City & Business: UK needs film studio that can rival Hollywood

LAST WEEK, the Department of Culture published a plan to help the British film industry. The proposals were fine as far as they went - pounds 25m to help with training and distribution; a new office in LA to promote British interests. But Culture Minister Chris Smith and his advisers stopped short of doing the one thing that most needs to be done: fostering a British film studio big enough to compete with Hollywood on its own terms.

The Government is targeting Britain's creative industries as a way of modernising the economy and pushing up the base rate of growth. There is a hot market for the manufacture of entertainment anchored in the British point of view. The Full Monty, a fable of redemption for the unemployed underclass, rakeD in millions. So did Trainspotting, a comedy of youthful rage.

But the Government did little, if anything, to ensure that British film companies can build themselves up by producing and distributing such films. Instead, it tried to strike a balance between helping British film makers without antagonising Hollywood. The Government, of course, needs to strike a balance between boosting the economy by helping British film-makers, and inducing Hollywood to use British film-making expertise. The trouble is the Government kow-towed to Hollywood. It operated on the premise that Hollywood's supremacy as the capital of film is unchallengeable.

This has been true in the past. Countries putting themselves forward as counter-weights to Hollywood - France, Italy, Japan, Poland, Hungary, the 1960s Britain of Billy Liar, Room at the Top and Saturday Night and Sunday Morning - have never got very far for very long. But it is possible Hollywood is weak now at exactly the moment it has never looked stronger.

American film-makers built their industry packaging the American Dream. Anyone with the pluck and intelligence to fulfil himself could. Under Reagan, Bush, and Clinton, however, the American Dream has looked increasingly jaded. So has Hollywood. US blockbusters are increasingly escapist. Hollywood's epics are increasingly pseudo-epics - like Titanic, the film via which Hollywood paid homage to itself by awarding it a ridiculous 11 Oscars last week. The degradation of American culture in general, and film culture in particular, represents - among other things - a market opportunity.

Should there be a major British film studio by the end of the Blair parliament? Yes. Would Hollywood penalise Britain by withholding invest- ment in the country if such a film studio were to be created? No, Hollywood would simply do all it could to stop such a studio from coming into being, and then - having failed - learn happily do business with it.

Why has the Government not committed itself to fostering a major British film studio? Answers please, Chris Smith.