News

Brexit:whatdoesitmeanforfilmandtelevisiondirectors?

Industry

Published on: 22 October 2018

With Brexit still topping the news agenda and new developments arriving thick and fast, Directors UK CEO Andrew Chowns provides an assessment on what leaving the European Union will mean for film and TV directors.

The UK is due to leave the European Union on 29 March 2019, yet so much of how this will affect the UK, its citizens and its economy remains unclear. If the UK is able to reach a withdrawal agreement with the EU in time, we will enter a transition period after the leave date that will take us through to the end of 2020 (with the new possibility that this period may be extended further); this transition period is intended to provide time in which to settle on a whole host of detailed arrangements for the UK’s future relationship with the EU, including a new trade relationship. In the current negotiations on the UK’s withdrawal, the dominant issues are around the border between Northern Ireland and the Republic of Ireland, and whether any residual form of membership of the single market and customs union should be continued. The prime minister’s favoured negotiating position as set out in the Chequers deal looks to attempt the softest possible form of Brexit that is still consistent with “leaving” the EU. By satisfying neither of the two opposite wings of her own party it may not survive the next EU Summit, let alone to Christmas and beyond.

There is very little detail in the Chequers proposals about how Brexit will impact on our industry – most passages about service and digital industries are vague, in contrast to proposals about manufacturing and trade in goods, which indicate a desire to keep the UK closely aligned with the EU customs union. Yet film and television programmes are products of a manufacturing process as well – a process that increasingly crosses international borders both for the manufacture and the trade in finished films and programmes.

Directors UK has been communicating with the Government about Brexit plans both directly and via our membership of the Screen Sector Task Force (a group of most industry bodies, chaired by the BFI). Our specific concerns about Brexit as far as directors are concerned cover six main headings:

Here is a summary of our position on each of these issues:

Digital Single Market

The implementation of the Digital Single Market Directive in the UK

The EU is currently working on two major new pieces of European legislation: the draft Digital Single Market Directive and the draft Copyright Directive. Both have a significant bearing on directors and other copyright holders, particularly regarding issues such as licensing the use of your works and remuneration.

The new Copyright Directive will, if passed, create important new rights for directors of audio-visual works, including:

The right to receive fair remuneration for your work
The right to receive transparent information about the uses of your work
The right to renegotiate the deal you struck for a work if it turns out to have been much more successful than was originally envisaged when you signed up
The right to invoke a disputes resolution procedure if you are unable to receive satisfactory treatment in relation to these rights

The Digital Single Market directive covers – among other things – new rules on how much original commissioning must be done by online platforms and services.

At Directors UK we have been lobbying very hard over the past two years for these important new laws and we will continue to do so to ensure they do pass through to law in their current form.

It appears likely that these Directives will pass into EU law in 2019. It will then be up to each EU Member State to transpose them into the law in their own country. If the UK has reached a withdrawal agreement and we are in the transition period, then we expect that the UK Government will transpose these new directives into UK law before we finally leave the EU.

If we cannot reach a deal in time, then the UK will leave the EU in March 2019 in a so-called “hard Brexit”, with enormous uncertainty around the way we function as an economy. Little planning for such an apocalyptic event has yet been done, and there is already talk of the need to stockpile medicines, turn motorways into lorry parks, require travellers to take out international driving licences and other drastic contingencies. There is a risk if there is a hard Brexit that the UK will not adopt the new directives. We – along with many other industry bodies – have and will continue to urge the Government to ensure that the UK’s copyright laws are in harmony with the rest of Europe to give us every opportunity to continue to trade our films and television programmes as easily as possible.

Reciprocal agreements

Reciprocal agreements for creators’ rights with the EU

Directors UK collects royalties for the use of your works in the EU from several sources. Most of the money we collect from the EU is for the retransmission by cable and satellite services of British works and from private copying levies. These arrangements are underpinned by a network of agreements we have with most other European directors’ collective management organisations (CMOs) – our equivalents in other countries. They also conform to a number of key copyright treaties that are separate from EU agreements, and thus we are reasonably confident that they would not be affected by Brexit. However, we have been made aware that the domestic laws in a few European countries state that they can only pay these royalties to foreign nationals as long as the other country remains in the EU or the EEA (as Norway, for example, does). If there is a hard Brexit, we will no longer satisfy this requirement and we may have to seek legal remedies (with other UK CMOs) to protect our access to these royalties.

Free movement

Free movement for creators and workers in the creative industries

Within the creative industries, co-productions, touring organisations, performances, films and television productions frequently use workers from the UK, EU and the rest of the world. Working within the EU we have become used to not having to apply for work permits or visas to work and travel, or to pay tariffs or charges to transport goods. The UK’s industries have also become reliant on labour from the EU especially in fields such as post-production and visual effects.

There is massive concern across the industry about the additional costs that will be levied on creative activity, and about the disruption to production that restrictions on work in other countries will have in both the long and short term.

These concerns have been signalled strongly to the Government by all parties. We understand that the Government does accept a difference between freedom of labour (i.e. to move around in order to work) as opposed to the freedom of movement for e.g. residence. We think the Government has understood this case well and is working hard to deliver this as part of a settlement with the EU, but we remain vigilant about it.

Access to EU funding

Access to EU funding for cultural projects

Recently, the report Creative Europe in the UK estimated that the UK’s audiovisual, creative and cultural industries in 2017 benefited through €16.6m of non-repayable grants and the distribution of British films in other countries, bringing UK support from 2014 to date to €74 million.

The UK also receives 24% of all European Research Council grants
1.5-2% of £258bn European Structural and Investment Funds for the period 2014-2020 will go to the cultural sector
The European Social Fund and the European Regional Development Fund (ERDF) will invest £8.66bn across the UK – targeting disadvantaged areas in particular

In 2015 the culture subprogramme supported 54 UK projects and the MEDIA programme supported 53 co-productions.

Our lobbying to the UK Government has stressed the risk to the creative industries if we were to lose access to these funds without any form of replacement Government funding. We understand that the Government believes that it may be possible for UK institutions to continue to access certain funds without the UK needing to remain in the EU but we have no detail or firm commitment on this point.

On a related topic, the Government appears to be convinced of the value of tax credits for UK films and television productions and intends to maintain their use at current levels. It would be an option for the UK to increase the value of state support for our industry once we have left the EU and are no longer under EU State Aid rules, but this may invite retaliatory action from EU states, so it is by no means clear that the Government would want to do this.

Working Time Directive

The Working Time Directive and health and safety issues for workers in the creative industries

Current EU working time and health and safety laws have been incorporated into UK law, although it is worth noting that the UK Government has chosen to allow UK employers and workers to opt out of some provisions, such as the 48-hour maximum working week. It is a concern that some commentators have suggested that a relaxation of these legal protections might be one of the “benefits” of Brexit. The Labour party has highlighted protection of the rights of workers as one of its six tests of an acceptable Brexit deal. We must anticipate the need for a co-ordinated campaign to protect working time and health and safety laws if they come under threat after Brexit.

Trade

Trade and the creative sector

So far, the Government has signalled, via a public consultation, that it wishes to enter into trade agreements with the US, Australia, New Zealand and the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP, formerly TPP).

Trade in UK films and television programmes is thriving at the moment. Inward investment film production in the UK is now at a record £1.8bn in 2017 and our leading film stages are fully booked for months ahead. Total revenues from TV exports were worth £902 million in 2016/17. Nor does the absence of a UK/USA free trade deal seem to have inhibited UK companies from investing in US production companies nor from working extensively in the US. It is hard to see how our trading position could be improved upon in any new trade deal.

Little is known yet about the shape of any proposed trade deal with either the EU or with the USA post-Brexit. What we do know as far as creative works are concerned is that some European countries (notably France) have always insisted that cultural goods are exempted from any trade agreements. This enables them to protect their domestic production and broadcasting from foreign imports by imposing quotas on non-EU cultural goods, such as the requirement that at least 50% of the broadcasts on EU TV services must be of European works. This threat could be applied to UK films and television programmes once we are out of the EU.

Conversely, in any UK/USA trade deal one could expect the USA to seek much greater freedom to export US content to the UK without any tariff or quota barriers.

UPDATE

Since the publication of this article, the BFI has released a Q&A piece on the potential effects of Brexit on the screen sector. Please read the piece here.

The BFI have also set up a dedicated Brexit advice mailbox ([email protected]) where you can ask questions and let them know about how Brexit is affecting you, all in the strictest confidence.