Picture the scene. It’s Bonnie and Clyde 2: The British Years, and our two rebels are found by their car somewhere off the North Circular. There’s Faye Dunaway as Bonnie, looking as iconic as ever. Something’s not quite right with Clyde, though. As he peers up from underneath his hat, we realise that it’s not Warren Beatty in the role but a preening Hugh Grant. “Dear boy,” he says. “May I present Miss Bonnie Parker. My name is Clyde Barrow. We rob banks.”
Fanciful? Perhaps. But if the financial boffins at the Treasury have anything to do with it, this type of scenario might actually become a future film-making reality. For thanks to the film-sector tax incentives announced by the Chancellor this month in his Pre-Budget Report to the House of Commons, the new movie-making imperative is all about Britishness.
From January 1, extremely generous tax relief will be offered to both local and international film-makers (20 per cent for smaller budgets, 16 per cent for larger), thereby encouraging a huge influx of Hollywood talent plus a resurgence of British projects. The only catch is that to qualify for this relief you must pass the so-called Cultural Test for British Films. In other words you must prove, in an intricate points system, that your movie is of cultural relevance to Britain, and isn’ t just a film about, say, space, or the jungle.
The generous tax relief, of course, is a balm aimed at helping British film-makers who were wounded by tax-loophole closures in 2004. The loophole allowed “tax partnerships” to be set up, in which investors would put money into a project but pull out before the film made any money. The Government argued that such investors went into film production knowing that they would make a loss, and so avoided paying tax. But the effect of this change on the industry was catastrophic, according to film-makers. Production on Jude Law’s film Tulip Fever was halted. The release of The Libertine, starring Johnny Depp, was also thrown into doubt, but finance was eventually secured.
“We’re hopeful that as many films as possible will be able to take advantage of these reliefs,” says Nic Stevenson, a Treasury spokesman, rejecting the notion that the criteria for this relief are a tad prescriptive. He explains the cultural test, which includes offering four “points” if three of the movie’s lead characters are British, one point if key crew members are British, and four points if the film is based on a story by a British citizen
— 16 points, or more, are needed to fully secure the financial benefit. “We’re quite comfortable and confident,” he adds, obliquely, “that films will be able to pass the test if they are the films that we want to be supporting.”
Kate Dyke, spokesperson for the Department for Culture, which oversees the test, is equally adamant that Britishness should be at the forefront of funding. “This is tax- payers’ money that we’re using,” she says. “So you can’t just get a tax break because you’re coming here to make a movie. You need to be giving something to British culture in some way.”
And yet, is there not a danger that today’s canny Hollywood film-makers, seduced by prospect of hefty tax cuts, simply alter their stories and their characters to be able to pass the test? Will Star Wars 7, for instance, feature a Cockney galactic overlord, an Oxbridge-educated space slug and a pair of sabre-wielding pearly king and queens? And if this is indeed the case, and Britishness simply becomes a series of ticked boxes, does it not then rubbish the very notion of a cultural test that’s supposed to identify some ineffable and inherent sense of cultural worth? Dyke is sanguine about the notion of Hollywood film-makers suffering from the test. And she adds that a new hypothetical Star Wars movie, without a single reference to Britain in the script, could nonetheless qualify for a tax break, provided that the crew was British, most of the lead cast was British, and the major locations were British, too. “The majority of films in the UK are then generally set in the UK,” adds Stevenson. “They are then culturally significant to the UK, and will therefore pass the test.”
The film-maker Mark Herbert, producer of the Shane Meadows hit Dead Man’s Shoes and the director’s forthcoming This is England, has no qualms about the scheme’s conspicuous reliance on Britishness. “I’m interested in British films, and British films have an international audience,” he says. “And in a weird way, the more British you are, the better I think the films travel.”
Herbert, whose recent films, all homegrown and gritty, would clearly pass the cultural test for Britishness, admits that producers will nonetheless do anything to get their movies made. Including a deeply unsubtle character switch in order to secure finance. “If I’m faced with a decision where it’s: ‘Do we make this character British and get the film financed, or do we let the film fall?’ Well then I’d seriously consider it. But it’s no worse than when you’re trying to pre-sell a movie internationally and you think that an actor isn’t well known in certain territories so you change them.”
Herbert’s next movie is set, ironically enough, in the jungle. Yet he won’t rule out tax credit even for this, and is willing to have a go at the cultural test. “Only part of it is set in the jungle,” he adds, hopefully.
But what about the Yanks? Is this scheme perhaps a timely re-evaluation of the “special relationship” that has existed between Hollywood and the British film industry? Historically the former has invested heavily during boom times and then suddenly disappeared during periods of recession, leaving the latter cruelly out to dry. Or is it actually just a helping hand to the big studios, with a few inconsequential British baubles attached? Walt Disney International, for one, seems to be pleased with the new incentives and has decided to make its second Chronicles of Narnia movie, Prince Caspian, mostly in the UK. The first £90 million budgeted movie, The Lion, the Witch and the Wardrobe, was shot in the film- making-friendly New Zealand and the Czech Republic, so the decision to film in the UK is seen as an early triumph for Gordon Brown and the Treasury bean-counters.
The irony, for all this, is that film production is increasing in the UK already. Eight of the top 20 British box-office releases last year were made in Britain. And £486 million was invested in production in the first half of 2006 — that’s a considerable increase on the £276 million for the same period in the previous year.
There is one final and unforeseeable sting in the tail for the scheme’s Hollywood-baiting ambitions. At current exchange rates a bullish pound and an increasingly weakened dollar (close to $2 to the pound), makes an enormous American spend in the UK deeply unattractive. The Czech Republic and New Zealand in particular (with its dirt-cheap NZ dollar) will thus remain the location champions, on paper at least, for the foreseeable future.
In the meantime the Treasury is surely to be applauded for engaging with the film industry in the first place, and for attempting a radical film-friendly overhaul of state aid for the sector. “I think it’s a great thing,” Herbert concludes. “And the knock-on effect is that I think we’ll start to see more confidence around, and more film-makers taking risks with their stories. Which is exactly what we need.” Let’s just hope that it doesn’t include Hugh Grant in a gangster’s hat.
