This is one of those rare but happy occasions in the House when such is the degree of harmony that we are all agreed on congratulating the Under-Secretary on bringing forward the Bill and we are agreed on its general purposes. In common with other hon. Members, naturally I welcome the Bill. I agree very much with most of the points that have been made, particularly that by my hon. Friend the Member for Reading, North (Mr. Durant) that television must stand its corner and contribute far more handsomely than it does now to such things as the National Film School.
The Under-Secretary rightly pinpointed the real cause of the present crisis in the film industry, namely, the withdrawal of American finance. The hon. Gentleman was right to do so, because for the last 10 years or more, 90 per cent. of the finance for British films has been coming from American sources. It is a valid point, and I hope not too contentious, to point out to the Under-Secretary that if only there had been a little more co-ordination between some of the Government Departments and his right hon. and hon. Friends, at least part of the crisis relating to American-source money for British films might have been avoided.
Just over a year ago every Member of the House received a letter from Mr. Alan Sapper, the General Secretary of ACCT. This source, which could hardly be described as a high Tory one, pointed out that the feature film industry in Britain would face extinction unless something was done about the 1974 Budget provisions, which caused United States citizens resident in Britain to pay up to 83 per cent. tax rates on three-quarters of their United Kingdom earnings. This affected an absolutely tiny number of people. It was a foreign jealousy tax. It was very regrettable that Mr. Sapper's wise words of advice were not heeded.
The 1974 Budget provisions had the effect of sending an infinitesimally small number of talented and creative American producers, directors and others working in the film industry back to their own country, where they were faced with much more modest rates of tax. America has a total tax rate of only 50 per cent. I suggest that the Under-Secretary makes this point when he has discussions with his right hon. and hon. Friends about the future of the film industry in Budgets to come.
The Under-Secretary spoke about a lack of good projects. This was a slight case of putting the horse firmly behind the cart. The lack of good projects is due to the fact that there is a complete lack of confidence in the industry, not to the fact that there is a lack of creative inventiveness latent in the film industry. The financial crisis is caused by the factors I have mentioned and by the fame drain of many top creative artists going to live overseas, and this is stopping many projects from coming forward.
We should seriously start to consider whether Britain should not follow the Irish example of creating a special tax category for creative artists, directors and writers. The Labour Party hates anything which might tend to create a new élite. Those who care deeply about this subject regard the Irish example as worthy of examination, because the Irish have benefited considerably from the arrangement.
We are talking fundamentally about a search for new financing methods. The Government would do well to consider Middle East money as a new source of finance. I know the Under-Secretary and his colleagues are to have talks with Saudi Ministers in the next few days. I hope they will try to get Arab money for the British film industry.
This is not a high-flown idea. There is one feature production—"Cinderella"—being made with the help of Arab money now. I declare an interest as director of a company that is trying, so far not too successfully, to raise Arab money for the British film industry. We have distinguished Arabs on the board and we believe that what we are trying to do will be a growing trend, but these trends have to be started mainly by inter-government discussions and agreements.
It is disappointing that we are having this debate in such an empty House and with not enough of a clarion call to Parliament to take an interest in this vital industry. If it goes down, we shall say goodbye to an industry of high exports and creative talent. I would regret that and I welcome the possible sign of hope that the working party, if it really gets working, may be able to instil confidence into this industry.