UKFilm Council CEO John Woodward yesterday launched an outspoken attack on the'merchants of gloom' who continually snipe and spread bad news aboutthe British film industry.

Woodward, giving a keynote speech at ScreenInternational's UK Film Finance Summit, insisted that the UK industry isperceived throughout the world as 'dynamic, entrepreneurial, internationalin outlook, clever with our subsidies and tax breaks.'

Acknowledging that the industry still has major'structural problems' and 'pressing issues' to resolveregarding such matters as Section 48 tax relief and the UK's co-productiontreaties, Woodward was nonetheless striking a resolutely upbeat note. 'Inthe broad sweep of history, the British film industry is on something of aroll,' he claimed.

Woodward revealed that the Film Council is likely to begiven a more prominent role in future 'acting as a watchdog' for theGovernment over tax legislation matters affecting the British film industry.

He admitted that the Government was 'fed up with theso-called middle men who were seen to be pillaging the tax system' andoutlined why the Treasury was so keen to get rid of Section 48. 'It wasseen as economically inefficient as a method of moving money from the Treasuryinto film productions and it was too easily abused...the whole notion ofselling on losses is not what this Government wants to see.'

The idea behind the new tax credit, the Film Council bossclaimed, was to introduce a scheme that did not 'rely on the smoke andmirror of sale and leaseback and did not require a PHD in rocket science inorder to understand all the wrinkles.'

Acknowledging that many questions still surround the new taxcredit, Woodward nonetheless insisted that it would be 'simpler, moretransparent and deliver the benefit directly to the industry.' He arguedthat even getting the Government to commit to the new tax credit was a victory.'These are not the days any more when Cool Britannia rules. These are thedays of tough Government spending rounds...what we have to understand is howspecial the bubble that we have created is in the context of the real world andother decisions that the Government has to make.'

Again calling for stronger links between production anddistribution, Woodward revealed that the Film Council would continue to makeavailable lottery cash to support the distribution of films. He applauded thefact that the public broadcasters (in particular, the BBC) were now likely tohike up their investment in the UK film industry.

Tax breaks, Woodward continued, were 'a privilege, nota right' and came with responsibilities attached. He warned financiers andtax experts that they will not be able to use other parts of the tax system todesign schemes which bring special benefits to investors in film. 'If youtry to, what you're going to do is not only bring the roof crashing down onyour own head but you're also very likely in time to bring down the wholeedifice of specific tax breaks for the British film industry down with it...ifyou think February 10 was a bloody nightmare, this time round as an industry,don't say we haven't been warned.'