The biggest challenge facing Chris Smith, the new heritage minister, is to solve the conundrum of why the British are so good at making films, so awful at making money out of them.
The hundreds of millions of dollars earned by the Oscar-winning The English Patient will go straight to its US investors, even though it was written and directed by a Briton and featured a mainly British cast. The same thing happened 16 years ago with Chariots of Fire.
Over the past century, the US film industry has become that country's second biggest exporter. In Britain, despite our traditions of movie-making excellence, we scarcely have a film industry at all. Most of our top talents work abroad as mercenaries. Our cinemas are full of Hollywood products, Americanising our culture for good and ill.
Films are an important-perhaps the most important-way a civilisation has of transmitting its culture, beliefs and values. Yet against the promising background of a big rise in cinema audiences and a huge increase in profits from merchandising, video and other spin-offs, 18 years of Tory rule have left us, financially and culturally, weaker than ever.
Even Margaret Thatcher realised our film industry needed help when annual British production sank to an all-time low of 30 in 1989. She called a one-day seminar at Downing Street in June 1990, and seemed inspired momentarily by a vision of London as the filmmaking capital of Europe. She fell from office five months later, but the early years of John Major's government took some steps in the right direction. There was the setting up of the European Co-Production Fund administered by British Screen, and the government's commitment to the Media programmes of the EU. A British film commission was set up in 1991 to make the logistics of filming in Britain simpler to arrange.
The creation of a department of national heritage after the Tory victory of 1992 suggested that more was about to be done, but the departure of David Mellor and his replacement by Stephen Dorrell and then Virginia Bottomley, neither of whom showed any interest in films, ensured more years of drift.
Tory policy towards European filmmaking has pulled in two opposite directions. On the one hand, Britain has withdrawn from Eurimages, the Council of Europe's production and distribution support fund, presumably on the quite reasonable grounds that it is commissioning films which few will pay to watch. Meanwhile, however, the European Co-Production Fund-a government quango-has continued to pour public money into even more films that few will pay to watch.
It is obviously a fine thing if Europeans can pull together to make films which reflect European culture, and the cultures of their individual countries. In practice, that is seldom achieved by bureaucrats and quangos. Any conscientious round-up of the worst films of the last two years would have to include Britain's three most disastrous contributions to the growing European film mountain: the painfully pretentious All Men Are Mortal, the deadly Two Deaths and the French-language absurdity Une Femme Fran?aise.
If a majority of filmgoers or politicians actually had to sit through such films, financed by apparatchiks who act in our name but appear answerable to no one, the European film industry would soon be transformed. One of the troubles with subsidised films is that bureaucrats have a vested interest in making flops. They are afraid of commissioning a hit-for, if it were to generate serious money, their subsidy for the next year might be cut.
The growth throughout Europe of quasi-governmental bodies such as Britain's European Co-Production Fund means that film-commissioning bureaucrats need not have the slightest interest in whether their product will find an audience.
A decision by a couple of people in Bavaria or Brussels carries its own momentum, as each body-although theoretically independent -proceeds on a covert principle of "you help finance my picture, I'll finance yours." The European Script Fund-an offshoot of the EU's Media Fund (which has just had its budget increased by the European commission to ?217m)-is proud of the fact that it avoids making artistic value judgements. If a screenplay has enough finance in place and a promise of distribution, the Fund will rubber-stamp it. The resulting films, with few exceptions, are akin to the goods produced by the command economies of eastern Europe, manufactured in order to reward loyalty and generate jobs, not to make things that consumers want.
Chris Smith will find no shortage of bad advice from Britain's cultural elite assuring him that the salvation of our film industry is to be found through that Old Labour solution: central funding, whether through European subsidy, government funding or lottery investment. He should take such recommendations with several pinches of salt, for that is the path that his Conservative predecessors trod, with disastrous results.
Centrally directed spending has a role in safeguarding Britain's film heritage (a job on which the British Film Institute, hopeless as a film producer, should concentrate its considerable resources). It can also have a valuable role in helping to promote new talent. However, the few millions which subsidy provides for filmmakers will never establish a movie industry. It can never be enough to finance more than a tiny slate of films-certainly not enough to challenge the US stranglehold over film distribution. Also, the people who commission films are too commercially na?ve-and far too socially and politically motivated-to spot a commercial trend, to exploit the zeitgeist in the way that US studios do. If British filmmakers are to succeed commercially, they need to concentrate on making films to please audiences, not bureaucrats.
It is hard to discern New Labour film policy from its manifesto, but it is good to see they have created a film minister, Tom Clarke. I hope Labour will avoid a policy of cultural protectionism-either by levying a tax on foreign movie imports and videos or, as the French do, laying down quota rules that a certain proportion of home-made films must be shown on cinema screens. Not only are protectionist policies unpopular with filmgoers, they are increasingly impractical, for it is often hard nowadays to discern what is or is not a "British" or "European" film.
The only way to increase the level of British film production is to encourage City and international investment in British-based movies on a scale which no government could ever contemplate. Our new government should also use the muscle of the EU to fight the protectionism of the US film industry, and ensure that commercial films from Europe have fair treatment when it comes to distribution.
Time and cultural trends are on the side of the small battalions. The growth of multiplexes means that it is becoming easier to find venues for films which are not Hollywood blockbusters. Whenever the British make films which have popular appeal (such as the current Channel 4-financed film, Fever Pitch) cinemas are there to show them. The national heritage select committee produced a sensible report only two years ago, and Chris Smith could do worse than set about implementing many of its proposals. His predecessors ignored the committee's findings and chose the palliative of ?80m from the National Lottery. Judging from the first three flops approved by the lottery panel, much of that ?80m will go down the drain.
It is the lack of infrastructure that is the biggest problem with British filmmaking. Chris Smith should look to Ireland, with its huge increase in production activity through its section 35 tax legislation. Fiscal measures are needed in Britain to enable companies to write off their inevitable failures in the way that other industries would be permitted to write off prototypes.
The new heritage minister should make his main priority to persuade Gordon Brown that such incentives can re-energise the film industry within months. Any short-term loss of revenue to the Treasury would be more than offset by longterm gains, as Britain at last generates the film industry which its talents have long deserved, and which the 21st century British economy will badly need.
