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“People make choices on a daily basis about where they’re going to film their latest Hollywood blockbusters. Ensuring the U.K. remains competitive is vital,” Sky exec Stephen Lotinga tells THR.
By Lily Ford
Within the U.K.’s entertainment industry, as the country soaks up the vast change brought about by a historic general election, there is hope.
Britain’s new Prime Minister Keir Starmer, who takes over from Conservative Party leader Rishi Sunak, made few promises during his campaign, but the Labour Party‘s Creative Industries Sector Plan, published in March, offered a glimpse into the kind of change these left-leaning politicians plan to make. Among the objectives are a commitment to supporting country-wide growth as well as access to culture. The plan also highlights a need for diversifying audiences and the workforce as well as boosting creative education and skills. However, the new Cabinet — and in particular, the country’s new chancellor, or finance minister, Rachel Reeves — is inheriting a host of financial problems, propelled by an unsteady economy following Brexit, the war in Ukraine war, and lingering ramifications of the pandemic.
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The creative industries weren’t completely without support from the right-wing Tories: their media bill, committed to maximizing the potential of British radio and television, allowed public service broadcasters (PSBs) to gain more control over their schedules and creative offerings through more flexible rules. They remain steadfast in the importance of regulating artificial intelligence. In only March of this year, the then-Chancellor Jeremy Hunt unveiled a 40 percent corporate tax break for film and TV studio facilities until 2034 — a tax cut worth about £470m ($610m) over the next 10 years. He also introduced a new independent film incentive of 40 percent, as well as an increase to an existing incentive for visual effects.
But across their 14 years in office, there has also been widespread instability and many would argue the party starved the industry of crucial funding. According to official BFI statistics from 2023, the national film, television and video sectors contributed a mammoth $26.5 billion to the U.K. economy in 2022, up from $16 billion in 2019. Yet, the budget for Britain’s Department for Culture, Media, and Sport (DCMS) was slashed 24 percent from 2010 to 2015. Boris Johnson, Sunak’s predecessor as Prime Minister, at one point threatened to cut support for beloved public broadcaster the BBC by axing its license fee, the annual TV tax that Britons pay, which accounts for 65 percent of the BBC’s total budget.
Paul W. Fleming, General Secretary of Equity, tells The Hollywood Reporter three core problems have landed on Keir Starmer‘s desk following over a decade of Conservative rule. Equity, the U.K’s performing arts and entertainment trade union, is made up of 50,000 actors, singers, dancers, designers, directors, comedians and more. It boasts Olivia Colman, Brian Cox and Judi Dench among its members and trustees. Ninety-five percent of film, TV and theater made in the U.K., even American productions, are made on Equity agreements. “[Number] one is austerity,” Fleming says of the task ahead. Austerity most commonly refers to the period between 2010 and 2019, when the then-Tory Prime Minister David Cameron set about attempting to control the national debt following 2008’s financial crisis by making severe cuts to public services.
“So what we’ve seen is 20 years of austerity in our industry,” Fleming continues. “That’s a reduction in the amount of money available for subsidized theater, for instance. That’s a key part of the talent pipeline on stage and screen. It’s part of our cultural infrastructure. It means we have world-leading talent in the second-largest producing economy in the world after U.S., funded by a theater sector that keeps people in work, develops new ideas… And that has been under attack for 20 years.” It worsened, he points out, as Tony Blair’s Labour government took money from theater to fund London’s 2012 Olympic efforts. Crucially, for every pound invested in the creative industries, about five to eight pounds is returned to the local economy, according to Equity research. In short, supporters argue that investment in theater is beneficial to everyone.
Another vital task for Labour is to represent the working people in a way the Tories did not. The industry’s biggest onscreen, onstage talent can only succeed when others — many on low or minimum wages — take on the smaller or behind-the-scenes roles and, Equity supporters argue, are properly supported by the government. The expansion of workers’ rights in the U.S. is palpable – historic actors and writers strikes earned them say in how they are treated and what they are paid, but the same rights do not exist for working people in the U.K. In 2015, the Tories introduced various rules such as a new thresholds for industrial action ballots, where areas in which workers want to strike will need the support of at least 40% of those entitled to vote in order to do so. In 2022, Johnson’s government banned “noisy” protests, so citizens conducting public marches or strikes would face tougher police enforcement if deemed to be too loud. “They’ve had a serious crackdown on people’s reasonable rights, freedoms and liberties, [there has been] a broader attack on working people,” Fleming notes. “So what we’ve seen is a Tory government who is not particularly concerned with working people who generate capital and their relationship with the economy as a whole.”
But instability has been the biggest problem, the Equity chief continues. “COVID, to a degree, has a lot to answer for, but what we’re looking for is a long-term plan, and Labour is committed,” Fleming says. This instability can be neatly exemplified by the Tories’ 12 culture secretaries in 13 years — top dog at the DCMS has not been considered a job-to-have in their Cabinet. The role, overseeing arts, culture, broadcasting, sport, tourism, museums, and more, is rather patronizingly labelled “Minister for Fun” in the press and among politicians themselves for its entertainment-related beat. “Funding for the BBC,” Fleming gives as an example of this instability. “Netflix and the big streamers are very clear with us that they need a strong BBC, the strong network of infrastructure that the BBC provides — whether that be recording studios or work for artists in fallow periods — that means the U.K. continues to be as attractive a proposition to come here and do full production and post-production.”
Enter Lisa Nandy, Labour’s Culture Secretary and the woman responsible for making political amends in the sector. “She’s a phenomenally capable politician and she’s obviously not new to the world of politics,” says Stephen Lotinga, Sky‘s group director of corporate affairs, who heads up the public affairs and policy team. “She’s been not just an MP [member of parliament], but a senior MP, and previously ran for Labour leadership. So we know she’s very capable. She’s clearly trusted, because Keir Starmer has gone directly to her.”
“I’ve known Lisa Nandy for a long time, and she is a heavy hitter in the Labour Party,” adds Fleming. “And I think that is really good news. She is somebody who deeply understands that need for economic growth, particularly in towns outside of London. She’s somebody who engages with us as a Trades Union and not just some arts lobbying group. She understands that there are working people who are creating capital in this industry more than anywhere else.” Though Fleming says the new Tory shadow culture secretary (a member of the minority party’s shadow Cabinet, who have no executive power but scrutinize the policies and actions of their in-Government counterparts), Julia Lopez, is a “solid intellectual performer” as well, and highlights the Party’s commitment to managing the power of AI.
Lotinga argues that the Conservatives have “taken creative industries seriously” over their 14 years in office. He has hope that Labour will not undo the extensive tax relief across film and television, which he says has been “pretty fundamental” in driving investment. One key issue Sky would like to see addressed, as voiced by their CEO Dana Strong in a recent op-ed for This is Money, is a transformation of the existing apprenticeship levy. Lotinga describes it as “a sizeable payroll tax” for those with a payroll of more than £3m ($3.9 million) to fund apprenticeship training. It is currently charged at 0.5% of a company’s annual pay bill, and they can only spend the subsequent subsidy on apprenticeships. But Labour is planning to turn it into a “growth and skills” levy to address wider workplace shortages. It would give firms in England flexibility to use up to half of their levy contributions for forms of non-apprenticeship training, allowing employers to pay for other forms of training they deem more valuable. This would leave Sky, Strong says, with more than £5m ($6.5 million) to invest in training without the existing restrictions currently in place with the apprenticeship levy.
“It feels like it was set up and designed for industries that don’t operate in the way the creative industries do,” Lotinga says of the existing apprenticeship levy. “And we’ve been involved in discussions about that for possibly eight, nine years. It feels like a very, very, very long time, and we have struggled to get the changes that we felt were necessary in order to be able to re-skill our workforce and drive the kind of growth that we want to see. We’re very supportive of Labour’s commitment to that.”
Fleming says Equity will be pressing the new government on a long-term plan for the U.K. to reach the EU’s average cultural funding. “Let’s get it to point 0.5 percent, that’s essentially doubling cultural funding. We think that is achievable if there’s the political will to do it.” Equity also wants to tackle high upfront fees charged by casting directories, to ensure public subsidy only supports work on decent union terms, and to fight for better rights in the video game and TV commercials sector. Ratifying the Beijing Treaty, legislation which both the U.K. and the U.S. have both signed up to on affirming workers’ rights in audio-visual performance, is also on Fleming’s radar.
Lotinga stresses the focus on tax. “People make choices on a daily, weekly, monthly basis about where they’re going to film their latest Hollywood blockbusters or whatever it might be. And ensuring that U.K. remains competitive within an environment where other countries are offering very significant incentives to do so is absolutely vital.”
He notes that though the international production boom has begun to slow down following an influx of backed-up pandemic projects, U.K. execs are still maintaining that the country is an attractive hub for global entertainment production. Lotinga cites Sky Studios’ recently-expanded Elstree site, currently filming Jurassic World 4 and Bridget Jones: Mad About the Boy, as a demonstration of their confidence. Sky’s internal estimates predict that the U.K. Media and Entertainment Sector has the potential to be worth an additional £10 billion ($13 billion) a year by 2033 — rising from £43 billion in 2021 to £53 billion in 2033, and equal to an additional 40,000 British jobs.
It’s a long road ahead for a Labour Party weighed down by years of economic crisis, but insiders are quietly hopeful. As for their industry-specific plans, only time will tell. Fleming certainly believes there’s work to be done: “Did we need change? Yes. Is there a decided change in tone from government now the Labour Party is in? Yes. We’re cautiously optimistic.”
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