Cinematograph Films Levy

Part of the debate – in the House of Commons at 12:00 am on 15th July 1971.

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Photo of Hon. Nicholas Ridley Hon. Nicholas Ridley , Cirencester and Tewkesbury 12:00 am, 15th July 1971

By leave of the House, the right hon. Member for Barnsley (Mr. Mason) rightly considered that the yardstick for this change should be whether it is good for the industry. What is good for the industry is what is good for the industry's customers, the cinemagoers, and the ultimate test of whether a policy of protection for the British film production industry is correctly ordered is whether it can secure maximum audiences and thus maximum size and maximum employment against its many dominant competitors, such as television and other forms of entertainment.

In considering whether the exemption limit should be raised, therefore, the first consideration is whether leaving the exemption limits at the present £400 level will cause some cinemas to close, which will be bad not only for the industry, but, equally important, for the cinema-goers. It will, of course, result in a loss of revenue to the industry.

It was for these reasons that the C.F.C. thought that an increase in the exemption limit of the levy would benefit the industry as a whole. This was a unanimous decision by the Council, although it disputed other suggestions and has not passed them on to me. Therefore, if the whole industry is in favour of the change, it is likely to be right.

The right hon. Gentleman asked me what was the rate of closure of cinemas and whether it would be changed by the Order. I confirm his figure, that cinemas have been closing at the rate of about 100 a year. We expect that the Order will mean that fewer cinemas will close in future than would otherwise have been the case. But it would be rash, indeed almost impossible, to forecast numbers, because this depends on the quality of films and the habits of cinemagoers. Indeed, I have never seen a figure that I could suggest to the House.

It is also hard to say how many cinemas the Order will free from paying the levy. This also depends on how many people go to the marginal cinemas in small towns, and that is impossible to estimate. But the effect on the levy is estimated to be small.

In 1964–65 the yield of the levy was about £4·6 million. Following the changes to which the right hon. Gentleman referred, it fell to about £4 million in 1968–69. It has been growing since then, and if no change is made during the current year, we expect it will yield about £4½ million. That is getting near the statutory ceiling of £5 million, and it is likely that this change in the levy will reduce it by—to quote one estimate I have heard—about £76,000, which is tiny compared to the yield. Therefore, I think it will have hardly any effect upon the amount of money which is available to come back to the producers, because the levy is growing not much more slowly than the reduction which the Order will cause.

We have no plans for altering the distribution pattern. It will always be this Government's intention to consult the C.F.C. on matters to do with the levy. We have had the annual consideration of this for this year and I would expect that we would wait for another year before we considered any changes. But, of course, it is possible that circumstances will change rapidly, and I would not preclude the possibility of looking at it again in a year if circumstances are different.

Both the right hon. Gentleman and the hon. Member for Putney (Mr. Hugh Jenkins) favoured the idea of trying to use the levy to keep this country's film industry as large as possible. If the levy is too high on cinema seats, on which it is paid, it will have the effect of frightening off the audience, who might find some cheaper form of entertainment, and that could positively damage the interests of the industry as a whole. So we have to find the right balance between the reasonably priced seat and the need to collect some levy to recycle into the industry.

Both the right hon. Gentleman and the hon. Gentleman seem to think that there is some crisis of confidence in the industry. I do not believe that this is so. If it is, then I do not believe that it is justified. There has indeed been a slight increase in the number of films produced in this country, and prospects are by no means as black as they have at times been in the past. It is always difficult to gauge in an industry which is declining year after year due to losing business to other forms of entertainment, but I see nothing in the present situation which would justify the pessimism and gloom which came from the other side of the House.

Both the right hon. Gentleman and the hon. Gentleman seem to think that the remarkable opportunity which has been given to the National Film Finance Corporation to help the industry is in some way not in its favour. The Opposition are totally wrong about this. Surely, to have a sum, which we hope will reach a total of £4 million, available for financing films is a shot in the arm, not a stab in the back. It seems extraordinary that this should be misrepresented as something which will damage the industry. Indeed, if the total is raised, the N.F.F.C. will have more money than had it drawn the last remaining amount in the Bill which the right hon. Gentleman put through Parliament last year. I do not think that the Opposition's argument will stand up.

I think the whole House will be delighted if the consortium comes into existence and its money comes not from the taxpayer or from the State but from the private sector.