The vast scale of the business ensures that all the services are there it also enables the large

The vast scale of the business ensures that all the services are there; it also enables the large studios to produce a dozen or more major films a year, which in turn enables them to hedge their bets. Most people think of Hollywood as being dominated by the giant studios, but actually it is an agglomeration of small specialist businesses - writers, actors, publicists, as well as production teams - which are pulled together by one or other studio in a loose association.Making a movie is an assembly job. Hollywood is the only place that matters in world terms (sure, India and China produce vast numbers of films, but the financial turnover of the business is tiny by comparison). If we look at the movie business as just another world industry and examine the UK competitive position, there are four problems and one important opportunity: four funerals, so to speak, and a wedding.The problems are, first, the economies of scale of the US industry.

But even if London financiers were peculiarly myopic, that would not matter: would-be film-makers could go anywhere in the world for cash if they had an attractive proposition. This happens in practice: Four Weddings and a Funeral was principally financed by PolyGram, a Dutch-owned, London-based company.So these two complaints cannot really be key factors in our film industry's lack of success. Risk capital is infinitely available anywhere in the world for projects which seem likely to make a profit. London manages more cross-border money than anywhere else in the globe, and it is hardly credible that a place which provides risk money to emerging economies in East Asia or Eastern Europe should not want to provide risk capital at home if the rewards are there. More than 85 per cent of French film directors were over the age of 50. Young people do not make films in France, so it is hardly surprising that French youth prefer the American product.As for moans about lack of support from the City, these miss the point that money is not only an international commodity, but the most international commodity of all.

Awaiting the Phoenix, a report last year on the European film industry by Martin Dale, pointed out that in 1960 the average age of French film directors was 28 In 1993, it was 55. Nearly half the films made in Germany between 1985 and 1991 were never seen by a paying audience at the box office.In France, subsidy has resulted in a fossilised industry. In the theatre, in pop music and especially in musicals, the British share of the world market is substantial In films it is tiny We have the language We have the talent We ought to be doing better than we are. What's wrong?The two most popular complaints from the luvvies are that the Government does not provide enough subsidy and the City does not give enough finance.

One has only to look to continental Europe to see the catastrophe that reliance on public subsidy has wrought. In Germany, it has resulted in an industry trained to produce films designed to attract subsidy rather than one that produces films which people actually want to see. It is less than the profits from one really successful film. Implicit in this snootiness towards a mere pounds 84m, however, is the assumption that if only the British film industry received more subsidy, be it from the lottery or taxpayers, it could improve its performance on world markets.This relatively poor performance is to many people a puzzle and a worry. Yet both detractors have half a point in that pounds 84m, to be disbursed over five years, is a tiny amount by the standards of the global film industry. However useful it might be as seed capital, it would make three, maybe four Hollywood movies. There is a temptation to assume that these are examples of luvvie hypocrisy and lefty hyperbole. Most people, when offered pounds 84m of lottery money, would be thrilled Evidently this is not so in the film business.