Chancellor hails Peppa Pig as screen industry boosts UK economy by £7.9bn
The Chancellor has hailed the economic power of Peppa Pig in response to a report that shows tax relief for the UK’s screen industry has boosted the economy by billions.
The animated children’s programme, along with productions such as blockbuster film Dunkirk and television series Game Of Thrones, has been cited by Philip Hammond as key to £2 billion in additional tax revenues generated by more than £600 million in Government-backed tax relief in 2016.
Film production tax relief has proved controversial in the past as it has been used by some wealthy people to legally reduce their tax bills. Some of the films have also flopped.
The new report, commissioned by the British Film Institute (BFI), shows that spending in the industry has doubled from £850.9 million in 2007 when the industry tax relief started, to a new record of £1.72 billion nine years later.
Tax breaks across content-creating industries in the UK – including film, high-end TV, special effects, video game production and animation – has also sparked a rapid rise in spending, according to the report.
Thousands of hours of work and billions in tax revenue have been recorded across screen industries, with film providing the biggest economic benefits.
Children’s television, which was added to the tax relief scheme three years ago, is yet to catch up with the rate of growth seen in other areas of the industry, and accounts for the smallest return on investment.
Mr Hammond said: “From TV shows like The Crown, to films like Darkest Hour, and animations like Peppa Pig, our creative industries are intrinsic to the rich cultural fabric of the UK.
“But they’re also an important part of a dynamic and diversified economy, and a key component of our great, global trading nation. That is why this government is committed to supporting our highly skilled and innovative creative industries through creative sector tax reliefs.
“I am confident that the creative industries will continue to grow, provide strong employment and be the face of British culture to the world in future years.”
The report, produced by analysts Olsberg SPI with Nordicity, examined film industry data from 2016.
Across the screen industry in that year, production reached a record total of £3.16 billion due to support from screen sector tax reliefs.
It is estimated that work hours produced by the boost in 2016 was the equivalent of creating 137,000 full-time jobs.
Programmes such as period dramas Poldark and Downton Abbey are credited in the report with driving £266 million from tourism in 2016.
British films with a “strong UK story”, such as the Harry Potter franchise and Kingsman, were cited as providing a £628 million boost from tourism.
Film claimed £343 million in tax relief for a record-breaking spend of £1.72 billion, and generated £619.7 million in direct tax revenues.
However, the report calculates the gross value added – the total contribution to the economy – which is estimated to be just over £5 billion, producing total tax revenues of £1.28 billion for UK film production.
When the gross value added is taken into account, the total economic boost provided by screen industries is estimated at £7.9 billion in 2016 – the highest on record.
When the gross value added is taken into account, the total economic boost provided by screen industries is estimated at £7.9 billion – the highest on record.
Video game production in the UK produced £106.3 million in direct tax revenues from relief of £78.0 million in 2016. Its overall economic impact was £525 million, with around £156 million in tax revenues.
High-end television – including fantasy series Game Of Thrones and royal period drama The Crown – claimed £179.4 million of tax relief to generate £1.72 billion in 2016, yielding £466.1 million in tax revenues.
The tax relief scheme was introduced for high-end TV productions in 2013.
TV animation productions, such as the globally popular Peppa Pig and Bob The Builder, claimed £19.4 million in tax relief to drive a £355 million gross boost to the economy, the report claims. TV animation productions, such as the globally popular Peppa Pig and Bob The Builder, claimed £19.4 million in tax relief to drive a £355 million gross boost to the economy, the report claims. This produced £107 million in tax.
Lagging behind other sectors in the industry, children’s television only began receiving tax relief in 2015. From £12.2 million claimed, the sector managed to generate £30 million in tax, from an estimated £78 million put into the economy.
Amanda Nevill, CEO of BFI, said: “This new report endorses the huge part the government’s tax incentives play in our success story, creating a fiscal environment that’s boosting the economy, creating jobs and supporting our outstanding talent and infrastructure.”