The boxer, Mike Tyson, was once asked about his plan for a fight and he answered; “Everyone has a plan until they get punched in the mouth.” Economists have a variation on that line: “Everyone has a plan until inflation punches you in the mouth.”
Workers will find that, when they tot up the cost of the inflationary increases between the spring of 2021 and the winter of 2023/4 (when current modeling suggests it will fall back to being within the 2% BoE target), they will find that nothing short of a payrise totalling nearly 20% plus some kind of unconsolidated increase of around 10% will be needed unless they are to suffer a fall in their standard of living.
The same is true for productions with (in my view) highly conservative estimates of a 20% inflationary increase that productions will need to meet – on top of all of the other problems the sector is facing.
This has to come as a jolt to anyone who is already worried about the perfect storm that is already threatening the future of UK Independent Production. The British Film Institute (BFI) certainly think so and said as much in the press release [pdf] responding to an Economic Review of UK Independent Film that they had commissioned from the independent research company Alma Economics.
The review recommends the following four recommendations to be modeled and further explored in order to stimulate a more sustainable UK independent film sector:
- an increase in film tax relief for UK independent films
- an extension to film tax relief to include prints and advertising (P&A) spend on UK
- the introduction of a new zero rate of VAT on the exhibition of UK independent
- an increase in the financial contribution of large streaming services to UK
The call for deeper, and more creative tax breaks look a bit like sticking plaster – the current tax-break regime has brought $billions in for production capacity but could be seen to be doing more harm than good to the British independent sector.
But the last bullet point is the most intriguing one, both in the context of Brexit and a weakening hold that the AVMSD over UK policymaking, but also the skills shortage.
In a nutshell, some EU countries expect big streaming services to address the market failures in safeguarding local independent production. Does the UK have to intellectual bandwidth to even notice this problem, never mind address it?
The jury is out (though anyone betting on ‘yes’ should be expecting very long odds).