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9.57 am
Mr. Kenneth Baker (Mole Valley): I am delighted to be speaking in this debate, for three reasons. First, this is the first occasion on which I have spoken during a morning sitting of the House since the previous experiment in 1969. So I am not making a habit of such early-morning sittings. On that previous occasion, I remember speaking on a Bill to reform the House of Lords--a feature film that I believe that the Labour party is going to make again and is billing as a forthcoming attraction. It might fill this House, but it will not play in Peoria.
The second reason why I am very glad to speak is that I warmly support the excellent report of the Select Committee on National Heritage. I congratulate the Select Committee Chairman, the right hon. Member for Manchester, Gorton (Mr. Kaufman), on it. It owes a great deal to his personal enthusiasm and commitment to the industry, and, like him, I support all its recommendations.
Mr. Mark Fisher (Stoke-on-Trent, Central):
Hear, hear.
Mr. Baker:
Jolly good. I am glad that the Labour party spokesman is saying, "Hear, hear." I shall be interested to hear his speech and the commitment that he makes to the report.
The third reason why I am glad to speak is that, for some 18 months in the 1980s, I found myself the Minister responsible for the British film industry--the responsibility that my hon. Friend the Minister of State, Department of National Heritage now has. Just after the 1983 election victory--yes, those were the days--I had added to my responsibilities as Minister for Information Technology that for the publishing and film industries. It was the first time that the responsibility for communicating technologies came together under one Minister. I drew several conclusions from that.
The first was that responsibility should not lie with the Department of Trade and Industry and the second was that responsibility for broadcasting should not lie with the Home Office. I was glad to be the first Home Secretary to recommend that responsibility for broadcasting should be moved to a new Department and I think that my proposal led to the creation of the Department of National Heritage. We now have in that Department full responsibility for all communicating technologies involving film. One of the great advantages that the British film industry has is the English language. If there is one Department that has responsibility for the development of the potential of the English language, it is the Department of National Heritage.
When I was responsible for the film industry in 1983-84, I put together a package of support. Among several proposals, it included support for that excellent institution, the British Film School, which is a real centre of excellence, and the removal of the Eady levy because I thought that recycling in the industry was not the right way in which to support the film industry. The essential element of that package was that tax incentives would be available to people who wanted to invest in British films. My whole package was based on that idea.
Unfortunately, that main pillar was struck down by the Chancellor of the day, now Lord Lawson, in his reform of corporation tax, because he removed all tax incentives. Being a mere Minister of State, I was not informed of his decision before the Budget, so the main pillar of that proposal, which would have built on the successes of the film industry, was struck away and I was left with a rag-bag of proposals rather similar to the statements on the film industry that we have had recently from the Government.
I strongly support, therefore, what the Committee says. In 1983-84, film admissions to cinemas were 53 million to 54 million a year; admissions are now 124 million a year. I can claim absolutely no credit for that increase over the years. It is due to a variety of factors--
Mr. Anthony Coombs (Wyre Forest):
Why not?
Mr. Baker:
My natural modesty would not allow me to claim credit for the increase. It is due to a variety of factors, one of which is a change in social behavioural patterns. Others are the cleaning up of old cinemas and the creation of multi-screen complexes. Above all, the increase is due to the making of better films, because, ultimately, that is what pulls people back into the cinema.
The sad history of the British film industry is that it has erratic and inconsistent bursts of real excellence. In the 1980s, we had "Chariots of Fire", "Local Hero" and a clutch of other films, but that burst sputtered out, largely as a result of the removal of tax incentives in the 1984 Budget. There have since been intermittent bursts of great glory, as the right hon. Member for Gorton said, such as "The Madness of King George", "Four Weddings and a Funeral" and "Restoration". But what has not happened in the past 20 years in the British film industry is the build-up of a critical mass. That is disappointing.
As the right hon. Member for Gorton said, the talent is here. The acting talent is here, the writing talent is here, the producing talent is here and the directing talent is here. When it comes to the technological manipulation of images and related areas, we are the world's centre. We should build on that and there is a great opportunity here for the Government.
It will not be adequate for the Government to say, "Well, it is going very well. There has been quite good investment, some of the studios have been revived and Warner has invested £75 million in multiplex screens around London." That is all very well. However, the opportunity is much greater than what has been achieved.
There was a conference last year at the Queen Elizabeth II conference centre, which the Prime Minister and the Foreign Secretary attended. One of its purposes was to try to enhance the potential of our country, and one of the things on which it focused was the importance of the English language. Central to that is software and film production. I believe that the Government's response so far has not been adequate.
The right hon. Member for Gorton made it clear, as does the report, that those of us who support the Committee's proposals are not asking for extra special treatment for the film industry. In many cases, we are asking for parity of treatment. As the right hon. Gentleman said, if a film is made for television facilities
in this country, one gets the 100 per cent. write-off. If, however, a film is made for the cinema, one is left with capital assets, such as a castle, stuck on one's books and they are written off over three years.
I do not believe that it is defensible for the Treasury to say that there should not be parity of tax treatment. I believe that there should be and that there is an unanswerable argument. I do not see the logic of the Treasury's position. I suspect that in his heart, my hon. Friend the Minister supports parity of treatment, but that the Treasury and the Inland Revenue will not allow it. That would not surprise me, because their job is largely one of negation.
When the history of the present Chancellor of the Exchequer is written, as long as he does not write it himself, two points will be made. The first will be that his economic judgment on the whole has been good and right. I do not expect any Opposition Member to agree with that, but I believe that impartial observers will say that he has got it right and that the Governor of the Bank of England has got it wrong. The second point will be that on tax, his approach has been unimaginative and not very exciting--a matter of trying harder next year or trying harder later this year.
I hope, therefore, that my hon. Friend the Minister will relate those comments to the Chancellor of the Exchequer and the Treasury. There is an unanswerable case for parity of treatment for the production costs of films in relation to the television industry and sound recording.
I agree with the right hon. Member for Gorton that there should not necessarily be direct production subsidies, such as money from the lottery. I would much prefer to operate within a generous and incentive-laden tax system. However, if subsidy is the course on which the Government have embarked and if money is to be made available, the amount available should be the amount that has been promised. The right hon. Gentleman said that there had been a promise of £80 million over five years and that so far, only £4.5 million had been made available. When my hon. Friend the Minister stops talking to the hon. Member for Stoke-on-Trent, Central (Mr. Fisher), I shall ask him specifically--[Interruption.] I am so glad that my hon. Friend is now back in his place.
Like the right hon. Member for Gorton, I do not believe that subsidy is the right way. However, if that is the course that the Government have followed and if £80 million is to be made available--so far, only £4.5 million has been made available--I hope that my hon. Friend the Minister will announce that there will be another £10 million or so today and that he can chart how the remaining £75 million will be made available. That may be the only card that my hon. Friend has left to play today. I believe that the Select Committee's proposals should be accepted.
I agree with the right hon. Member for Gorton that investment in the film industry is mobile. Investment moves from country to country and goes to the countries that have the best facilities and the best tax treatment. Therefore, we have to set out our stall to attract that investment. Certain factors bring people to invest in this country. I think that I am right in saying that about 70 per cent. of all films are made in English, but that we happen to make only 4 per cent. in this country. We really must do better than that.
I am not talking about propping up an ailing industry; the film industry is not a lame duck industry, but a very successful one. However, the natural hurdles that the tax
regime places in front of the industry should be removed. I very much hope that the Minister will be forthcoming in his reply. I, having held responsibility in this area, suspect that he will be totally constrained by the Treasury, but that is not good enough.
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