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Election time for TV and film

Blog
06 May 2015

The licence fee takes centre stage in the manifestos, but other policies will be just as crucial for the creative industries.

The political party’s proposals for the creative industries have not been a particularly major part of the general election campaign.

After all, plans for the film and TV business aren’t a classic vote winner, or particularly a vote loser when it comes to the public at large.

But there are some important points of difference between the parties for the film and TV industry. And there are dangers, and opportunities, for the creative industries whichever flavour of government eventually takes power.

Licence to kill?
Most of the parties’ manifesto commitments are vague but generally surround the very British political obsession with the BBC, its governance and its funding.

The Conservatives have a philosophical dislike of the licence fee, but that’s always offset by a voting public which, while it doesn’t like paying fee, has warm and fuzzy feelings for the BBC brand.

So the manifesto pledge this time from the Tories is that the licence fee will be frozen, at least until Charter renewal, but not frozen out. The Conservatives also want to top slice the BBC’s income to pay for the roll out of super fast broadband continuing the top slicing they began in 2010 to pay for the World Service and Jeremy Hunt’s Local TV experiment.

And it’s the Tory’s antipathy to the licence fee that could be the biggest challenge for the TV sector. Whether a BBC staffer or an independent producer, it’s the BBC’s spending power for new programmes that stimulates the unique commissioning ecology of the UK and is a big part of what has allowed the growth of independent TV businesses and their success internationally.

Indie trade body Pact, while often at odds with the BBC when it comes to issues of in-house versus indie production guarantees and rights retention, sees the preservation of the licence fee as a big concern. “The licence fee tied to inflation at the next settlement with no top-slicing for non-TV use,” will be crucial, says chief exec John McVay.

The Labour Party’s manifesto is somewhat vague on the issue, stating that the BBC “makes a vital contribution to the richness of our cultural life, and we will ensure that it continues to do so while delivering value for money.” A comment that suggests support for the funding model, but says little about what level the licence fee should be set at. The Liberal Democrats state that they want a licence fee that “does not rise faster than inflation,” leaving a glimmer of hope that the fee could at least rise with inflation if they have any say in it.

The SNP has plenty to say about the BBC, pushing for responsibility for broadcasting in Scotland to move from Westminster to Edinburgh. It’s also after a greater share of the licence fee to be transferred to BBC Scotland and it wants a bigger say in Charter Renewal and BBC governance for the Scottish government.

And it’s the BBC’s governance that concerns the other parties too, and its rivals. Commercial broadcaster trade body Coba’s executive director Adam Minns says: “it’s in the long term interests of the BBC that there is robust and transparent oversight that is independent and beyond reproach. If that is a dedicated body, then it needs greater independence, greater powers and possibly greater resources than the current model.” That will be up for grabs when the next government comes in.

Four sale?
Channel 4 crops up in the manifestos too with pledges from both Labour and the Lib Dems to halt any sell off of the publicly owned broadcaster. There’s nothing on the issue from the Conservatives in their manifesto, but plans for a sale were drawn up by the Conservatives in 2014 (but blocked by Business Secretary Vince Cable). A Conservative government without a Liberal Democrat partner to block it would mean a sell off could be tempting as the broadcaster could be expected to bag an estimated £1bn plus for the Treasury.

What a relief
But while the Conservative led coalition has posed threats to television with its licence fee antipathy, many of its moves in the creative industries have been undoubtedly helpful.

Firstly, the coalition government listened to the tax credit campaign from the animation industry and responded admirably. Tax credits for animation production have transformed the UK industry, turning it from a business that seemed to be slowly dying away as production and rights drifted to territories with more favourable tax regimes, into an industry with a bright future. Animation production spend rose from £46m in 2011 to £51.7m in the first year of the tax credit, 2013-14 – a rise of 11%.

High-end drama, a genre that was similarly losing out to foreign competitors as productions headed abroad to take advantage of financial incentives, was given a similar boost, as was film tax relief. Televisual’s Film 40 report in this issue gives some indication of the transformation of the industry as US and international productions increasingly bring their big budget shoots to a newly enlivened UK.

Specifically, tax incentives for film, high-end TV shows and children’s TV have all been given a boost in the pre election budget. Film tax relief has been increased to 25% on all qualifying expenditure. Previously the 25% rate applied for the first £20m of qualifying expenditure and then 20% afterwards. Now the 25% rate applies across the board.

The same budget also brought in changes to high-end television tax relief. The minimum UK expenditure requirement changed from 25% to 10% and the cultural test for television will be revised to reflect previous changes to Film tax relief. The changes have been brought in to allow projects shooting outside the UK to bring just their VFX, post and secondary shoot work to the UK.

The tax relief on live action children’s television production has begun too and will mirror that for animation with the relief available at a rate of 25% on qualifying production expenditure. Live action kids TV has other challenges to face, but the new rules will give some welcome respite.


What the manifestos say

Conservatives
Promise to freeze the licence fee at least until Charter Renewal and have plans for more ’top slicing’ to pay for super fast broadband.

Labour
Will ensure the BBC “continues to make a vital contribution to the richness of UK cultural life while delivering value for money.” Also pledges not to privatise C4.

Liberal Democrats
Will not let licence fee rise higher than inflation, and pledge to keep C4 in public ownership. Will maintain funding to BBC World Service and Welsh language broadcasters.

SNP
Want responsibility for Scottish broadcasting to devolve to Holyrood. Want more of the licence fee for BBC Scotland

UKIP
Want to reduce the licence fee substantially and stop it being a criminal offence not to pay.

Green
Will get rid of the licence fee and fund the BBC through direct taxation.

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