Expert warns of job losses as Trump puts huge Scottish industry in firing line – and it’s not whisky or cars
TRUMP’S tariffs could have major ramifications for Scotland’s blossoming film and TV industry, according to a leading expert.
Amazon Prime has invested £50million in Scotland to make shows including The Rig, while Los Angeles-based Halon Entertainment announced it is ploughing £28million into a new animation facility in Glasgow.
But now it is feared attempts to claw back tax from streamers’ subscriptions, as many European countries do, could be scuppered as Sir Keir Starmer continues to cosy up to Trump.
Director and producer Peter Strachan, founder of the campaign group SUSST – Speaking Up for Scotland’s Screen Talent – believes many Scots working in the industry could get caught up in the trade wars.
HAVING slapped a ten per cent tariff on all imports from the UK, one of Trump’s next assaults will be directed at our film and TV sectors – and if we don’t stand up to him, the impact on Scotland’s screen industry will be devastating.
Trump wants American streaming platforms to have unfettered access to global film and TV markets.
Egged on by the Motion Picture Association (MPA), which represents the leading US studios and streamers, we’re being pressured to dump what they see as unfair tax regimes and practices implemented on US digital services abroad.
In return for lower tariffs, the UK is reportedly offering the US tech giants big tax cuts including scrapping the current Digital Services Tax which brings in about £800million per year.
But this tax only applies to social media platforms, search engines and online marketplaces. Crucially, video streaming subscriptions are excluded.
Sir Keir Starmer claims we have a fair and balanced trade relationship with the US but when it comes to what we watch on our screens, we absolutely don’t.
Now streaming in over 17million UK homes, Netflix generated revenue of £1.7billion in 2023, paying £14.2million in corporation tax. That’s just 0.8 per cent.
It’s estimated the British arms of seven major US tech giants paid just £750million in corporation tax instead of a possible £2.8billion in 2021 alone. You get the picture. The American video streamers also profit from substantial UK tax breaks.
While these have led them to making more films and TV programmes here, this investment is far less than the subscription revenue they squirrel away to countries with lower tax rates.
Precious little of this US spend comes to Scotland and when it does, we have to pay extra for the privilege.
Los Angeles-based animation and video effects company Halon Entertainment, which has worked on blockbuster movies such as the Planet of the Apes franchise, Mission: Impossible, The Mandalorian, and video game Fortnite, recently announced plans to invest £28million in a new Glasgow studio, promising to create up to 250 jobs over the next three years.
While Halon is coming to Scotland because we have world-class VFX talent, it will also benefit from a net tax rebate of 29.25 per cent via the Visual Expenditure Credit — that’s the current UK tax relief system for film, high-end TV, children’s TV and animation.
On top of this, Scottish Enterprise, our national economic development agency, is providing £3.9million of taxpayer money towards the overall cost of the project.
So, US companies can do very well out of Scotland. I hope our trade negotiators are reminding their US counterparts about all of this.
There’s another downside to the Americans making films and TV programmes here. Their spend is pushing up prices making it even harder for our Public Service Broadcasters to compete and fund homegrown productions.
Licence fee and ad revenue, both of which have taken big hits, isn’t enough.
The BBC is facing an unprecedented funding challenge with its content spend set to drop by £150million.
Channel 4 has slashed commissions by 50 per cent. It all means fewer productions and fewer jobs, including in the factual genres myself and many others based in Scotland work in.
ITV lost £1million making Mr Bates and the Post Office. The popular TV period drama Wolf Hall 2 starring Mark Rylance and Damian Lewis was only made because senior creative talent reduced their fees and expensive exterior scenes were ditched.
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Its director, Peter Kosminsky, is calling for the US streamers to hand over five per cent of their subscription revenue to a cultural fund for British film and TV content.
The BBC also wants a “Netflix tax” on US streamers that 14 European countries have already introduced to boost home grown production.
The focus on Trump’s tariffs has been on steel, cars, agriculture and such like. But our creative industries are also in the firing line.
Contributing £124billion to Britain plc, second only to construction, more than one fifth comes from our screen sectors.
To appease Trump, it’s my worry that calls for a much needed and fair “Netflix tax” will be ignored with disastrous consequences.
But without taxing US video streamer subscriptions, our own film and TV productions will become increasingly harder to finance, meaning Scottish stories and voices will become even more of a rarity on our screens.
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