As UK cinema attendance soars, is Brexit the trigger to bring back The Eady Levy?

By Jonathan Sothcott

One thing there isn’t is a great deal of hope around Brexit in the UK. The most divisive political event in Britain in three decades generates a lot of hype but very little faith – from either side – and therefore slim optimism for a positive economic outcome. I was and am a Remainer, but I also believe that one has to respect democracy and do that very British thing of making the best of a bad situation. It is part of our DNA: tea, crumpets and Blitz spirit.

And amongst all the headlines and political machinations, good news has a habit of getting lost in the cracks. For example, this week it was reported that the UK Cinema Association had released figures confirming British cinema admissions are at their highest since the early 1970s. More cinemas are opening than closing and box office takings are expected to his £1.3 billion by the end of the year. Amidst chaos and uncertainty – and despite a hot summer, the World Cup and the inexorable rise of Netflix – people are flocking to watch movies on the big screen.

As such I’d like to call on the government to seriously consider the reintroduction of The Eady Levy, in an updated form, to support and strengthen the indigenous British film industry.

The Eady Levy, named after Sir Wilfred Leavy, was a tax on box office receipts to encourage inward investment in the British Film Industry. Incorporated into the Cinematograph Films Act in 1957, the Levy split a portion of cinema ticket prices between exhibitors and pro-rata between qualifying British films, with no obligation to reinvest in further production. The Levy was a significant factor in the British film boom of the 1960s and early 1970s, with many international producers making films in the UK to take advantage of the rebate. 

To qualify for the Levy, a minimum of 85% of the movie had to be filmed in the United Kingdom or The Commonwealth, and only three non-British individual salaries could be excluded from the costs of the film, ensuring the use of largely British actors, writers, directors and crew. There’s can be little doubt that the Eady Levy was one of the principal factors in the huge success of the Hammer Horror, Carry Onand James Bond films.

The decline in America’s outward film investment following the Vietnam War, together with the rise of colour television and VHS, saw the British film industry hit a slump in the later half of the 70s and throughout the 1980s, despite the best efforts of Goldcrest and Handmade, which lead to the Levy being terminated in 1985.

Today the principal incentive to invest in British Film Production is the UK Film Producer’s Tax Credit, a rebate which offers filmmakers 25% of their qualifying production spend (with a ceiling of 80% of the budget). It is a good mechanism but it doesn’t specifically encourage producers to make British films – merely to take advantage of our very talented crews and facilities and claim a rebate on this part of their production spend. So American studios shoot films here but use American stars and take the box office receipts home. This is an economic positive and keeps people in work but it is not to be confused with actually making British films.

For some years now, private investors have been encouraged to invest in the Government’s Enterprise Investment Schemes, one of the ‘qualifying trades’ for which is Film Production. However, since the last budget, the rules have changed quite significantly and no longer encourage direct investment into production slates. This change, largely because the system has been regularly abused by film financiers, has had a significant impact upon the film industry and as such the timing seems perfect to give the film industry a new backbone whilst also addressing many cinemagoers greatest frustration – the insane inflation in cinema ticket prices.

We’re all familiar with the so-called ‘blockbuster tax’ whereby cinemas set higher prices (creeping up towards £50 in London!) for premium tickets for the latest Hollywood movies. Of course, these films with their huge marketing campaigns and brand awareness are the ones that sell the most tickets anyway and its only logical that familyies will choose to prioritise these films over indigenous productions. So how do we get people out of the Marvel films on the iSensescreens and watching genuine British movies? Because there’s no point in encouraging British film production if nobody actually sees the films.

The Eady Levy (or something similar) would address both issues – the cinemas get a rebate against their corporation tax payable on British film receipts, provided they show a certain number of British films each month via a quota system. And no, not at 8am on a Wednesday morning. The exhibitors need to be encouraged to get behind and promote commercial British films, so that producers can see that if they invest in British film production, there’s a level playing field on which their product can perform.

If Odeon were incentivised to promote a ‘British Film Friday’ or something similar, everyone would win. I don’t consider the vast majority of the films I make to be for theatrical release, I’m a B movie producer – I get it, but that doesn’t stop people asking on social media which cinemas they can see them at every time one is released. Make tickets for the British films cheaper than Hollywood blockbusters. Find a sponsor. Get behind our own industry, because frankly given half a chance British films are amongst the best in the world. So they need a world class platform, at least at home.

Many people still see ‘straight to DVD’ as a failure rather than a marketing choice but we can’t blame the cinemas for only showing the blockbusters which are an easier sell. If we give film-makers a reason to make British films and cinemas a reason to show them, at least the public will have the chance to see local films on the big screens if they want. Europe has never been the best place to sell British films and once we Brexit as inevitably we now must, I can only see that market declining. As such we need to support our own industry or see it fade away.

The next few years are going to be an incredibly bumpy ride for the UK and it is a well-established fact that people increasingly seek entertainment in the bad times. Our film industry is a feather in the UK’s cap – let’s make it better, let’s make it something to be proud of. Let’s get more British films made.

Jonathan Sothcott is a prolific British film producer withsuccesses including Vendetta, We Still Kill The Old Way and The Krays – Dead Man Walking. His films have sold in excess of a million DVDs.

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