Budget – tax credit for our animators!

‘After three years of hard work and tireless campaigning, especially from Animation UK’s Oli Hyatt, I am delighted that the Chancellor has announced today the government’s intention to introduce a tax credit for the UK’s animation industry. Finally, we have the level playing field our creative industries deserve. Combined with our animators’ flair and talent, this fantastic boost will help keep some of our favourite characters animated on these shores. As the Chancellor has declared, the government is determined to keep Wallace and Gromit where they are. I am so glad that he and Culture Secretary, Jeremy Hunt, have recognised the enormous value of the UK’s creative industries – a value that’s not just economic but cultural. This will raise the quality of children’s television, retain valuable IP in this country and is brilliant news for this vibrant sector in my central London constituency and far beyond.’

Mark Field MP Cities of London & Westminster Patron of Animation UK Information on our campaign

  • My constituency is spiritual home to a globally competitive creative sector in Soho and the West End that includes the film, music, television, theatre and animation industries. Creative industries offer one of the great white hopes for economic growth but all has not been well for some of its players.
  • Nearly three years ago I was contacted by Oli Hyatt of Blue Zoo, an animation company with offices within the constituency, as he was deeply concerned about the future of the UK animation industry. In terms of quality, humour and inventiveness, the British animation industry is second to none. Past success in this field has been such that characters like Aardman’s Wallace and Gromit, Peppa Pig, Bob the Builder and Thomas the Tank Engine have become part of our national heritage. They are also adored worldwide, acting as ambassadors that embody the spirit of our nation. But many programmes are now being animated abroad by foreign production companies. Why?
  • Cheaper overseas labour provides part of the answer. But bigger than that have been the huge funding incentives in terms of tax breaks and creative funds in other countries that make it nearly impossible for UK companies to compete. Now nearly every nation in the world with an animation industry is offering government-backed incentives to attract animation work. Put simply, there is no level playing field. Price and product have become secondary to cashflow. The corollary is that animators can waste years putting together funding packages in the UK before often having to resort to co-production with a business operating outside the country, losing a significant proportion of IP rights in the process. Combine that with a massive reduction in children’s broadcasting and a drop in the prices for programming because of the junk food advertising ban, and we are left to rely on the UK’s edge in talent, alongside a minute slice of the BBC’s children’s programming budget, to keep the animation industry afloat.
  • Oli has since been absolutely tireless in his campaign to keep animation work on these shores, setting up Animation UK in a bid to get government to wake up to the industry’s problems. As Patron of Animation UK, I have been helping make the case to government for a tax credit to support the industry alongside him.
  • Naturally it would be good if a tax credit helped keep animation jobs on these shores but the real golden egg is the retention in this country of intellectual property rights – the key reason why, as a believer in free and open markets, I am supportive of a targeted tax credit.
  • The money generated annually worldwide from unimaginably successful franchises such as Thomas the Tank Engine, Wallace & Gromit and Peppa Pig – especially when it comes to secondary branded products – massively exceeds the money brought in by, for example, films like the King’s Speech which was helped along by the film tax credit. To give some perspective, Thomas the ‘Bank’ Engine tots up worldwide sales in excess of £1 billion every year, with his tales broadcast to more than a billion households in 185 countries each and every week. The King’s Speech, hailed as the most successful independent British film ever, grossed just shy of £374m.
  • Before the General Election we had meetings with Culture Minister, Sion Simon, and Shadow Culture Secretary, Jeremy Hunt, to spell out the problem. Both at that time accepted the scale of the industry’s difficulties and stressed their enthusiasm to find a solution whilst making quite clear that we could not ignore the dire state of the public finances. As such, they pressed the need for solid research. Animation UK pressed ahead with research and published its report, Securing the Future of UK Animation, in the autumn. The report concludes that the most appropriate form of government support would be a tax credit modelled on the Film Tax Credit but with a focus on projects where material IP is held in the UK. They projected that such a credit is likely to prove moderately revenue positive to the Exchequer.
  • Alongside the report I have written a series of articles promoting a tax credit. We have secured significant national coverage both on television and in the print media, and have established an online campaign to spread the word. Upon the report’s release, we secured a private meeting with Culture Minister, Ed Vaizey, and I have been in very close touch (he might call it relentless badgering!) with my friend and colleague, Jeremy Hunt. Both have said they are very supportive of a tax credit and Jeremy indicated that it was his Number One Budget ask.
  • We are delighted that the government has now announced its intention to introduce in 2013 a tax credit for the televised animation sector.