The British government has been urged to take a series of drastic measures to help support the beleaguered U.K. TV industry and indie film sector in a major parliament committee report.
Following months of evidence provided to MPs by some of the biggest figures in the British creative industries, the wide-ranging report asserted that “tax breaks and a streamer levy should be on the table” as part of an “urgent package of support for U.K.’s crisis-hit high quality drama sector.”
Amid spiraling costs, a collapsing ad market, major funding cuts across the local networks and the recent global pullback by studios and streamers when it comes to local co-productions, the report called for an enhanced tax incentive for domestic high-end TV, much like the new Independent Film Tax Credit (IFTC), announced in 2024.
Some of the evidence given to MPs underlined a crisis when it came to getting prestige British storytelling financed (“Wolf Hall” director Peter Kosminsky said “Wolf Hall: The Mirror and the Light” could only get made when lead star Mark Rylance took a major pay cut). To that end, the report urged streamers, who it said “benefit from the creativity of British producers,” to “put their money where their mouth is” by committing to pay 5% of their U.K. subscriber revenue into a cultural fund to help finance “drama with a specific interest to British audiences.”
It added: “If the industry does not voluntarily establish the fund within a year, the Government should introduce a statutory levy.”
Also on the subject of TV, the report argued that that “dynamic between independent producers and streamers is not sustainable,” and that U.K. production companies were being “gutted by deals that deny them the ability to fully monetise their intellectual property.” It said the government should consider ways that U.K. could retain a greater share of IP rights when working with streaming platforms.
While the report acknowledged the IFTC — as called for by the previous committee in the last parliament — as a “welcome first step” for the film industry, it said it was a “game-changer but not a silver bullet for all the problems facing independent British film.” It recommended that the U.K. government go further with, among various measures, a targeted 25% tax relief towards the P&A costs of films that had benefitted from the IFTC.
In an industry that is dominated by freelance workers, the report also made a range of recommendations on ways to bolster both skills and workers rights. Among them was it backing — as put forward by the last committee — for the government to appoint a dedicated Freelancers’ Commissioner.
Other recommendations including the government funding an AI observatory and tech demonstrator hub with the British Film Institute, a reduction in taxes on cinema tickets and a twice-yearly analysis comparing the U.K.’s film and high-end TV tax incentives with those of other countries in order to maintain competitiveness.
The report also addressed efforts to tackle bullying and harassment, urging the industry to commit to “unconditional, long-term funding” of the previously-unveiled Creative Industries Independent Standards Authority “within six months.” It added that the government should step in to explore options to fund the body should the industry not delivery a voluntary solution.
“Big box-office blockbusters made in Britain have showcased the U.K.’s world-class film and high-end television industry like never before,” said committee chair Dame Caroline Dinenage MP. “But the boom in inward investment of recent years now risks crowding out our many talented independent British producers. While streamers like Netflix and Amazon have proved a valuable addition for the industry and economy, unless the Government urgently intervenes to rebalance the playing field, for every ‘Adolescence’ adding to the national conversation, there will be countless distinctly British stories that never make it to our screens.”
Kosminsky — who made the case for the 5% levy on streamers — unsurprisingly welcomed that aspect of the report. “This is a brave thing to do in the current political climate and absolutely the right solution,” he said. “However, I do think it is important to stipulate that the fund created by this levy should only be available to productions which are either commissioned or co-commissioned by a public service broadcaster. As far as I can see, this isn’t made clear in the report and it is an essential aspect of the 5% levy solution to the problems our industry faces.”
In a statement provided to Variety, Netflix pushed back against the recommendation, arguing that the added cost from the levy would only be passed on to the consumer.
“The U.K. is Netflix’s biggest production hub outside of North America — and we want it to stay that way,” a spokeswoman said. “But in an increasingly competitive global market, it’s key to create a business environment that incentivises rather than penalises investment, risk taking and success. Levies diminish competitiveness and penalise audiences who ultimately bear the increased costs.”
Numerous distributors, including StudioCanal, Lionsgate, Black Bear Pictures, Altitude, Picturehouse Entertainment and True Brit, applauded the urge for the government to offer a P&A tax relief on British indie features.
“When releasing a British film in the U.K., we are spending and competing in advertising terms with Blockbuster movies, games and other commercial retailers, who have many more millions of pounds in their budgets than independent film distributors,” said True Brit CEO Zygi Kamasa. “In order to ensure that those very films that are now being supported in production are adequately released, then a tax credit for P&A would be a huge boost to distributors and to those films to maximise their potential box office takings.”
