Directors’ cut: the end of UKFC

In abolishing the UK Film Council, Jeremy Hunt has shown himself to be ignorant of history. David Pu

On 15 June 1990, I was one of 20 senior representatives of the British film world invited to 10 Downing Street by Margaret Thatcher to discuss the parlous state of the industry and to find out what her government might be able to do about it. Sitting alongside the prime minister was Lew Wasserman, head of Universal Studios and a man who, over almost six decades, had deployed a mix of business acumen and political guile to establish himself as by far the most powerful man in Hollywood.

It was Ronald Reagan who had recommend­ed that Wasserman, who was once his agent, be invited. Reagan used to say, "Lew, if only you'd got me a longer-running TV series, I wouldn't have had to run for president!" For some years, Reagan, a fan of British movies, had tried to persuade Mrs Thatcher that this was an industry with a lot to offer.

The seminar generated a series of proposals that eventually resulted in the establishment of a new quango, the British Film Commission, along with a £5m European Co-Production Fund and a dedicated tax break. A few years later, at the urging of Richard Attenborough, the then prime minister, John Major, agreed to National Lottery funds being used to support film production.

In retrospect, that seminar in 1990 can be seen as the beginning of the British film industry's long march back from the wilderness. Ironically, it was Thatcher's government that had cast the industry into the wilderness in the first place, with a series of hasty decisions driven very largely by ideological prejudice.

One of the most striking, and to me distressing, things about the coalition government's recent decision to abolish the Film Council is that it appears to have been taken without any examination of the way support for British cinema evolved over many decades. For it was the Conservatives who first introduced government support for the industry with the Cinematograph Films Act of 1927, which created an advisory committee and introduced quotas on distributors and cinemas.

However, it was only after the Second World War that the concept of public subsidy for film, and the need for a dedicated, independent and expert body to administer and disburse such funding, were recognised. It was Harold Wilson, then president of the Board of Trade, who was the moving spirit behind the initiative to create an organisation that would give "improved access to finance to qualified independent producers during the difficult period of postwar transition".

In 1949, Wilson's efforts led to the Cinema­tograph Film Production (Special Loans) Act and with it the creation of the National Film Finance Corporation, which can in many respects be seen as a forerunner of the UK Film Council. Its mandate was to support people who

. . . while having reasonable expectations of being able to arrange for the production and distribution of cinematograph films on a commercially successful basis, are not, for the time being, in a position to obtain adequate financial facilities for the purpose on reasonable terms from an appropriate source.

The first chairman of the NFFC was Lord Reith, and the corporation was able to borrow money from the Board of Trade which was then loaned to producers. Alexander Korda's company British Lion was an early and significant client. At the time, the creation of the NFFC led to predictable gibes from opposition benches about "casting couches across Whitehall", but the body quickly proved its worth.

It was supposed to have a lifespan of just five years but, following the Conservatives' election victory in 1951, and despite a broad antipathy to state intervention, Winston Churchill (a great film fan) set about strengthening the NFFC and putting it on a secure long-term footing. In 1952, the Tories passed legislation enabling the corporation to borrow an extra £2m from sources beyond the Board of Trade, and in 1954 further legislation extended the NFFC's lifespan - as well as introducing a scheme enabling loans to be written off.

It was also the Conservatives, under Harold Macmillan, who were responsible for the next significant piece of film legislation, the impact of which would be felt for almost three decades. And once again, they chose to build upon the foundations laid by Harold Wilson. In 1949, a Treasury official named Wilfred Eady had proposed an ingenious voluntary scheme for reducing the impact of the entertainments tax on cinema owners, while also rewarding producers of successful British films. Eady proposed that a proportion of the ticket price should be set aside, with half retained by cinemas (in effect a rebate on the tax) and half divided among producers of British films in proportion to the UK box-office takings that their movies achieved.

The Cinematograph Films Act 1957 placed the Eady Levy on a statutory basis. It specified that one-twelfth of the price of a cinema ticket would be paid to the British Film Fund Agency, and that the payments would be allocated to support the NFFC and the Children's Film Foundation. Support was later added for the British Film Institute Production Board and the National Film School.

From 1957 to 1984, the landscape of film policy remained broadly stable, underpinned by a cross-party consensus. To be sure, the Eady Levy had its fair share of critics - not least the cinema owners who believed it helped to drag down admissions, when it was really the impact of television, along with their appalling lack of investment in the fabric of the cinemas themselves, which led to the downturn.

During that period, the NFFC was well managed, productive and relatively well funded. It was also responsible for launching the careers of many outstanding British cinematic talents, including Alan Parker and Ridley Scott, both of whom got an early boost from the NFFC. A film that I produced called Stardust (1974) made sufficient money to encourage the corporation to invest in the making of Bugsy Malone (1976), directed by Parker. As a direct consequence of the success of that film, Paramount in the US offered to put $1m into the next project I was hoping to produce. That was The Duellists (1977), Ridley Scott's first feature.

On the basis of Paramount's offer, I was once again able to secure the balance of the finance from the NFFC, resulting in what Scott recently referred to as "a personal landmark". So, the support from the NFFC, along with that he'd received as a student at West Hartlepool College of Art and subsequently at the Royal College of Art in London, provides a vivid demonstration of the way in which public subsidy can nourish outstanding creative talents, offering them space in which to demonstrate their ability and, in doing so, providing the catalyst for hundreds of millions of pounds of inward investment.

But despite, or possibly because of, the state- owned corporation's comparative success, in 1984, Thatcher's government published a white paper in which it proposed to do away with both the NFFC and the Eady Levy. At the same time, the government introduced legislation abolishing the capital allowances which, following a decision by the Inland Revenue in 1979, had been used as a form of tax relief by the film production sector.

This combination of measures was regarded as a disaster by large parts of the industry (with the notable exception of the UK cinema owners). Even the Conservative minister Kenneth Baker confided to me at the time that he had severe doubts about the wisdom of the proposals.

The abolition was fiercely opposed in a campaign led by the Association of Independent Producers, which described the substitute proposals as little more than "interim measures and vague hopes for the future". Ignoring the criticism, in 1986 the Tory government created British Screen Finance, a private company to support British film-makers, with shareholders including Channel 4 and the Rank Organisation, topped up by an annual government grant of £1.5m. It quickly developed a decent track record of investment, helping to support such films as Stephen Frears's Prick Up Your Ears in 1987 and Mike Leigh's High Hopes in 1988. But its budget was far too small to enable it to make a meaningful difference to the overall levels of production. As a result, investment in British films declined from roughly £275m in 1984 to £137m by the end of 1990.

These were barren years for British film production. However, a meeting between a thoroughly enlightened arts minister, Richard Luce, and Richard Attenborough led to the idea for that Downing Street seminar. And together with John Major's subsequent decision to allow Lottery money to be used for film production, the meeting helped to put the industry on the road to recovery.

Consequently, when Labour assumed power in May 1997, the landscape for British cinema looked very different from the way it had been in 1990, before the Downing Street seminar. But film policy continued to lack any real strategic coherence. To remedy this, the incoming secretary of state, Chris Smith, set up a "film policy review" chaired by Stewart Till, then president of Polygram Filmed Entertainment. Among its many recommendations was the proposal to create a unifying body with strategic responsibility for film, which in turn led to the creation, in 2000, of the UK Film Council. (The idea for a "British Film Auth­ority" had in fact been proposed as early as 1976, by a working party created by none other than Harold Wilson, but it had never been taken further.)

Tragically, instead of building on everything that has been learned, the present government has set about destroying the UK Film Council - to little purpose and with even less of a plan. In doing so, the Culture Secretary, Jeremy Hunt, would appear to have acted without any sense of the role that his party, and Margaret Thatcher and John Major in particular, played in breathing new life into an industry that, in 1990, had still to recover from the blow dealt to it by the abolition of the Eady Levy and the withdrawal of tax allowances.

At some point, long after Hunt and his team have left the Department for Culture, Olym­pics, Media and Sport, the work of rebuilding a coherent film policy, organised and controlled by a single body, will have to start all over again. It would be extremely helpful, therefore, if the Secretary of State were prepared to debate with me and others in a public forum, so that we might better understand why he and his coalition partners, in making their decision to demolish the UK Film Council, failed to take account of any of the lessons of recent history.

David Puttnam is a former film producer and a Labour peer