My constituency is best known for containing in Westminster and the City respectively our nation’s political and financial heart. But it is also spiritual home to a globally competitive creative sector in Soho and the West End that includes the film, music, television, theatre and animation industries. With our success in design, our expertise in information technology and our originality in film and theatre, creative industries arguably rank as the next most important overseas economic driving force after our financial services industry.
While I am assured by tourism experts that Theatreland is enjoying an unprecedented run of success even in these dark economic times, unfortunately the same cannot be said of the animation industry. In terms of quality, humour, inventiveness and imagination, the British animation industry is second to none. Past success in this field has been such that characters like Aardman’s Wallace and Gromit have become part of our national heritage. But many of our family favourites have moved abroad to be animated by foreign production companies. Bob the Builder is now animated in Taipei and Los Angeles, Thomas the Tank Engine in Canada and Noddy in India. Such is the global reach of the animation industry that our home grown product now hangs on the fortunes of a handful of shows including Roary the Racecar and Fifi and the Flowertots.
So why the large scale emigration? For some time, our animation industry has been struggling to compete with cheaper overseas labour and the huge funding incentives in terms of tax breaks and creative funds in France and Canada. The industry has also been hammered badly by ITV’s massive reduction in children’s broadcasting and a drop in the prices for programming because of the junk food advertising ban. Yet until now, the strong talent base in the UK had helped keep the industry’s head above water.
As the recession bites into programme budgets, business is getting noticeably tougher. But it is the lack of a level playing field in animation that is making life impossible for English animators in particular. Now nearly every country in the world with an animation industry is offering government-backed incentives to attract animation work – including the Welsh assembly and Scottish parliament. With no such incentives here in England, animators are finding that despite the incredible talent and quality of English animation companies, programme makers will not even consider them for work.
The problem does not seem to be price but cash flow. With other countries providing up front money in terms of access to funds (Ireland, for instance, has a cultural fund and a Section 481 tax credit incentive), and as other countries improve their expertise, animators in my constituency are hanging on by a thread. Oliver Hyatt, of the Blue Zoo animation company in my constituency, estimates that 0.1% of the children’s television shown in the UK has been animated in England in the last five years. In the nine years he has been in business, he regards this as the bleakest time he has experienced. As the industry is already run incredibly efficiently, there is simply no fat to trim before he and his counterparts will have to start cutting staff.
English animators do not want handouts. They are confident that they have the skill, flair and ideas to attract work. Nor do they argue against the free market. The problem lies in the fact that at the moment the market is far from free. To put things right, they would like to see the government introduce tax incentives and ideally a £10 million animation fund to allow projects to access up to thirty per cent of their budgets if they are completed in the UK. The government could take a stake in these projects and benefit from their success and the two hundred highly skilled workers that would be employed. Those in the industry believe a scheme such as this – with all profits being re-invested – could be self sufficient within a few years.
Our nation has been at the heart of global trade and the financial and commercial services fields for some centuries. But as the financial services have been hit hard in recent months, and with the rapid emergence of India and China as future economic superpowers, it is all the more important that we continue to promote spheres of excellence and comparative economic advantage.
As the Prime Minister himself said recently, the creative industries have never been more important in pulling the UK out of recession and to leave this to chance would be ‘economic and political folly’. He is quite right. We need to maintain our place as one of the world’s innovators in terms of film animation, computer games and all other parts of the creative industries. Help for innovative English animators would be a good start.