It's frightening how much havoc can be caused by one stroke of a civil servant's pen. The entire British film industry is in chaos this month thanks to a Treasury decision to cross out a short section of its tax rules without notice.
Overnight, a facility that had brought millions of pounds into the UK for film production disappeared...along with much of the cash it now seems. According to the Treasury, the change was needed to prevent a tax fiddle which was prevalent across all UK industries, and the Chancellor didn't even have the film sector in his sights.
So the imminent threatened collapse of many film shoots that were on the brink of principal photography, was an unfortunate side effect of a bigger initiative. Well thanks Gordon!
Admittedly, the tax loophole was a bit odd, although perfectly legal. A group of investors who clubbed together to fund a project, were able to offset their tax against losses greater than the amount they had sunk in. One of those neat tricks that explains why the rich get richer and the poor get poorer.
However, the union's beef wasn't about loopholes being closed, BECTU was incensed about the way it was done. The change wasn't just instant, it was effectively retrospective, as far as investors were concerned if they were involved in projects that had got beyond script stage.
It may seem odd to take the government to task so soon after the union re-affiliated to Labour, but it was a terrible mistake for the Treasury not to talk to someone - us, the film producers, the BFI, anyone at all - who could have pointed out the devastating effect that the change would have on the film industry.
No transitional arrangements were put in place to protect projects that were underway already, and millions of pounds either went abroad as a result, or went away altogether.
BECTU's response was to team up with the rest of the industry, and lobby for soem sort of interim relief for films that were close to production. The Treasury, reinforcing its reputation as Whitehall's most arrogant ministry, flatly refused to reverse the change, even though the industry is already struggling to deal with the problem of a soaring pound and a dollar just about to go through the floor.
The UK may be one of the best places in the world to make movies, thanks to the skills of British crews, but to American producers it isn't cheap at the moment thanks to the soaring pound. Add to that a bad taste left by the tax bureaucrats moving the goalposts, and other locations begin to look very attractive.
Sadly, it's not just the film industry where our political masters inadvertantly turned off the cash tap - the rules on Arts Council funding have brought half a dozen theatres to the point of closure in the last month. Public money going into theatres is often restricted to paying for redevelopment, not running costs.
This leaves operating companies and local authorities in a position where they have beautifully-restored buildings, but no money to hire staff to put shows on. Without shows, what was the point of doing the theatre up in the first place?
Both of these cash crises point to the need for BECTU to keep hammering on at government about the uniqueness of our industries, and their special needs. Ironically, there is a will in government to support us, but as the theatre example demonstrates, good intentions don't always translate into sensible actions.
Fortunately, the union has already used last year's Labour affiliation ballot as a lever to open a line of communication with the top of the party. Officials already know about the problems with Arts Council funding, and the film tax disaster will be raised with them soon.
We're not demanding special treatment...but on behalf of members we do expect results.
Tony Lennon
March 2004
