operation of the scheme the Secretary of State will withdraw the scheme from the consortium.

I think I have described the general feeling of Government in response to this series of amendments. Perhaps I ought to say just one word in response to the noble Lord, Lord Willis, in regard to Amendment No. 9. Amendment No. 9 seeks to ensure that the prior consent of the Treasury would not be required before financial assistance was given. I am sure the Committee will be aware that it is an accepted convention that where the Secretary of State has discretionary power to give financial assistance, he must obtain the consent of the Treasury before that power is exercised. That is designed to enable the Treasury to ensure that the intentions which Ministers have expressed to Parliament are observed when these discretionary powers are used.

There is also the practical consideration that the supply estimates through which these sums are provided have to be presented to Parliament and signed by a Treasury Minister. He would, of course, be unlikely to provide his signature if he were not generally content with the way in which these discretionary powers were being used.

If the Committee so desire, I should be quite happy to address myself to individual amendments, but I hope that what I have said will persuade your Lordships that the Government (and, to do them justice, the consortium also) understand the spirit behind these amendments and are taking practical steps to ensure that the project development scheme is operated in a way which will meet the legitimate concerns which have been expressed both here today and earlier in another place. I hope that, with those fairly short remarks, noble Lords who have tabled the amendments will feel able to withdraw them.

Lord McIntosh of Haringey

I am grateful to the noble Lord. He has, I am afraid, gone no further than the assurances given by his honourable friend in another place, which were not entirely satisfactory to my friends there, as he will know. However, I think it was necessary to bring these issues into the open again, and we shall read his remarks very carefully before deciding on our course of action at a later stage. On that basis, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendments Nos. 10 to 13 not moved.]

Lord Lloyd of Hampstead had given notice of his intention to move Amendment No. 14:

Page 6, line 44, at end insert— ("( ) With respect to provisions made under the Films Act 1970 and re-enacted in the Film Levy Finance Act 1981, whereby payments from the British Film Fund could be made to not more than one body incorporated after the passing of the said Films Act and approved by the Secretary of State, being a body having among its objects the carrying on of a school in Great Britain for the training of persons employed or to be employed in the making of films, and in pursuance whereof the National Film School has been so approved, the Secretary of State shall use his best endeavours to secure annual payments from the film and the television industries to the National Film and Television School to assist it in pursuance of its objects.").

Lord McIntosh of Haringey

The noble Lord, Lord Lloyd has asked me to apologise to the Committee because he had to leave for an urgent appointment. On the basis that this is an amendment which is very personal to him, he would wish me not to move the amendment.

[Amendment No. 14 not moved.]

Clause 5 agreed to.

Remaining clauses and schedules agreed to.

House resumed: Bill reported without amendment.