United States Film Tariff

12.36 pm

(Urgent Question): To ask the Minister if he will make a statement on the potential implications for the UK film industry of the United States’s proposed 100% tariff on foreign-produced films.

As the House will be aware, President Trump announced on Sunday that he had authorised the Department of Commerce to initiate tariffs on all movies produced in foreign lands. He has made other comments since. This is a very fluid situation and we will continue to take a calm and steady approach. I spent most of Monday talking to UK and US film makers and the general secretary of Bectu, among others, and I can tell the House that we are already in active discussions with the top of the US Administration on this subject.

We are working hard to establish what might be proposed, if anything, and to make sure our world-beating creative industries are protected. We are absolutely committed to ensuring that the film industry can continue to thrive and create good jobs right across the UK. UK film and high-end television generated production spend of £5.6 billion in 2024, and we want to work with our domestic industry and international partners to continue to build on that success.

We are absolutely clear that the deep ties between the US and UK film industries provide mutual benefits to both countries. Productions are, by their very nature, international partnerships, which are often developed and created across different countries and locations. Indeed, US movies are often multinational precisely because US movies earn far more overseas than they do domestically in the United States. The UK and the US both benefit when the likes of “Star Wars” and “Mission Impossible” are filmed in the UK, just as we both benefit from the close working relationship between our producers, talent and crew.

Our countries have a long history of working together to drive the growth and creative success of our film and television sectors. From Cary Grant to Hugh Grant, and from Alfred Hitchcock to Christopher Nolan, British talent has often been at the forefront of the US sector, and I am absolutely sure this will continue in the years ahead. I was once told by a film producer, “Never judge a film by the first 10 minutes.” I think we can say the same of this.

I thank the Minister for his answer. As he rightly says, we learnt over the weekend that the President’s Administration intend to impose a 100% tariff on all films produced outside the US. It is understood that he has directed the US Government to begin implementing the policy immediately.

I welcome the fact that the Minister recognises the film industry in this country as a jewel in our crown of world-leading creative industries. I also point out that the sector alone is worth £1.96 billion here, and supports 195,000 jobs up and down the country. It shows off our great British culture and values, the talent we have, and some of the most amazing settings for so many films of different genres.

I am glad that the Government are working to ensure that all is done to give confidence to our directors, actors, screenwriters and producers that they are thinking about them, because for both independent film makers and major studios this action could result in cancelled projects, lost investment and a significant decline in UK film exports, which is especially hard given that they are still recovering from the covid pandemic. But I have to say that it is disappointing the Government failed to start the negotiations with President Trump’s team for five months after the election and fired Britain’s top trade negotiator. It is difficult not to wonder whether a different approach could have led to a different outcome.

None the less, the priority is to protect our film industry, so what assessment has the Minister made of the potential impact on the UK film sector? What immediate steps are the Government taking to engage with the US and ensure that the investment in UK facilities by many US businesses, which would be affected, is highlighted? What contingency plans has he prepared in the event that no exemptions can be secured? Finally, what assessment have the Government made of the potential drastic cut in BBC Studios’ profits from sales to the US market, and what impact could that have on the licence fee?

First, may I, on a co-operative note, say that one reason we have a very strong film and high-end television sector in the UK is the joint policy, adopted across several years by both Conservative and Labour Administrations, to ensure we have very competitive tax credits. I pay tribute to the work done by the previous Government, which we were able to enhance when we brought in two new tariffs—I mean two new tax credits—in the Budget just before Christmas. No, we are not in favour of bringing in tariffs. I think I am right in saying that in 1947 the Labour Government did bring in tariffs on US films, because we thought too many US films were being shown in British cinemas. That strategy did not go very well: the Americans simply banned the export of US films and we ended up watching “Ben Hur” repeatedly in every cinema, as well as a film called “Hellzapoppin’” which I do not think anybody has watched since. However, the successful bit of what we did in 1947 and 1948 was that we invested in the British film production system, which led to films such as “Hamlet” and “Kind Hearts and Coronets”. That is the pattern we still want to adopt.

Let me be absolutely clear: we believe that there are mutual benefits to both of us if we continue on the path we have selected. I am not sure precisely what is intended: I do not know what a tariff on a service would look like and I do not know whether the intention is for it to be on movie theatres. The danger is that the US already has two major problems with its film industry: one is distribution costs, so if the US went down that route, it could lead to heavy problems for the industry; and the other is the very high cost of making movies in the US.

Most films these days are an international collaboration of some kind, and we want to maintain that. Even the British production of “Paddington”—I am looking at the hon. Member for Cheltenham (Max Wilkinson) only because I suspect he is about to mention it; and he has just given me a Paddington hard stare—was made by StudioCanal, which is, of course, part of Canal+. It had Spanish actors as well as British actors. This is just a fact of modern films: they are multinational and that is one of their strengths. Incidentally, I do not think that Paddington ever went to Peru—I do not think they filmed any of it in Peru. I am also told by my Peruvian friends that there aren’t any bears in Peru.

I welcome the Minister’s measured and thoughtful response to President Trump’s latest announcement and his full-throated support for the British film industry. He will be aware that my constituency is very much a filming venue for both film and television. In his discussions with the United States, will he ensure that he is also championing high-end television, as I think he briefly mentioned, which is often filmed, produced and made in Hackney? I also make a plea for all the creative industries in my constituency that feed into the film industry. Can the Minister ensure there is good communication from the Government on these negotiations? This is creating a great a deal of uncertainty.

I know Hackney very well; as my hon. Friend knows, I used to be a councillor there. It is not just London that is a phenomenal place to make a movie, but the whole United Kingdom. We have some of the best scenery and some of the best buildings. It is not only Bath, which gets used endlessly in lots of films—when I was there a couple of weeks ago, I heard about a long list of them. My hon. Friend is also right about television. What is the difference between making “Bridgerton” and making a movie? In fact, the pattern is very similar; international collaboration is important because it delivers international audiences, and we want to maintain that.

I call the Liberal Democrat spokesperson.

British film really is the marmalade sandwich in the lunchbox of our creative industries; it has given us Bond, Paddington, Harry Potter and Monty Python. Donald Trump clearly thinks he is a god-like figure, but on the Lib Dem Benches, we are clear that he is not the messiah—he’s a very naughty boy. If he had his way, we would be watching “Harry Potter and the Prisoner of Alcatraz”, or perhaps “Harry Potter and the Executive Order of the Phoenix”. Will the Minister confirm that all options will be on the table to protect our film industry, including working with allies such as Canada and Australia, which have shown strength in recent weeks by voting anti-Trump? Will he commit to immediately meeting film industry leaders in the UK to co-ordinate a response in this area, and will the Government back our world-leading creatives by doing the right thing on AI and copyright?

I could have predicted half the hon. Gentleman’s question, because I knew Paddington would get in there. On a serious note, I am meeting industry representatives tomorrow afternoon, and I look forward to understanding their precise concerns, in addition to the obvious concerns that we all share.

I want to caution slightly against a word that has been used three times now, I think, with Members saying that President Trump has “announced” something. A clear policy has not been announced—I think we need to be careful about that. As I said earlier, it is difficult to see how a tariff would be imposed on a service or on films in this way. I want to be careful and precise in the way we move forward on this.

I have been asked what we are doing: we have already had people in Washington DC talking with people in the Trump Administration at the highest level, and we will progress that. Of course, we want to do everything we can to preserve the strength of the industry.

I declare an interest, as one of my little sisters works in the UK film and TV industry; I am immensely proud of her. I urge the Minister to look at how we bolster home-made film and TV as part of the soon-to-be published creative industries sector plan, particularly in Northumbria, where we have some of the most wonderful landscapes; a couple of years ago we sadly lost Sycamore Gap, which provided a memorable backdrop, but we also have Hadrian’s wall. We also have a fantastic workforce, but too often I see young people having to leave the north-east to get creative opportunities elsewhere in the UK.

That is an extremely well-made point, and I would add to it something I said when I appeared before the Select Committee—from whom I suppose we might hear in a moment—which is that I am very keen on having a mixed economy in the British film industry. Sometimes we will be making films for other markets; sometimes we will be making films that tell predominantly British stories about the way we are in this country and selling them around the world, but where the intellectual property remains with British production companies. That is the mix that we need to achieve.

The hon. Member for Cheltenham (Max Wilkinson) referred to our relationship with the US. I should also say that the Secretary of State was in India last week; both she and I want to ensure that we also have a much stronger relationship with India, which is one of the fastest growing economies in the world. We think we can do a great deal more in that film production space as well.

I call the Chair of the Culture, Media and Sport Committee.

There is no doubt that this speculation will cause huge worry to those working in British film production, but, as the Minister says, it highlights once again the importance of bolstering the British screen sector. We recommended steps to deliver that in a recent Select Committee report, yet within days of publishing it, his Department had already asked for an extension to the time in which it would respond. This weekend we heard rumours that the whole Department is up for the chop under his Government—I am not sure if that is before or after he has sacrificed our creative industries on the altar of AI. The Minister is a brilliant communicator, and I know that deep in his heart he cares passionately about this issue, but when will he show some grit and action on behalf of our world-leading creative industries, in particular our screen sector?

I hope the hon. Lady accepts that there are areas where I have taken very deliberate action on the back of recommendations from her Committee, not least in relation to a levy on gig and arena tickets to fund support for small music venues—but I take her point. I was not aware that we had asked for an extension. We will get on with providing a response to her as fast as possible. It was an excellent report; I have read it. It contains lots of good things that I want to take forward, but we probably will not be able to do everything in it.

It is really important that we focus on skills in the UK screen industry; that has been raised repeatedly with me. I want every kid in the country to have a chance to work in the creative industries, including in film and high-end television. Many would not even think that that was a possibility, so we need to transform the whole pathway into those industry skills; I know that that is one of the things that the hon. Lady’s Committee has raised.

Whether it is because of the fantastic, state-of-the-art Shinfield Studios just up the road, access to fantastic filming locations such as Swinley forest on the Crown Estate, or our incredible transport links, Bracknell Forest is increasingly becoming a go-to location for the film industry. As the Minister has already touched on, we need to see more emphasis placed on home-grown skills, so that young people in Bracknell can access the fantastic opportunities that the film sector offers. Will he say a bit more about what this Government will do to break down the barriers to opportunity in the film industry?

We have already invested significant amounts of money in the skills sector, and more came as a result of the Budget. My hon. Friend is quite right that his patch is a go-to area for film production. One reason that US companies—and, for that matter, companies from many places around the world—come to the UK to make films is for our skills; we have some of the best cinematographers, technical experts and designers, as well as the acting talent, which means that it is possible to make a very convincing film in the UK more effectively and cheaply than in many other places. We are determined to ensure that the UK remains the best place in the world to make movies.

Film studios are a really important part of our economy in Hertfordshire and give opportunities, jobs, apprenticeships and work experience to people in my constituency. As the Minister has recognised, it is not remotely clear yet how the tariffs will operate, and many have said that they are unworkable, but if America goes ahead and we have to take action in this country to ensure that our film industry is competitive, I urge him to look at the business rates regime with the Treasury. Sky Studios Elstree near my constituency has seen its business rates go up by more than 600%—they now account for 30% of its operating costs. I encourage the Minister to look at tackling that regime, as one measure to ensure that we protect our creative industries and the film sector here in the UK.

The hon. Lady makes a good point, which has been raised with me by several other Members. We made special provision in the Budget to ensure that the business rates for studios are protected until 2034, and I think that is a good measure. I know that some of the very large studios are finding it more difficult, and I am happy to continue looking at the issue. Let me read some statistics that may be helpful. According to a report published in January by the Motion Picture Association of the United States of America, in 2023 the US earned $22.6 billion in film and television exports, and its services trade surplus was $15.3 billion, or 6% of the total US trade surplus in services. It is mutually beneficial for the US and the UK to remain with the system we have, without tariffs.