Film Review Group Report: A Bigger Picture (Hansard, 30 June 1998)

§ Lord McIntosh of Haringey
My Lords, work is well under way towards the implementation of the action plan set out in the report A Bigger Picture. The proposed training strategy, which will include a major new skills investment fund, is being developed for launch later this year. Considerable progress has been made towards designing the new all-industry fund which is due to begin operating in mid-1999. A detailed work plan for the Film Education Group is being worked up for its first full meeting in September. Progress is also being made on the other recommendations in the report and we are on target to have a new strategy for the film industry in place by April 2000.

§ Lord Dormand of Easington
My Lords, is my noble friend aware that while this report is to be warmly welcomed there is a long way for the British film industry to go before it catches up with the major Hollywood companies? Therefore, implementation of the report is a necessary first step. Is my noble friend entirely persuaded that a voluntary all-industry fund—he mentioned the fund but he did not say whether it was voluntary—is the best way forward? Of the many valuable recommendations which are made, will he say whether the Government can indicate their priorities in taking action?

§ Lord McIntosh of Haringey
My Lords, my noble friend is, of course, right. Despite the recent successes of the British film industry we are still structurally very much at a disadvantage compared with the United States film industry. To that extent the boom and bust—if I may use the Chancellor's term—which the British film industry has suffered in recent years is still likely to recur. As regards the all-industry fund, my noble friend queries whether it should be voluntary. The British film industry is not mendicant; £3 billion is spent by the British public on attendance at British films and on television performances of British films. It would not be right for the Government to throw money at the British film industry. What we can do is attempt to deal with the market failures that the industry has recognised.
If my noble friend is asking whether the all-industry fund is going to work, I draw his attention to the membership of the action group. It is very powerful indeed. Broadcasters, including Channel 5, Granada, BSkyB and the BBC, are included; the major American players such as Goldwyn, Warner Brothers and 20th Century Fox are included; the major studios; 525 British Screen Finance; the British Film Commission; the Arts Council; and the BFI are all included. That is good evidence that the voluntary fund will work.

§ Baroness Rawlings
My Lords, will the noble Lord explain how the removal of tax relief on the travelling and subsistence expenses of film crews on short-term contracts on British locations helps to achieve the objectives of A Bigger Picture?

§ Lord McIntosh of Haringey
My Lords, it will hardly make a significant difference in either direction. However, it is in accordance with normal tax procedures. We ought not to be making special interest exceptions of that kind.

The Viscount of Falkland
My Lords, following the supplementary question by the noble Lord, Lord Dormand of Easington, and the important point about the establishment of an all-industry film fund, is the noble Lord aware that many of those who will be asked to subscribe are not at all happy to subscribe to a fund, rather than doing as they presently do and will continue to do—namely, individually supporting the industry in ways that are fitting for commercial reasons? In the cost-benefit analysis now being undertaken as to whether this is the way to proceed, will the Government be reasonably impartial? Will they examine that concern, rather than trying to support the proposals contained in the document, A Bigger Picture?

§ Lord McIntosh of Haringey
My Lords, I can certainly confirm that the cost-benefit analysis will be impartial. Regarding the noble Viscount's major question, he should see the all-industry fund as sitting alongside other public sector activities. After all, we are seeking only 0.5 per cent. of film-based turnover. Although there is presently no evidence, my conviction is that the powerful membership of the action group to which I have referred will secure that. It will bring £15 million to £25 million to add to the funds already available from the Arts Council, lottery financing and the production fund.

§ Lord Dormand of Easington
My Lords, is my noble friend aware that one of the biggest difficulties facing the British film industry lies in the distribution of its films? Do the Government have any specific proposals in relation to that problem?

§ Lord McIntosh of Haringey
Yes, my Lords. My noble friend is right. We have a number of major players in film production. However, our exhibitors are very much in the hands of the major American players. The result is that, instead of the vertical integration that exists in the United States' film industry, our distribution facilities are very fragmented and under-financed. A substantial part of the effort described in A Bigger Picture is the provision of research, marketing and other support for that weak link in the film production, distribution and exhibition chain.