The British film industry received a dual boost yesterday with the announcement of government plans to aid domestic productions and the release of figures showing that the British are becoming increasingly avid cinema-goers.
Research from Screen Digest finds that the renewed appetite for cinema-going that was kickstarted in the 1990s by the development of multiplexes shows no sign of abating. While the overall level of admissions rose only slightly on last year to 171.39 million, it estimated that by 2009 annual attendance would reach 190.1 million.
Last year, cinemas also brought in record box office receipts of £784.9m, a total that has almost doubled in the past 10 years. The number of times the average punter went to the cinema also rose to 2.92, against 1.98 in 1995. On average, we each spent £13.61 visiting the cinema during the year.
The UK and Ireland, along with Greece and Austria, were predicted to show the strongest growth in audience figures among all western European countries over the next five years.
The government yesterday published its long awaited financial blueprint for the film industry, including a "cultural test" to determine whether films are British enough to receive financial assistance.
Film-makers will be tested on criteria worth a total of 30 points. A film that ticks enough boxes to reach more than 15 points will qualify for tax relief from the Treasury.
The cinematic Britishness test includes the awarding of points if: the film is set in the UK; is based on a story by a British writer; or uses UK studios such as Pinewood, home of the James Bond series.
James Purnell, the minister for creative industries, said the test would not dissuade Hollywood studios from taking productions to the UK. The weak dollar and the attraction of cheaper studios in eastern Europe have lured away some US productions over the past year.
"This is for the Batmans as well as the Vera Drakes. The cultural goals go hand in hand with the industrial goals," Mr Purnell said.
Every big Hollywood film shot in the UK over the past two years, including Charlie and the Chocolate Factory and Batman Begins, would still have qualified for tax relief worth millions of pounds under the cultural test.
The Treasury also announced proposals to overhaul the system of tax breaks for film-makers, which has been criticised as a haven for investors seeking a quick, taxpayer-funded return with no risk attached. The code has been derided as a tool for entrepreneurial accountants rather than professional film-makers.
Under the new proposals, a film with a budget of less than £20m can claim back up to 24% of its expenditure. The payment, which takes the form of a tax credit, would account for £4.8m of a £20m film budget. Films that cost more than £20m, usually Hollywood productions, will be able to claim back 20% of the budget.
The Treasury plans also offer producers a larger reward if they defer the credit or spread it over a slate of films, in order to encourage long-term investment in the industry. John Woodward, chief executive of the government-backed UK Film Council, called the scheme a "totally new approach to tax relief for film".
"The new tax credit system will continue to provide a subsidy for British films, but also offers the potential to help build British film businesses by encouraging investment in slates of films rather than single projects," he said.
The proposals will be put out to consultation and are likely to provoke a mixed response. Producer Michael Kuhn recently warned that "the hour is dark" for the British film industry and joined other production companies in lobbying the government to reform the UK Film Council and design financial incentives for mid-budget films that otherwise would not get made.
