Irish Film Board Bill, 1979: Second Stage .

: The Chair understands it is proposed to debate the Irish Film Board Bill and the National Film Studios of Ireland Limited Bill together. The Minister will move the Second Stage of the first Bill and the two Bills will be debated together. When the debate is concluded the second Bill will then be moved.

: I move: "That the Bill be now read a Second Time."

Because this Bill and the National Film Studios of Ireland Limited Bill both relate to the development of the film industry in Ireland I propose, for the sake of convenience, to cover both Bills in my speech.

It may surprise many people to learn that, in Ireland, there is a long tradition of film-making going back to the early days of this art form. The films of Sydney Olcott and the Film Company of Ireland in the early part of the century are notable examples. In recent years interest in film-making here has centred on the shooting of many of the scenes for international feature films and the growth of Irish film-making in the documentary and short feature areas. These activities, however, have not resulted in the establishment of what might be regarded as an Irish film industry. Many recommendations, proposals and suggestions have been made over the years for the establishment and development of such an industry. For one reason or another none of these ideas has come to fruition. Notwithstanding our present economic difficulties, the Government at my suggestion, have agreed that the time is now opportune to provide the framework within which a film industry in Ireland might develop. Needless to say the Government themselves cannot create such an industry but hopefully can provide the necessary encouragement and incentives for those who can.

By the establishment of an Irish film industry I mean not only the making of films in Ireland, but also the development of Irish entrepreneurs who will take a leading part in organising the financing and production of films, of producers, directors, script-writers, cameramen, lighting technicians, editors, sound recordists, designers, make-up artists, craftsmen, technicians and the various people who together make up a film industry. Such an industry would produce not only short films but feature films for world distribution both for television and for cinema.

In considering the need for an Irish film industry, account should be taken not only of the factors applicable to industrial development in general, such as creating employment and attracting foreign exchange, but also a number of major reasons, mainly non-economic, for having films made in Ireland: development of artistic and technological skills; promotion of tourism; promoting cultural values and public relations, and providing a potent means of presenting this country, its heritage and its people to the world and of keeping Irish people in touch with their distinctive environment. It is, I think, relevant to point out that Ireland is one of the few European countries which lacks a specific scheme of inducements of one kind or another to encourage the development of film-making.

In 1968 the Film Industry Committee, under the chairmanship of Mr. John Huston—the well known film director—submitted a report to the then Minister for Industry and Commerce making recommendations for promoting the development of a native film industry in Ireland. The committee's main recommendations formed the basis of the principal provisions of the Film Industry Bill, 1970, which lapsed in early 1973.

The object of that Bill was to set up a board which was to have the function of furthering and encouraging the development of an Irish film industry. The board itself was not intended to engage in film production but was to have been empowered to make or guarantee loans for film-making subject, in certain cases, to prescribed financial limits. Following the acquisition of the Ardmore Film Studios by the Government in July 1973, it was decided that the format of the Bill would have to be changed to take account of the new situation. In any event certain sections of the 1970 Bill were contrary to the provisions of the Treaty of Rome.

The Government in July 1973 authorised the purchase of the land, premises and equipment of the former Ardmore Film Studios International (1972) Limited, Bray, County Wicklow which were being sold at public auction by the Receiver. These assets were purchased through Radio Telefís Éireann on behalf of the then Minister for Industry and Commerce for a total of approximately £450,000 (including fees). RTE took over the studios in September 1973 and acted as caretaker-managers on behalf of the Minister for Industry and Commerce pending the establishment of permanent structures to operate the studios.

I understand that the Government believed at that time that the establishment and maintenance of well-equipped film studios, operating on commercial lines, was an essential prerequisite for the development of a film industry in Ireland in that if the studios were to be closed permanently the emergence of an indigenous film industry producing feature films would become less likely.

On 4 June 1975 the Government approved a proposal by the then Minister for Industry and Commerce to establish a company, to be known as National Film Studios of Ireland Ltd., to take over and operate the studios. The business of NFSI is that of renting studios and other premises—offices, dressing rooms and so on—and equipment to film producers who are making films in Ireland. The company also make available sets, fittings and furnishings to theatrical producers. In both cases charges are designed to cover the costs of providing these facilities and to yield a profit. Similar facilities are provided on a commercial basis to advertising agents and firms making short commercial films for television or cinema. A major function of NFSI to date has been to persuade film makers, both foreign and Irish, to use their facilities.

Employment on a full-time basis in NFSI is being provided at present for about 60 people. Additional employment during periods of feature film activity has been provided by the company and directly by production companies filming in Ireland. Overall, however, the level of what could be termed significant film making projects attracted to the studios has been disappointing and has fallen far short of what would be necessary to make the operation of the studios viable and capable of ensuring a reasonable continuity of employment for Irish personnel involved in the industry.

One of the main reasons why NFSI are unable to keep the studios operating at full capacity is the company's inability to offer any financial incentives to film makers. This places the studios at a marked disadvantage as almost all the other member states of the European Communities and a number of important third countries offer varied incentives and inducements in respect of film making. For example, in the United Kingdom the Eady levy, based on a tax on box office receipts, is designed to attract foreign investment, since the opportunity of obtaining an additional bonus from the levy makes it financially more attractive to produce a film in Britain. In the Federal Republic of Germany and in Denmark, national film institutes provide financial assistance to producers, exhibitors, scriptwriters and assistance in film promotion and distribution. In Canada, the Canadian Film Development Corporation provide financial investments for feature films, loans to producers and training grants.

Excluding the expenses incurred in the purchase of the studios, direct Exchequer grants totalling £1.3 million have been made available to NFSI up to the end of 1979 to cover principally the company's administrative expenses during periods of inactivity. In addition, NFSI have, with ministerial approval, obtained a bank overdraft of £850,000 which has been used mainly for capital development. A significant level of capital expenditure had to be undertaken in order to bring the studios up to the highest international standards in the absence of which there would have been even greater difficulties in the procurement of business. While the company have had some success in attracting film business since they commenced operations, overall the company's experience illustrates their inability to generate a satisfactory level of business without the availability of some form of financing incentives. This is a point that NFSI made forcefully shortly after they were set up. Again early in 1977 in a proposal to the then Minister for Industry and Commerce, NFSI suggested that the proposed film industry legislation should provide for the establishment of a film financing and distribution company that would be a subsidiary of NFSI.

On taking up office in July 1977 and following a re-appraisal of the overall position of film making in Ireland, including NFSI's failure to generate sufficient business to make their operations viable, I decided to seek independent advice on systems of finance for film making and on possible methods of making the studios viable. I engaged Messrs. A.D. Little Ltd. of London, international consultants, to undertake this task and they reported to me in May 1978. In addition to the consultancy advice, officials of my Department—and indeed I myself —had numerous meetings during 1978, 1979 and 1980 with groups and individuals involved in the film industry here. These groups included the board and management of NFSI, representatives of the trade unions and the Irish Film and Television Guild, the Association of Independent Producers Ireland, the Arts Council, RTE and a number of independent Irish film makers. These meetings were normally held at the specific request of those involved. The views of all these groups and individuals were considered in formulating my legislative proposals in consultation with my colleagues in Government.

I have adopted a pragmatic approach to the legislation and to the level of financing involved and have tried to take account of the needs of all interests involved, the NFSI, the independent Irish film makers and the technicians and artists. It is easy to be critical of such proposals depending on where one's own interests lie but I think the time is now opportune for all the people who wish to be involved in the film industry here to work together in order to make the legislation a success. This is a unique opportunity and, because of the many calls on the Exchequer, is likely to be the only chance the industry is given. I am sure there is a substantial body of opinion in this country who will feel that the money involved in these proposals could be put to much better use in the national interest. It will be up to those involved in the film industry to prove them wrong.

I shall now deal with the Irish Film Board Bill and then with the National Film Studios of Ireland Limited Bill.

The provisions of the Irish Film Board Bill are set out in the Explanatory Memorandum which has already been circulated to Deputies. The Bill provides for the establishment of a board which shall have overall responsibility for the promotion and development of film making in Ireland and for the operation of financial aid schemes designed to further these ends. The board will have considerable flexibility in their operations and in relation to the administration of the fund of £4.1 million. This is a departure from the terms of the 1970 Bill which had the disadvantage of being too rigid and not allowing the board wide enough powers. Subject to such terms and conditions as they think fit, the board may invest in or make a loan, a guarantee or a grant towards the cost of the making of a film in the State. In addition, the board may provide grants for training and provide moneys for general activities in keeping with their general functions. I expect that the main preoccupation of the board will be to get films made here and that the bulk of the finance available to them will go in this way. I will be looking to the board to adopt a businesslike approach to prospective projects and will expect that the potential viability of each project will be a major consideration for assistance being given.

Some of the projects will be international feature or television films with good employment and training potential for Irish actors and technicians, while others will be projects by Irish film makers a number of whom have shown themselves in recent years to be capable of producing works of high technical and artistic merit. I should stress, however, that the board will not be in the business of giving gratuitous handouts as this would not be of long-term benefit in an area which, the Government intend, will eventually have to be able to stand on its own feet without State support.

I do not intend at this stage to indicate who might be on the film board. Obviously, particularly dedicated individuals will be required, a number of whom should be able to carry out an objective and critical assessment of both the commercial viability and artistic value of individual projects and be able to read and evaluate scripts. It is my intention that the board would appoint a very small permanent staff, and would have available to it, in whatever may be the most appropriate capacity, persons with expert knowledge and experience of the many facets of film making and distribution.

At this stage, I should say that I have been somewhat disappointed with the response to the publication of the Film Bills. Since the Bills were presented to the House on 26 November 1979, I have received little in the way of concrete reaction, suggestions, proposed amendments and so on, apart from a joint submission from the Association of Independent Producers Ireland, the Irish Film and Television Guild and the Irish Transport and General Workers' Union. Perhaps on the other hand, I should interpret this as indicating general satisfaction with my proposals.

I would like to deal now with the main points which have been raised in relation to the Irish Film Board Bill: first, that the general functions of the board should be extended specifically to include such areas as film distribution and the establishment of a National Film Archive.

I am, of course, aware of the importance of distribution in the context of film making and I will deal with this in greater detail later. Naturally, the board will have to devote considerable time and energy in considering this whole area. However, I do not think that it is appropriate specifically to spell this out under the proposed functions of the board as it would be rather unfair to commit the board to becoming involved on a statutory basis in this area in advance of giving them an opportunity to consider the matter in more detail. But, perhaps more important, there might be a temptation for some film makers to subrogate entire responsibility for distribution to the board and to blame them for the possible subsequent commercial failure of the films concerned.

Again while I recognise that the establishment of a film archive had merit and that this is another matter which the board will have to consider, I feel nevertheless that there should be no statutory obligation on the board to get involved in this area at the very start. The establishment of an archive could be fairly expensive and could present certain technical/administrative difficulties and therefore I feel that it would be more prudent to await an in-depth study of this whole question. In my opinion, the main preoccupation of the film board should be to get films made and if they become too deeply involved at an early stage in ancillary matters, it could have a detrimental impact on their operations.

A fundamental criticism that is contained in the joint submission from the AIPI/Irish Film and Television Guild/ ITGWU is that the Film Board Bill does not give expression to what I might refer to as an "Irish dimension" and linked to this is their view that not less than 80 per cent of the fund should be used to assist in the making of films by independent producers whose normal operation and residence is in Ireland. I should say at this stage that the proposed film legislation has been very carefully drafted in order to avoid possible objections from the Commission of the European Communities on the grounds of discrimination against other member states. As I said earlier, the 1970 Bill had been discriminatory in certain respects as it included restrictions on grounds of nationality. In fact, my Department have successfully secured the Commission's approval of the texts of the two Bills, although the Commission has requested full details of the proposed method of operation of the board and the criteria for the provision of assistance as soon as the board is formally established. To introduce a number of amendments as suggested, no matter how carefully drafted, would inevitably create difficulties and could unduly delay the passage of the legislation.

I am not prepared to specify how the fund of £4.1 million over four years might be split between films predominantly using the facilities of the studios and film making activities by independent Irish producers. Indeed, it would be dangerous to make such distinctions as the fund is experimental in nature and only experience will show how it may be effectively operated. However, I think it is important to make two points in this regard: firstly, it seems clear to me that, at least in the short-term, the National Film Studios will require a limited number of international feature films to provide sufficient work for the studios; and, secondly, that notwithstanding their worth-while efforts in recent years, the ability of the majority of independent Irish producers to properly put together, manage and control commercial films with substantially increased budgets is, as yet, unproven.

I see no objection to an amendment on the lines that have been suggested to section 8(1).

In relation to section 31 of the Film Board Bill, which has been the subject of some public comment, I have already said that the provisions in the Irish Film Board Bill are very broad and give the board very wide discretionary powers in relation to its general functions and the administration of the film financing fund. Indeed, this is deliberate in order to enable the board to operate in an effective and flexible manner. I envisage that the provision enabling me to give directives to the board would only be used very infrequently and in relation to important policy issues. I can confirm to the House that there is absolutely no intention that I would interfere in the day-to-day operations of the board or in the selection or rejection of individual film projects for assistance by the board. Furthermore, I feel that the members of the Film Board would welcome guidelines from the Minister on the general policy which might be adopted.

It must not also be forgotten that the Minister of the day has an obligation to the Oireachtas to ensure that the film financing fund is spent in the best possible interests of the development of the film industry and that, given the very broad provisions in the Bill, the Minister should have the power to rectify any obvious areas where the board might be departing from a prudent overall policy.

I believe that there has also been expression of disappointment in some quarters about the level of the fund, that is, roughly a million pounds a year over four years. We are a small country and the calls on the Exchequer are many and varied. Although the fund may be regarded as low in absolute terms and in relation to film production budgets, it is relevant to point out that in the UK, with a population nineteen times our own, the National Film Finance Corporation has operated reasonably effectively since 1949 on a very small revolving fund. As I said earlier, given the present difficult economic climate and the low priority which the film industry could be regarded as having, the available finance is well up to what can be expected.

Of course, the fund, in addition to encouraging native film making, is also designed to attract international Film and TV projects, either to be made at NFSI or on location in Ireland. A consistent level of international projects would, hopefully, result in a regular flow of business for the studios which should reduce the existing burden on the Exchequer of keeping NFSI in funds. But perhaps more importantly such large-scale projects could provide regular and valuable employment for many people in Ireland, not only for actors and actresses in major or supporting roles, but for extras, technicians, carpenters, electricians, plasterers etc. involved in film making. Such projects also have valuable spin-off benefits in the general servicing area—for example, hotels, restaurants and so on— and in the promotion of tourism. They can also be important in training Irish personnel in the basic film techniques. In the light of these benefits I am very often surprised at the apparent criticism against international projects as if they were almost a discouragement to the Irish film makers. Surely two or three of this type of project a year, if carefully selected in order to ensure viability, are to be welcomed and could flourish in conjunction with the activities of Irish film makers.

While the obvious ultimate goal would be for Irish directors, producers, script writers and so on of international calibre to emerge, I think it is unrealistic to expect that this can be accomplished overnight. In any event certain international features will continue to be made in Ireland either because of our natural advantages—for example, unspoilt countryside, splendid scenery, and so on—or because of a particular Irish theme, but special financial incentives will be required in other cases.

As I have said earlier, the board and the film finance fund are also designed to further native film making talent. I accept that it is only if this section of the industry blossoms that we can have a truly Irish film industry making films that reflect the Irish way of life and with Irish themes.

We have seen the emergence of a number of Irish film makers in recent years without direct State support and these people are to be congratulated on their efforts. I know that most of these low budget films would not have been possible, however, without the indirect support of the State through RTE, the Arts Council and other State bodies who have encouraged those involved. I would encourage these bodies, and indeed the major Irish companies and banks in the private sector, to consider supporting by sponsorship native Irish film makers in the years to come. As a result of the efforts of these few film makers, some commentators have suggested that an Irish film industry would develop without direct State support. But, I for one am aware that a number of Irish film makers have put a great deal of personal savings and have gone into debt to have these films completed. I am hopeful, therefore, that, once established, the Irish Film Board would look into this whole area and actively encourage those involved. However, a cautious approach is needed. There are limited funds and to expect overnight miracles is foolhardy.

I mentioned before the very important issue of film distribution and this was highlighted in the consultants' report to which I referred earlier. For those involved in the industry, distribution is seen as the key to survival. For no matter how good a film is, if it is not shown it can never hope to bring a return to the film maker. Distribution is, of course, mainly controlled by the film majors who naturally give preference to their own product as part of their integrated operations. The Film Board will have to devote a lot of time and energy to this question. From the point of view of assessing individual projects, either international or native, a project for which there are already guaranteed distribution arrangements would have a better chance of receiving assistance from the board than one for which no arrangements had been made. In the case of Irish film makers, who would be more likely to have distribution problems because of inexperience and lack of international standing, the board would try to assist in this area perhaps by setting up a distribution office or making the necessary contacts at home or abroad. In addition, I understand that NFSI and RTE have acquired experience in this field and might also be able to provide assistance. Notwithstanding these remarks, I feel I must stress a most important point: that there is no easy solution to the distribution problem and those in the industry should not assume that the Film Board will prove a panacea for all their ills.

In the final analysis it is essentially up to the film maker to go as far as he can in relation to negotiating a distribution deal for his own project. Film makers cannot expect the board to provide assistance for the making of a film which will simply be deposited on the board's doorstep for distribution and for which the film maker can blame the board for its possible failure. I feel that another area which needs attention is the distribution opportunities within Ireland for Irish films and I would appeal to Irish distribution companies to be helpful here.

I would now like to turn to the National Film Studios of Ireland Limited Bill. This is a fairly standard piece of legislation and, as set out in the Explanatory Memorandum which has already been circulated, it is designed to give appropriate statutory backing to NFSI and regularise its position. As I mentioned earlier, the company was set up in 1975 in advance of enabling legislation with a nominal share capital of £1 million which has not been issued to date. This has meant that NFSI has had to borrow the bulk of the funds needed for capital development and the consequential financing charges have been a particularly heavy burden on the company. This burden, together with the inability of the company to attract a regular flow of film making business, has meant that the studios have been a burden on the Exchequer over the past few years. Deputies will be aware of the criticism made in this regard by the Public Accounts Committee recently.

Hopefully the two Bills, when enacted, will improve the situation considerably by eventually regularising the capital structure of the company and providing incentives for film makers more fully to utilise the excellent facilities at the studios.

I believe that to get NFSI working on a fully profitable basis the studios must for a few years at least, depend heavily on work from international film producers, who will make films here because they can get the kind of facilities they want and are prepared to pay for these facilities on the normal commercial scale. A steady flow of work from such film makers will provide an income for the studios which should, hopefully, put the company in a profitable position. It should also, and this is no less important, provide invaluable experience and training for Irish people working in the industry.

Although NFSI have been severely criticised in the past, I feel I must pay tribute to the members of the board, and in particular the chairman, Mr. John Boorman, for their efforts over the past few difficult years. Mr. Boorman has served the Irish film industry very well and through his personal efforts has influenced the making of a number of films here, some of them by himself. In fact, a feature film with a budget of over $10 million was completed a few months ago at NFSI. This film—"Knights"—was written, produced and directed by John Boorman and provided employment for a large number of Irish workers in the film industry for most of the first half of this year.

Most of the post-production work was also carried out at the studios and it is of great significance that this film provided opportunities for young Irish trainees in all departments of the production. Mr. Boorman's international reputation and position has contributed in no small measure to any success that has been accomplished to date by the studios and this country owes him a considerable debt. I only hope that, despite his many commitments in the future, he will continue to play a vital role at this important period in the development of the industry.

While developments in the last decade in the film industry seemed to be showing a trend away from studios and concentrating more on location work, the situation seems to be turning in recent years with the trend for films with a higher studio content. In fact, I believe that most studios around the world are quite busy at present because of the present buoyant situation in the film industry. However, it is my personal opinion that the film industry is one that, because of its artistic and technical nature, is not particularly suited to the State sector. The national film studios, nevertheless, do constitute a valuable major asset and I believe that they are regarded by people who have worked there as one of the finest of their size in the world.

In conclusion, I would like to stress that the overall package of proposals contained in the legislation is experimental in nature and will be reviewed by the Government after an initial period of about three to four years to assess what further role, if any, the State will play in this area. I know that it may be too early, even at that stage, realistically to assess the impact of the board's activities, but we could not continue to provide scare State funds without reviewing their effectiveness and value to the community. As I said before, I regard the present proposals as a great challenge to the nascent film industry in Ireland and I hope they are regarded as a measure of anticipation by the Government of the future prospects of the industry and of its expectation that those who will be involved will justify this act of faith. With that in mind, I would hope that some of the divisions that have existed in the past between the independent film makers and those involved in the studios will be overcome and that everybody will work together in the hope of ultimate success.

I am confident that the Irish Film Board Bill will commend itself to the Dáil and I recommend the Bill for its approval.

: I welcome both the Irish Film Board Bill and the National Film Studios of Ireland Limited Bill. The Minister has made a very lengthy statement on the background to present difficulties and the reasons for the introduction of legislation at this time. My over-riding reaction is that he would seem to be suggesting that this is the last chance which this industry has in so far as public sector involvement or Government involvement is concerned. I agree with him that, in particular in the recent past—and I say this as chairman of the Committee of Public Accounts—there has been severe criticism of the situation which obtained in the Ardmore Studios. While this criticism may be unfair in many respects, the studios possibly being expected to do too much too quickly, nevertheless as Members of the House and of that committee specifically charged with this scrutiny of expenditure on behalf of the House, must be seen to be critical and, hopefully, give constructive criticisms at all times. The Bills are very welcome indeed.

The setting up of a board with specific functions to organise the industry and, hopefully, give it emphasis in the right direction over the next few years is very welcome. Up to now, the one physical indication of an industry was the Ardmore Studios which up to now have been working in a vacuum and but for the direct involvement, co-operation and enthusiasm shown by a few individuals, their limited success over the past couple of years would not have been achieved.

Despite what the Minister said in relation to the lack of reaction to the publication of the Bill, I feel that there has been a very healthy reaction, if critical at times, in the industry itself and, after all, that is the source from which the Minister would expect informed comment and criticism to help him to draw up legislation which would be workable and acceptable to the people directly involved in the industry. The Minister has had representations made to him from three sources directly involved in the industry.

There are some aspects in relation to the board which possibly are more appropriate to Committee Stage and concern the size of the board. I am glad that the Minister has given reasons for not being too specific in the Bill about the functions of the board. In other words, he has left the board a certain degree of discretionary power and, hopefully, they will use that flexibility for the benefit of the industry as a whole.

Debate adjourned.