As someone who has spent the better part of my career in the creative industries, I can’t help but feel a sense of cautious optimism regarding the recent change in government. For over a decade, we have seen successive Conservative administrations provide extensive tax relief across film and television, which has been fundamental in driving investment and growth. However, there are still challenges that need addressing, such as the transformation of the apprenticeship levy.
In the U.K.’s entertainment sector, despite the significant shift following a groundbreaking election, optimism prevails.
The newly appointed Prime Minister of Britain, Keir Starmer, from the Labour Party, who succeeded Rishi Sunak of the Conservative Party, didn’t make many promises during his election campaign. However, the Labour Party’s Creative Industries Sector Plan, published in March, provides some insight into the changes the left-leaning politicians intend to bring about. The objectives include promoting growth throughout the country and ensuring accessibility to culture for all. Moreover, there is a focus on diversifying both audiences and workforces, as well as enhancing creative education and skills. However, Starmer’s Cabinet, especially the new Chancellor Rachel Reeves, are facing significant financial challenges. These issues were exacerbated by Brexit’s economic instability, the ongoing Ukraine-Russia conflict, and the lingering effects of the pandemic.
The conservative government didn’t leave the creative industries entirely uncared for: they passed a media bill aimed at enhancing the capabilities of British radio and TV. This legislation granted more freedom to public service broadcasters (PSBs) in scheduling and programming, allowing them to be more innovative. At the same time, they continue to emphasize the significance of regulating artificial intelligence. In March of this year, then-Chancellor Jeremy Hunt announced a 40% corporate tax reduction for film and TV production studios until 2034 – a tax break amounting to approximately £470m ($610m) over the following decade. Additionally, he introduced a new 40% independent film incentive and boosted an existing visual effects incentive.
During their 14-year tenure, the party faced significant instability and critics claim they neglected to provide essential financing for the industry. In 2023, official data from BFI revealed that the film, television, and video sectors in the U.K. generated an impressive $26.5 billion for the economy, compared to just $16 billion in 2019. Despite this substantial contribution, the budget for the Department for Culture, Media, and Sport (DCMS) saw a reduction of 24% between 2010 and 2015. Previously, Boris Johnson, who served as Prime Minister before Sunak, considered eliminating funding for the popular BBC by abolishing its license fee – the yearly TV tax paid by British residents – which represents around two-thirds of the BBC’s entire budget.
Paul W. Fleming, the General Secretary of Equity in the U.K., spoke with The Hollywood Reporter about the three major challenges that have arisen for Keir Starmer’s desk as a result of over ten years of Conservative rule. Equity is a trade union comprising approximately 50,000 actors, singers, dancers, designers, directors, and comedians, as well as esteemed members like Olivia Colman, Brian Cox, and Judi Dench. The union plays a significant role in the production of around 95% of films, TV shows, and theater in the U.K., even those produced by American companies, under Equity agreements. According to Fleming, “The first issue is austerity.” Austerity typically refers to the timeframe between 2010 and 2019 when the Conservative Prime Minister, David Cameron, tried to manage the national debt following the 2008 financial crisis by making substantial cuts to public services.
For two decades, our industry has experienced austerity measures, leading to decreased funding for subsidized theater, Fleming explains. This reduction in financial resources is significant because it affects the development of new talent on stage and screen, which is essential for our cultural infrastructure. With the UK being the second largest producer of media content after the US, this investment is crucial. Unfortunately, this sector has faced attacks for the past 20 years, worsened when Tony Blair’s Labour government diverted funds to finance London’s Olympic Games in 2012. According to Equity research, each pound invested in the creative industries generates a return of five to eight pounds to the local economy. In essence, proponents argue that investing in theater benefits everyone.
As a gamer, I can relate to the importance of having a voice and being represented fairly in any community or industry. In the case of the U.K. labour sector, it’s crucial for Labour to stand up for the working class who often go unnoticed but are essential to the success of industries. The big names may grab headlines, but it’s the unsung heroes – those on low wages or in behind-the-scenes roles – who keep things running smoothly.
As a dedicated gamer, I’ve experienced my fair share of instability in the gaming industry, and it’s been a major concern for me. COVID-19 has definitely played a role in this, but what we really need is a solid long-term plan. And that’s where Labour comes in, they’re committed to providing stability.
Lisa Nandy, the skilled Labour politician serving as the Culture Secretary, steps into the scene. With a wealth of political experience under her belt, she is now tasked with mending relationships in this sector. “Lisa is an exceptionally competent politician,” remarks Stephen Lotinga, Sky’s corporate affairs group director, who leads their public affairs and policy team. “She isn’t new to the political realm,” he continues. “Beyond being an MP, she has held senior positions, even contested for Labour leadership. Her abilities are undeniable, which is why Keir Starmer has placed his trust in her.”
“Fleming shares his long-standing connection with Lisa Nandy and praises her impactful role in the Labour Party. He believes this is beneficial as she recognizes the significance of economic development, especially in regions beyond London. Moreover, she values our input as a Trade Union instead of merely viewing us as an arts advocacy group. Nandy appreciates the contributions of laborers in this industry more than anywhere else.”
Lotinga believes that the Conservatives have given significant attention to the creative industries during their 14-year tenure, leading to substantial tax relief in film and television production. He is optimistic that Labour won’t reverse this progress. A concern for Sky, as expressed by their CEO Dana Strong, is the proposed transformation of the apprenticeship levy. Lotinga characterizes it as a hefty payroll tax for businesses with a payroll exceeding £3 million ($3.9 million). However, Labour intends to rebrand it as a “growth and skills” levy to tackle workforce shortages. Under this new plan, companies could utilize up to half of their levy contributions for training through channels other than apprenticeships, leaving Sky with over £5 million ($6.5 million) for flexible training investments.
Lotinga expresses her frustration with the apprenticeship levy, stating it seems ill-suited for creative industries due to their unique operational structures. She’s been advocating for modifications for almost a decade, and progress has been slow. She’s eager for the changes required to reskill her workforce and foster growth, and she welcomes Labour’s pledge to support this endeavor.
Fleming advocates for a comprehensive plan from the new U.K. administration to boost cultural funding towards EU’s average level, which is around 0.5%. This would essentially double the current funding. Equity believes this goal can be achieved if there’s sufficient political commitment. They also aim to address high initial fees charged by casting directories, ensuring public grants support projects under fair union agreements. Furthermore, they plan to advocate for better rights in the video game and TV commercial industries. Ratifying the Beijing Treaty, an international agreement concerning workers’ rights in audio-visual performances, is another priority for Fleming.
Lotinga emphasizes the importance of taxation. “Our primary concern is preventing the government from making hasty decisions and withdrawing reliefs or benefits in other areas. Although there’s no evidence they will, Rachel Reeves will soon be figuring out how to create her first budget. It’s essential to remind people that these aren’t luxuries; we live in a competitive global market. Every day, individuals and businesses choose where to invest based on incentives. Keeping the U.K. competitive amidst other countries offering substantial incentives is crucial.”
Despite the international production boom starting to decelerate due to pandemic-delayed projects, U.K. executives continue to believe that Britain is a desirable location for global entertainment production. Lotinga points to Sky Studios’ expanded Elstree site, currently filming “Jurassic World 4” and “Bridget Jones: Mad About the Boy,” as proof of their optimism. According to Sky’s projections, the U.K. Media and Entertainment Sector could be valued at an additional £10 billion ($13 billion) per year by 2033 – growing from £43 billion in 2021 to £53 billion in 2033, and resulting in approximately 40,000 new jobs.
The Labour Party faces a long and challenging journey, burdened by decades of economic hardship. However, industry experts remain quietly positive about their prospects. As for the specifics of their industrial plans, only the future will reveal their effectiveness. Fleming expresses his belief in the need for change and acknowledges the shift in tone from the government following the Labour Party’s election. We are cautiously optimistic about the outcome.
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2024-07-16 12:55