Chancellor Jeremy Hunt has namedropped Idris Elba, Keira Knightley and Orlando Bloom in an hour+ budget speech that sought to sprinkle a bit of celebrity stardust on tax changes for the screen industries.
Hunt announced a rise in the tax credit available to the film and TV industry by five per cent, and removed the 80 per cent cap for visual effects costs.
The chancellor added that the UK’s film industry will shortly be the biggest outside Hollywood, which must have come as news to India: “We have become Europe’s largest film and TV production centre,” Hunt said. “At the current rate of expansion, we will be second only to Hollywood globally by the end of 2025.”
Although Hunt made no direct mention of government support for the huge planned Crown Works Studio development in the North East, following growing pressure from local industry figures and media, he announced a deal that signals good news for the studio.
Further devolution of wide-ranging powers are coming to the North East after leaders in the region secured a “trailblazing deal” with the government, with new funding potentially worth more than £100m. This will be in addition to the devolved powers coming to the new North East Combined Authority in May, following the election of a mayor.
Fulwell 73 said they were “absoutely delighted” in a post on X, adding the news will “pave the way for Crown Works Studios to progress” and create over 8,450 jobs in the North East.
Commenting on the news in a joint statement, seven council leaders across the North East said: “This is excellent news for the people of the region and will bring more power closer to our communities. As a group of seven council leaders we made the case for a bespoke package that works for the people of this region.
“From enabling investment for Crown Works Studios to securing essential transport funding, to a taskforce to tackle rural and coastal issues, this is a deal we have custom made for the North East.”
Hunt also u-turned on controversial changes to the eligibility criteria to qualify as a high net worth or sophisticated investor, which had sparked a fierce backlash from the tech sector.
Welcoming the change of plans, Sam McArthur, partner at Praetura Investments, said: “British businesses are at a financing bottleneck, with last week’s figures on the number of SME accounts closed by banks over the last year proving many are still struggling to access the capital they need to grow. But it’s encouraging to see the chancellor reversing changes made in his Autumn Statement to the qualifying criteria for high-net-worth individuals and self-certified sophisticated investor exemption. These groups are dynamic backers of early-stage, high potential businesses, and it’s crucial they’re empowered to support our small business ecosystem.”
McArthur insisted there’s still more to be done, however, particular when it comes to bridigng the North/South investment divide: “There’s still work to be done to address inequality of funding between the North and the South,” he said. “Our own research revealed there’s an annual funding gap of £9bn for Northern based small businesses seeking funding for growth. More measures and initiatives to lower the barriers for firms raising capital will only support economic growth.”
In life sciences, Hunt promised £45m investment, including £3m for cancer research, new government investment into life sciences company AstraZeneca, and a major new vaccine manufacturing hub in Liverpool.
He promised up to £120m more to the Green Industries Growth Accelerator, which will be used to build supply chains for new technology such as offshore wind and carbon capture, and £270 million to advanced manufacturing industries, to fund car and space innovation, to grow “zero emission vehicle and clean aviation technology.”
There was, as predicted, a cut in National Insurance, from 10% to 8% for employees and from 8% to 6% for the self-employed although early analysis by the BBC suggests this will be largely swallowed up by a combination of inflation and the frozen income tax changes in tax threshold.
There was the promise of new funding for AI and automation in the NHS, and in related downtime news alcohol duty was frozen, while duty is to be brought in on vapes.
Canary Wharf, meanwhile, was a surprising recipient of £242m in levelling up funding, in news which is sure to be well received by local officials in the North who have been refused such funding for their own towns and cities.
