Mr.
Vaizey: Does it not concern the hon. Lady that the new
cultural test, which I emphasise was forced on the Government,
effectively dictates the content of the British film? The previous test
simply attracted money if the film was made in Britain, including by
small, independent
producers.
Glenda
Jackson: With respect, that is absolute nonsense. People
were attracted to making films in this country by a very good financial
deal; that was one of the major factors. Another was that we have a
vast, deep ocean of technical film skills, in every aspect of film
making. We have markedly failed to support a system that ensures that
the technicians work regularly and that there is a core of people to
teach those who come after them. If we cannot do that, we will not be
able to keep up in the rush.
The idea of the cultural content
of a film is absurd. My idea of culture would not be the hon.
Gentleman’s idea of culture; my idea of entertainment probably
would not be the same as his. As he was positing the idea of a British
version of “The Sound of Music” and/or “Mary
Poppins”, I point out to him that it would not be anyone in this
country who took that proposition to the courts: it would be the owners
of those film rights, whom I can assure him are exclusively American.
It would be difficult for anyone, anywhere in the world, to obtain
permission to make another version of “The Sound of
Music” or “Mary Poppins”.
I go back to my
original point: the order could bring benefits by ensuring that what we
genuinely need in the British film industry can be helped
along—if not in total, then at least in the form of
encouragement—and not produce the big down-turn that certain
hon. Members have attempted to make
it. 5.35
pm
Tony
Baldry: I do not have any particular quarrel with what the
hon. Lady says. It is always heartening to hear Labour Members say that
the only thing that now matters is the money, not the culture. That
shows how far new Labour has travelled in its time in office.
I draw attention to my entries
in the Register of Members’ Interests, as a member of the Bar
and as a partner in the Diamond Film Partnership. I want to make only
two points. First, I was stunned by the Minister, although it is an
uncharacteristically bad-tempered, portentous and middle-aged point. I
am getting pretty fed up with Ministers seeking to suggest that the
Conservative party is a group of Eurosceptic old bores.
I have to explain—I am
sure, Mr. Conway, that you can bear testament to
this—that I and others were promoting Britain’s entry
into and membership of the European Union when the Minister was in
short trousers. I can recall that when I was on the barricades
promoting Britain’s entry into Europe with Margaret Thatcher,
alongside me were such people as Shirley Williams and others who were
leaving the Labour party because they could not put up with its
anti-market little England attitude any longer. I am therefore not
going to take any lectures from the Minister about our attitude to
Europe. Of course, having at different times been fortunate enough to
be a member of the Council of Ministers, I appreciate the difficulties
in reconciling UK policy with the single market. However, if the
Minister had come to the House and said, “Look guys, we have got
to somehow get round the Commission and make sure that this way of
giving money to the UK does not fall foul of state aid
provisions”, we would have had a lot more respect. He cannot
pretend that we are all getting excited because he has been having
negotiations in Europe; frankly, that is
infantile. Secondly,
the Minister did not answer my question about Bollywood. I do not think
that it is a fanciful point, for this reason. Almost all of us in the
Committee at this time grew up in a post-war consensus trying to build
a multicultural Britain. There seems to be some debate about whether we
still have a multicultural Britain, but we grew up in a world in which
we were trying to have mutual respect for different groups within our
society. All of us in our different ways have tried quite hard to do
that.
However, I cannot think of any
other instance in UK law that has a test of Britishness and what is
British culture. I gently say to the Minister that if the Department
does not get that right, I can see that the order could be a boon for
some of the leader writers—quote, sic, unquote—in The
Daily Mail and The Sun about what does or does not qualify
as being British. Under the old cultural test, if a UK citizen was a
non-resident Indian in Southall, Ealing or wherever, making a Bollywood
film here, it would almost certainly have qualified because of the hub,
the location and the UK nationality of the producers and participants.
I am not sure whether, under the new test, that will be the
case. Might I make a
gentle suggestion to the Minister? His officials should invest a little
money now with counsel and sit down to think of all the worst-case
scenarios that would give The Sun and The Daily Mail a
field day as to what is, and what is not, British culture. They should
ensure in the guidance that the Department issues that the diaspora of
the migrant community and UK nationals from other parts of the world
can tell stories about their experiences there. They are now part of
the UK, and they must be covered by the guidance. Otherwise, the
Government might well rue using the words “British Film”
in the title of the order. With a little care, as the hon. Member for
Hampstead and Highgate said, they can ensure that such people get the
money without falling into open
traps.
Mr.
Vaizey: My hon. Friend makes a valid point. To a certain
extent, the situation is worse than he imagines. The test is about not
only whether a film is British culture but the degree to which it is.
For example, the current draft guidance sets out that one point will be
awarded if a film includes significant British culture and two points
if it is an outstanding representation of British culture. It is to be
about not just British culture but how outstanding it
is.
Tony
Baldry: The Minister yawns at that point, but it is
serious. After his conversion to his position, I recall him lecturing
those on our Benches about being more inclusive. I do not have any
quarrel with him on that, and many of us in the Committee have spent
the whole of our political lives trying to be inclusive. I say to
Labour Members that they might need to examine their constituency
correspondence and press the Minister on the point, perhaps in the
Division Lobby. It would be a great tragedy if an instrument that was
meant to attract money to the UK film industry—a motive that we
all applaud—were to end up generating divisiveness and mischief
making in certain quarters of our society in the attempt to define what
is or is not British culture at the start of the 21st
century. 5.42
pm
Mr.
Woodward: I welcome the contribution made by the hon.
Member for Bath, particularly his remarks on the figures that show just
how well the industry continues to do. We have every reason to believe
that it will continue to prosper in the future. I am sorry to say that
those comments were in marked contrast to the contribution made by the
hon. Member for Wantage. It was highly entertaining, but for the most
part it verged
on fantasy and was a highly misleading account of the state of the film
industry in both this country and the United States.
It is important when
considering such an industry that we do not turn to hyperbole. It is an
important industry, and film bosses around the world see huge merit in
coming to this country to make films. The tax relief scheme will not
put that in jeopardy. To suggest that it will, and that film companies
all over the world will turn their backs on the UK film industry as a
result, is simply wrong and highly misleading, and the hon. Gentleman
knows
it.
Mr.
Vaizey: I will pass on the Minister’s remarks to
Screen Finance, from which I quoted the opinion that the scheme
will be a disincentive. If my speech was one of fantasy, will the
Minister explain why his predecessor, who is now the Minister for
Pensions Reform, wasted Parliament’s time by passing the
original Films (Definition of “British Film”) Order 2006
in March, and why we are now considering this
order?
Mr.
Woodward: Again, it is important for the hon. Gentleman to
keep his feet on the ground. He suggested that when my predecessor
introduced the previous order, he had taken part in no consultation
with the Commission. If the hon. Gentleman reads through his remarks,
he will see that he suggested that the Department had not involved
itself in such consultation by March. The fact is that that process
began on 14 September 2005, when the Treasury and HMRC notified the
Commission of the UK’s new film tax
relief. On 7 December,
the DCMS notified the Commission of the final version of the cultural
test. On12 December, the Treasury and HMRC notified it of
variations to the tax relief following consultation. In February, there
was further consultation with the Commission on modelling, and there
were two further dialogues in March. I could go on, but if the hon.
Gentleman reads through his remarks with a little more care and measure
than he applied in addressing the Committee, he will see that he was
wrong. It is important that the Opposition are a little calmer about
the scheme. It is a good scheme for the UK film industry, and I welcome
the remarks from those hon. Members who, fortunately, have a little
more sense and recognise its
benefits. The hon.
Member for Bath raised the issue of guidance. He quite rightly made
some remarks about one or two drafting issues, which we shall, of
course, address. The new test and the underlying guidance, which
retains many of the features of previous versions, were developed in
consultation with the Treasury, HMRC and the Film Council and followed
not only conversations with the Commission, but the results of our
consultation last year. The guidelines should be open to change
precisely because they are guidelines. It would be extremely foolish if
guidelines were set in stone and were not capable of being
updated. Hon. Members
have asked about PACT. Our response is that we will always seek to keep
the relief competitive, but it is important to remember that we
want to encourage UK activity. What we do not want is for the scheme
wantonly to subsidise films being made substantially abroad, which was
part of the problem with the previous regime. The hon. Member for Bath asked
about “The Wind That Shakes the Barley”, which was, of
course, a co-production and, as such, would not have qualified.
However, it would have been quite possible for it to qualify under the
new scheme, but it would not have been made as a co-production. One of
the virtues of the new scheme, as opposed to the former schemes, is
that it ensures that the money that is either put up in the making of
the film or made subsequently in profits comes to this country and does
not disappear abroad. As my hon. Friend the Member for Hampstead and
Highgate has recognised, when films are being made the spend happens in
this country, and we do not want to sponsor that to happen abroad. We
want to see the industry thriving here, money being invested here and
all the benefits being felt in the UK. That is the basis for driving
the scheme forward.
The hon. Member for Bath asked
what would happen with the previous tax regime being brought to an end
and with there being no replacement in place. We are keeping some of
the provisions of the previous legislation open for a limited period,
particularly for films that would have had a problem in that respect,
to ensure that we can assist with those
productions. The
cultural test will not apply to official co-productions. Films that
meet the terms of the European convention on cinematographic
co-production or one of the UK’s bilateral treaties will be
certified as British films and will be able to access the new relief,
in line with the schedule 1 films.
My hon. Friend the Member for
Hampstead and Highgate made a number of absolutely crystal-clear
comments about the future of the industry in this country. I pay
tribute to her knowledge as both a practitioner and someone who
understands the people working in the industry. It is important that we
encourage young people into the industry, as my hon. Friend the Member
for Stoke-on-Trent, North rightly pointed out in her
intervention. It is
essential that we strike the right balance between ensuring that we
have a thriving film industry and having a tax relief scheme that
supports the industry here, rather than one that is simply used as a
vehicle for others to acquire a film and offset tax losses against
problems in other companies that have nothing whatever to do with the
film industry. The
hon. Member for Maldon and East Chelmsford, the Chairman of the
Culture, Media and Sport Committee, mentioned his list of blockbusters,
but it is important that the profits from those films have some benefit
here in the UK. Part of the problem with the previous system was, as he
knows, that it was wildly open to abuse. Before the Conservative
Front-Bench spokesman, the hon. Member for Wantage, gets too carried
away by that, I am, of course, not suggesting that everybody from
Hollywood was using the UK’s film tax relief schemes of the past
as a scam or dodge. However, he must recognise that it was wildly open
to abuse and that there were, indeed, many abuses.
It was essential, and not only
because of the sunset clauses, that we produced a scheme that benefited
the UK film industry. Yes; it may take a little time to bed the scheme
down, but there is certainty. As a result of my conversations with
studios here and abroad, I can reassure the Committee that the picture
that has been painted is nonsensical. However, if the industry has
genuine or legitimate concerns, my Department and I will be more than
happy to help it understand what we are trying to offer and how we are
trying to make things work.
The purpose of the scheme is to
ensure that we have a long-term and sustainable film industry, and I am
confident that we will attract the kind of money now being spent in the
Czech Republic, which, regrettably, is too often based on using cheap
labour. One of the virtues of all such countries being members of the
European Union is that that kind of exploitation will eventually come
to an end. When it does, the UK will have a sustainable film industry,
with skills and talents that can be used by companies around the
world.
Mr.
Whittingdale: Will the Minister accept that one reason why
internationally mobile film companies come here is because we probably
have the most expert and professional technicians anywhere in the
world? Our post-production expertise is probably second to none, as is
that of our cameramen and sound engineers. We have enormous expertise,
yet those factors have been downgraded in the test. They previously
counted for 13 points, but under the revised proposals they have been
reduced to only eight.
Mr.
Woodward: The hon. Gentleman makes a fair observation. We
believe that companies that want to come here will be able to use those
facilities, but it is important that they realise that we need to work
in partnership with other EU member states. We do not see that as a bad
choice; we see it as hugely beneficial. Indeed, being part of the
European Union is one reason why we have a successful film industry. We
value having a tradition and history upon which we can
build.
Mr.
Vaizey: The Minister did not answer my previous question
but, reading between the lines, he seems to be indicating that the
regulations represent a conscious policy change by his Department. Will
he confirm that that is the
case?
Mr.
Woodward: I am confirming that the changes are a
consequence of the dialogue that has taken place with the Commission.
The hon. Member for Banbury and I welcome that, although I am not sure
that we should spend too much time recollecting me in short trousers.
His enthusiasm for Europe is well known, more now than seven years ago,
among members of the Conservative party. The Conservative party was a
pretty lonely place, but I am sure that things have got a little better
and that there is now much more inclusion. I am sure that one or two
Damascene conversions have taken place, which will have widened the
appeal of the party, although the harking back in the press to the need
for Victorian values is a little worrying. However, I shall leave that
to one side, because it is a matter for another day.
By and large, I feel that there
is a tension within the Conservative party, which wants to welcome the
proposals for the film industry but feels that, because the Commission
is involved, they are a bad thing. They are not a bad thing—they
are a good thing. Working within the single market is good for Britain.
It will be a good day when, instead of thinking of it as an opportunity
to exploit the tensions within Europe, Conservative Front Benchers
recognise the value of the single market. The benefits that it brings,
whether for the film industry or elsewhere, are good for
Britain.
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