Third Standing Committee on Delegated Legislation
Tuesday 1 February 2000
[Mr. Mike Hancock in the Chair]
Draft Films (Modification of the
Definition of "British Film") Order 2000
The Minister for Tourism, Film and Broadcasting (Janet Anderson): I beg to move,
That the Committee has considered the draft films (Modification of the Definition of "British Film") Order 2000
The order's purpose is to supplement the amendment to schedule 1 to the British Films Act 1985 that came into force in August last year. That schedule sets out the criteria that a film must meet in order to be certified as British, and therefore eligible for film-specific tax incentives. Compliance with the criteria is also a basic requirement for access to Government production funding.
The new rules that we introduced in August have been welcomed because they are simpler and more transparent. The amendment, endorsed by the main industry bodies, also simplifies the criteria, making them more rational. Living expenses will no longer have to be included in the calculation of labour costs, one of the main schedule 1 criteria.
There is a good reason for that. If a foreign star or producer who is working on a film stays at a London hotel, or rents an expensive house in, say, Hampstead, that should count in the film's favour, not against it, because the money is being spent in the United Kingdom. The problem is that living expenses of staff brought in from abroad for a production could cause a film to fail the current labour cost test, even though the living expenses were being spent in the UK and contributing to our economy.
Without the change, some film productions might fail to qualify as British, even if most of their budgets were spent in the UK and most production staff were British, which were the key new requirements of the definition under last year's revision. The change will make the definition more rational, and it should make filming in the UK even more attractive by excluding accommodation and living expenses from the calculation of labour costs.
Mr. Richard Spring (West Suffolk): I thank the Minister for detailing the provisions before us. As so often happens on these occasions, we are in total agreement. We were happy to support the redefinition of the British film. The proposed change is that living expenses considered reasonable by the Secretary of State should be excluded from the definition of labour costs, and that is important when 70 per cent. of a film's labour costs are relevant to that definition. When the original change was made to the definition of British film, the Government consulted widely, and we welcome that.
Without the change, there could be distortions when costly individuals come to the UK, a situation that could damage the new definition. The Minister is right to say that some individuals, despite their cost, add to the film industry in different ways. The definition appears to be more rational.
I would, however, like some clarification of "living expenses". The Secretary of State is given some discretion by the draft order over how living expenses will be defined. Will the definition include merely food and shelter, or will it be broader? Will it include travel expenses? How can one calculate reasonable living expenses? How will expenses be assessed in practice? What guidelines will the Secretary of State provide? If the Minister cannot outline her thinking on those questions, perhaps she would write to me. That said, we are happy to support the order.
Mr. Ronnie Fearn (Southport): I am interested in the word "definition". Labour costs have been defined previously, but I seek some clarification of the definition. The order refers to "a person" who incurs costs. If a person—perhaps a supporting actor or actress—from Northern Ireland, Scotland and Wales had to stay for two or four weeks in London, would he or she be covered by the order? Many actors and actresses work under contract, even if they are working casually. How would the order affect them? Would something have to be written into their contracts, or would their position be covered?
Janet Anderson: I thank the hon. members for West Suffolk (Mr. Spring) and for Southport (Mr. Fearn) for their support. I shall write to both of them with exact details of the Secretary of State's guidelines and on other matters. Food and accommodation are covered by the definition, and travel is included if it is paid as a per diem allowance. Some clarification is obviously needed, however. Broadly speaking, we are trying to draw up a definition that means that money should be allowed for when it is spent in the UK, benefiting our economy.
The hon. Member for Southport asked about people from Scotland, Northern Ireland and Wales. They would not count as foreign because they are of course, British.
Question put and agreed to.
That the Committee has considered the draft Films (Modification of the Definition of "British Film") Order 2000.
Committee rose at twenty-three minutes to Five o'clock.
The following Members attended the Committee:
Hancock, Mr. Mike (Chairman)
Smith, Miss Geraldine
Taylor, Mr. Ian