Written evidence submitted by Pact

Introduction

1. Pact is the UK trade association which represents and promotes the commercial interests of independent feature film, television, digital, children's and animation media companies. Pact has presence around the UK; with over 500 members with clusters of companies based in the production centres of Glasgow, Belfast, Bristol, Cardiff and Manchester with smaller clusters in Birmingham, Leeds, East Midlands and the North East.
2. The UK independent television sector is one of the biggest in the world. The overall size of the independent television production sector stands at around £2.5 billion in 2016[1].
3. The UK is a world leader in the sales of TV content globally and revenues continue to rise. Latest international revenue figures show current sales at more than £1.3 billion, a 10% increase from £1.2 billion in 2014/15.[2]
4. Independent producers are using the resulting revenues to become significant investors in the creation of UK content creation and are vital part of the UKs creative industries.
5. The creative industries are highly skilled, with 62% of employees educated to a degree level, in comparison to 34% of the national population and the industry employs almost 2 million people. They have been the source of strong UK job growth, with employment in the sector growing by 25.4% in 2011-2016, compared to a national average of 7.4%[3].

Overview

The government should reform the migration system to enable easy access to critical skills and talent from both EU and non-EU countries, including a review of the shortage occupation list in the light of our exit from the EU. Pact is a member of the Creative Industries Council (CIC) and in July last year the CIC produced a paper that stated these objectives and Pact continues to agree with this and will look to support the work of the CIC in representing the creative sectors priorities and views.

The TV and film production sector relies on an immigration system which is as burden free as possible to minimise costs for business. Looking at the Migration Advisory Committee’s objectives on Migration for the UK it focuses on three key objectives efficiency, transparency and fairness to maximise the welfare of the UK resident.

In our recent submission to the MAC we urged them to look at all objectives and ensure a focus on one is not to the detriment of the other. For example it is crucial that the efficiency of the immigration system is maintained so that the UK can continue to be a world leading global media centre which sustains a considerable amount of talent, skills and business. We need to maintain this competitive edge especially if the government aims to promote a ‘Global Britain’ where trade in goods and services will play an even more significant part in the UK economy in a post Brexit world.

UK production in film and television is often dependent on securing a relatively small number of highly skilled workers from overseas. For example, appointing a high-profile foreign director or leading Hollywood animator to a UK film may be critical to giving potential investors’ confidence and securing the production investment to make the TV programme or film in the first place. This appointment generates work for many more UK nationals as productions hire cast, crew and service and support personnel, as well as the use of UK studio facilities. In addition, depending on how globalised a business is many of our members have international support structures i.e. distribution arms, finance, legal departments, and HR teams who have up to 10% of workers from the EEA to help support a globalised business.  If the retention and recruitment of EEA workers were to be made more complex or expensive it will be difficult for our industry to compete with other global centres of media production who may not face similar barriers or costs. We should not jeopardise our current competitive advantage by reducing the diverse pool of talent and production centres in the UK. In addition to this the UK government and industry should increase our efforts to make sure we have the appropriately skilled talent pool coming through our education system.

The UK TV/Film industry recognise the need to train up UK workers and provide the necessary skills for our industry and for that reason we have been working closely with Creative Skillset to understand the current gaps in the education system for the TV/Film industry. We will outline our efforts to support the right kind of training for our industry.

Consultation questions

1. What approaches the Government might adopt to build consensus on how future immigration to the UK should be dealt with?

1.1  To build consensus on how the future UK immigration system should work the government must demonstrate that the system supports and plays a part in generating further economic value and opportunity for all UK residents across the country. This is especially important for businesses who rely on the opportunity to access the best talent to compete globally which in turn creates jobs for UK residents.

1.2  The creative industries, of which TV and film play a big part in, is one of the growth sectors that the government itself has recognised. Between 2011 and 2016 employment in the sector increased by 25.4% (circa 400,000) jobs) compared to 7.6% average across the wider UK.[4] With this in mind there is the opportunity for government to further boost its growth by continuing as burden free an immigration system as possible. This will help generate more jobs in the sector and benefit UK residents. Many countries across the world engineer their migration system to help shape and boost their industrial strategy by allowing particular migrants with particular skills and experience.  For example New Zealand and America have purposefully incentivised highly skilled talent to apply for visas in their country because they recognise growth industries and have specifically planned to accelerate that growth in that industry.

1.3  The UK is competing in a competitive global market place. UK workers have benefited from companies and employers being able to hire talented staff from around the world, including from the EEA, and benefit from their skills and expertise. In addition within the TV and film production sector global distribution relies on local knowledge of other countries systems and cultures, which by its nature cannot be readily taught to UK workers. Larger production companies looking to export their programs need to be able to employ people with these skills.

1.4  No matter where the talent or skills comes from productions need a fast and efficient way to hire talent in an industry that operates quickly without which funding may not be secured at all if the talent or production staff are not quickly available.

1.5  That is why it is crucial that any system that comes into place recognises that the film and TV production is a:

• global industry with production moving around the world according to a range of factors such as currency exchange rates, local tax incentives ( such as the UK film tax credit)  and the availability of high class studio facilities.
• High risk activity which is actively dependent on the producer raising a substantial level of investment to cash-flow a production before production can actually happen. Failure to secure talent of sufficient calibre to give investors confidence may often mean the production does not take place at all.

1.6  Given the future growth prospects of the creative industries and the part TV and film will play in this, it is important that the government look closely at ensuring the operational costs for businesses and access to talent continue to keep the UK competitive. A recent OECD report confirmed that as other OECD countries look for ways to implement a simpler regulatory system to admit skilled workers the UK has made it increasingly restrictive. This means we may already be losing talent to other countries.[5]  For example at the moment companies within our membership need to advertise a role for 30 days under a tier 2 visa and get a licence to sponsor someone. This costs £750 followed by a yearly fee of £1000, the job must also meet a minimum salary threshold of £30,000. If a similar model were to be followed for EEA migrants then there would be an additional cost to business to employ EU workers.

1.7  Pact has recommended that the government look at the immigration system as a whole and look to create a creative industries exemption or an acknowledgement that where a migrant worker is contributing to these industries an assurance is given that any system will be as burden free as possible to minimise costs for business.

1.8  This also needs to work in tandem with a fully funded education system with clear routes to employment in order to combat any perception that opportunities or educational attainments are curtailed due to immigration.  The UK TV/Film production sector is acutely aware of the need to ensure a skilled talent pipeline is developed across the whole UK and given the recent success of the UK tax credit this is more necessary than ever before as the demand for skilled talent grows across all areas of expertise. There are schemes in place by industry to improve skills and encourage and professionalise learning in the TV/Film industry, such as Creative Skillset, which provides niche training for screen-based freelancers working in the creative industries and supported 1,680 learners in 2015/16, the Future Film Skills Programme, recently launched by the BFI and the Film Skills Industry Task Force, and the Digital Schoolhouse initiative to bringing play-based IT learning into schools.

1.9         In September, Pact announced the development of a university module on the TV industry, to be introduced to universities nationwide in 2018. The module has been written with extensive feed in from industry representatives, universities and Creative Skillset. It will focus on current skills gaps within the industry as identified by a Pact member survey this includes:

• IP and Rights – understanding them and their value;
• Content and funding – understanding co-production structures and new commercial models around TV productions; and
• IP exploitation – understanding distribution, global trading and secondary exploitation

1.10     Representatives from 200 UK media companies – including all of the public service broadcasters – have signed up to support the module by offering their time and expertise to work with universities to offer students hands on experience before entering the industry. The module is also recognised by the Department for Digital Culture, Media and Sport and the Department for Education who sat on the original working group led by Creative Skillset to understand the skills gaps.

2. What key principles would an immigration policy need to satisfy in order to achieve consensus?

2.1  We think the Home Affairs Committee should consider the following key principles when investigating broader principles to achieve consensus; especially if it wants to continue to attract and retain key talent from around the world to maintain the UK as a key global TV and Film production destination:

• Ensure an immigration system that minimises burdens and business cost and effectively aligns with other government policy in the creative sectors by:
1. Maintaining flexibility and responsiveness to the tier 5 system for temporary workers.
2. Flexibility in definitions for skilled workers: Pact recommends that the government look again at the definitions of ‘skilled’ workers for the production sector given that many workers have specific skills but not necessarily formal qualifications.
3. Exceptions for the industry through more flexibility and responsiveness from the government as to how occupations are added to the shortage occupation lists (which define skills definitions). Pact and the wider creative industries will need to set up an ongoing dialogue around skills shortages and feed into the MAC on an ongoing basis. The production sector need a straightforward and low burden means of bringing people in from the EEA on short term productions.
• Continue to increase effective domestic investment in developing the skills and talent pipeline:
4. Industry training investment through levies and working closely with Creative Skillset

8 November 2017