The House of Lords communications committee launched an inquiry into the contribution of the UK film and television industries to the British economy yesterday. The Committee will focus on how the contribution might be increased.

The peers will also review the role of the UK Film Council and examine the effectiveness of the tax credit system. Lord Fowler, Chairman of the Committee, said 'We will look into the financing of the film industry, and in particular how the 2006 changes to the tax regime have affected it.'

The review comes in the wake of a recent report prepared by Oxford Economics which warned that the UK film tax credit has created adverse effects for co-productions and offshore activity. UK Film Council figures have shown that UK co-productions almost halved from 52 in 2006 to 29 in 2007.

The report pointed to a loss of around $105m in co-production activity and indicated that in terms of UK productions, the tax credit has had a negative effect on UK suppliers or service providers. Fowler said 'We shall assess the prospects for film and television production in the UK and what might be done to improve them.'