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Local Heroes: Is UK film saving the economy?

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Will Gompertz | 12:25 UK time, Monday, 7 June 2010

Boasting, showing-off and succumbing to hyperbole are traits that will not, on the whole, endear you to people. Self-aggrandisement is rarely acceptable.

Unless, of course, you run a British, state-funded organisation in 2010. In which case, you blow your trumpet so hard that the foundations of the House of Commons shudder in a way that would have made Guy Fawkes light up.

UK Film Council reportFear does not tend to respect decorum; nor does the film business. Its UK chapter, the Film Council, launched a paper this morning [1.36MB PDF] extolling the success of the British film industry. It is an immodest document, proclaiming with gusto the enormous economic importance of the British film business. And why not? That's part of the Council's job.

The central purpose of the report appears to be a plea to the government to retain its Film Tax Relief incentive. It argues that this is a jolly good thing and warns that to remove it in any of the forthcoming budget cuts would signal The End for the British film industry.

The report says that such a move could reduce current production income in the UK by 75%. Foreign film-makers come to the UK for the skills of our production professionals and for the generous tax incentives. Take them away and Woody Allen and co would look, cut and run. Right now, according to the report, it is 40% cheaper to make a movie in Britain than it is in the USA - due to tax relief and a weak pound.

Screenshot of Her First AffaireGovernment interventions on behalf of the British film business date back at least to 1927 and Parliament's introduction of the Cinematograph Films Act that mandated a minimum allotment of screen time to British films. It began at 5% in 1927 and was to rise to 20% by 1936. The extremely-low-budget films that were made to fulfil the criteria were known as Quota Quickies, which you can read about more here.

Ultimately, though, the "Quickies" didn't satisfy film-makers or audiences and so the government-backed strategy to create a British studio system to match and mirror the burgeoning American movie-making model was abandoned - thankfully not before it had given birth to Michael Powell's talents.

The current system of government support through tax breaks appears to be working well for all parties. Unlike the old Quota Quickies, today's investment is predicated on selling the UK as a production base and not as a producing centre of home-made films, which is a frustration for some British film-makers who are struggling to finance their projects.

This morning's report has been compiled by the consultancy Oxford Economics, supported with funding from the UK Film Council and other interested parties; it does not provide an impartial overview. Some figures have been attributed with the scantest of evidence. Here for example is a passage about the British film industry's contribution to tourism:

"Limited robust statistical data qualifying the value of this impact [on tourism], the available evidence suggests around a tenth of the value of foreign tourism to the UK may be attributable to the impact of UK films. On this basis we estimate that around £1.9bn of visitor spend a year might be attributable to UK films."

Jude Law and Robert Downey JrNot only are there more caveats employed in these assumptions than you'd find in an LA pre-nuptial agreement, but they are based on movies such as Sherlock Holmes and Pride and Prejudice. Both are more famous as books and had been trading successfully for many years as tourist candy. Now if they had cited Fish Tank or Sex and Drugs and Rock and Roll, that would have been worth a mention.

Nevertheless, the £1.9bn is shamelessly banked, and contributes to a headline total that exclaims the annual contribution of the British film industry to the UK economy as £4.5bn. That's if you count every single available pound that could possibly be attributed to the UK film business, such as the sales to foreigners of deerstalkers and pipes.

Elsewhere in the document are rather more robust figures. The British film business directly employs 36,000 people (up 7% from 2006), enjoying a reasonably high average wage of £33,700, in three cases out of every four working in London or the South East. A stand-out statistic was the existential conclusion that a British-made and British-themed film will enjoy 30% better box-office takings than had it been made elsewhere. Er...?

The report would have benefited from more comparative data, outlining how British state funding of the UK film business compares against the support given by the French, German and American governments to their film industries, both financially and strategically.

And distribution is barely mentioned - which seems too big an issue to be completely ignored. For example, what percentage of British-made films, with or without UK Film Council support, receive a full theatrical - that is, a cinema - release?

It's one thing making a movie but quite another finding a distributor. Is the UK Film Council investing enough in helping pay for the high cost of film prints and marketing costs that are central to having a movie successfully released?

This report tells us what is going well and outlines a couple of apparent threats such as illegal downloading and copyright threat, but it's actually more of a PR document than a genuine overview - which is a shame.

Comments

  • Comment number 1.

    "but it's actually more of a PR document than a genuine overview"

    Even if it were a full overview with lots of robust statistical data that proves their point about the benefit of the industry, it won't help them escape economic reality.

    You can find any number of groups representing tax-payer funded industries, who are warning about the damage that funding cuts will bring, many of which also contribute significantly to the UK economy... The Russell Group of Universities was once of the most recent. Problem is, we can't spray the money around like it's going out of fashion any more. Many areas are going to have to be face cuts.

    The film industry can thank its lucky stars that it has that cheap pound on its side, as that will still make it competitive for the time-being at least.

  • Comment number 2.

    The UK can never hope to compete with the US film industry with it's huge wealth, economies of scale and wide managerial competence however much the government contributes. The Americans are able to invest so much more per film than us and enjoy a larger narket. However, there is nothing wrong with our creativity, quirky sense of humour and technical ability. British films at their best - when we play to our strengths - remain amongst the best. Moreover, not all of us want our entertainment and culture to be US based. I am proud to be English and want to be stimulated, entertained and educated by English films.

  • Comment number 3.

    Having worked in the British Film Industry for nearly 15 years things are not nearly as rosy as the report makes out.

    Sure the tax credit helps bring over US productions into the UK, but the average (well made) UK independent film has a budget of no more than £2m. As the tax credit works out at a maximum of 20% of the budget and is not available where the writer is not UK for many types of film, it is of limited use.

    What is needed is an enhanced tax credit for lower budget (less than £5m) british films otherwise there is a real danger that those films will be made in other parts of the world which provide bigger tax incentives. In the current economic client this is unlikely but govt will need to consider the alternative which is that with the Harry Potter series coming to an end, James Bond delayed - there will be a very large fall in the number of films being made in Britain and a very large drop in employment.

    This would be a shame as the British crew are some of the best in the world and most flexible both in terms of working practices and how and when (and how much) they get paid

  • Comment number 4.


    Chipshopshippers "You can find any number of groups representing tax-payer funded industries, who are warning about the damage that funding cuts will bring, many of which also contribute significantly to the UK economy... The Russell Group of Universities was once of the most recent. Problem is, we can't spray the money around like it's going out of fashion any more. Many areas are going to have to be face cuts."

    Yes let's cut waste. Let's not cut public spending that has a significant multiplier effect for the UK economy. It is like telling a shopkeeper to not restock his highest grossing products so that he can save money. Universities and the UK film industry are worth far more to the economy than they cost.

  • Comment number 5.

    #3. Justin150 wrote:

    "Having worked in the British Film Industry for nearly 15 years things are not nearly as rosy as the report makes out."

    The past is a different country. I've blown 100K on making TV programmes - what I would like to see is the return to the Quota Quickies - but this time for all UK TV channels, in all gendres. To get and maintain the skills base in the UK requiring that everything in the quota was UK based (or given the EU at least European based). This established market would underpin the whole industry and perhaps new talent would emerge. The French do it, so why can't we? Heaven knows the repeated dross on British TV could do with some more new programming. All channels should be forced to show a quota of new low budget independent UK productions. (The independent bit is v. important!)

  • Comment number 6.

    Whenever the British film industry is mentioned in the UK media the discussion always turns to micro-budgeted kitchen sink realism as though this is all that UK film makers are capable of producing. One of the previous posters states that "the UK can never hope to compete with the US film industry", in fact when it comes to summer tent-pole block-busters UK film crews, production facilities and indeed UK creative talent punches way above their collective weight. Most people are aware of the Harry Potter and Bond franchises and their UK affiliations, perhaps fewer realise that much of the high-end "Hollywood" product that fills multiplexes is made either in part or entirely in the UK. Recent examples include Iron Man 2, Batman Begins, The Dark Knight, Fantastic Mr Fox, The DaVinci Code, Angels and Demons, Prince of Persia, X Men 3, Iron Man 2, Clash of the Titans, and Avatar to name but a few. The major Hollywood studios have indeed taken advantage of the tax reliefs and used them to help build a world-class production and post-production infrastructure that brings in hundreds of millions of pounds of inward investment to the UK every year. Most of this money is spent on salaries paid in the UK, which in turn generates a not-inconsiderable amount of income for the Inland Revenue.

  • Comment number 7.

    I seem to remember a document a few years ago called 'Building Public Value', which with equal immodesty (and no great impartiality) requested £3bn a year of public money for ten years, to pay for television programmes. The one notable difference was that nobody had a clue what public value actually meant.

  • Comment number 8.

    #7. Will wrote:

    "'Building Public Value'... £3bn a year of public money for ten years, to pay for television programmes. The one notable difference was that nobody had a clue what public value actually meant."

    Will... But wouldn't a local sourced quota (see my #5 above) let the broadcasters choose what to spend their advertisers /licence payers money on and so get round the problem of civil servants 'picking winners'?

  • Comment number 9.

    This comment has been referred for further consideration. Explain.

  • Comment number 10.

    Uh oh, art snob alert at the end there... not the old 'films must have a theatrical release' chestnut! Film has changed, and the way real people watch films has also changed. So who cares? - it's about the impact the films have, not the prestige of being shown via an old fashioned medium.

  • Comment number 11.

    I think it's a great idea to continue support the British film industry. It's something we're world class at. The UK film industry is a major contributor to the UK economy making films that UK and international audiences want to see and generating financial and cultural benefits. The film sector is a big part of rebalanced economy, and the country's future success is tied up with their success. Despite a grim outlook for the UK economy as a whole, it would seem that the tax breaks awarded to film productions are of great benefit to the nation and is a key example of how governments can step in to stimulate growth in times of economic hardship and create new jobs, supporting other sectors of the economy and promoting British Culture. As the film industry involves many crafts and special skills, it has a wider impact on other sectors such as merchandising, manufacturing and tourism.

 

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