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12.13 pm

Mr. Richard Spring (West Suffolk): I warmly congratulate the right hon. Member for Coatbridge and Chryston (Mr. Clarke) on securing this debate this morning about an industry that has real cultural, historic and economic importance. The right hon. Gentleman's knowledge and understanding of the film industry are exceptional. He was the driving force behind the report of the film policy review group, "A Bigger Picture". It is a matter of regret that that report did not receive a proper airing in the House at the time of its publication, so today's debate is especially welcome.

I thank all hon. Members who have contributed to the debate, particularly my hon. Friend the Member for Brentwood and Ongar (Mr. Pickles), who is a real film buff, and the hon. Member for Keighley (Mrs. Cryer), who followed in a family tradition. One of the central reasons for our continued success in obtaining Oscars and British Academy of Film and Television Arts awards is the creative genius of our people and their love and appreciation of acting and the theatre.

Turning to the current state of the industry, we must examine several areas this morning. The new umbrella body of the film industry, British Film, will begin in April 2000 distributing approximately £27 million of lottery money each year. It will seek to develop a strategy for the industry. However, British Screen will maintain its private sector status and the British Film Institute will retain its charitable status, pursuing educational and cultural objectives. It is unclear what relationship the British Film Commission will have with British Film.

I realise that we are a year away from the target date, but it is difficult to understand at this point exactly what roles these bodies will play and to what extent the proposed new structure will be streamlined and produce clear benefits. I hope that the Minister will expand on those interconnecting corporate relationships when she responds to the debate.

One of our greatest national success stories is our film skills base. For many years, British individuals have scooped awards for technical skills all over the world.

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That is a remarkable achievement. However, the Minister will know that there is considerable and genuine concern in the industry about the future of training in this country, which appears to be under pressure. I understand that Lord Puttnam has expressed his anxieties directly to the Secretary of State. This is the seed corn for the future of the industry, but only 32 students are currently taking film and television freelance training courses.

I shall give an example of the difficulties being experienced. In the field of creative writing, the Television Arts Performance Showcase--TAPS--has said that it can remain open for only another two months without some form of Government or lottery funding. It has been one of the most successful developers of new talent in the film and broadcasting industries.

The Government responded to this type of problem by founding Skillset, which was established with a training remit to all media industries. However, many of the training opportunities provided by Skillset are on the technical rather than the creative side of the industry. Do the Government consider that a more flexible approach to funding criteria may be appropriate?

In July 1997, the Chancellor of the Exchequer introduced a 100 per cent. tax write-off on expenditure on the production of films up to £15 million. Will the Minister indicate for precisely how long that write-off has been guaranteed? I am not clear about that point. Will the Minister also confirm to the House how many new films have been made under section 48 legislation? I fear that she already knows the answer: sadly, it is none. The reason is that the statement of practice was issued some 18 months after the write-off was promulgated in July 1997. Its implementation by the Treasury has, regrettably, been a fiasco.

Meanwhile only one large production is currently being filmed in this country: the new James Bond film at Pinewood. We have a high cost structure in the United Kingdom. Why does the Minister think that we are unable to attract large productions to this country? The spin-offs are obvious. Has she discussed with the Treasury the £15 million cut-off and whether that is the right level for this tax concession? Tax rules for employee travel expenses were introduced in April 1998, to undisguised dismay in the industry. It is estimated that the majority of the industry's employees work as freelancers on short-term contracts of typically a few weeks' or months' duration.

Herein lies the irony: the Treasury has given a tax write-off concession for production, but has hurt the people employed in the industry. Under Treasury rules, producers must gross up expenses payments in order to allow for income tax and national insurance. That occurs only if the film is being shot in the United Kingdom. If it is being filmed in Ireland or France, the producer will not have to gross up expenses, so costs are much less. Despite assistance from Treasury officials, that remains a considerable problem.

I would also be grateful to hear the Minister's views on how the working time directive will impact on film making in Britain. I was disappointed that, in a written reply to me on 22 February, the Minister of State, Department of Trade and Industry, the hon. Member for Makerfield (Mr. McCartney), indicated that no specific assessment had been made of the impact on film making. Our concern is obvious. What discussions has the Minister

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had with the Department of Trade and Industry about minimising any potential damage that the directive may cause?

Let us turn briefly to the role of the lottery in funding British films. The emphasis thus far has clearly been on the production side. There must be a balance between commercially viable films and culturally significant productions. Several films produced with lottery money have not been box office successes, to say the least. I understand that box office receipts cannot be viewed as the sole and exclusive criterion for judging a film's success, but there must be an appropriate balance. After all, it is the people's money and there is always a risk of lottery fatigue--which may have started already.

I know that the right hon. Member for Coatbridge and Chryston will agree that the success of American films is substantially due to the structure of their industry, which invariably includes production and distribution. We simply lack a vertical approach. I hope that British Film will tackle that problem. However, I point out to the Minister that there may be an imbalance in the provision of lottery funding in favour of production rather than distribution. Ultimately, of course, the market will determine the success or failure of a film, no matter what the Government or lottery distributor may want.

This is a wide subject and I have sought only to touch on issues that are now of concern to the industry. We make brilliant films such as "The Full Monty", "Chariots of Fire" and "Four Weddings and a Funeral", and we feel proud of their success. When our actors and actresses triumph, we share their delight, and we salute the quality of our technical expertise here and abroad. The right hon. Member for Coatbridge and Chryston has done a great deal to highlight the industry and to seek to put it on a more sustainable path, away from the rather roller-coaster ride that it has always had. However, the jury is out on the future of the industry.

I am grateful to you, Mr. Deputy Speaker, for allowing me to participate this morning, and I look forward to the Minister's response to the issues that have been raised.

12.21 pm

The Minister for Tourism, Film and Broadcasting (Janet Anderson): In the short time left, I shall try to deal with as many points as possible. First and foremost, I pay tribute to my right hon. Friend the Member for Coatbridge and Chryston (Mr. Clarke) for securing the debate and bringing to the House his knowledge, expertise and enthusiasm for the film industry, which it is extremely difficult, if not impossible, for any of us to match.

I pay tribute in particular to my right hon. Friend's achievement in bringing to a successful conclusion the film policy review, "A Bigger Picture", which now underpins Government film policy. His was the most thorough and imaginative review for many years. It was a partnership with the industry, and working with his co-chairman, Stewart Till of Polygram Filmed Entertainment, my right hon. Friend managed to secure broad agreement to a blueprint for the future development of the British film industry. I have the privilege of implementing that blueprint, and I thank him for giving me that opportunity.

I shall briefly refer to some of the contributions to the debate. My hon. Friend the Member for Keighley (Mrs. Cryer) mentioned all the connections that her

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constituency and the surrounding Pennines have with the film industry. She referred particularly to the spin-off in tourism. She will know--if I may refer to this, Mr. Deputy Speaker--that the tourism strategy that we produced on Friday specifically mentioned that relationship and the benefits to the local and the national economy.

The hon. Member for Brentwood and Ongar (Mr. Pickles) referred to his family connection with "Yanks". There cannot be any hon. Member who does not have such a connection. I thank him for his contribution. He referred to the curse of Cannes, and I assure him that I am well aware of it.

The right hon. Member for Caithness, Sutherland and Easter Ross (Mr. Maclennan) referred to the way in which we competing with other countries in attracting film makers. He is right--New Zealand, Australia, Ireland and the Isle of Man are all passionate about that. We must match their enthusiasm and I hope that we can.

My hon. Friend the Member for Brighton, Pavilion (Mr. Lepper) referred to the recent 50th anniversary celebrations of "Brighton Rock", which starred our noble Friend Lord Attenborough, and Brighton's links with the industry. He referred particularly to the role of the regional commissions, and I take this opportunity to pay tribute to their excellent work in facilitating film making in their areas. Following the departmental spending review, we are closely examining the relationship that they will have with regional development agencies and other regional structures because, as he rightly said, that is very important.

I shall do my best to answer the questions of the hon. Member for West Suffolk (Mr. Spring). He referred to the structure of British Film, although I am not sure that the organisation will be called that because we have not yet made a final decision on that. He asked what roles the various bodies would play. We are concerned to make sure that the new body brings together the cultural and industrial sections of British film and we shall, I hope, make an announcement very soon. I take this opportunity to pay tribute to Lord Attenborough's contribution to that process, for which we are grateful.

I shall try to deal with most of the hon. Gentleman's questions, but if I do not, I will write to him. On the working time directive, I understand from colleagues and friends in the industry that they are relaxed about the directive and do not expect it to present them with huge problems, but of course we shall keep an eye on that.

My right hon. Friend the Member for Coatbridge and Chryston set out clearly the objectives of "A Bigger Picture", and I reassure him that we have made substantial progress on many of its proposals.

Many hon. Members have referred to a continuing dialogue with the Treasury. I assure them that that dialogue is continuing, and a fax will be winging its way to the Treasury this afternoon to emphasise the importance of the current tax concession. We want to examine how that is working, and if I have time, I will deal with that. Various hon. Members mentioned that there was no evidence that British film had benefited from the concession, but I can tell the hon. Member for Brentwood and Ongar that I have lists, provided by Ernst and Young, of films that are being produced or are about to be produced which have benefited from it. Ernst and

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Young told me the other day that it has a number of investors who are investing in British film precisely because of the concession.

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