Film Policy in the UK and the Spending Review: The Cultural-Shock Doctrine in Action?

The Spending Review and Film

In one of the first posts on this blog I speculated as to whether the closure of the UK Film Council would signal a return to the dark days of the 1980s and the almost complete collapse of British film production. As I said then, the devil is in the detail: how much will overall subsidy be reduced, how will it be distributed? The details of the cuts made to public subsidy for film in the UK are now emerging. What do these suggest?

Cuts or Restructuring?

The following article in Screen Daily outlines the cuts, reproduced via BFI Watch:

film-sector funding outside Lottery funds and the British Film Institute (BFI) has been slashed by over 50% . . .

. . . the annual grant-in-aid budget for film in each of the next four years will be around £18.618m, down from £23.9m in the year 2010/11. After counting the BFI’s newly reduced annual budget, that leaves just £4.655m for all other film activities (excluding Lottery development/production funding which the government has pledged to maintain at current levels). That £4.655m will have to cover:

• inward investment and the work of the British Film Commissioner
• National and regional screen agencies
• research and statistics
• film exports
• certification (assessing which films qualify as British and are therefore eligible for Lottery funding and/or UK Film Tax Relief)
• diversity initiatives
• anti-piracy initiatives
• co-production support
• The UK MEDIA Desk activities
• Sponsorship of work such as The UK Film Centre at Cannes

Cuts had been anticipated but the 50% figure for non-BFI and non-Lottery funding is a stiff reduction and confirms the fear of many in the industry that, while Lottery funding and the tax certification are safe, other areas of the film business will suffer . . .

. . . Meanwhile regional screen agencies are anticipating a cut in funding along the same 15% lines as the BFI.

So these are big cuts, disproportionately placed on certain parts of the subsidised film sector. The tax incentives designed to stimulate commercial feature film production and inward investment are maintained, along with Lottery funding for production. The main cuts are to come from the BFI and the Regional Screen Agencies. The Spending Review can be seen, therefore, as a restructuring exercise for film subsidy in the UK. We can understand it by looking at the structure of film subsidy during the New Labour period.

The Structure of Film Subsidy under New Labour

In the UK Film Council’s first major policy statement, ‘Towards a Sustainable Film Industry’, then Chairman Alan Parker described the UKFC’s strategy thus: "Essentially our intention is to use public money to make better, more popular and more profitable films in real partnership with the private sector, which drives our industry and largely creates our film culture." On the other hand, the “cultural role of the UK FILM COUNCIL has been largely delegated to the British Film Institute and its regional partners." (Here, page 1)

While the separation of industrial and cultural functions proved to be not as neat as Parker would have us think, this demonstrates the structural division between commercial subsidy – primarily via the tax incentive and lottery investment in production – and cultural subsidy – via the BFI and the Regional Screen Agencies – that characterised the New Labour period. As a DEMOS report put it: “The Government and the UK Film Council look to the RSAs to help capture the many facets of British communities”:

To encourage the growth of a sense of community and identity, to identify and empower under-represented and marginalised voices, give support for different forms of distribution, and ensure diversity of access and participation. (Here, pages 20 and 17)

In policy terms, the social and cultural objectives of film subsidy – community, identity, diversity, social inclusion – were placed onto the RSAs and the BFI. The extent to which the Regional Screen Agencies concerned themselves with social and cultural initiatives in practice is a bigger topic than I have space to discuss here, but it is undoubtedly true that they provided a badly-needed inroad to the industry for marginalised social groups. However imperfect they were, these aspects of film policy recognised the failure of the market to be representative of British social and cultural life. It is these sorts of initiatives that will be reduced. We’ve already seen Screen East, one of the Regional Screen Agencies, close (although the circumstances of this are unclear).

So while operators like Clint Eastwood, Dreamworks and Directors UK might be breathing a sigh of relief for the moment, this spells trouble for community film-makers in Leicester or Newcastle. In short, these cuts are not fair; like the more general attack on the welfare state of which they are a part they will disproportionally effect the poorer, more independent and vulnerable sections of the film sector. 

In the 1980s commercial subsidies – the Eady Levy in particular – were slashed leading to the almost complete collapse of commercial feature film production in this country. At the same time, cultural-film subsidy was maintained at a certain level, mostly through BFI Production. This produced some memorable, often oppositional films (My Beautiful Laundrette, Orlando, The Draughtsman’s Contract, Young Soul Rebels).

In this phase of neoliberal restructuring we appear to be witnessing the opposite strategy: the maintenance of subsidy to the commercial film sector at the same time as the withdrawal of state support for the cultural sector. This is the cultural-shock doctrine in action.

How to Fund Film in the UK? The Tax Credit System

The longstanding debate about film policy in the UK seems to have been reignited by the closure of the UK Film Council.  The latest addition has been producer Matthew Vaughn's call for changes to the Tax Credit system.  Under Vaughn's proposal, Tax Credit would be treated as capital investment and used to leverage a share of Hollywood profits back into the British industry.

The Tax Credit system was one of, if not the, central plank of New Labour's film policy, giving a 20% cash rebate to outside films (which in practice means Hollywood) that chose to spend money in the UK.  The rationale was that Hollywood is a global industry that will outsource production to countries with the most favourable conditions and therefore the strength of the British industry was dependent on getting a slice of this action.  This essentially sought to characterise the British film industry as a cheap service provider, particularly of post-production facilities but also of studio space, for runaway Hollywood productions.  In order to qualify films must be official British films or official co-productions (what qualifies as officially British deserves a post of its own) which encouraged Hollywood into linking up with British production companies.

It is this that allowed the UK Film Council to claim films like Harry Potter, The Dark Knight and Mama Mia! as successes of the British cinema, despite their obvious orientation to the international Hollywood-dominated market place and the fact that the primary beneficiaries of their profits are foreign-based companies.  It's the cinematic equivalent of the Chinese government claiming that its ability to provide cheap shoe-stitchers makes Nike a success story of the Chinese sports industry.

What Vaughn proposes is that the Credit system be treated as investment which can recoup a return to the Treasury which can then be channelled into independent British productions.  Vaughn argues that:

"the point is that the studios need capital and will pay for it, so the tax credit does not have to be free.  The studios will argue that asking for any kind of return will undermine the UK’s appeal as a location.  We disagree.  Certainly there are other jurisdictions with attractive incentives, but every incentive programme has its limits.  Looking at the UK’s position as a production centre, the country has a strong hand and should play to it.  In today’s cash-strapped world, 'soft equity' is a valuable commodity for studios and producers alike."

So could this work?  The first problem is that Hollywood will be loathe to accept even the principle that it should share its profits.  The Hollywood studios are well organised and quite capable of acting together when their collective interests are threatened.  The relative size of Hollywood productions means that shifting even a couple of them away from Britain will have serious consequences for the sections of the British industry which are dependent on such investment.  I expect Prague and Canada are waiting with bated breathe.  So it is a risky strategy.

Secondly, this does nothing to challenge the system through which Hollywood controls the international market, which is distribution.  That is where the real money lies.

Finally, even if it could be successfully applied, this plan would mean a change of policy.  It would require the political will to base film policy on the principle that the successful sections of the industry (Hollywood) should subsidise the less successful (independent British companies), essentially redistributing wealth from massive organisations like Fox and Disney to smaller organisations like Vaughn's company, Marv Films.  While Vaughn's proposals are relatively modest - he does not, for example, suggest that the money recouped would be channelled into non-commercial films - they still require interfering with what is a nice set-up for Hollywood.

Under the current policy-makers I just can't see it.

Hollywood's Politics

There's a good interview with Matthew Alford over at the consistently excellent New Left Project website.  Alford has just written a book on Hollywood films as propaganda for the American empire.

This is a longstanding and interesting debate: the extent to which Hollywood is dominated by whinging pinko liberals, as the American Right has it, or whether it is best understood as the ideological arm of American capitalism and imperialism.  Or does it matter?  Film studies has tied itself up in knots with this stuff for years, from the rejection of all film narrative as inherently reactionary which was fashionable in film theory circles in the 1970s and 1980s to the more recent drive to resuscitate and depoliticise the concept of entertainment.

As a useful antidote to the more ludicrous intellectual contortions that have attempted to make sense of film and politics, Alford puts it simply: "Nothing is ‘just a story’ – films are part of a socialisation process, just as we read Fairy Tales in part to help children make sense of the world. Of course, if someone asks you what article you’re reading in newspaper, it would be rather truculent to reply ‘It’s a propaganda piece consistent with establishment interests’. It would be more worthwhile though if you investigated the content of that article, identified its sources and what it omits, how it fits in with other material in the same newspaper, and so on. It’s the same with Hollywood – it does not suit corporate owners when audiences recognise the obscenity or the idiocy of the political messages they provide but this is best exposed systematically."

As such, Alford notes that "The US first declared a ‘War on Terror’ in 1985. Hollywood has stuck closely to Washington’s line ever since, including the trend for Islamist villains in the mid-1990s (True Lies, Executive Decision), as the ‘clash of civilisations’ theory was gaining traction. More recently, we have had movies like Munich, Back Hawk Down and The Kingdom that support the notion of Western benevolence in the quest to stamp out Islamic terrorism.

With regard to 9/11 itself, no major studio has thought to question the government’s narrative despite the incredible popularity of alternate takes on that day’s events. The Pentagon and the White House warmly embraced United 93 and a string of other similar films."

But Alford, what about all the exceptions?  Doesn't Hollywood make many films that critique the myths of American capitalism and Empire?

"There are a few, but look what happens to them… Genuinely critical films such as John Cusack’s War, Inc and Brian de Palma’s Redacted opened in just a few dozen cinemas in New York and L.A. Disney told its subsidiary Miramax to ditch Fahrenheit 9/11, which led to Miramax’s bosses leaving to create a new company. CBS, NBC and ABC all refused to advertise Michael Moore’s DVD in between news programming. The pattern is familiar."

This looks like a solid, interesting and useful bit of research and Montagu can't wait to read it.