The UK government’s film and TV committee looking into the challenges facing the country’s independent film and high-end TV industry has published its initial recommendations following submissions from 130 companies and industry bodies.
The Culture, Media and Sport (CMS) Committee has written to chancellor Jeremy Hunt to highlight the government’s priorities for its Autumn Statement next week.
This is ahead of the full inquiry that will take place in the coming months and coincides with the publication of all 130 submissions.
The letter’s key points noted the need for targeted tax support to promote visual effects work; planned rules around connected party transactions; defining documentary programming; and reforming the apprenticeship levy should be among the top priorities.
The letter also noted it will be considering ”the case for further tax incentives outlined in the evidence we have received, for example to support lower budget British films or incentivise regional production, during our inquiry and look forward to engaging with Government on them next year.”
Scroll down for the full letter
The CMS committee put a call-out for submissions in July as part of its inquiry into the industry, including how to maintain the UK’s position as a leading production hub and support independent producers. Companies to submit include the British Film Insitute (BFI), Pact, Paramount, Amazon, the BBC, Channel 4, ScreenSkills and the UK Cinema Association.
The BFI has recommended exploring the possibility of more interventions for streamers, including levies, as a means to support independent film and maintain a healthy relationship between the US and international industry. By looking at what other countries are doing in this regard, it said: “Measures that may be relevant to look at during this analysis of other countries include their implementation of quotas, prominence obligations, levies, direct investment obligations and standard terms of trade, to determine if they could have a workable and positive impact on UK independent film.”
“Market failure”
Producing body Pact assessed the independent film sector was “now at the point of market failure” and urgent intervention is needed, putting forward proposals to increase tax reliefs by 30-40% for films with a budget of £1m-£15m. The report claimed this increase would cost the UK government “very little” and would “see a net positive impact of £50m per year” with knock-on benefits, like tourism, increasing that rate even further.
“An enhanced rate would also help strengthen the indigenous film sector’s ability to attract finance and continue developing key talent,” the report continued. “Which would benefit the wider audiovisual sector and help to create a more equal balance of work between domestic and international productions for the UK’s workforce.”
Several organisations backed Pact’s tax relief proposal including the BFI and Paramount, with the former stressing it ”could prove a lifeline to UK independent film in such a challenging operating context”.
Amazon put forward suggestions on how to incentivise further international production in the UK including benchmarking off other successes, such as New York, and urged the government to consider the impact of “short-term policy changes or additional costs on doing business”.
The danger to intellectual property, from both streamers and studios as well as artificial intelligence, was commented on by several submissions. The BFI noted the lack of UK-based production companies in line with US scale made it difficult for independent growth and that ”going forward, we need to ensure that independent producers and distributors in the UK have a number of routes by which to build a valuable asset base and grow sustainable companies”.
On AI, Paramount suggested that a more “principles-based” approach be taken to regulation as opposed to generalised restrictions. “It will be crucial to tailor AI regulations, such as disclosure obligations, to reflect actual risks to IP creators, IP owners, and consumers without overbroad application to routine use of AI functionality within systems that do not create such risks,” the studio’s report stressed.
All 130 submissions are available to read via the Parliament Committees website.
Letter to chancellor:
Dear Jeremy,
British Film and High-End Television: Priorities at Autumn Statement
As you will be aware, the Culture, Media and Sport Committee is currently looking into the UK’s attractiveness as a global destination for the production of film and high-end television, and the challenges facing the UK’s independent production sector.
Ahead of the Autumn Statement, we are writing to highlight some of the most common and urgent issues raised in the more than 130 written evidence submissions to our inquiry, which we are publishing today.
The UK has an internationally competitive tax relief system, but we cannot be complacent as more and more countries seek to attract production to their own shores. We welcome the Government’s plans for Audio-Visual Expenditure Credits; however, there is opportunity for even greater ambition.
We therefore echo the industry’s calls for targeted tax support to ensure more visual effects work takes place across the whole of the UK. We are encouraged that the Government has been considering the case for this intervention, but time is of the essence: decisions on where this work is conducted are made years in advance, so an annoucement now will ensure the UK can fully compete as and when work resumes following the strikes in the US.
We have also heard concerns about the Government’s definition of documentary programming, and that the new rules around connected party transactions would make the UK less competitive. We hope the Government will heed the sector’s concerns and address these provisions when finalising the new system.
We will be considering the case for further tax incentives outlined in the evidence we have received, for example to support lower budget British films or incentivise regional production, during our inquiry and look forward to engaging with Government on them next year.
While financial incentives make Britain an attractive destination for productions, it is our people that truly makes us stand out among our global competitors. Our highly talented and respected workforce in front of and behind the camera is what makes the British film and
television industry thrive. Yet, the evidence we have received highlights widespread concerns around the training, recruitment and retention of skilled workers that are essential to the sector.
We will be considering these issues in detail, but the evidence received so far has already highlighted that the current form of the apprenticeship levy is not working effectively for the screen sector. The industry have been making the case for reform to the levy, to make it more flexible and applicable to them, for a considerable time: given the risk that a shortage of skilled workers poses to our attractiveness as a home for production, we believe that there is no room for delay.
We are grateful for your consideration of these issues ahead of the Autumn Statement.
Yours sincerely,
Dame Caroline Dinenage DBE MP
Chair, CMS Committee
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