Looking inward

On the face of it, these are buoyant times for production in Britain. This summer, Walt Disney Studios and Jerry Bruckheimer Films are shooting parts of Pirates Of The Caribbean: On Stranger Tides at Pinewood and other UK locations. Clint Eastwood shot supernatural thriller Hereafter at Pinewood. The new X-Men is at Pinewood. Joe Johnston’s Captain America: The First Avenger and Martin Scorsese’s Hugo Cabret has been shooting at Shepperton. Steven Spielberg is shooting The War Horse on location. Further down the line, there is talk of the next Batman film, the new Aliens and Catherine Hardwicke’s Hamlet all possibly shooting in Britain.

However, past experience has shown how fickle Hollywood studios’ loyalties are when choosing where to house their productions. There are some worrying signs that they are again beginning to look elsewhere.

“The (US) studios basically only care about the bottom line. There is no special relationship we can rely on that would in any way vary that,” says producer Iain Smith, whose credits include Cold Mountain, Children Of Men and The A-Team.

Emily Stillman at the Production Guild says that since last month’s Government announcement about abolishing the UK Film Council, one major US project due to come to the UK has reconsidered at the last minute, citing “the uncertainty” as the reason for going elsewhere.

The UK film tax credit remains crucial in attracting big US productions to Britain. To some, this is the key factor. Andrew M. Smith, Group Director Corporate Affairs for the Pinewood Studios Group, expresses his relief that the Government pledges that the tax credit is safe. “The Government has made it crystal clear in a series of statements that  the Government is 100% behind the film tax relief,” Smith says. “That is the cornerstone to attract inward investment films to the United Kingdom.”

Clint Eastwood’s letter to Chancellor George Osborne asking him not to axe the UK Film Council has, however, made clear it that other factors also affect the decisions to come to Britain.

Alarm is mounting that the UK Government has not yet given no indication yet about its plans for the Office of the British Film Commissioner. This is the part of the Film Council that works to ensure the UK remains an attractive base for US films; the current Commissioner is Colin Brown.

As Smith puts it: “it is not just a matter of saying there is a pot of money, it’s here if you want it. The reality is that the business has to be fought for. That means there has to be a sensitivity to projects at their very earliest stage. There has to be an ability to interpret for the American studios how best to proceed.”

The danger - unless the DCMS clarifies quickly its plans for the Office of the Film Commissioner - is that there will be nobody to do the fighting on behalf of the UK industry. Other countries like Canada and Australia that also incentivise inward investment look bound to benefit.

This summer, the press has been full of scare stories about top sports stars (Usain Bolt and Tiger Woods among them) who may shy away from competing in Britain because of the Government’s tax policies. Tax experts warn that these policies will also affect film actors working in Britain.

“There have been instances of a major star saying ‘I don’t want to go to Britain.’ A major star can influence the choice of where a film is going to be made,” Smith points out.

Liz Brion, media partner at financial and legal adviser Grant Thornton, says that major stars may have to pay more tax while working in the UK because of the new 50% tax rate.She refers to “the aggravation factor” confronting US stars working in the UK and dealing with “the push pull between the IRS and HMRC in terms of who has rights to tax.”

The rate of exchange is also hugely important. (Worryingly for British studios, the pound is currently edging up against the dollar.)

In order to reassure Hollywood, Smith suggests, culture secretary Jeremy Hunt and the DCMS must move quickly to explain their plans “The thing that is worry people a little bit in Los Angeles is what is going on, what is happening in Britain,” says Smith. “Clearly, they (the US studios) don’t want to put their feet in a mantrap where a Government will suddenly - and without any consultation - change the rules. That is something they don’t want to be part of.”

As has been apparent since the decision to axe UKFC was made in late July, the UK film industry is divided and fractious about the course that public film policy should take. The one area about which there is consensus is the importance of inward investment.

“Britain can’t rest on whatever laurels it has got,” adds Smith. “They (the US studios) will go to Hungary, the Czech Republic, to places like Michigan and the Canadian provinces where - if you’re making a certain kind movie - you can get up to 40%…even the (UK) tax credit, wonderful though it is, is really not enough to be the bedrock of our industry.”