How will Star Wars being filmed in the UK impact the jobs market?

News that the filming of the next Star Wars movie, the seventh in the franchise, will take place in Britain next year has been greeted with glee by Chancellor George Osborne. Speaking on Sky News Osborne called the announcement a “real vote of confidence in Britain’s creative industries”, and one which he claims will secure thousands of jobs – if only for the duration of the film.

The Chancellor also feels the deal is a fresh coup for British tax breaks. He has done a lot of work over the past couple of years to court the international movie and television business, and he sees this as a vote of confidence in his efforts.

But looking beyond the political rhetoric, how will it impact the jobs market? According to Gov.uk, the country’s creative industries are a real success story. “They are worth more than £36 billion a year; they generate £70,000 every minute for the UK economy; and they employ 1.5 million people in the UK. According to industry figures, the creative industries account for around £1 in every £10 of the UK’s exports,” announces the website.

In terms of the film industry, the UK certainly does have an impressive skills base in things like special effects, but we need to keep our workforce busy to retain our competitive edge. The UK’s tax incentives have been set up to support this. There is considerable competition from abroad in this sector, with many countries offering subsidies and/or Film Tax Credits to encourage film making in their territories. China, in particular, has invested a huge amount in studios in Shanghai, hoping to exploit its relatively cheap labour costs.

“Bearing in mind all of the factors, the UK needs to offer incentives like the Tax Credit in order to stay competitive. In reality there should be a net overall gain for the UK because the taxes generated from spend in the UK should, in many cases, exceed the 20% Tax Credit offered once higher rate taxes and National Insurance are factored in,” explains Dave Morrison Partner at entertainment specialist accountants Nyman Libson Paul. “However, this is not a ‘cast iron’ rule. The VAT impact will depend on how a film is sold/delivered, but where VAT is not charged on an overseas sale, the UK economy benefits from the sale anyway.”

Morrison is more measured in his response to the news than Mr Osborne. “I grew up about half a mile from Pinewood Studios and back in those days you could always tell whether things were busy or not because so many locals were connected to the Studios,” he says. “Dollar exchange rates were often the significant factor that I recall people talking about, meaning that if they were favourable, the studios got more US work, and people had money.”

He continues: “As for trying to evaluate the jobs impact, take a look at the credits for the film on IMDB, but bear in mind that these are only temporary assignments. The total number of people involved will, of course, exceed the cast and crew, so the number of jobs affected will be bigger, but can you claim that someone doing a small service as a result of Star Wars counts as a job? Probably not, certainly not a full-time job.”

So there is a wider economic benefit, but a long-term benefit to the jobs market from one film – even as big as Star Wars – is debatable. “So long as we keep getting inward film production, jobs may be sustained, but I struggle with the concept that one film has anything beyond a temporary impact on jobs,” concludes Morrison.

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