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Films Bill

Volume 983: debated on Friday 25 April 1980

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Question again proposed, That the Bill be now read a Second time.

11.18 a.m.

I had hoped that we might have had a somewhat more substantial audience for the continuation of the debate, but it appears that my wishes will go unfulfilled. I think that Labour Members would agree with the Minister that it was about time that the Government brought forward a measure to enable us to consider the British film industry and the policy of the industry for the future.

References were made by the Minister and by my hon. Friend the Member for Hackney, Central (Mr. Davis) to the various roles that they are playing in this epic before us this morning. I suspect that the Minister's role may be a little difficult to define, because it was clearly my reading of his performance this morning that he could not quite make up his mind whether he was with the cops or with the robbers. Certainly it appeared at one stage that he was definitely on the side of the angels and with the cops, in the sense that he was bringing to the House a measure to give some consideration to the film industry and to help it on its way for the future. That appeared to be the good news.

The bad news seemed to be that the Minister had taken on the mantle of the villain and the robber by saying that, whatever the Government had in mind and whatever their intentions were, they saw in future no further than 1985. I think that the fears expressed by my hon. Friend to the effect that we ought to be concerned about the long-term prospects and the long-term future of the industry were valid.

I hope that I emphasised sufficiently that there has been a tradition of legislation in blocks of five years in this matter, and that I am taking a view exactly as far ahead as that taken by my predecessors. But I have also undertaken to consider during those five years what the much longer-term implications are. Indeed, we might have hoped that, having had the Terry report for three years, my predecessor in office could have come to some conclusions on his reaction to i! before the general election.

The Minister might be surprised to know that he will not necessarily find a hostile response from me to his intervention, because I think that many of us would have hoped that this matter would have received the attention of the Labour Government in a more positive way than it did. None the less, a new Government are now bringing forward their proposals, and it is those which the Minister is more than prepared to defend and argue for. But the industry has certainly been neglected for a long time. The work which my right hon. Friend the Member for Huyton (Sir H. Wilson) has contributed towards parliamentary debate and discussion on the issue has taken us a few steps further. I join with those who have paid tribute to my right hon. Friend for the work which he and his committee colleagues have contributed towards the debate on the future of the film industry.

I make one or two more specific points. I think that both sides of the House have recognised that the industry is in a spot of bother—to put it mildly—in so far as it is suffering from a lack of funds, and it appears to be suffering from a lack of strategy for the future. Those of us who wish to protect our indigenous film industry are anxious that the Government should be able to offer some advice and comfort to it in the future. As my hon. Friend the Member for Hackney, Central said, the Government seem today to have missed the opportunity. The boat seems to have been there for them to jump on in order to steer the ship of State towards helping the industry, based on the information which has come from the various reports to which he referred, and from the various inputs into the Government's " think tank " from all those concerned in the industry.

I know that a lot of work has been done outside. The Minister alluded to that. I should have thought that that would have created an opportunity for us to have brought a very exciting Bill to the House today. The House could have been discussing the long-term future of the industry. It could have been concerned with all aspects of the industry, with regard to training young people who are anxious to make their way in film production and distribution and the management of the industry. Certainly the Government could have brought forward proposals to indicate their support for what is recognised throughout the globe, I think, as one of the foremost film production industries.

Reference has been made to the lack of capital and the lack of funds from which the industry has suffered for many years, and to falling attendances and the closure of cinemas. All these matters would have been good ground for the Government to have considered bringing forward wider, longer-term proposals for the industry's future. There are many millions of people in Britain who like to go to the cinema and see a good film. A lot of those millions like to visit the cinema and see a good British film, made with British technology, acted out by British performers and, one would hope, making profits for British companies. It is that element which the Minister has somewhat overlooked today.

I do not criticise the Minister too much for what is in the Bill. There is not a lot in it which I think one would in any reasonable sense wish to oppose. But it is not enough. It is not in depth. The reports which the Minister has before him are more than sufficient for him to have been able to bring to the House an exciting, progressive bit of legislation, which would have done two things at least. It would have ensured him a greater audience for his proposals and it would also have given the industry the encouragement and support which I believe it is looking to the Government to provide but which, as I have said, this measure has failed to give.

I hope that the reference that the Minister has made to the fact that this matter will have to be discussed again will result in his bringing forward the legislative proposals which the industry needs and desires in order to survive and which I believe we have a right to demand after such a long time.

11.26 am

I wish to raise two matters. The first concerns the future of the children's cinema clubs. I do not know how many other hon. Members, like me, had experience of them in their childhood. The memory of seeing Tom Mix and Buck Jones at the local cinema on Saturday mornings is one which is dear to me. In those days, if I remember rightly, it cost 6d.—2½p nowadays—and the fact that similar performances are available to children nowadays on Saturday mornings for 25p is very important. Twenty-five pence is not all that much to pay in view of the inflation we have had since I was a regular attender.

I understand that there are some difficulties about the continuation of children's cinema clubs in the strength and with the support that they have previously enjoyed. Of course, the body responsible, the Children's Film Foundation, has been entitled, as I understand it, to a share of the Eady levy, and it is very important that generosity should be applied in future towards the determination of its share. It may well be that exhibitors find it more profitable to keep their cinemas open late on Friday night and into the early hours of Saturday morning, making it difficult for them to open again for children later on Saturday morning.

That is one of the major problems of the Children's Film Foundation. Exhibitors are basically not keen on this activity on Saturday mornings.

I am grateful for my hon. Friend's expert confirmation of the impression which I already had about the reluctance of exhibitors.

We should not just leave the matter there. Exhibitors prefer to show X-certificate films very late at night, and they know very well that if CFF films were shown at some other part of the school day they would get similar audiences, because that has been shown by the work that the CFF has done. Therefore, it is too simple to say that exhibitors do not want to show in the mornings. There are reasons for that which could be dealt with easily.

I am grateful to the hon. Lady for adding that comment. It is clear that exhibitors who show films late on Friday nights are able to charge quite a high price for their seats, and, equally, arrangements for children may not be profitable for them. However, with good will and perhaps a little prompting from my hon. Friend the Minister, I am sure that it would be possible to resolve the situation and to enable children's cinema clubs to carry on in the future as in the past, providing a wonderful, valuable and most educative and helpful service to children.

The second matter that I wish to raise is amateur films, in which I have no pecuniary interest, though I am an amateur film producer on a modest scale. Amateur films are to the film industry what small businesses are to the economy. No doubt many big producers started as amateurs. I have no such ambitions, but I am sure that it is necessary for us to give as much encouragement to amateur film producers as to professional producers and the financing of the big business that is dealt with by the Bill.

It may be that my hon. Friend the Under-Secretary will not be able to comment on amateur films; they may come within the portfolio of the Secretary of State for Education and Science. But the British Film Institute is responsible for matters such as the annual exhibition of the six best amateur films, which has been dislocated recently through financial difficulties and other reasons. It has not been possible to continue that excellent exercise which shows to amateur film societies throughout the country the best films made during the preceding year by amateur film producers. It is an important exercise in developing and improving film techniques and encouraging new blood.

I agree with my hon. Friend the Under-Secretary that the British have a lot of talent available for film-making which can be important and valuable to the nation. It is important that we should consider assistance at both ends of the industry and especially what can be done to encourage amateur film producers, not only in the exhibition of the six best films but in many other ways, as well as in helping with the other important projects dealt with by the Bill.

11.32 am

In view of the references that have been made to my film committee, for which I am grateful, I must make clear that I am not attempting to represent the views of the committee in this debate, though the work that we have done and our first three reports provide some background to the Bill.

Any legislative measure on films and the NFFC is bound to arouse a little nostalgia, which, in the interests of other hon. Members, I shall try to keep as short as possible. The NFFC was set up by legislation more than 30 years ago, at a time when, despite the high quality of our producers and stars, there was a real danger that our film industry would fold.

Following the convertibility crisis in 1947, the Government blocked American film earnings in this country and cut them off until, after negotiations with the late Mr. Eric Johnston, we released 25 per cent. Of the remainder, a significant amount was ploughed back into American production and joint films in this country.

The Under-Secretary referred to Sam Goldwyn, one of the great historic characters of the film industry. I remember that when the Hollywood chiefs thought that we had worsted Eric Johnston in the negotiations, they insisted on meeting me in Washington. All eight attended the meeting—Sam Goldwyn, Louis B. Mayer, Nick Schenk, Spyros Skouras, Barney Balaban and the rest of the legendary names. Spyros Skouras came to London to complain about what we were doing. With his dubious broken English—more broken than English—I had great difficulty in following him, but I asked " To sum up, would you say that our blocking of your revenues has had a serious effect on Hollywood's finances? " He replied, " That, Mr. Minister, would be an exaggerated understatement."

Our producers, including refugees from Hitler such as Sir Alexander Korda, lacked the necessary resources to produce films, and the NFFC was set up with £5 million, which was a lot of money in those days. I also decided to set up the Eady scheme at that time. Sir Wilfred Eady at the Treasury gallantly took on from me the nominal paternity of a scheme which was bound to be more unpopular with some producers and exhibitors than others.

Fortunately, the then Chancellor of the Exchequer, Sir Stafford Cripps, was mad on films—and rather strange ones, really. I hasten to add that they could have been shown at any hour of the day or night. Sir Stafford's favourite producer, Mr. del Giudice, failed to benefit from the NFFC when it got the £5 million from Sir Stafford.

Lord Reith was the chairman—austere and economical—and the first three films that we helped to finance were winners—"The Fallen Idol", "The Winslow Boy " and " The Third Man ", which was the first of the Korda films we financed. That was not a bad start for Government film financing. We were lucky.

Later, in, I think, 1949, I was able to persuade Sir John Woolf, who had resigned after deciding that he could not sign the Rank balance sheets of those years because of the way that they constructed the figures of film losses, to go into production with NFFC backing, and he has produced some of the most remarkable, world-famous films of the past 10 or 12 years.

The cost has not been high. The Minister said that £11 million was currently owed to the Government and we know that other sums have been written off, but I submit that the total expenditure is a small cost to have kept in being our indigenous film industry, earning benefits in terms of the portrayal of British life and institutions and in helping to produce and maintain a skilled and dedicated work force at all levels, including producers and directors.

While our committee has been sitting, our members engaged in film production have won three or four Oscars and other awards, mainly reflecting the modern trend to Anglo-American co-production such as we have seen with " Murder on the Orient Express ", " The Deer Hunter ", " Midnight Express " and so on.

The tribute paid to the industry by the Under-Secretary is justified. It could not have existed but for the continuance of the NFFC. Hon. Members may have seen our third report published two months ago with our recommendations on better statistics for the industry—I do not think that that is controversial—and on the revolution facing the industry with the development of, not to mention pirating by, video discs and tapes and video recorders and players on which are played films for which the producers are not getting a satisfactory return.

Of course, there has been opened up through our report the great debate on the opportunities presented to the film industry, but also the threats represented to television, by satellite visual broadcasting.

The Bill gives the industry a measure of help until 1985, though with the threat, which I trust will not become a reality, of an earlier cut-off by Government order, subject to approval by both Houses. I was a little reassured—no more; I did not get enthusiastic—by the intervention of the Minister at that time. He said that there was no decision as yet to have that cut-off. I believe that it is vital that he gets himself into a position, as quickly as possible, where he can say what is the Government's intention.

A real assurance to the industry would be given—and I pick up the point made by my lion Friend the Member for Hackney, Central (Mr. Davis)—-if the Government would soon announce that the British Films Authority, recommended in Cmnd. 7071, became a reality. The Secretary of State—I do not think he will object to my saying this—with whom members of my committee and I have had a number of constructive meetings went so far as to envisage the creation, in due course, of the British Films Authority. To be fair to him, I must make it clear that this will not be dependent on the provision of Government money. The necessary funding is to be sought elsewhere. The right hon. Gentleman regards that as a necessary proviso. One hopes that there will be a change in that attitude.

However, whether there is a change or not, my colleagues and I are prepared to accept this challenge. I believe that it will be possible to raise some finance capital from the industry and from the investing institutions of the City, not least in respect of international and multinational films. It is in relation to these films that I ask the Government to look carefully at relevant tax changes.

There is a clause in the Finance Bill which is a little obscure. It would be out of order for me to attempt to debate it and go into the arguments today, but it is fair to say—I think that it should be put on record—that the Board of Inland Revenue has approached the problems of the industry, in consultations of which the industry and members of my committee have heard, with considerable understanding and characteristic ingenuity. Members of my committee have deputed informally to the Board of Inland Revenue—and I believe that many hon. Members who realise and emphasise the importance of co-production will have welcomed what happened—the acceptance by the Revenue of a proposal made by the committee and the industry that would enable key production staff and international stars to stay somewhat longer in this country in order to complete a film without falling foul of the tax collector.

The House need only consider in that context the case of a film being produced in one of our studios which involves considerable outdoor shooting. Too short a residence period for stars and producers might cause, and has caused, great difficulties if there is rain and there are still two weeks to go when permits run out.

In relation to the words " British made " and the definition of those words, a great deal of work and ingenuity has gone into various proposals. The definition has been the subject of a number of speeches this morning.

The committee itself produced one or two variants which we hope the Revenue will consider. Perhaps I can indicate one of them because it takes up the Minister's point about encouragement to British production and the definition of British production. However, if I quote it it is only right to say that at yesterday's monthly meeting of the committee other members of the committee felt that there were better alternative drafts. This is the sort of thing that might be considered.
" A claim by a company for the first year allowance in respect of expenditure on the provision of machinery or plant for the purposes of a trade carried on by it "—
because it has been linked with the leasing legislation—
" shall be allowed if the asset in question is a cinematograph film only when not less than 30 per cent. of the total cost of production thereof (exclusive of v.a.t.) is attributable to services, materials or facilities supplied by persons ordinarily resident in the United Kingdom or by companies incorporated in and carrying on a trade within the United Kingdom."
That is, as I say, one suggestion. Others will be considered. Hon. Members will, I think, already be asking whether we will be pushed fairly quickly into saying not "United Kingdom" but "Europe" on the lines mentioned by the Minister in his speech commending the Bill.

I have one anxiety about the Bill and I hope that the Minister will be able to reassure me. That anxiety concerns the tight limit on film financing. The point has already been hinted at that the system of priorities in the Bill may endanger even the existing provision—ignoring increases in inflation—for such vitally important bodies as the National Film School. The committee received a presentation yesterday from the school's director, Dr. Young. The point has already been made in the debate that the Children's Film Foundation may also be endangered. If there are not sufficient funds for production and if production is to have an overriding priority, those institutions will suffer—at a time when they can barely keep going because of inflation—unless there is a year-on-year increase to provide for inflation.

Does my right hon. Friend take the view, as a result of the considerable amount of work that he has done on behalf of the industry, that because there is a degree of uncertainty about how the Government view the future there is reluctance on the part of those personnel who have been referred to in the debate to come into the industry and make a career in films?

I entirely agree. To add to what has been said by my hon. Friend the member for Birmingham, Ladywood (Mr. Sever)—there is nothing I can subtract from it—the problem in the National Film School is that when young people enter straight from school or from the industry they are not able to get a grant during their first year though there are grants for the second, third and even fourth years. That is a serious matter.

There is not enough money as yet to meet the year-on-year inflationary costs, and if at the same time that institution is to be treated as a lesser breed—without the law so far as film financing is concerned—there will be a serious problem for an existing and successful organisation in creating the film industry of the future and of the next generation.

I referred to video cassette recorders and discs and the fears about them. I believe that video cassette recorders will be on the way out very soon. That is already happening in America. The discs with the laser beam will last almost for ever and it has other advantages compared with video. But it is a serious problem for producers, whether of domestic films or of films bought in from overseas, because of the possibility of absolutely unstoppable and unpreventable domestic piracy—in the privacy of one's home—of copyright products by putting these films on tape or disc.

We have studied the measures introduced abroad and we have come to the conclusion—it is contained in our third report—that in order to find some compensation for the industry for what it is losing, including audience attendance at future re-runs of these films, we believe that the right answer is that a small tax should be levied on the cassette instrument at the time of purchase. Experience in the United States suggests that, in the long run, the development of all these mechanical visual instruments need not mean a decline in the film industry.

My committee accepts the fact that, while there may be a short-run falling off in cinema attendances—as in the case of drive-in cinemas in the United States—audiences may very well, in increasing numbers, wish to see on the wide screen, for which there is no alternative or substitute, some of the films that they have been seeing on cassette or disc.

We have examined the possibility of cable television—another measure that I have suggested many times in the House—to help film production revenue. I referred to that in the debate on the BBC licence fee last December. To give the BBC the monopoly of cable—this could have been incorporated in the Bill—with strict safeguards to ensure that it did not secure a monopoly of programmes which were generally available in the past, such as the Cup Final or test matches, could help the BBC to become more viable, to save its orchestras and, over a longer period, to avoid a situation in which meeting the cost of a television licence becomes more and more difficult, especially for people on low incomes.

Does my right hon. Friend agree that he would not regard it as helpful if, through cable, the BBC became the only monopoly of pay TV in respect of films? Far from helping either the industry or production, that would simply result in a second closed circuit.

I certainly agree with that qualification. Indeed, in the near future we shall have to consider what we can do to save independent television, which I think is in greater danger than any other institution in this country as a result of the development of satellites, to which I was about to refer. It is certainly possible for cable television to develop new programmes. I would never have expected the snooker programmes to be so popular. Conservative Members may argue that it was obvious from the start, but I would not have thought that show jumping would be so popular. Therefore, I believe that it will be possible to make new programmes rather than to monopolise programmes that have already been widely seen.

The development of satellites will create a new facility for film production and showing. There will be a huge demand, and it will not cost that much. Jf any hon. Member is thinking of getting in on the act, he will need a dish aerial of about a yard in diameter. However, he will have to be careful where he locates it. It will probably be all right if he lives in a block of flats, and if he has a garden he can site it there, provided he is prepared to face up to the problems of vandalistic louts and peripatetic canines. However, if he wants to place it under his roof, he will need new fibre tiles, because the aerial will not work through existing tiles.

The House can readily imagine the effect on independent television if satellites increasingly capture advertising revenue. Satellite routes have already been allocated. I am afraid that Britain has come out of it very badly. We did not get in on the act fast enough. Apart from that, it is clear that foreign producers will not only be able to get their advertising on to our screens but will also be able to show their artistic products, such as films and so on. This will be a great thing for the film industry. Every film producer I know has already started to mark up his old films. He is marking up films which in the past he sold for about £10,000 because of the increased demand that will emerge. He is wise to do so.

As I said, all this will take place at the cost of independent television. Unfortunately, we have fallen behind in the race. I take full responsibility for giving the duty to the Home Office when the Post Office was merged. However, at that time I do not think that the Home Office was prepared for the subtleties of negotiation. The French got away with murder, as did Luxembourg, Iceland and even Ireland. The result is that the satellite coverage of France covers the whole of Britain from the Wash to the Humber. Luxembourg covers a considerable part of the South-East. Ireland covers the greater part of the country, and Iceland covers a substantial area of Scotland and parts of Northern England. But, in return, our pathetic coverage of France and the Continent will consist of a strip of north Brittany, along the coast north of Paris—we shall not be seen in Paris, except in the suburbs—finishing at Emden. It is essential that the Government address their minds to the problem of satellites.

As the House knows, by the middle 1980s satellites will be circling the earth at a distance of 22,300 miles. They will cost £100 million each, but that is no problem. There will be no problem in raising finance in the City, considering that each is expected to make £70 million profit from advertising in the first year. Satellites will become a significant feature of our lives before 1985—that is, before the date of the shut-off period envisaged in the Bill. That is why the option of keeping the period open is so important. I hope that that is what the hon. Gentleman has in mind.

As to the film industry, a wonderful market will be provided for old and even forgotten films. There will also be a market for new films whose budgets are reasonable.

I welcome the Bill in so far as it perpetuates the policy of successive Governments over more than 30 years since the time of the Act which established the NFFC.

I ask the Government to think again about the financial provisions and about the length of time for which provision should be made. I believe that the British film industry is poised for success and expansion. I hope that the Government will give it the chance. In this connection, I hope that there will be a further follow-up to several of our recommendations. For example, with regard to the NFFC, we commented on the inordinate rake-off from the NFFC which at that time was received automatically by the supporting film which was shown with a major film of great success. The example quoted was, I think, "Star Wars". The film which accompanied it was in no way undesirable, but I believe that it got more revenue than it was really worth just because it was shown jointly.

Our second recommendation, which was warmly welcomed by the press and the greater part of the industry, was that there should be a formula—I know how difficult it is to achieve—to preclude Government money going to what are simply called sexploitation films. I appreciate that this is a difficult area, because there is the problem of censorship as well as the problem of deciding. However, when the NFFC was introduced, that was not the intention of the then Government or the House of Commons, and I am sure that it is not the desire of the House of Commons now. Whatever ingenuity is needed, we should find a means of arriving at a definition, because the problems must be overcome. Out of the exiguous sums of money, which are even more exiguous now, there will be more help for films of which we can all be proud.

11.58 am

I apologise to the House and to my hon. Friend the Under-Secretary for waddling in rather late in the debate. However, I was delighted to hear the remarks of the right hon. Member for Huyton (Sir H. Wilson), who for more than 30 years has shown an interest in the British film industry in so many practical ways, and continues to do so. The right hon. Gentleman would not expect me to say that I look back with happy memories to all his contributions to the industry. He may say that it is very unfair, but I have always regarded him as the parent of the quota quickies. However, his work will be, and has been, of very great value to the industry and to the Government. It has led to regulations and legislation.

I must declare an interest, with a small " i ". As the Minister knows, I spent 13 amazing years with the Rank Organisation and two years after that as managing director of Granada International. Like the right hon. Member for Huyton, I find the subject one of happy nostalgia. The Department should give urgent consideration to the subject of copyright, not only with reference to today's debate but with reference to many other creative aspects. The existence of tapes has come close to destroying our gramophone record industry, just as discs are threatening the film industry and those who work within it. I hope that consideration will be given to imposing a levy system not simply on cassette machines but on th tapes used to record gramophone records. No doubt the Minister mentioned in his opening remarks that we all recognise that the Bill represents a piece of holding legislation. I hope that it will receive a Second Reading, but—as a result of technological changes—a great deal remains to be done.

My hon. Friend the Member for Orpington (Mr. Stanbrook) introduced the Children's Film Foundation. AU hon. Members will probably regret that some of the splendid work done by the Children's Film Foundation has recently diminished in quantity, but not in quality. All hon. Members were probably delighted that Mr. Geddes received a major international award a few weeks ago for his work. The Children's Film Foundation has temporarily declined in influence, not because its markets have disappeared but as a result of the restricted way in which it was set up. No doubt that was appropriate at the time. However, the foundation's directorate consists primarily of individuals who are concerned with some part of the cinema industry. The television industry has been excluded largely at its own wish. Those involved with video discs and other developments also play no part.

There is lack of demand for the foundation's products. It suffers because its distribution channels have become unduly restricted. I hope that a future Bill will include much of the committee's recommendations and a proposal that the Children's Film Foundation should be reconstituted to embrace a wider distribution network. However, we cannot tell the cinema industry how to conduct its business.

I look back to children's Saturday clubs with bpleasure. When I was 10 years old, I got a job that involved standing outside the cinema in the village in North Wales in which my family then lived. I had to shout " This way to the balcony seats." I was told to shout " balcony " in a way that would stress its three separate syllables—in composite motion—and I was paid 10s. to do so. My father was a keen member of the Labour Party but he had old fashioned ideas of discipline. When he found out about my job, he put those ideas into practice. My film memories probably go back longer than those of other hon. Members who have spoken.

Little boys no longer earn 10s. a morning for doing that, because television has made a rival claim on their Saturday mornings. It provides an alternative focus for the interests of children who might otherwise have gone to Saturday morning clubs. The present director of the Children's Film Foundation is nearing retirement and has lost his deputy. The foundation's administration is grinding down. It would be undesirable if he were to retire without a successor of equal calibre. I therefore hope that the foundation will be revitalised and that it will apply its activities to all aspects of the media, not just the cinema. I am aware of the difficulties of doing that, but if the foundation goes out of business not only shall we lose a highly specialised and distinctive type of film—which so many of us, including my hon. Friend the Under-Secretary, look back on with pleasure—but it will open the way for foreign productions. Such films do not always convey the type of messages that we would wish our children, or those of our friends overseas, to receive. These issues concern not only the Department of Trade but the Foreign and Commonwealth Office. I hope that it will be consulted when the Children's Film Foundation is considered.

12.8 pm

The debate has brought out one interesting fact, namely, that the House of Commons—which is enormously interested in many aspects of the media—unfortunately regards the film industry as of little importance. It is tremendously helpful to have a spokesman such as my right hon. Friend the Member for Huyton (Sir H. Wilson), who claims a number of distinctions. He has made an enormous contribution to the work of the British film industry. He inspired the original Eady levy. It is important to remember that the industry does best when a certain degree of discipline is imposed from outside.

It may be slightly unkind to tell the Minister that although the Bill is welcome it is pretty poor. Given the extraordinary economic views of Her Majesty's Government, I had not expected a Bill. I had assumed that the film industry would be abandoned without a backward glance. I therefore pay an ungrudging, if perhaps mildly ungracious, tribute to the Minister for managing to bring a Bill before the House.

The industry is its own worst enemy. There is no co-operation between those responsible for exhibition, distribution and production. The changes that have come about in the Bill are largely negative. It is worrying that we seem to be saying " There are enormous changes taking place and we must have different things done for the industry, but we must not be too positive."

The changes that we bring forward are always negative. For example, if we want to do something about pre-production work, we do not say " Let us give more money for pre-production packages. Let us expand the work of the National Script Development Fund." Instead, we bring the existing operation inside the National Film Finance Corporation. That is our approach to solving the problem of the pre-production package.

I am sorry that the Minister has allowed himself to do away with the voluntary work of the National Script Development Fund, especially the work of script writers and producers who have given their help voluntarily. They had a high degree of expertise and they were able to exercise the sort of judgment that enabled a number of packages to go forward. I know that so far there has not been a great number of films made from the work that has been done. However, I think that we shall see development over the next 10 years. I should have liked the committee to be given more muscle rather than for it to be subsumed in the corporation in the way that the Bill proposes.

Why is it that we still have many of the old barring procedures operating in the industry? After all, the cinema industry is going downhill very fast. There are areas in Great Britain where it is not possible to go to the cinema. Hardware improves all the time, but the opportunities to see software disappear.

There are many who would like to open independent cinemas. There are municipalities which find themselves in charge of cinemas which would be capable of being run efficiently and usefully. The immediate problem that both groupings face is that when they go to the distributors they are told that there are barring problems. Sometimes those prob- lems apply to cinemas that no longer exist.

That is all the wrong way round. We cannot run an industry with a number of restrictive practices and not have someone to criticise the operation. British cinema could be developing by using all the new techniques. It could run smaller cinemas. By using mixed television and cinema techniques, it could provide many outlets for modern film producers. However, it is not doing anything to change the way in which it has operated since the 1940s, when there were literally hundreds of cinemas throughout Britain.

I hope that the Minister will take from the debate the suggestion that he should be examining the operation of the barring committees. I have always believed that there should be a totally outside committee to examine barring. I know that the present committee has an independent chairman, but industry people sit on the committee. They have an advisory role, but I should like to see a greater degree of independence in the barring decisions. That could be achieved by having a wider independent membership on the committee.

The Bill brings forward only a derisory sum. The Minister said with some justification that all films Bills have a life of about five years and that the figure that has been written into the Bill relates only to the normal passage of time for films legislation. That would be true if the sum in the Bill were so large that we could foresee a successful period of operation for the corporation over the next five years and if we could see it producing a programme of films, some of which would undoubtedly be successful. On the one hand, the Department has rightly said "We shall write off your debts and give you some assistance." On the other hand, it has limited the assistance and it is possible that the next five years will see the demise of the corporation.

If there is insufficient finance to make films, especially at a time when inflation and rising costs are doing away with the small budget film, we are, in effect, saying to the film industry "There is little likelihood of your being able to continue in the near future." The Minister should be giving urgent and careful attention to the sum that is to be provided by the Bill and seeking means of increasing the borrowing requirement so that it is not restricted to £5 million. He should be considering ways of allowing the corporation to go to even double that sum.

There is clear evidence that the corporation will be one of the few sources of finance open to any British film producer in the next five years. Bankers are not coming forward with the offer of finance. In America there has been an explosion of film-making and production. It is true that that has been mainly for television, but films are being made that may be shown on television and in the cinemas. They are supported by finance from ordinary banking circles.

That is difficult to achieve in Britain. The average finance house regards the financing of films as exceedingly risky, which, of course, it is. However, were there a greater injection of Government finance as an anchor, the corporation would be able to turn its finance to some account. It will have to make a programme of films. Even though it has lost money during its existence, that has been a gentle process and it has contributed to the continuance of a British film industry.

I should like to see a change in the corporation's terms of reference. I should like it to be told " If we are to have a British film industry, you are the only peole who can assure it." I should like it to be told " Use the money which you have to make films which have a particularly British flavour." The Minister will remember that we were most successful when we were making moderate budget films that reflected aspects of British life. I do not believe that the British have become so boring that there is no subject matter than can be turned into a successful film.

The attitude of distributors, the need to cover the negative costs in the home base and the number of other factors cause producers to look increasingly for mid-Atlantic subjects and mid-Atlantic scripts. They think that that is the only way in which they will make a profit.

I hope that the Minister will bear in mind all that has been said about the Children's Film Foundation. I was interested to hear that the hon. Member for Fulham (Mr. Stevens) had such an intelligent family. I am only sorry that he did not manage to achieve the intellectual standards of his father. However, he has a strong point when he says that the work of the foundation is of such a calibre that we should be tremendously proud of it.

The films that have been made by the foundation, especially with Henry Geddes at the helm, have represented all that is best in the British tradition. The films are funny, clever and moving. They make a point without being propaganda. They encourage participation in an audience. One feature that I find rather worrying about television programmes for tiny children is the wholly passive relationship. Some children's programmes encourage the child to participate in art and in story writnig, but the foundation was always the initiator of something more than simply a film. It was the basis for a children's film club that brought in children on a Saturday morning. It made them part of a larger participatory exercise. That enabled the cinema to become a recognisable centre of entertainment. The industry has been extremely shortsighted in the attitude that it has taken to the foundation.

The CFF was created in the first instance because the industry understood that, unless new audiences were created, that entertainment medium would die out. The fact that the industry is not prepared to alter its procedures enough to allow the CFF to benefit from new audiences and new times of showing is a condemnation of the industry. It will have cause to rue that inflexibility before long.

It is not an accident that Henry Geddes and his team have received tributes from America, Russia and many other countries for the quality of the work they have done, with the strong co-operation of the unions. If we lose that quality we shall never replace it; it is unique, and we should be prepared to defend it.

I am worried about the change included in clause 8. I understand that the method of calculation of labour costs has to be looked at again, but I am worried that, in an industry with a high level of unemployment amongst skilled personnel, if we widen the terms of the clause we shall make it more difficult for British technicians to find employment. I am, therefore, slightly anxious about the clause.

I hope that the Department is looking closely at the means of protecting copyright. The late Hugh Orr in his capacity as the chairman of the Association of Independent Cinema Exhibitors—an international organisation—did a tremendous amount of work on copyright because he believed, rightly, that as people were able to lease or buy machinery to enable them to record film easily, inevitably the producer would find himself in considerable difficulty if there were no levy on that operation. The conclusions reached by the Union Internationale des Exploitants du Cinéma was that a levy at the point of sale was the only way to get any justifiable contribution to production costs. That also will have to be discussed in Committee.

The cinema industry in this country will be wiped out unless it is prepared to be much more flexible and realistic and to stop thinking only in terms of the next film, which is its normal horizon. It must start thinking about whether there can be any justification for operating an industry that will not protect itself.

Unless the producers, exhibitors and distributors get together, unless the big duopoly is prepared to be far more flexible in the way it deals with the independent cinema owners, unless there is a much more radical approach to the times and places of showing, unless a specific fund is created to enable cinema owners to upgrade and improve the standard of their operations, within a short time the mass cinema audience which some of us can remember will be a thing of the distant past. The film industry is in danger of becoming a minority interest, at a time when more people are looking at more films than ever before.

It is easier now to look at films in our own homes, in cinemas, and elsewhere. They can be shown with greater facility than ever before, but the speed of the industry's response to these developments is frighteningly slow. It leads me to believe that only by Government intervention, by the creation of the British Film Authority and by the joining together of the BFI and the various interests in the commercial world shall we get any new thought in this important branch of the media. I hope that that tiny light on the horizon will be capable of expansion, but I believe, sadly, that we may be at the beginning of the end of British film making.

12.25 pm

As the hon. Member for Hackney, Central (Mr. Davis) suggested, we are not exactly " packing them in " for this performance today. I suppose that is part of the problem of the film industry generally. Had we been debating television, I suspect that there would have been a much larger attendance. There is perhaps an element of truth in what the hon. Gentleman and other hon. Members said about the Bill. He suggested that it was a timid Bill. I would not say that it was a timid Bill. The hon. Member for Crewe (Mrs. Dunwoody) suggested that it was a modest Bill. Yes, it is a modest Bill.

The hon. Member for Hackney, Central was a little unfair. He spoke of the Terry report. That report was presented to the Government of whom he was a member in January 1976, and no action was taken on any of the proposals made therein in the ensuing three years. To criticise me for having brought forward this modest Bill after rather less than a year in office is a little unfair, particularly as we still await the final reports of the committee under the chairmanship of the right hon. Member for Huyton (Sir H. Wilson), which has drawn attention to matters which were not seen so clearly in 1976 as they are now. I have in mind particularly the impact of satellite television broadcasting. That problem will not go away. The right hon. Gentleman recognises the problems which have arisen from irrevocable decisions which have already been taken.

I am a little concerned about the hon. Gentleman's reference to our final report. I am not sure whether he meant to imply that it was a terminal report or the final report of the Interim Action Committee before a successor body becomes the British Films Authority.

I was certainly not pronouncing sentence of death on the right hon. Gentleman's proceedings. I was referring to the Interim Action Committee and its next report, which re await with considerable eagerness.

If far-reaching reforms are to be made, they had best be made after proper consideration of all these matters. I must confess I have a fondness for the idea of a single quango to replace a proliferation of quangos. The right hon. Gentleman put forward that proposal in a very subtle manner which would have appealed to my hon. Friend the Member for Carlton (Mr. Holland) had he still been here. A commitment to such an organisation could be made quite easily and has been made by many people. The problem is a commitment on how to finance it, and that is a much more difficult problem.

It is a little unfair of the hon. Member for Hackney, Central to say that a Labour Government would have done more. The Labour Government had the chance to do more for three years, but unhappily they did not take that opportunity.

My hon. Friend the Member for Reading, North, (Mr. Durant), who is not present now because he had to go to an engagement in his constituency, questioned the changes which we propose to make in the quota regulations as they affect multi-screen complexes. Often there is an assumption that the British film would be squeezed into the smallest cinema, and that worries me. The film which packs them in will be used in the biggest cinema.

Had "Star Wars" not only been full of British actors, British producers and British technicians and been made in Britain but had been a British film in the sense that it was financed and managed by British film-makers, it would still have been shown in the biggest cinemas that could be found because it was the type of of film which audiences want to see.

Of course, we want to pay attention to the cultural nature of British films and, of course, we should remember that some of the most successful British films were Ealing comedies and others which emphasised the British character and life. Audiences go to see successful films. They go to see the films about things that interest them, not necessarily the films that interest us or the more esoteric filmmakers. Seldom is the winner of the Cannes festival tiie film that packs in the audiences in the United Kingdom. We must be careful not to be carried away by what one might call the art and culture section of the industry. I know that the hon. Member for Crewe is not, so I shall give way.

The Minister is falling into a trap. We are not saying that the British films that we want should be " cultured ". We argue that we have something to contribute in terms of humour and drama and that it is sad that nobody seems to be prepared to give us a chance.

I agree. That is why I emphasised the essential Britishness of a film such as " Star Wars " which finished up as an American film. It involved our work.

The hon. Member for Birmingham, Ladywood (Mr. Sever) made an interesting speech. However, he did not come to the point that the heart of both the Terry report and the Interim Action Committee proposals involve the need to resolve the relationship between the television and film industries. Perhaps the relationship between the sponsoring Ministries—the Department of Trade and the Home Office—should also be resolved.

If the hon. Gentleman thinks that such matters can be resolved in the course of a busy year, I hope that he will chat with his right hon. Friend the Member for Huyton. I am only just beginning to learn a fraction of what the right hon. Gentleman knows about the way in which such matters are conducted in Whitehall and within the Government. Such issues cannot be resolved quickly.

My hon. Friend the Member for Orpington (Mr. Stanbrook) referred to the Children's Film Foundation. I have much sympathy for the work of that organisation, although I cannot claim to have been a great cinemagoer as a child. I am worried about the problems of the CFF. The foundation is considering how it should best continue its work. That might involve a restructuring of the organisation. The problem is far from easy because it involves the distribution of Alms and changes of fashion. There are changes in fashion in what children want to do on Saturday mornings.

The problems also affect the trade union's view of the relationship between television and film-making. It is perhaps appropriate to express my gratitude to the work that Mr. Sapper is doing in that connection. We usually think of him when our television screens go blank and then we do not think kindly of him. It is appropriate to think more kindly of him for the work that he is doing for that organisation.

My hon. Friend the Member for Orpington also mentioned the British Film Institute and amateur films. The BFI is not my responsibility. That again emphasises the difficulties that we have in dealing with these matters.

If I refer to what the right hon. Member for Huyton said, that will probably cover most of the issues raised in the debate. The right hon. Gentleman referred fairly to what my right hon. Friend said about the British Film Authority. I emphasise that we have not concluded that the concept of a BFA is to be dismissed. However, we have emphasised strongly the problems of financing and organising it in its relationships with the two great industries—the television and film industries.

When the right hon. Gentleman referred to a clause in the Finance Bill which is a little obscure, he was making another of his " exaggerated understatements ". I have never thought that of any Finance Bill. There are many other clauses which are " a little obscure ". I shall draw the Chancellor of the Exchequer's attention to the possible improvements which could be made to the Finance Bill. I hope that that will help the Finance Bill Committee.

The right hon. Member for Huyton also referred to the other beneficiaries of the levy. He and the hon. Member for Ladywood mentioned the National Film school. One of the problems is that half of the graduates of that school go to the television industry. But the television industry makes little contribution to the costs of running it. There is something inherently unfair and wrong in the way that the two industries will not recognise that they have a common interest.

The right hon. Gentleonan tempted me many times to stray well beyond my departmental responsibilities into those of the Home Office and television. I fear that I must resist the temptation.

My hon. Friend has no stronger supporter in the House than I. However, in one breath, he rebuked the television and film industries for failing to get together and told us for the second time that Government responsibility for the two industries is dispersed. There is a slight inconsistency in that.

Indeed, I recognise that inconsistency. I shall not defend myself against the charge. I do not know whether that gives my hon. Friend comfort or concern.

I hope that it will help the Minister if I say that I agree with all that he has not said.

I must be cautious in accepting the right hon. Gentleman's compliments, although not as cautious as he was in accepting my compliments when he was Prime Minister. When the right hon. Gentleman expressed surprise at the success on television of show jumping and snooker I thought that perhaps at some time somebody would seize the opportunity of producing a combined programme and calling it " Polo ", which might also be a success.

The right hon. Gentleman emphasised the problems of satellite broadcasting. I know that he is aware—but the House generally may not be aware—that the Home Office has recently written to a wide variety of interests, including the film industry organisations, asking for their views on the problems that are raised by satellite and cable broadcasting. They will be considered as part of the Home Office study which was announced in the House recently. I believe that the Interim Action Committee has been asked for its views by the Home Office.

The hon. Gentleman has obviously concluded his comments on my speech, but he did not refer to the unhappy way in which statistical information is made available to the Government. Will he give the House some indication of the Government's consideration of the recommendations of the Film Industry Committee report of March 1980?

I have not brought forward any proposals for change. In all cases where there are calls for more statistics, I have to bear in mind two main problems—the burden that is placed on the industry and the burden that is placed upon manpower in the Civil Service in collecting those statistics. We have to be satisfied that the benefits will considerably outweigh the costs.

As the hon. Gentleman said, the report was published in March, and we are now studying it. He may wish to return to the subject in Committee.

The right hon. Member for Huyton spoke about the levy regulations and their effect. The new regulations have dealt largely with the problems to which he referred. The " Hot Wheels " phenomenon was covered largely by the £50,000 limit for the benefit of short films and by a variation of the multiplier.

The change in the multiplier has also affected the likely benefits which may flow to the so-called sexploitation films. However, I should emphasise that it was not done primarily with that purpose in mind. I have no ambition to take over the censorship functions of the Home Office, or anyone else. I have plenty of trouble already, without taking on more. I have never seen myself in the role of censor, nor do I believe that the levy or payments from it were intended to be used as a back-up for censorship. If there is a place for censorship, it must be conducted independently of any measures for the support of the industry.

My hon. Friend the Member for Fulham (Mr. Stevens) referred to the Children's Film Foundation, with which I have dealt. The hon. Member for Crewe was kind enough to pay me a compliment. If she knew the whole story of how the Bill reached the Floor of the House, she might have given me an Oscar rather than simply a compliment.

With regard to the national film development fund, the Bill is intended not to kill off the concept but to transplant it into surroundings where it will have more chance of bearing fruit than it has done in the past. Anyone can be wrong in these judgments, and I notice that the hon. Member for Crewe is crossing her fingers. I hope that that is how it will work. Certainly that is the intention.

Throughout the discussions it has been said that the Bill provides insufficient finance for the industry. I expected that point to be raised. It should be remembered that one film that was made recently—"Superman"—cost about £18 million. The sums of money involved in the film industry are huge, and the sums about which we are talking are relatively small. In the present climate, I do not think that the proposals of the Bill are ungenerous. It includes a proposed grant of £1 million and a proposal to write off debts of £11 million and interest accrued of about £2 million. We are thus remitting payments of interest in future of about £0·7 million a year. The corporation will still benefit from any income from the investments which it made as a consequence of those amounts of money which we are writing off. So the Bill is not ungenerous.

Another £5·7 million a year is given to the British Film Institute through the Office of Arts and Libraries. That is not an insignificant amount, and some people suggest that it might be better spent in other ways within the industry. That is a difficult and delicate question, and perhaps I would run foul of my right hon. Friend the Leader of the House if I were to get mixed up in that affair.

As a modest Minister, I have introduced a modest Bill, and that is a modest claim to make. I believe that the House has given it a modest welcome. In that sense, we have had a good day and we have done something to secure the future of the British film industry for the next five years. I accept that during that time there may be more that needs to be done.

Question put and agreed to.

Bill read a Second time.

Bill committed to a Standing Committee pursuant to Standing Order No. 40 (Committal of Bills).